Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 12, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | RESEARCH FRONTIERS INC | ||
Entity Central Index Key | 793,524 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 24,494,488 | ||
Entity Common Stock, Shares Outstanding | 24,043,846 | ||
Trading Symbol | REFR | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,737,847 | $ 1,691,603 |
Short-term investments | 1,523,333 | |
Royalties receivable, net of reserves of $1,051,424 in 2017 and $1,110,020 in 2016 | 597,441 | 1,117,146 |
Prepaid expenses and other current assets | 29,697 | 256,892 |
Total current assets | 2,364,985 | 4,588,974 |
Fixed assets, net | 482,561 | 651,655 |
Deposits and other assets | 33,567 | 33,567 |
Total assets | 2,881,113 | 5,274,196 |
Current liabilities: | ||
Accounts payable | 58,090 | 29,932 |
Accrued expenses and other | 254,833 | 339,338 |
Deferred revenue | 824 | |
Total current liabilities | 313,747 | 369,270 |
Shareholders' equity: | ||
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 24,043,846 2017 and 2016 | 2,404 | 2,404 |
Additional paid-in capital | 111,627,789 | 111,551,490 |
Accumulated deficit | (109,062,827) | (106,648,968) |
Total shareholders' equity | 2,567,366 | 4,904,926 |
Total liabilities and shareholders' equity | $ 2,881,113 | $ 5,274,196 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Royalty receivables, reserves | $ 1,051,424 | $ 1,110,020 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,043,846 | 24,043,846 |
Common stock, shares outstanding | 24,043,846 | 24,043,846 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Fee income | $ 1,509,070 | $ 1,236,097 | $ 2,007,482 |
Operating expenses | 3,127,979 | 4,086,408 | 4,742,166 |
Research and development | 799,702 | 1,417,634 | 1,588,491 |
Total Expenses | 3,927,681 | 5,504,042 | 6,330,657 |
Operating loss | (2,418,611) | (4,267,945) | (4,323,175) |
Net investment income | 4,752 | 29,535 | 43,319 |
Net loss | $ (2,413,859) | $ (4,238,410) | $ (4,279,856) |
Basic and diluted net loss per common share | $ (0.10) | $ (0.18) | $ (0.18) |
Weighted average number of common shares outstanding | 24,043,846 | 24,043,846 | 24,007,974 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance beginning at Dec. 31, 2014 | $ 2,392 | $ 110,210,480 | $ (98,130,702) | $ 12,082,170 |
Balance beginning, shares at Dec. 31, 2014 | 23,924,465 | |||
Exercise of options and warrants | $ 12 | 548,463 | $ 548,475 | |
Exercise of options and warrants, shares | 119,381 | |||
Share-based compensation | 725,016 | $ 725,016 | ||
Net loss | (4,279,856) | (4,279,856) | ||
Balance ending at Dec. 31, 2015 | $ 2,404 | 111,483,959 | (102,410,558) | $ 9,075,805 |
Balance ending, shares at Dec. 31, 2015 | 24,043,846 | |||
Exercise of options and warrants, shares | ||||
Share-based compensation | 67,531 | $ 67,531 | ||
Net loss | (4,238,410) | (4,238,410) | ||
Balance ending at Dec. 31, 2016 | $ 2,404 | 111,551,490 | (106,648,968) | $ 4,904,926 |
Balance ending, shares at Dec. 31, 2016 | 24,043,846 | |||
Exercise of options and warrants, shares | ||||
Share-based compensation | 76,299 | $ 76,299 | ||
Net loss | (2,413,859) | (2,413,859) | ||
Balance ending at Dec. 31, 2017 | $ 2,404 | $ 111,627,789 | $ (109,062,827) | $ 2,567,366 |
Balance ending, shares at Dec. 31, 2017 | 24,043,846 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (2,413,859) | $ (4,238,410) | $ (4,279,856) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 175,643 | 188,501 | 140,170 |
Stock based compensation | 76,299 | 67,531 | 725,016 |
Loss on sale of fixed asset | 1,775 | ||
Bad debts, net of recovery | 43,215 | 480,563 | 324,286 |
Change in assets and liabilities: | |||
Royalty receivables | 476,490 | (283,035) | (463,743) |
Prepaid expenses and other current assets | 227,195 | (123,427) | (12,213) |
Accounts payable, accrued expenses and other | (56,347) | (98,941) | (14,472) |
Deferred revenue | 824 | ||
Net cash used in operating activities | (1,470,540) | (4,005,443) | (3,580,812) |
Cash flows from investing activities: | |||
Purchases of fixed assets | (6,549) | (11,715) | (316,185) |
Proceeds from sale of fixed asset | 6,000 | ||
Proceeds from sale of investments | 1,523,333 | (9,549) | 1,491,295 |
Net cash provided by (used in) investing activities | 1,516,784 | (15,264) | 1,175,110 |
Cash flows from financing activities: | |||
Net proceeds from issuances of common stock and exercise of options and warrants | 548,475 | ||
Net cash provided by financing activities | 548,475 | ||
Net increase (decrease) in cash and cash equivalents | 46,244 | (4,020,707) | (1,857,227) |
Cash and cash equivalents at beginning of year | 1,691,603 | 5,712,310 | 7,569,537 |
Cash and cash equivalents at end of year | $ 1,737,847 | $ 1,691,603 | $ 5,712,310 |
Business and Basis for Presenta
Business and Basis for Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis for Presentation | (1) Business and Basis for Presentation Research Frontiers Incorporated (“Research Frontiers” or the “Company”) operates in a single business segment which is engaged in the development and marketing of technology and devices to control the flow of light. Such devices, often referred to as “light valves” or suspended particle devices (SPDs), use colloidal particles that are either incorporated within a liquid suspension or a film, which is usually enclosed between two sheets of glass or plastic having transparent, electrically conductive coatings on the facing surfaces thereof. At least one of the two sheets is transparent. SPD technology, made possible by a flexible light-control film invented by Research Frontiers, allows the user to instantly and precisely control the shading of glass/plastic manually or automatically. SPD technology has numerous product applications, including: SPD-Smart™ windows, sunshades, skylights and interior partitions for homes and buildings; automotive windows, sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels and navigation systems; aircraft windows; museum display panels, eyewear products; and flat panel displays for electronic products. SPD-Smart light control film is now being developed for, or used in, architectural, automotive, marine, aerospace and appliance applications. The Company has historically utilized its cash, cash equivalents, short-term investments, and the proceeds from the sale of its investments to fund its research and development of SPD light valves, for marketing initiatives, and for other working capital purposes. The Company’s working capital and capital requirements depend upon numerous factors, including the results of research and development activities, competitive and technological developments, the timing and cost of patent filings, and the development of new licensees and changes in the Company’s relationships with its existing licensees. The degree of dependence of the Company’s working capital requirements on each of the foregoing factors cannot be quantified; increased research and development activities and related costs would increase such requirements; the addition of new licensees may provide additional working capital or working capital requirements, and changes in relationships with existing licensees would have a favorable or negative impact depending upon the nature of such changes. We have incurred recurring losses since inception and expect to continue to incur losses as a result of costs and expenses related to our research and continued development of our SPD technology and our corporate general and administrative expenses. Our limited capital resources and operations to date have been substantially funded through sales of our common stock, exercise of options and warrants and royalty fees collected. As of December 31, 2017, we had working capital of approximately $2.1 million, cash of approximately $1.7 million, shareholders’ equity of approximately $2.6 million and an accumulated deficit of approximately $109.1 million. Our quarterly projected cash flow shortfall, based on our current operations adjusted for any non-recurring cash expenses for the next 12 months, is approximately $350,000-450,000 per quarter. We may eliminate some operating expenses in the future, which will further reduce our cash flow shortfall if needed. Based on the expected benefit of expense reductions and the recently completed convertible debt offering detailed in the Subsequent Event section of this report, we expect to have sufficient working capital for the next 18 months of operations. Since last year we have reduced our cash shortfall and are working to further reduce it and may seek new sources of financing. In February 2018, a small group of long-time shareholders of the Company made an interest-free five-year loan of $1.25 million to the Company which, upon the occurrence of certain conditions, is expected to convert into common stock. See Footnote 11 for further details. In the event that we are unable to generate sufficient cash from our operating activities or raise additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition and long-term prospects. The Company may seek to obtain additional funding through future equity issuances. There can be no assurance as to the availability or terms upon which such financing and capital might be available. Eventual success of the Company and generation of positive cash flow will be dependent upon the commercialization of products using the Company’s technology by the Company’s licensees and payments of continuing royalties on account thereof. To date, the Company has not generated sufficient revenue from its licensees to fund its operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies (a) Cash and Cash Equivalents The Company considers securities purchased with original maturities of three months or less to be cash equivalents. Cash equivalents consist of short-term investments in money market accounts at December 31, 2017 and 2016. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. FDIC insurance coverage is $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. Amounts on deposit in excess of federally insured limits at December 31, 2017 and 2016 is approximately $1.0 million and $1.0 million, respectively. (b) Short-term/Long-term Investments The Company classifies investments in marketable securities as trading, available-for-sale or held-to-maturity at the time of purchase and periodically re-evaluates such classifications. Trading securities are carried at fair value, with unrealized holding gains and losses included in earnings. Held-to-maturity securities are recorded at cost and are adjusted for the amortization or accretion of premiums or discounts over the life of the related security. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income (loss) until realized. In determining realized gains and losses, the cost of securities sold is based on the specific identification method. Interest and dividends on the investments are accrued at the balance sheet date. At December 31, 2017 and 2016 all investments were classified as held to maturity and consisted of the following: December 31, 2017 December 31, 2016 Certificates of Deposit Maturity Value of Held to Maturity Value of Held to Maturity Investment Date Investments (based on cost) Investments (based on cost) $ 1,523,333 2/23/2017 $ - $ 1,523,333 $ - $ 1,523,333 The Company elected to transfer the Certificates of Deposit investment that matured on February 23, 2017 to a money market account. (c) Royalties Receivable Royalties receivable from licensees are recorded at the amounts specified within the license agreements when the collectability of the receivable is reasonably assured. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing royalties receivable. The Company determines the allowance based on historical write off experience as well as the current status of the Company’s customers. The Company reviews its allowance for doubtful accounts periodically. Past due accounts are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2017 four companies accounted for 33%, 25%, 17% and 11%, respectively, of the Company’s outstanding receivables. As of December 31, 2016, four companies accounted for 28%, 21%, 13% and 10%, respectively, of the Company’s outstanding receivables. (d) Fixed Assets Fixed assets are carried at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. (e) Revenue Recognition/Fee Income The Company has entered into a number of license agreements covering its light control technology. The Company receives minimum annual royalties under certain license agreements and records fee income on a ratable basis each quarter. In instances when sales of licensed products by its licensees exceed minimum annual royalties, the Company recognizes additional fee income as the amounts have been earned. Certain of the fees are accrued by, or paid to, the Company in advance of the period in which they are earned resulting in deferred revenue. Such excess amounts are recorded as deferred revenue and are typically recognized as fee income when earned. As of December 31, 2017 and 2016, deferred revenue balances were immaterial. Fee income represents amounts earned by the Company under various license and other agreements (note 7) relating to technology developed by the Company. During 2017, four licensees accounted for 35%, 15%, 10%, and 9%, respectively of fee income recognized during the year. During 2016 three licensees accounted for 30%, 27%, and 15%, respectively of fee income recognized for the year. During 2015, three licensees accounted for 33%, 15%, and 9%, respectively, of fee income recognized for the year. In addition, during the year ended December 31, 2015, approximately 14% of revenues related to fees generated by a large architectural glass project. (f) Basic and Diluted Loss Per Common Share Basic earnings (loss) per share excludes any dilution. It is based upon the weighted average number of common shares outstanding during the period. Dilutive earnings (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company’s dilutive loss per share equals basic loss per share for each of the years in the three-year period ended December 31, 2017 because all common stock equivalents ( i.e., (g) Research and Development Costs Research and development costs are charged to expense as incurred. (h) Patent Costs The Company expenses costs relating to the development or acquisition of patents due to the uncertainty of the recoverability of these items. (i) Use of Estimates The preparation of the Company’s consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during this period. Actual results could differ from those estimates. (j) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. On December 22, 2017, The Tax Cuts and Jobs Act (Act) was enacted into law. The Act provides for significant changes to the US Internal Revenue Code of 1986, as amended, that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. The reduction in the corporate tax rate under the Act required a one-time revaluation of certain tax-related assets to reflect their value at the lower corporate tax rate of 21%. As such, the Company reduced the value of these assets by approximately $10 million which primarily relates to the Company’s net operating loss carryforward. As the Company has determined in accordance with ASC 740 that it is not more likely than not that it will realize this future tax benefit, the reduction in the asset value was accompanied by a reduction for a like amount in the associated valuation allowance. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act In accordance with ASC Topic 740 (FIN 48), we recognize tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. We classify accrued interest and penalties related to any unrecognized tax benefits in our income tax provision. At December 31, 2017 and 2016, we do not have accrued interest and penalties related to any unrecognized tax benefits. We do not believe we have any uncertain tax positions as of December 31, 2017 and 2016. The tax years subject to examination by major tax jurisdictions include the years 2013 and forward by the U.S. Internal Revenue Service and certain states. The Company is not currently being audited by any tax jurisdiction. (k) Equity-Based Compensation We recognize all stock-based compensation as an expense in the financial statements and such costs are measured at the fair value of the award at the date of grant. In addition to reflecting compensation expense for new share-based payment awards, expense is also recognized to reflect the remaining vesting period of awards that had been granted in prior periods. Tax benefits related to stock option exercises are reflected as financing cash inflows. The exercise price for stock options granted are generally set at the average for the high and low trading prices of the Company’s common stock on the trading date immediately prior to the date of grant, and the related number of shares granted are fixed at the date of grant. In order to determine the fair value of stock options on the date of grant, the Company uses the Black-Scholes option-pricing model. Inherent in this model are assumptions related to expected stock-price volatility, option term, risk-free interest rate and dividend yield. While the risk-free interest rate and dividend yield are less subjective assumptions that are based on factual data derived from public sources, the expected stock-price volatility and option term assumptions require a greater level of judgment. In connection with employee stock options and restricted stock grants, the Company charged to compensation expense $76,299, $67,531 and $715,009, during the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017 these awards were fully vested. In lieu of higher cash compensation, the Company has granted warrants and non-employee options to consultants. These warrants and non-employee options vested ratably over various terms ranging from 24 to 59 months. Non-employee options covering 24,000 shares were granted to consultants during 2014. These non-employee options are valued at fair value at the time that the related services are provided using the Black Scholes method and marked to market quarterly using the Black Scholes method. The Company incurred a charge to operations of $10,007 in 2015 in connection with these warrants and non-employee options. There were no such charges for the years ended December 31, 2017 and 2016. (l) Restricted Stock Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. The compensation cost is recognized over the period between the issue date and the vesting period for such shares. Restricted stock is included in total common shares outstanding upon the lapse of any vesting conditions. (m) Impairment of Long-Lived Assets The Company reviews long-lived assets to determine whether an event or change in circumstances indicates the carrying value of the asset may not be recoverable. The Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets and any historical or future profitability measurements, as well as other external market conditions or factors that may be present. There was no impairment of long-lived assets recorded during the years ended 2017, 2016 and 2015. (n) Fair Value Measurements The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of all financial instruments classified as a current asset or current liability are deemed to approximate fair value because of the short maturity of those instruments. Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”) establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC Topic 820 applies other previously issued accounting pronouncements that require or permit fair value measurements but does not require any new fair value measurements. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). We value financial instruments using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices for similar assets or liabilities in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of December 31, 2017 and 2016, the fair value of the Company’s financial assets and liabilities including cash and cash equivalents, royalty receivables and accounts payable approximated carrying value due to the short-term maturity of these instruments. (o) Recent Accounting Pronouncements New Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) jointly issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and International Financial Reporting Standards (IFRS). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB approved a deferral of the ASU effective date from annual and interim periods beginning after December 15, 2016 to annual and interim periods beginning after December 15, 2017. The Company will adopt the new revenue standard on a modified retrospective basis as of January 1, 2018. The Company has not yet completed its assessment of the impact of adopting the new revenue standard. The Company’s preliminary assessment has identified one revenue stream and has identified three performance obligations in each of our contracts with customers. The Company is currently analyzing the allocation of transaction price to each performance obligation and the pattern of recognition of revenue. The Company is also assessing the new disclosure requirements. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company does not expect the application of this guidance to have a significant impact on its financial position or results of operations. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) No. 2016-02, Leases. ASU 2016-02 requires lessees to apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the new guidance is permitted. While not yet in a position to assess the full impact of this application of the new standard, the Company expects that the impact of recording the lease liabilities and the corresponding right to use assets will have an impact on its total asset and liabilities with a minimal impact on equity. In June 2016 the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), that requires entities to use a new impairment model based on expected losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. ASU 2016-13 is effective for us beginning January 1, 2020 with early adoption permitted January 1, 2019. We are currently evaluating new processes to calculate credit losses in accordance with ASU 2016-13 that, once completed, will determine the impact on our consolidated financial statements. The Company is currently evaluating the impact of the provisions of this standard. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of the provisions of this standard. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | (3) Fixed Assets Depreciation and amortization expense for the years ended December 31, 2017, 2016, and 2015 was $175,643, $188,501 and $140,170, respectively. Fixed assets and their estimated useful lives as of December 31, 2017 and 2016 are as follows: 2017 2016 Estimated useful life Equipment and furniture $ 1,372,449 $ 1,366,401 5 years Trade show materials 775,654 775,654 5 years Life of lease or estimated Leasehold Improvements 584,967 584,466 life of asset if shorter 2,733,070 2,726,521 Less accumulated depreciation and amortization (2,250,509 ) (2,074,866 ) $ 482,561 $ 651,655 |
Accrued Expenses and Other
Accrued Expenses and Other | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other | (4) Accrued Expenses and Other Accrued expenses consist of the following at December 31, 2017 and 2016: 2017 2016 Payroll, bonuses and related benefits $ 47,932 $ 128,246 Professional services 4,400 4,400 Deferred rent 202,141 206,332 Other 360 360 $ 254,833 $ 339,338 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (5) Income Taxes Since inception, the Company has incurred losses from operations and as a result has not recorded income tax expense. Benefits related to net operating loss carry-forwards and deferred items have been fully reserved since it is not more likely than not that the Company will achieve profitable operations. For the year ended December 31, 2017, the difference between the total income taxes at the federal statutory rate and the fact that there was no tax expense is attributable to both the federal rate reduction that was enacted as a part of the Act on December 22, 2017 as well as the change in the valuation allowance due to the net operating loss for the current year. The difference between the total income taxes at the federal statutory rate for each of the years ended December 31, 2016 and 2015 and the fact that no income tax benefit was recorded in each of these years is attributable to the change in the valuation allowance recorded in each year. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2017 and 2016 are presented below and reflect the new federal statutory rate enacted in 2017. The 2017 deferred tax amount were adjusted for the effects of the new federal statutory rates. 2017 2016 Deferred tax assets: Depreciation $ 89,000 $ 116,000 Allowance for bad debts 225,000 393,000 Net operating loss carry-forwards 15,575,000 24,916,000 Stock option expense 257,000 1,272,000 Research and other credits 1,266,000 1,210,000 Other temporary differences 15,000 15,000 Total gross deferred tax assets 17,427,000 27,922,000 Less valuation allowance (17,427,000 ) (27,922,000 ) $ - $ - In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the period in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon its historical operating losses, utilization of deferred tax assets cannot currently be determined. Accordingly, the Company has recorded a full valuation allowance against the deferred tax assets, due to the uncertainty regarding the future utilization of the deferred tax assets for all periods presented. At December 31, 2017, the Company had a net operating loss carry-forward for federal income tax purposes of approximately $73,000,000, varying amounts of which will expire in each year from 2018 through 2037. Research and other credit carry-forwards of approximately $1,266,000 are available to the Company to reduce income taxes payable in future years principally through 2037. The Company’s ability to utilize its net operating loss carryforwards and its current year tax credits in future periods are subject to the 382 limitation. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | (6) Shareholders’ Equity (a) Common Stock and Warrants During 2015, the Company received $548,475 in proceeds from the exercise of warrants. The Company received no proceeds from the exercise of options and warrants during 2017 and 2016. (b) Options and Warrants (i) Employee Options In 2008, the shareholders approved the Company’s 2008 Equity Incentive Plan which provides for the granting of both incentive stock options at the fair market value at the date of grant and nonqualified stock options at the fair market value at the date of grant to employees or non-employees who, in the determination of the Board of Directors, have made or may make significant contributions to the Company in the future. The Company may also award stock appreciation rights, restricted stock, or restricted stock units under this plan. The Company initially reserved 750,000 shares of its common stock for issuance under this plan, and 150,182 options and other awards were available for issuance under this plan as of December 31, 2017. At the discretion of the Board of Directors, options expire in ten years or less from the date of grant and are generally fully exercisable upon grant but in some cases may be subject to vesting in the future. Full payment of the exercise price may be made in cash or in shares of common stock valued at the fair market value thereof on the date of exercise, or by agreeing with the Company to cancel a portion of the exercised options. The Company granted 204,000 fully vested options during 2015 and recorded share-based compensation of $483,915. . 2017 2016 2015 Fair value on grant date $ 0.48 $ 0.79 $ 2.37 Expected Dividend yield - - - Expected volatility 50 % 47 % 50 % Risk free interest rate 2.20 % 1.93 % 1.80 % Expected term of the option 5 years 5 years 5 years Activity for stock options is summarized below: All options are exercisable at December 31, 2017. In 2017, 2016 and 2015, the Company did not receive proceeds from the exercise of options. Number of Weighted Average Weighted Average Remaining Shares Subject to Option Exercise Price Contractual Term (Years) Aggregate Intrinsic Value Balance at December 31, 2014 1,570,799 $ 7.49 5.2 Granted 204,000 $ 5.26 Cancelled (367,793 ) $ 7.70 Exercised - $ - Balance at December 31, 2015 1,407,006 $ 7.11 6.2 Granted 85,250 $ 1.83 Cancelled (200,390 ) $ 5.89 Exercised - $ - Balance at December 31, 2016 1,291,866 $ 6.96 6.2 $ - Granted 158,000 $ 1.06 Cancelled (470,956 ) $ 10.57 Exercised - $ - Balance at December 31, 2017 978,910 $ 4.26 7.1 $ - (ii) Warrants and Non-Employee Options Activity in warrants is summarized below: Number of Shares Underlying Warrants and Non-Employee Weighted Average Options Granted Exercise Price Balance at December 31, 2014 1,353,620 $ 5.64 Exercised (137,174 ) 4.73 Terminated (426,083 ) 6.09 Issued 0 0.00 Balance at December 31, 2015 790,363 $ 5.56 Exercised 0 0.00 Terminated 0 0.00 Issued - Balance at December 31, 2016 790,363 $ 5.56 Exercised 0 0.00 Terminated (332,363 ) 4.36 Issued - Balance at December 31, 2017 458,000 $ 6.43 In lieu of cash compensation, the Company has granted warrants and non-employee options to consultants. These warrants and non-employee options vested ratably over various terms ranging from 12 to 59 months. Non-employee five year options covering 24,000 shares were granted to consultants during 2014 that vested over a period of 12 months. These non-employee options are valued at fair value at the time that the related services are provided using the Black-Scholes option valuation model and marked to market quarterly using the Black-Scholes option valuation model. The Company incurred a charge to operations of $10,007 for 2015 in connection with these warrants and non-employee options. There were no such charges in 2017 and 2016. Warrants and non-employee options generally expire from five to ten years from the date of issuance. At December 31, 2017, all warrants and non-employee options outstanding were exercisable. (c) Restricted Stock Grants During 2017, 2016, and 2015, the Company did not issue restricted stock to its directors and employees. In connection with prior grants of restricted stock to its directors and employees the Company charged $231,876, to operations during 2015. There were no such charges during the years ended December 31, 2017 and 2016. |
License and Other Agreements
License and Other Agreements | 12 Months Ended |
Dec. 31, 2017 | |
License And Other Agreements | |
License and Other Agreements | (7) License and Other Agreements The Company has entered into a number of license agreements covering various products using the Company’s SPD technology. Some of these license agreements are limited to specific countries and/or markets. Licensees of Research Frontiers who incorporate SPD technology into end products pay Research Frontiers an earned royalty of 5-15% of net sales of licensed products under license agreements currently in effect, and may also be required to pay Research Frontiers fees and minimum annual royalties. Licensees who sell products or components to other licensees of Research Frontiers do not pay a royalty on such sale; Research Frontiers will collect such royalty from the licensee incorporating such products or components into its own end-products. Research Frontiers’ license agreements typically allow the licensee to terminate the license after some period of time, and give Research Frontiers only limited rights to terminate before the license expires. Most licenses are non-exclusive and generally last as long as our patents remain in effect. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | (8) Commitments The Company has an employment agreement with two of its officers which provides for an annual base salary of $450,000 and $255,000 respectively for calendar year 2018. Each of these employment agreements have an evergreen provision that extend the term by one year on the anniversary date unless either the Company or the employee has given notice that they will not be renewing the agreement upon the expiration of its term. The Company has a defined contribution profit sharing (401K) plan covering employees who have completed one year of service. Contributions are made at the discretion of the Company. The Company did not make any contributions to this plan for 2017, 2016, or 2015. The Company occupies premises under an operating lease agreement which expires on March 31, 2025. As of December 31, 2017, the approximate minimum annual future rental commitments under lease agreements for the next five years are as follows: Year Amount 2018 $ 186,000 2019 $ 191,000 2020 $ 197,000 2021 $ 199,000 Thereafter: $ 707,000 Rent expense, including other occupancy related expenses, amounted to approximately $185,000, $184,000, and $181,000, |
Rights Plan
Rights Plan | 12 Months Ended |
Dec. 31, 2017 | |
Treasury Stock, Number of Shares and Restriction Disclosures [Abstract] | |
Rights Plan | (9) Rights Plan In February 2013, the Company’s Board of Directors adopted a Stockholders’ Rights Plan (the “Rights Plan”) and declared a dividend distribution of one right (a “Right”) for each outstanding share of Company common stock to stockholders of record at the close of business on March 3, 2003 (“Record Time”) and authorized the issuance of one Right in respect of each share of Common Stock issued after the Record Time and prior to the Separation Time. “Separation Time” shall mean the earlier of the Close of Business on the tenth Business Day (or such later date as the Board of Directors may from time to time fix by resolution adopted prior to the Separation Time that otherwise would have occurred) following but not including (i) the date on which any Person commences a tender or exchange offer that, if consummated, would result in such Person’s becoming an Acquiring Person, and (ii) the date of the first event causing a Flip-in Date to occur; provided that if any tender or exchange offer referred to in clause (i) of this paragraph is cancelled, terminated or otherwise withdrawn prior to the Separation Time without the purchase of any shares of Common Stock pursuant thereto, such offer shall be deemed, for purposes of this paragraph, never to have been made. Subject to certain exceptions listed in the Rights Plan, if a person or group has acquired beneficial ownership of, or commences a tender or exchange offer for, 15% or more of the Company’s common stock, unless redeemed by the Company’s Board of Directors, each Right entitles the holder (other than the acquiring person) to purchase from the Company $80 worth of common stock for $40. If the Company is merged into, or 50% or more of its assets or earning power is sold to, the acquiring company, the Rights will also enable the holder (other than the acquiring person) to purchase $80 worth of common stock of the acquiring company for $40. The Rights will expire at the close of business on February 11, 2023, unless the Rights Plan is extended by the Company’s Board of Directors or unless the Rights are earlier redeemed by the Company at a price of $.0001 per Right. The Rights are not exercisable during the time when they are redeemable by the Company. The above description highlights some of the features of the Company’s Rights Plan and is not a complete description of the Rights Plan. A more detailed description and copy of the Rights Plan has been filed with the SEC and is available from the Company upon request. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | (10) Selected Quarterly Financial Data (Unaudited) Quarter 2017 First Second Third Fourth (2) Fee Income $ 393,116 $ 348,179 $ 488,336 $ 279,439 Operating loss (954,432 ) (490,652 ) (304,251 ) (669,276 ) Net loss (952,555 ) (489,812 ) (303,138 ) (668,354 ) Basic and diluted net loss per common share (1) (0.04 ) (0.02 ) (0.01 ) (0.03 ) Quarter 2016 First Second Third Fourth (2) Fee Income $ 409,133 $ 244,432 $ 304,772 $ 277,760 Operating loss (1,187,591 ) (1,124,730 ) (566,063 ) (1,389,561 ) Net loss (1,176,693 ) (1,116,758 ) (559,731 ) (1,385,228 ) Basic and diluted net loss per common share (1) (0.06 ) (0.05 ) (0.02 ) (0.06 ) (1) Since per share information is computed independently for each quarter and the full year, based on the respective average number of common shares outstanding, the sum of the quarterly per share amounts does not necessarily equal the per share amounts for the year. (2) The Company incurred higher costs in the fourth quarter of 2017 and 2016 due to: (i) $76,000 and $68,000 of stock and option compensation charges in 2017 and 2016, respectively, relating to common stock and options granted to directors and employees, and $480,563 of bad debt expense recorded in the fourth quarter of 2016. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | (11) Subsequent Event In February 2018, a small group of long-time shareholders of the Company made an interest-free five-year loan of $1.25 million to the Company which, upon the occurrence of certain conditions, is expected to convert into common stock at a price equal to the market price of the Company’s common stock when the loan was made, plus warrants exercisable at a premium to such market price. No payments are due on this note during its five-year term. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | SCHEDULE II RESEARCH FRONTIERS INCORPORATED Balance at beginning of period Charged to cost and expenses Deductions (1) End of period balance Description Allowance for uncollectible royalty receivables: December 31, 2017 $ 1,110,020 $ 43,215 $ 101,811 $ 1,051,424 December 31, 2016 $ 629,457 $ 480,563 $ - $ 1,110,020 December 31, 2015 $ 305,171 $ 324,286 $ - $ 629,457 (1) To write-off uncollectible receivables from the allowance for royalty receivable account. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | (a) Cash and Cash Equivalents The Company considers securities purchased with original maturities of three months or less to be cash equivalents. Cash equivalents consist of short-term investments in money market accounts at December 31, 2017 and 2016. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. FDIC insurance coverage is $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. Amounts on deposit in excess of federally insured limits at December 31, 2017 and 2016 is approximately $1.0 million and $1.0 million, respectively. |
Short-term/Long-term Investments | (b) Short-term/Long-term Investments The Company classifies investments in marketable securities as trading, available-for-sale or held-to-maturity at the time of purchase and periodically re-evaluates such classifications. Trading securities are carried at fair value, with unrealized holding gains and losses included in earnings. Held-to-maturity securities are recorded at cost and are adjusted for the amortization or accretion of premiums or discounts over the life of the related security. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income (loss) until realized. In determining realized gains and losses, the cost of securities sold is based on the specific identification method. Interest and dividends on the investments are accrued at the balance sheet date. At December 31, 2017 and 2016 all investments were classified as held to maturity and consisted of the following: December 31, 2017 December 31, 2016 Certificates of Deposit Maturity Value of Held to Maturity Value of Held to Maturity Investment Date Investments (based on cost) Investments (based on cost) $ 1,523,333 2/23/2017 $ - $ 1,523,333 $ - $ 1,523,333 The Company elected to transfer the Certificates of Deposit investment that matured on February 23, 2017 to a money market account. |
Royalties Receivable | (c) Royalties Receivable Royalties receivable from licensees are recorded at the amounts specified within the license agreements when the collectability of the receivable is reasonably assured. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing royalties receivable. The Company determines the allowance based on historical write off experience as well as the current status of the Company’s customers. The Company reviews its allowance for doubtful accounts periodically. Past due accounts are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2017 four companies accounted for 33%, 25%, 17% and 11%, respectively, of the Company’s outstanding receivables. As of December 31, 2016, four companies accounted for 28%, 21%, 13% and 10%, respectively, of the Company’s outstanding receivables. |
Fixed Assets | (d) Fixed Assets Fixed assets are carried at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. |
Revenue Recognition/Fee Income | (e) Revenue Recognition/Fee Income The Company has entered into a number of license agreements covering its light control technology. The Company receives minimum annual royalties under certain license agreements and records fee income on a ratable basis each quarter. In instances when sales of licensed products by its licensees exceed minimum annual royalties, the Company recognizes additional fee income as the amounts have been earned. Certain of the fees are accrued by, or paid to, the Company in advance of the period in which they are earned resulting in deferred revenue. Such excess amounts are recorded as deferred revenue and are typically recognized as fee income when earned. As of December 31, 2017 and 2016, deferred revenue balances were immaterial. Fee income represents amounts earned by the Company under various license and other agreements (note 7) relating to technology developed by the Company. During 2017, four licensees accounted for 35%, 15%, 10%, and 9%, respectively of fee income recognized during the year. During 2016 three licensees accounted for 30%, 27%, and 15%, respectively of fee income recognized for the year. During 2015, three licensees accounted for 33%, 15%, and 9%, respectively, of fee income recognized for the year. In addition, during the year ended December 31, 2015, approximately 14% of revenues related to fees generated by a large architectural glass project. |
Basic and Diluted Loss Per Common Share | (f) Basic and Diluted Loss Per Common Share Basic earnings (loss) per share excludes any dilution. It is based upon the weighted average number of common shares outstanding during the period. Dilutive earnings (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company’s dilutive loss per share equals basic loss per share for each of the years in the three-year period ended December 31, 2017 because all common stock equivalents ( i.e., |
Research and Development Costs | (g) Research and Development Costs Research and development costs are charged to expense as incurred. |
Patent Costs | (h) Patent Costs The Company expenses costs relating to the development or acquisition of patents due to the uncertainty of the recoverability of these items. |
Use of Estimates | (i) Use of Estimates The preparation of the Company’s consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during this period. Actual results could differ from those estimates. |
Income Taxes | (j) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. On December 22, 2017, The Tax Cuts and Jobs Act (Act) was enacted into law. The Act provides for significant changes to the US Internal Revenue Code of 1986, as amended, that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. The reduction in the corporate tax rate under the Act required a one-time revaluation of certain tax-related assets to reflect their value at the lower corporate tax rate of 21%. As such, the Company reduced the value of these assets by approximately $10 million which primarily relates to the Company’s net operating loss carryforward. As the Company has determined in accordance with ASC 740 that it is not more likely than not that it will realize this future tax benefit, the reduction in the asset value was accompanied by a reduction for a like amount in the associated valuation allowance. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act In accordance with ASC Topic 740 (FIN 48), we recognize tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. We classify accrued interest and penalties related to any unrecognized tax benefits in our income tax provision. At December 31, 2017 and 2016, we do not have accrued interest and penalties related to any unrecognized tax benefits. We do not believe we have any uncertain tax positions as of December 31, 2017 and 2016. The tax years subject to examination by major tax jurisdictions include the years 2013 and forward by the U.S. Internal Revenue Service and certain states. The Company is not currently being audited by any tax jurisdiction. |
Equity-Based Compensation | (k) Equity-Based Compensation We recognize all stock-based compensation as an expense in the financial statements and such costs are measured at the fair value of the award at the date of grant. In addition to reflecting compensation expense for new share-based payment awards, expense is also recognized to reflect the remaining vesting period of awards that had been granted in prior periods. Tax benefits related to stock option exercises are reflected as financing cash inflows. The exercise price for stock options granted are generally set at the average for the high and low trading prices of the Company’s common stock on the trading date immediately prior to the date of grant, and the related number of shares granted are fixed at the date of grant. In order to determine the fair value of stock options on the date of grant, the Company uses the Black-Scholes option-pricing model. Inherent in this model are assumptions related to expected stock-price volatility, option term, risk-free interest rate and dividend yield. While the risk-free interest rate and dividend yield are less subjective assumptions that are based on factual data derived from public sources, the expected stock-price volatility and option term assumptions require a greater level of judgment. In connection with employee stock options and restricted stock grants, the Company charged to compensation expense $76,299, $67,531 and $715,009, during the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017 these awards were fully vested. In lieu of higher cash compensation, the Company has granted warrants and non-employee options to consultants. These warrants and non-employee options vested ratably over various terms ranging from 24 to 59 months. Non-employee options covering 24,000 shares were granted to consultants during 2014. These non-employee options are valued at fair value at the time that the related services are provided using the Black Scholes method and marked to market quarterly using the Black Scholes method. The Company incurred a charge to operations of $10,007 in 2015 in connection with these warrants and non-employee options. There were no such charges for the years ended December 31, 2017 and 2016. |
Restricted Stock | (l) Restricted Stock Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. The compensation cost is recognized over the period between the issue date and the vesting period for such shares. Restricted stock is included in total common shares outstanding upon the lapse of any vesting conditions. |
Impairment of Long-lived Assets | (m) Impairment of Long-Lived Assets The Company reviews long-lived assets to determine whether an event or change in circumstances indicates the carrying value of the asset may not be recoverable. The Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets and any historical or future profitability measurements, as well as other external market conditions or factors that may be present. There was no impairment of long-lived assets recorded during the years ended 2017, 2016 and 2015. |
Fair Value Measurements | (n) Fair Value Measurements The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of all financial instruments classified as a current asset or current liability are deemed to approximate fair value because of the short maturity of those instruments. Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”) establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC Topic 820 applies other previously issued accounting pronouncements that require or permit fair value measurements but does not require any new fair value measurements. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). We value financial instruments using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices for similar assets or liabilities in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of December 31, 2017 and 2016, the fair value of the Company’s financial assets and liabilities including cash and cash equivalents, royalty receivables and accounts payable approximated carrying value due to the short-term maturity of these instruments. |
Recent Accounting Pronouncements | (o) Recent Accounting Pronouncements New Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) jointly issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and International Financial Reporting Standards (IFRS). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB approved a deferral of the ASU effective date from annual and interim periods beginning after December 15, 2016 to annual and interim periods beginning after December 15, 2017. The Company will adopt the new revenue standard on a modified retrospective basis as of January 1, 2018. The Company has not yet completed its assessment of the impact of adopting the new revenue standard. The Company’s preliminary assessment has identified one revenue stream and has identified three performance obligations in each of our contracts with customers. The Company is currently analyzing the allocation of transaction price to each performance obligation and the pattern of recognition of revenue. The Company is also assessing the new disclosure requirements. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company does not expect the application of this guidance to have a significant impact on its financial position or results of operations. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) No. 2016-02, Leases. ASU 2016-02 requires lessees to apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the new guidance is permitted. While not yet in a position to assess the full impact of this application of the new standard, the Company expects that the impact of recording the lease liabilities and the corresponding right to use assets will have an impact on its total asset and liabilities with a minimal impact on equity. In June 2016 the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), that requires entities to use a new impairment model based on expected losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. ASU 2016-13 is effective for us beginning January 1, 2020 with early adoption permitted January 1, 2019. We are currently evaluating new processes to calculate credit losses in accordance with ASU 2016-13 that, once completed, will determine the impact on our consolidated financial statements. The Company is currently evaluating the impact of the provisions of this standard. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of the provisions of this standard. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Investments | At December 31, 2017 and 2016 all investments were classified as held to maturity and consisted of the following: December 31, 2017 December 31, 2016 Certificates of Deposit Maturity Value of Held to Maturity Value of Held to Maturity Investment Date Investments (based on cost) Investments (based on cost) $ 1,523,333 2/23/2017 $ - $ 1,523,333 $ - $ 1,523,333 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets and their estimated useful lives as of December 31, 2017 and 2016 are as follows: 2017 2016 Estimated useful life Equipment and furniture $ 1,372,449 $ 1,366,401 5 years Trade show materials 775,654 775,654 5 years Life of lease or estimated Leasehold Improvements 584,967 584,466 life of asset if shorter 2,733,070 2,726,521 Less accumulated depreciation and amortization (2,250,509 ) (2,074,866 ) $ 482,561 $ 651,655 |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other | (4) Accrued Expenses and Other Accrued expenses consist of the following at December 31, 2017 and 2016: 2017 2016 Payroll, bonuses and related benefits $ 47,932 $ 128,246 Professional services 4,400 4,400 Deferred rent 202,141 206,332 Other 360 360 $ 254,833 $ 339,338 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2017 and 2016 are presented below and reflect the new federal statutory rate enacted in 2017. The 2017 deferred tax amount were adjusted for the effects of the new federal statutory rates. 2017 2016 Deferred tax assets: Depreciation $ 89,000 $ 116,000 Allowance for bad debts 225,000 393,000 Net operating loss carry-forwards 15,575,000 24,916,000 Stock option expense 257,000 1,272,000 Research and other credits 1,266,000 1,210,000 Other temporary differences 15,000 15,000 Total gross deferred tax assets 17,427,000 27,922,000 Less valuation allowance (17,427,000 ) (27,922,000 ) $ - $ - |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Assumptions Used to Value Options Granted to Employees | . 2017 2016 2015 Fair value on grant date $ 0.48 $ 0.79 $ 2.37 Expected Dividend yield - - - Expected volatility 50 % 47 % 50 % Risk free interest rate 2.20 % 1.93 % 1.80 % Expected term of the option 5 years 5 years 5 years |
Schedule of Option Activity | In 2017, 2016 and 2015, the Company did not receive proceeds from the exercise of options. Number of Weighted Average Weighted Average Remaining Shares Subject to Option Exercise Price Contractual Term (Years) Aggregate Intrinsic Value Balance at December 31, 2014 1,570,799 $ 7.49 5.2 Granted 204,000 $ 5.26 Cancelled (367,793 ) $ 7.70 Exercised - $ - Balance at December 31, 2015 1,407,006 $ 7.11 6.2 Granted 85,250 $ 1.83 Cancelled (200,390 ) $ 5.89 Exercised - $ - Balance at December 31, 2016 1,291,866 $ 6.96 6.2 $ - Granted 158,000 $ 1.06 Cancelled (470,956 ) $ 10.57 Exercised - $ - Balance at December 31, 2017 978,910 $ 4.26 7.1 $ - |
Schedule of Warrant Activity | Activity in warrants is summarized below: Number of Shares Underlying Warrants and Non-Employee Weighted Average Options Granted Exercise Price Balance at December 31, 2014 1,353,620 $ 5.64 Exercised (137,174 ) 4.73 Terminated (426,083 ) 6.09 Issued 0 0.00 Balance at December 31, 2015 790,363 $ 5.56 Exercised 0 0.00 Terminated 0 0.00 Issued - Balance at December 31, 2016 790,363 $ 5.56 Exercised 0 0.00 Terminated (332,363 ) 4.36 Issued - Balance at December 31, 2017 458,000 $ 6.43 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Annual Future Rental Commitments | The Company occupies premises under an operating lease agreement which expires on March 31, 2025. As of December 31, 2017, the approximate minimum annual future rental commitments under lease agreements for the next five years are as follows: Year Amount 2018 $ 186,000 2019 $ 191,000 2020 $ 197,000 2021 $ 199,000 Thereafter: $ 707,000 |
Selected Quarterly Financial 26
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | Quarter 2017 First Second Third Fourth (2) Fee Income $ 393,116 $ 348,179 $ 488,336 $ 279,439 Operating loss (954,432 ) (490,652 ) (304,251 ) (669,276 ) Net loss (952,555 ) (489,812 ) (303,138 ) (668,354 ) Basic and diluted net loss per common share (1) (0.04 ) (0.02 ) (0.01 ) (0.03 ) Quarter 2016 First Second Third Fourth (2) Fee Income $ 409,133 $ 244,432 $ 304,772 $ 277,760 Operating loss (1,187,591 ) (1,124,730 ) (566,063 ) (1,389,561 ) Net loss (1,176,693 ) (1,116,758 ) (559,731 ) (1,385,228 ) Basic and diluted net loss per common share (1) (0.06 ) (0.05 ) (0.02 ) (0.06 ) (1) Since per share information is computed independently for each quarter and the full year, based on the respective average number of common shares outstanding, the sum of the quarterly per share amounts does not necessarily equal the per share amounts for the year. (2) The Company incurred higher costs in the fourth quarter of 2017 and 2016 due to: (i) $76,000 and $68,000 of stock and option compensation charges in 2017 and 2016, respectively, relating to common stock and options granted to directors and employees, and $480,563 of bad debt expense recorded in the fourth quarter of 2016. |
Business and Basis for Presen27
Business and Basis for Presentation (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Working capital | $ 2,100,000 | |||
Cash and short-term investments | 1,700,000 | |||
Shareholders' equity | 2,567,366 | $ 4,904,926 | $ 9,075,805 | $ 12,082,170 |
Accumulated deficit | 109,062,827 | $ 106,648,968 | ||
Minimum [Member] | ||||
Non-recurring cash expenses | 350,000 | |||
Maximum [Member] | ||||
Non-recurring cash expenses | 450,000 | |||
February 2018 [Member] | ||||
Interest free loan | $ 1,250,000 | |||
Interest free loan, term | 5 years |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
FDIC insurance coverage | $ 250,000 | $ 250,000 | |||||
Amounts on deposit in excess of federally insured limits | 1,000,000 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
Number of options and warrants that were not included because their effect is antidilutive | 1,436,910 | 2,082,229 | 2,197,369 | ||||
Charge recorded for employee options and restricted stock | 76,000 | $ 68,000 | $ 76,299 | $ 67,531 | $ 725,016 | ||
Federal tax rate, percentage | 35.00% | ||||||
Percentage of lower tax rate | 21.00% | ||||||
Net operating loss carry-forward | $ 10,000,000 | $ 73,000,000 | 73,000,000 | ||||
Share-based goods and nonemployee services transaction, quantity of securities issued | 24,000 | ||||||
Charge recorded for non-employees | 10,007 | ||||||
Impairment of long-lived assets | |||||||
Minimum [Member] | |||||||
Warrants and non-employee options vested term | 24 months | ||||||
Maximum [Member] | |||||||
Warrants and non-employee options vested term | 59 months | ||||||
Employee Stock Option [Member] | Restricted Stock [Member] | |||||||
Charge recorded for employee options and restricted stock | $ 76,299 | $ 67,531 | $ 715,009 | ||||
Reduced Federal Tax Rate [Member] | |||||||
Federal tax rate, percentage | 21.00% | ||||||
Company One [Member] | Accounts Receivable [Member] | |||||||
Concentration risk percentage | 33.00% | 28.00% | |||||
Company Two [Member] | Accounts Receivable [Member] | |||||||
Concentration risk percentage | 25.00% | 21.00% | |||||
Company Three [Member] | Accounts Receivable [Member] | |||||||
Concentration risk percentage | 17.00% | 13.00% | |||||
Company Four [Member] | Accounts Receivable [Member] | |||||||
Concentration risk percentage | 11.00% | 10.00% | |||||
Licensee One [Member] | Sales [Member] | |||||||
Concentration risk percentage | 35.00% | 30.00% | 33.00% | ||||
Licensee Two [Member] | Sales [Member] | |||||||
Concentration risk percentage | 15.00% | 27.00% | 15.00% | ||||
Licensee Three [Member] | Sales [Member] | |||||||
Concentration risk percentage | 10.00% | 15.00% | 9.00% | ||||
Licensee Four [Member] | Sales [Member] | |||||||
Concentration risk percentage | 9.00% | ||||||
Large Architectural Glass Project [Member] | Sales [Member] | |||||||
Concentration risk percentage | 14.00% |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Schedule of Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Value of Held to Maturity Investments (based on cost) | $ 1,523,333 | |
Certificates of Deposit [Member] | ||
Certificates of Deposits Investment | $ 152,333 | |
Maturity Date | Feb. 23, 2017 | |
Value of Held to Maturity Investments (based on cost) | $ 1,523,333 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 175,643 | $ 188,501 | $ 140,170 |
Fixed Assets - Schedule of Fixe
Fixed Assets - Schedule of Fixed Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fixed assets | $ 2,733,070 | $ 2,726,521 |
Less accumulated depreciation and amortization | (2,250,509) | (2,074,866) |
Fixed assets, net | 482,561 | 651,655 |
Equipment and Furniture [Member] | ||
Fixed assets | $ 1,372,449 | 1,366,401 |
Estimated useful life | 5 years | |
Trade Show Materials [Member] | ||
Fixed assets | $ 775,654 | 775,654 |
Estimated useful life | 5 years | |
Leasehold Improvements [Member] | ||
Fixed assets | $ 584,967 | $ 584,466 |
Estimated useful life description | Life of lease or estimated life of asset if shorter |
Accrued Expenses and Other - Sc
Accrued Expenses and Other - Schedule of Accrued Expenses and Other (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Payroll, bonuses and related benefits | $ 47,932 | $ 128,246 |
Professional services | 4,400 | 4,400 |
Deferred rent | 202,141 | 206,332 |
Other | 360 | 360 |
Accrued expenses | $ 254,833 | $ 339,338 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 22, 2017 | |
Net operating loss carry-forward | $ 73,000,000 | $ 10,000,000 |
Research and other credit carry-forwards | $ 1,266,000 | |
Earliest Tax Year [Member] | ||
Net operating loss carry-forward expiration dates | Dec. 31, 2018 | |
Latest Tax Year [Member] | ||
Net operating loss carry-forward expiration dates | Dec. 31, 2037 | |
Research and other credit carry-forwards expiration dates | Dec. 31, 2037 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Depreciation | $ 89,000 | $ 116,000 |
Allowance for bad debts | 225,000 | 393,000 |
Net operating loss carry-forwards | 15,575,000 | 24,916,000 |
Stock option expense | 257,000 | 1,272,000 |
Research and other credits | 1,266,000 | 1,210,000 |
Other temporary differences | 15,000 | 15,000 |
Total gross deferred tax assets | 17,427,000 | 27,922,000 |
Less valuation allowance | (17,427,000) | (27,922,000) |
Deferred Tax Assets, Net of Valuation Allowance |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds from exercise of options and warrants | $ 548,475 | |||||
Shares of common stock reserved for issuance | 750,000 | 750,000 | ||||
Awards available for issuance | 150,182 | 150,182 | ||||
Number of options granted | 158,000 | 85,250 | 204,000 | |||
Stock and option compensation | $ 76,000 | $ 68,000 | $ 76,299 | $ 67,531 | $ 725,016 | |
Issuance of stock and warrants for services or claims | 10,007 | |||||
Restricted Stock [Member] | Directors and Employees [Member] | ||||||
Stock and option compensation | 231,876 | |||||
Minimum [Member] | ||||||
Warrants and non-employee options vested term | 24 months | |||||
Maximum [Member] | ||||||
Warrants and non-employee options vested term | 59 months | |||||
Employee Stock Options [Member] | ||||||
Stock and option compensation | $ 483,915 | |||||
Warrant [Member] | Non- Employee Stock Option [Member] | ||||||
Number of options granted | 24,000 | |||||
Warrant [Member] | Non- Employee Stock Option [Member] | Minimum [Member] | ||||||
Warrants and non-employee options vested term | 12 months | |||||
Option expiration period | 5 years | |||||
Warrant [Member] | Non- Employee Stock Option [Member] | Maximum [Member] | ||||||
Warrants and non-employee options vested term | 59 months | |||||
Option expiration period | 10 years |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Assumptions Used to Value Options Granted to Employees (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||
Fair value on grant date | $ 0.48 | $ 0.79 | $ 2.37 |
Expected Dividend yield | |||
Expected volatility | 50.00% | 47.00% | 50.00% |
Risk free interest rate | 2.20% | 1.93% | 1.80% |
Expected term of the option | 5 years | 5 years | 5 years |
Shareholders' Equity - Schedu37
Shareholders' Equity - Schedule of Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||
Number of Shares Subject to Option, Beginning | 1,291,866 | 1,407,006 | 1,570,799 |
Number of Shares Subject to Option, Granted | 158,000 | 85,250 | 204,000 |
Number of Shares Subject to Option, Cancelled | (470,956) | (200,390) | (367,793) |
Number of Shares Subject to Option, Exercised | |||
Number of Shares Subject to Option, Ending | 978,910 | 1,291,866 | 1,407,006 |
Weighted Average Exercise Price, Beginning | $ 6.96 | $ 7.11 | $ 7.49 |
Weighted Average Exercise Price, Granted | 1.06 | 1.83 | 5.26 |
Weighted Average Exercise Price, Cancelled | 10.57 | 5.89 | 7.70 |
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Ending | $ 4.26 | $ 6.96 | $ 7.11 |
Weighted Average Remaining Contractual Term (Years), Beginning | 6 years 2 months 12 days | 5 years 2 months 12 days | |
Weighted Average Remaining Contractual Term (Years), Ending | 7 years 1 month 6 days | 6 years 2 months 12 days | |
Aggregate Intrinsic Value |
Shareholders' Equity - Schedu38
Shareholders' Equity - Schedule of Warrant Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||
Number of Shares Underling Warrants and Non- Employee Options Granted, Beginning | 790,363 | 790,363 | 1,353,620 |
Number of Shares Underling Warrants and Non- Employee Options Granted, Exercised | 0 | 0 | (137,174) |
Number of Shares Underling Warrants and Non- Employee Options Granted, Terminated | (332,363) | 0 | (426,083) |
Number of Shares Underling Warrants and Non- Employee Options Granted, Issued | 0 | ||
Number of Shares Underling Warrants and Non- Employee Options Granted, Ending | 458,000 | 790,363 | 790,363 |
Weighted Average Exercise Price, Beginning | $ 5.56 | $ 5.56 | $ 5.64 |
Weighted Average Exercise Price, Exercised | 0 | 0 | 4.73 |
Weighted Average Exercise Price, Terminated | 4.36 | 0 | 6.09 |
Weighted Average Exercise Price, Issued | 0 | ||
Weighted Average Exercise Price, Ending | $ 6.43 | $ 5.56 | $ 5.56 |
License and Other Agreements (D
License and Other Agreements (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum [Member] | |
Percentage of royalty revenue on net sales | 5.00% |
Maximum [Member] | |
Percentage of royalty revenue on net sales | 15.00% |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Lease expiration date | Mar. 31, 2025 | ||
Rent expense | $ 185,000 | $ 184,000 | $ 181,000 |
One Officers [Member] | |||
Commitment amount | 450,000 | ||
Two Officers [Member] | |||
Commitment amount | $ 255,000 |
Commitments - Schedule of Minim
Commitments - Schedule of Minimum Annual Future Rental Commitments (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 186,000 |
2,019 | 191,000 |
2,020 | 197,000 |
2,021 | 199,000 |
Thereafter: | $ 707,000 |
Rights Plan (Details Narrative)
Rights Plan (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Treasury Stock, Number of Shares and Restriction Disclosures [Abstract] | |
Percentage of acquisition threshold | 15.00% |
Value of stock covered by each right | $ | $ 80 |
Exercise price of rights | $ 40 |
Threshold for change in control | 50.00% |
Rights plan expire date | Feb. 11, 2023 |
Redemption price | $ 0.0001 |
Selected Quarterly Financial 43
Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||
Fee income | $ 279,439 | $ 488,336 | $ 348,179 | $ 393,116 | $ 277,760 | $ 304,772 | $ 244,432 | $ 409,133 | $ 1,509,070 | $ 1,236,097 | $ 2,007,482 | ||||||||
Operating loss | (669,276) | (304,251) | (490,652) | (954,432) | (1,389,561) | (566,063) | (1,124,730) | (1,187,591) | (2,418,611) | (4,267,945) | (4,323,175) | ||||||||
Net Loss | $ (668,354) | $ (303,138) | $ (489,812) | $ (952,555) | $ (1,385,228) | $ (559,731) | $ (1,116,758) | $ (1,176,693) | $ (2,413,859) | $ (4,238,410) | $ (4,279,856) | ||||||||
Basic and diluted net loss per common share | $ (0.03) | [2] | $ (0.01) | [2] | $ (0.02) | [2] | $ (0.04) | [2] | $ (0.06) | [2] | $ (0.02) | [2] | $ (0.05) | [2] | $ (0.06) | [2] | $ (0.10) | $ (0.18) | $ (0.18) |
[1] | The Company incurred higher costs in the fourth quarter of 2017 and 2016 due to: (i) $76,000 and $68,000 of stock and option compensation charges in 2017 and 2016, respectively, relating to common stock and options granted to directors and employees, and $480,563 of bad debt expense in the fourth quarter of 2016. | ||||||||||||||||||
[2] | Since per share information is computed independently for each quarter and the full year, based on the respective average number of common shares outstanding, the sum of the quarterly per share amounts does not necessarily equal the per share amounts for the year. |
Selected Quarterly Financial 44
Selected Quarterly Financial Data - Schedule of Quarterly Financial Data (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||
Stock and option compensation | $ 76,000 | $ 68,000 | $ 76,299 | $ 67,531 | $ 725,016 |
Bad debts | $ 480,563 | $ 43,215 | $ 480,563 | $ 324,286 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) | 1 Months Ended |
Feb. 28, 2018USD ($) | |
Subsequent Event [Member] | |
Proceeds from loan | $ 1,250,000 |
Valuation and Qualifying Acco46
Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Balance at beginning of period | $ 1,110,020 | $ 629,457 | $ 305,171 | |
Charged to costs and expenses | 43,215 | 480,563 | 324,286 | |
Deductions | [1] | 101,811 | ||
End of period balance | $ 1,051,424 | $ 1,110,020 | $ 629,457 | |
[1] | To write-off uncollectible receivables from the allowance for royalty receivable account. |