Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 20, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | IMAGEWARE SYSTEMS INC | ||
Entity Central Index Key | 941,685 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 69,127,864 | ||
Entity Common Stock, Shares Outstanding | 91,846,795 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 1,586 | $ 3,352 |
Accounts receivable, net of allowance for doubtful accounts of 1 and 3 at December 31, 2016 and 2015, respectively. | 287 | 349 |
Inventory, net | 23 | 46 |
Other current assets | 135 | 69 |
Total Current Assets | 2,031 | 3,816 |
Property and equipment, net | 93 | 162 |
Other assets | 34 | 98 |
Intangible assets, net of accumulated amortization | 105 | 117 |
Goodwill | 3,416 | 3,416 |
Total Assets | 5,680 | 7,609 |
Current Liabilities: | ||
Accounts payable | 425 | 198 |
Deferred revenue | 1,045 | 1,059 |
Accrued expenses | 1,047 | 1,149 |
Convertible lines of credit to related parties, net of discount | 2,528 | |
Total Current Liabilities | 5,045 | 2,406 |
Pension obligation | 1,895 | 1,511 |
Total Liabilities | 6,940 | 3,917 |
Shareholders' Equity (Deficit): | ||
Common Stock, $0.01 par value, 150,000,000 shares authorized; 91,853,499 and 94,077,599 shares issued at December 31, 2016 and 2015, respectively, and 91,846,795 and 94,070,895 shares outstanding at December | 917 | 940 |
Additional paid-in capital | 156,195 | 149,902 |
Treasury stock, at cost 6,704 shares | (64) | (64) |
Accumulated other comprehensive loss | (1,543) | (1,195) |
Accumulated deficit | (156,767) | (145,893) |
Total Shareholders' Equity (Deficit) | (1,260) | 3,692 |
Total Liabilities and Shareholders' Equity (Deficit) | 5,680 | 7,609 |
Series B Preferred Stock [Member] | ||
Shareholders' Equity (Deficit): | ||
Preferred stock, authorized 4,000,000 shares | 2 | 2 |
Series E Preferred Stock [Member] | ||
Shareholders' Equity (Deficit): | ||
Preferred stock, authorized 4,000,000 shares | ||
Series F Preferred Stock [Member] | ||
Shareholders' Equity (Deficit): | ||
Preferred stock, authorized 4,000,000 shares | ||
Series G Preferred Stock [Member] | ||
Shareholders' Equity (Deficit): | ||
Preferred stock, authorized 4,000,000 shares |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Accounts receivable, net of allowance for doubtful accounts | $ 1,000 | $ 3,000 |
Shareholders' equity: | ||
Common stock, par value | $ .01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 91,853,499 | 94,077,599 |
Common stock, shares outstanding | 91,846,795 | 94,070,895 |
Treasury stock, shares | 6,704 | 6,704 |
Series B Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, shares authorized | 750,000 | 750,000 |
Preferred stock, par value per share | $ 0.1 | $ 0.1 |
Preferred stock, shares issued | 389,400 | 239,400 |
Preferred stock, shares outstanding | 239,400 | 239,400 |
Liquidation preference | $ 607,000 | $ 607,000 |
Series E Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, shares authorized | 12,000 | 12,000 |
Preferred stock, par value per share | $ 0.01 | $ 0.1 |
Preferred stock, shares issued | 12,000 | 12,000 |
Preferred stock, shares outstanding | 12,000 | 12,000 |
Liquidation preference | $ 12,000,000 | $ 12,240,000 |
Series F Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, shares authorized | 2,000 | 2,000 |
Preferred stock, par value per share | $ 0.1 | $ 0.1 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 2,000 | 2,000 |
Liquidation preference | $ 2,000,000 | |
Series G Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, shares authorized | 6,120 | 6,120 |
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 6,021 | 0 |
Preferred stock, shares outstanding | 6,021 | 0 |
Liquidation preference | $ 6,021,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Product | $ 1,249 | $ 2,192 | $ 1,634 |
Maintenance | 2,563 | 2,577 | 2,525 |
Total | 3,812 | 4,769 | 4,159 |
Cost of revenues: | |||
Product | 243 | 1,117 | 257 |
Maintenance | 827 | 827 | 735 |
Gross profit | 2,742 | 2,825 | 3,167 |
Operating expenses: | |||
General and administrative | 3,722 | 3,437 | 3,818 |
Sales and marketing | 3,021 | 2,791 | 2,471 |
Research and development | 5,332 | 4,643 | 4,495 |
Depreciation and amortization | 129 | 164 | 179 |
Total | 12,204 | 11,035 | 10,963 |
Loss from operations | (9,462) | (8,210) | (7,796) |
Interest expense | 245 | 447 | 416 |
Other income, net | (201) | (145) | (297) |
Loss before income taxes | (9,506) | (8,512) | (7,915) |
Income tax expense | 21 | 22 | 25 |
Net loss | (9,527) | (8,534) | (7,940) |
Preferred dividends | (1,347) | (1,065) | (51) |
Net loss available to common shareholders | $ (10,874) | $ (9,599) | $ (7,991) |
Basic and diluted loss per common share - see Note 2: | |||
Net loss | $ (0.1) | $ (0.09) | $ (0.09) |
Preferred dividends | (0.02) | (0.01) | |
Basic and diluted loss per share available to common shareholders | $ (0.12) | $ (0.1) | $ (0.09) |
Basic and diluted weighted-average shares outstanding | 94,426,783 | 93,786,079 | 91,795,971 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements Of Comprehensive Income Loss | |||
Net loss | $ (9,527) | $ (8,534) | $ (7,940) |
Other comprehensive income - loss: | |||
Reduction - increase in additional minimum pension liability | (347) | 332 | (744) |
Foreign currency translation adjustment | (1) | 67 | (20) |
Comprehensive loss | $ (9,875) | $ (8,135) | $ (8,704) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Series B Convertible Redeemable Preferred | Series E Convertible Redeemable Preferred | Series F Convertible Redeemable Preferred | Series G Convertible Redeemable Preferred | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Beginning, shares at Dec. 31, 2013 | 239,400 | 7,555,317 | (6,704) | |||||||
Beginning, amount at Dec. 31, 2013 | $ 2 | $ 874 | $ (64) | $ 131,652 | $ (830) | $ (128,303) | $ 3,331 | |||
Issuance of common stock pursuant to warrant exercises, Shares | 4,742,632 | |||||||||
Issuance of common stock pursuant to warrant exercises, Amount | $ 47 | 2,801 | 2,848 | |||||||
Settlement of derivative liabilities pursuant to warrants exercised for cash | 57 | 57 | ||||||||
Issuance of common stock pursuant to cashless warrant exercises, Shares | 868,565 | |||||||||
Issuance of common stock pursuant to cashless warrant exercises, Amount | $ 9 | (9) | ||||||||
Warrants issued to secure line of credit borrowing facility | 128 | 128 | ||||||||
Issuance of common stock pursuant to option exercises, Shares | 98,617 | |||||||||
Issuance of common stock pursuant to option exercises, Amount | $ 1 | 66 | 67 | |||||||
Recognition of beneficial conversion feature on convertible debt | 296 | 296 | ||||||||
Warrants issued to consultants as compensation | 53 | 53 | ||||||||
Conversion of related party notes payable to common stock, shares | 154,607 | |||||||||
Conversion of related party notes payable to common stock, amount | $ 2 | 83 | 85 | |||||||
Stock-based compensation expense, shares | 94,116 | |||||||||
Stock-based compensation expense, amount | $ 1 | 855 | 856 | |||||||
Addition/reduction in minimum pension liability | (744) | (744) | ||||||||
Foreign currency translation adjustment | (20) | (20) | ||||||||
Dividends on preferred stock | (51) | (51) | ||||||||
Net loss | (7,940) | (7,940) | ||||||||
Ending, shares at Dec. 31, 2014 | 239,400 | 93,513,854 | (6,704) | |||||||
Ending, amount at Dec. 31, 2014 | $ 2 | $ 934 | $ (64) | 135,982 | (1,594) | (136,294) | (1,034) | |||
Issuance of Series E Convertible Redeemable Preferred Stock for cash, net of issuance costs, Shares | 10,022 | |||||||||
Issuance of Series E Convertible Redeemable Preferred Stock for cash, net of issuance costs, Amount | 9,955 | 9,955 | ||||||||
Conversion of related party debt into Series E Convertible Redeemable Preferred Stock, Shares | 1,978 | |||||||||
Conversion of related party debt into Series E Convertible Redeemable Preferred Stock, Amount | 1,978 | 1,978 | ||||||||
Issuance of Common Stock in payment of Series E Preferred dividends, Shares | 478,664 | |||||||||
Issuance of Common Stock in payment of Series E Preferred dividends, Amount | $ 5 | 769 | (774) | |||||||
Issuance of common stock pursuant to cashless warrant exercises, Shares | 45,376 | |||||||||
Issuance of common stock pursuant to cashless warrant exercises, Amount | $ 1 | (1) | ||||||||
Issuance of common stock pursuant to option exercises, Shares | 39,705 | |||||||||
Issuance of common stock pursuant to option exercises, Amount | 33 | 33 | ||||||||
Recognition of beneficial conversion feature on convertible debt | 146 | 146 | ||||||||
Warrants modified in lieu of cash as compensation | 80 | 80 | ||||||||
Stock-based compensation expense, amount | 96 | 96 | ||||||||
Addition/reduction in minimum pension liability | 332 | 332 | ||||||||
Foreign currency translation adjustment | 67 | 67 | ||||||||
Dividends on preferred stock | (291) | (291) | ||||||||
Net loss | (8,534) | (8,534) | ||||||||
Ending, shares at Dec. 31, 2015 | 239,400 | 12,000 | 94,077,599 | (6,704) | ||||||
Ending, amount at Dec. 31, 2015 | $ 2 | $ 940 | $ (64) | 149,902 | (1,195) | (145,893) | 3,692 | |||
Issuance of common stock pursuant to cashless warrant exercises, Shares | 144,459 | |||||||||
Issuance of common stock pursuant to cashless warrant exercises, Amount | $ 1 | (1) | ||||||||
Issuance of common stock pursuant to option exercises, Shares | 12,626 | |||||||||
Issuance of common stock pursuant to option exercises, Amount | 3 | 3 | ||||||||
Recognition of beneficial conversion feature on convertible debt | 219 | 219 | ||||||||
Stock-based compensation expense, amount | 1,162 | 1,162 | ||||||||
Addition/reduction in minimum pension liability | (347) | (347) | ||||||||
Foreign currency translation adjustment | (1) | (1) | ||||||||
Dividends on preferred stock | $ 10 | 1,286 | (1,347) | (51) | ||||||
Issuance of Series F Convertible Redeemable Preferred Stock for cash, net of issuance costs, Shares | 2,000 | |||||||||
Issuance of Series F Convertible Redeemable Preferred Stock for cash, net of issuance costs, Amount | 1,979 | 1,979 | ||||||||
Issuance of Series G Convertible Redeemable Preferred Stock for cash, net of issuance costs, Shares | 1,625 | |||||||||
Issuance of Series G Convertible Redeemable Preferred Stock for cash, net of issuance costs, Amount | 1,614 | 1,614 | ||||||||
Issuance of Series G Convertible Redeemable Preferred Stock in exchange for Common Stock, Shares | 4,396 | (3,383,830) | ||||||||
Issuance of Series G Convertible Redeemable Preferred Stock in exchange for Common Stock, Amount | $ (34) | 31 | (3) | |||||||
Net loss | $ 0 | (9,527) | (9,527) | |||||||
Ending, shares at Dec. 31, 2016 | 239,400 | 12,000 | 2,000 | 6,021 | 91,853,499 | (6,704) | ||||
Ending, amount at Dec. 31, 2016 | $ 2 | $ 917 | $ (64) | $ 156,195 | $ (1,543) | $ (156,676) | $ (1,260) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net loss | $ (9,527) | $ (8,534) | $ (7,940) |
Adjustments to reconcile net loss to net cash used by operating activities | |||
Depreciation and amortization | 129 | 164 | 179 |
Amortization of debt discounts and debt issuance costs | 145 | 438 | 426 |
Stock-based compensation | 1,162 | 960 | 856 |
Write down of capitalized labor inventory to net realizable value | 281 | ||
Reduction in accounts payable and accrued expenses from expiration of statute of limitations | (200) | (224) | |
Warrants modified/issued in lieu of cash as compensation for services | 80 | 53 | |
Change in assets and liabilities | |||
Accounts receivable | 62 | (83) | 35 |
Inventory | 23 | 589 | (411) |
Other assets | (50) | 17 | 62 |
Accounts payable | 227 | (261) | 188 |
Accrued expenses | 94 | (76) | 130 |
Deferred revenue | (13) | (768) | 165 |
Pension obligation | 37 | 10 | 59 |
Total adjustments | 1,616 | 1,351 | 1,518 |
Net cash used by operating activities | (7,911) | (7,183) | (6,422) |
Cash flows from investing activities | |||
Purchase of property and equipment | (49) | (87) | (117) |
Net cash used by investing activities | (49) | (87) | (117) |
Cash flows from financing activities | |||
Proceeds from line of credit, net | 2,650 | 400 | 1,550 |
Proceeds from exercise of stock options | 3 | 33 | 67 |
Proceeds from issuance of preferred stock, net of issuance costs | 3,593 | 9,955 | |
Dividends paid to preferred stockholders | (51) | (51) | (51) |
Proceeds from exercised warrants to purchase stock | 2,848 | ||
Net cash provided by financing activities | 6,195 | 10,337 | 4,414 |
Effect of exchange rate changes on cash | (1) | 67 | (20) |
Net increase (decrease in cash) | (1,766) | 3,134 | (2,145) |
Cash at beginning of year | 3,352 | 218 | 2,363 |
Cash at end of year | 1,586 | 3,352 | 218 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 1 | 2 | |
Cash paid for income taxes | 1 | ||
Summary of non-cash investing and financing activities: | |||
Conversion of related party notes payable into common stock | 85 | ||
Conversion of related party notes payable into Series E Preferred | 1,978 | ||
Beneficial conversion feature of convertible debt | 219 | 146 | 296 |
Accrued unpaid dividends on Series E Preferred | 240 | ||
Stock dividend on Series E Preferred | 1,228 | 774 | |
Stock dividend on Series F Preferred | 63 | 240 | |
Stock dividend on Series G Preferred | 5 | ||
Issuance of Common Stock pursuant to cashless warrant exercises | 1 | 1 | 9 |
Exchange of Common Stock for Series G Preferred | 34 | ||
Reduction (increase in additional minimum pension liability) | (347) | 332 | (744) |
Reclassification of warrants previously classified as derivative liabilities to additional paid-in capital | 57 | ||
Issuance of common warrants securing line of credit borrowing facility | 128 | ||
Issuance of restricted stock pursuant to achievement of vesting conditions | $ 1 |
DESCRIPTION OF BUSINESS AND OPE
DESCRIPTION OF BUSINESS AND OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
DESCRIPTION OF BUSINESS AND OPERATIONS | Overview As used in this Annual Report, we, us, our, ImageWare, ImageWare Systems, Company or our Company refers to ImageWare Systems, Inc. and all of its subsidiaries. ImageWare Systems, Inc. is incorporated in the state of Delaware. The Company is a pioneer and leader in the emerging market for biometrically enabled software-based identity management solutions. Using those human characteristics that are unique to us all, the Company creates software that provides a highly reliable indication of a persons identity. The Companys flagship product is the patented IWS Biometric Engine®. The Companys products are used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials. The Companys products also provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software using biometrics to secure physical and logical access to facilities or computer networks or internet sites. Biometric technology is now an integral part of all markets the Company addresses and all of the products are integrated into the IWS Biometric Engine. Recent Developments Creation of Series G Convertible Redeemable Preferred Stock and Series G Financing On December 27, 2016, the Company filed the Certificate of Designations, Preferences, and Rights of the Series G Convertible Preferred Stock with the Delaware Division of Corporations, designating 6,120 shares of the Companys preferred stock, par value $0.01 per share, as Series G Convertible Redeemable Preferred Stock ( Series G Preferred Common Stock Series G Liquidation Preferenc On December 29, 2016, the Company accepted subscription forms from certain accredited investors (the Investors Series G Financing Creation of Series F Convertible Redeemable Preferred Stock and Series F Financing On September 2, 2016, the Company filed the Certificate of Designations, Preferences, and Rights of the Series F Convertible Preferred Stock with the Delaware Division of Corporations, designating 2,000 shares of its preferred stock as Series F Convertible Redeemable Preferred Stock ( Series F Preferred Series F Liquidation Preference On September 7, 2016, the Company and Cap 1 LLC (the Investor Series F Financing Amendments to Lines of Credit On December 27, 2016, in connection with the consummation of the Series G Financing, the Company and Neal Goldman, a member of the Companys Board of Directors (the Holder into the fifth amendment (the Line of Credit Amendment Goldman Line of Credit In addition, on January 23, 2017, the Company and Charles Crocker, also a member of the Board of Directors of the Company, amended the line of credit and promissory note, dated March 9, 2016 (the Crocker LOC Key Product Introduction On November 14, 2016, the Company introduced GoVerifyID® Enterprise Suite, a multi-modal, multi-factor biometric authentication solution for the enterprise market. An algorithm-agnostic solution, GoVerify ID Enterprise Suite is an end-to-end biometric platform that seamlessly integrates with an enterprises existing Microsoft infrastructure, offering businesses a turnkey biometric solution for quick deployment. The Company feels that this product has the potential to dramatically accelerate adoption of its biometric solution due to the worldwide prevalence of enterprise use of the Microsoft infrastructure. Working across the entire enterprise ecosystem, GoVerifyID Enterprise Suite offers a consistent user experience and centralized administration with the highest level of security, flexibility, and usability. Specific benefits include: ● Mobile-workforce friendlyWith GoVerifyID Enterprise Suite user authentication logins are possible for a tablet or laptop even when disconnected from the corporate network. Additionally, GoVerifyID Enterprise offers a consistent user authentication experience across all login environments. ● Hybrid cloudGoVerifyID Enterprise Suite is linked from the cloud to an enterprises Microsoft infrastructure and is backward compatible with Windows 7, 8 and 10. Additionally, because the solution is SaaS-based it can easily scale to process hundreds of millions of transactions and store just as many biometrics. ● Seamless integrationGoVerifyID Enterprise Suite is a snap-in to the Microsoft Management console and can be centrally managed at the server. Additionally, the solution allows for seamless movement as it integrates with Active Directory using an organizations existing Microsoft security infrastructure. Liquidity, Going Concern and Management’s Plan Historically, our principal sources of cash have included customer payments from the sale of our products, proceeds from the issuance of common and preferred stock and proceeds from the issuance of debt, including our Lines of Credit (defined above). Our principal uses of cash have included cash used in operations, product development, payments relating to purchases of property and equipment and repayments of borrowings. We expect that our principal uses of cash in the future will be for product development including customization of identity management products for enterprise and consumer applications, further development of intellectual property, development of Software-as-a-Service (“ SaaS At December 31, 2016, we had a working capital deficit of approximately $3.0 million, compared to a working capital surplus of approximately $1.4 million at December 31, 2015. Our principal sources of liquidity at December 31, 2016 consisted of available borrowings under our Lines of Credit of $3.35 million, and approximately $1.68 million of cash and cash equivalents, compared to approximately $3.35 million in cash and cash equivalents at December 31, 2015. In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which, in turn, is dependent upon the Companys ability to continue to raise capital and generate positive cash flows from operations. However, the Company operates in markets that are emerging and highly competitive. There is no assurance that the Company will be able to obtain additional capital, operate at a profit or generate positive cash flows in the future. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Companys wholly-owned subsidiaries are XImage Corporation, a California Corporation, ImageWare Systems ID Group, Inc. a Delaware corporation (formerly Imaging Technology Corporation), I.W. Systems Canada Company, a Nova Scotia unlimited liability company, ImageWare Digital Photography Systems, Inc., LLC a Nevada limited liability company (formerly Castleworks LLC), Digital Imaging International GmbH, a company formed under German laws and Image Ware Mexico S de RL de CV, a company formed under Mexican laws. Operating Cycle Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying consolidated balance sheets, although they will be liquidated in the normal course of contract completion which may take more than one operating cycle. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ( U.S. GAAP Accounts Receivable In the normal course of business, the Company extends credit without collateral requirements to its customers that satisfy pre-defined credit criteria. Accounts receivable are recorded net of an allowance for doubtful accounts. Accounts receivable are considered delinquent when the due date on the invoice has passed. The Company records its allowance for doubtful accounts based upon its assessment of various factors. The Company considers historical experience, the age of the accounts receivable balances, the credit quality of its customers, current economic conditions and other factors that may affect customers ability to pay to determine the level of allowance required. Accounts receivable are written off against the allowance for doubtful accounts when all collection efforts by the Company have been unsuccessful. Inventories Finished goods inventories are stated at the lower of cost, determined using the average cost method, or market. See Note 6. Property, Equipment and Leasehold Improvements Property and equipment, consisting of furniture and equipment, are stated at cost and are being depreciated on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged to expense as incurred. Major renewals or improvements are capitalized. When assets are sold or abandoned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. Expenditures for leasehold improvements are capitalized. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Fair Value of Financial Instruments For certain of the Companys financial instruments, including accounts receivable, accounts payable, accrued expenses, deferred revenues and lines of credit payable to related parties, the carrying amounts approximate fair value due to their relatively short maturities. Revenue Recognition The Company recognizes revenue from the following major revenue sources: ● Long-term fixed-price contracts involving significant customization; ● Fixed-price contracts involving minimal customization; ● Software licensing; ● Sales of computer hardware and identification media; and ● Post-contract customer support ( PCS The Companys revenue recognition policies are consistent with U.S. GAAP including the Financial Accounting Standards Board ( FASB ASC Software Revenue Recognition Revenue Recognition, Construction-Type and Production-Type Contracts Securities and Exchange Commission Staff Accounting Bulletin 104 Revenue Recognition, Multiple Element Arrangements The Company recognizes revenue and profit as work progresses on long-term, fixed-price contracts involving significant amount of hardware and software customization using the percentage of completion method based on costs incurred to date compared to total estimated costs at completion. The primary components of costs incurred are third party software and direct labor cost including fringe benefits. Revenues recognized in excess of amounts billed are classified as current assets under Costs and estimated earnings in excess of billings on uncompleted contracts. Amounts billed to customers in excess of revenues recognized are classified as current liabilities under Billings in excess of costs and estimated earnings on uncompleted contracts. Revenue from contracts for which the Company cannot reliably estimate total costs or there are not significant amounts of customization are recognized upon completion. For contracts that require significant amounts of customization that the Company accounts for under the completed contract method of revenue recognition, the Company defers revenue recognition until customer acceptance is received. For contracts containing either extended or dependent payment terms, revenue recognition is deferred until such time as payment has been received by the Company. The Company also generates non-recurring revenue from the licensing of its software. Software license revenue is recognized upon the execution of a license agreement, upon deliverance, when fees are fixed and determinable, when collectability is probable, when all other significant obligations have been fulfilled a nd the Company has obtained vendor specific objective evidence ( VSOE ) of the fair value of the undelivered element. VSOE of fair value for customer support services is determined by reference to the price the customer pays for such element when sold separately; that is, the renewal rate offered to customers. In those instances when objective and reliable evidence of fair value exists for the undelivered items but not for the delivered items, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of arrangement consideration allocated to the delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items Goodwill The Company accounts for its intangible assets under the provisions of ASC 350, Intangibles - Goodwill and Other Property, Plant and Equipment The Company did not record any goodwill impairment charges for the years ended December 31, 2016, 2015 or 2014. Intangible and Long Lived Assets Intangible assets are carried at their cost less any accumulated amortization. Any costs incurred to renew or extend the life of an intangible or long lived asset are reviewed for capitalization. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Companys management currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Companys products under development will continue. Either of these could result in future impairment of long-lived assets. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high quality financial institutions and at times during the years ended December 31, 2016 and 2015 exceeded the FDIC insurance limits of $250,000. Sales are typically made on credit and the Company generally does not require collateral. The Company performs ongoing credit evaluations of its customers financial condition and maintains an allowance for doubtful accounts. The Company considers historical experience, the age of the accounts receivable balances, the credit quality of its customers, current economic conditions and other factors that may affect customers ability to pay to determine the level of allowance required. Accounts receivable are presented net of an allowance for doubtful accounts of approximately $1,000 and $3,000 at December 31, 2016 and 2015, respectively. For the year ended December 31, 2016 two customers accounted for approximately 30% or $1,162,000 of total revenues and had trade receivables of $78,000 as of the end of the year. For the year ended December 31, 2015 two customers accounted for approximately 37% or $1,753,000 of total revenues and had trade receivables of $78,000 as of the end of the year. For the year ended December 31, 2014, one customer accounted for approximately 17% or $725,000 of total revenues and $0 trade receivables as of the end of the year. Stock-Based Compensation At December 31, 2016, the Company had one stock-based compensation plan for employees and nonemployee directors, which authorize the granting of various equity-based incentives including stock options and restricted stock. The Company estimates the fair value of its stock options using a Black-Scholes option-pricing model, consistent with the provisions of ASC 718, Compensation Stock Compensation ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option-pricing model, which incorporates various assumptions including volatility, expected life, and interest rates. The Company is required to make various assumptions in the application of the Black-Scholes option-pricing model. The Company has determined that the best measure of expected volatility is based on the historical weekly volatility of the Companys Common Stock. Historical volatility factors utilized in the Companys Black-Scholes computations for options granted during the years ended December 31, 2016, 2015 and 2014 ranged from 65% to 116%. The Company has elected to estimate the expected life of an award based upon the SEC approved simplified method noted under the provisions of Staff Accounting Bulletin No. 110. The expected term used by the Company during the years ended December 31, 2016, 2015 and 2014 was 5.17 years. The difference between the actual historical expected life and the simplified method was immaterial. The interest rate used is the risk-free interest rate and is based upon U.S. Treasury rates appropriate for the expected term. Interest rates used in the Companys Black-Scholes calculations for the years ended December 31, 2016, 2015 and 2014 averaged 2.6%. Dividend yield is zero as the Company does not expect to declare any dividends on the Companys common shares in the foreseeable future. In addition to the key assumptions used in the Black-Scholes model, the estimated forfeiture rate at the time of valuation is a critical assumption. The Company has estimated an annualized forfeiture rate of approximately 0% for corporate officers, 4.1% for members of the Board of Directors and 6.0% for all other employees. The Company reviews the expected forfeiture rate annually to determine if that percent is still reasonable based on historical experience. Restricted stock units are recorded at the grant date fair value with corresponding compensation expense recorded ratably over the requisite service period. Income Taxes Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is computed for the expected future impact of differences between the financial reporting and tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Foreign Currency Translation The financial position and results of operations of the Companys foreign subsidiaries are measured using the foreign subsidiarys local currency as the functional currency. Revenues and expenses of such subsidiaries have been translated into U.S. dollars at weighted-average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of shareholders equity, unless there is a sale or complete liquidation of the underlying foreign investments. The Company translates foreign currencies of its German, Canadian and Mexican subsidiaries. The cumulative translation adjustment, which is recorded in accumulated other comprehensive loss, decreased approximately $1,000 for the year ended December 31, 2016, increased approximately $67,000 for the year ended December 31, 2015 and decreased approximately $20,000 for the year ended December 31, 2014. Comprehensive Loss Comprehensive loss consists of net gains and losses affecting shareholders equity that, under generally accepted accounting principles, are excluded from net loss. For the Company, the only items are the cumulative translation adjustment and the additional minimum liability related to the Companys defined benefit pension plan, recognized pursuant to ASC 715-30, " Compensation - Retirement Benefits - Defined Benefit Plans Pension Advertising Costs The Company expenses advertising costs as incurred. The Company incurred approximately $24,000 in advertising expenses during the year ended December 31, 2016, $12,000 in advertising expenses during the year ended December 31, 2015 and $9,000 during the year ended December 31, 2014. Loss Per Share Basic loss per common share is calculated by dividing net loss available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing net loss available to common shareholders for the period by the weighted-average number of common shares outstanding during the period, adjusted to include, if dilutive, potential dilutive shares consisting of convertible preferred stock, convertible notes payable, stock options and warrants, calculated using the treasury stock and if-converted methods. For diluted loss per share calculation purposes, the net loss available to commons shareholders is adjusted to add back any preferred stock dividends and any interest on convertible debt reflected in the consolidated statement of operations for the respective periods. (Amounts in thousands, except share and per share amounts) Year Ended December 31, Numerator for basic and diluted loss per share: 2016 2015 2014 Net loss $ (9,527 ) $ (8,534 ) $ (7,940 ) Preferred dividends (1,347 ) (1,065 ) (51 ) Net loss available to common shareholders $ (10,874 ) $ (9,599 ) $ (7,991 ) Denominator for basic loss per share weighted-average shares outstanding 94,426,783 93,786,079 91,795,971 Effect of dilutive securities Denominator for diluted loss per share weighted-average shares outstanding 94,426,783 93,786,079 91,795,971 Basic and diluted loss per share: Net loss $ (0.10 ) $ (0.09 ) $ (0.09 ) Preferred dividends (0.02 ) (0.01 ) ( ) Net loss available to common shareholders $ (0.12 ) $ (0.10 ) $ (0.09 ) The following potential dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as their effect would have been antidilutive: Potential Dilutive Securities: Common Share Equivalents at December 31, 2016 Common Share Equivalents at December 31, 2015 Common Share Equivalents at December 31, 2014 Convertible lines of credit 2,201,903 1,649,548 Convertible redeemable preferred stock Series B 46,029 46,029 46,029 Convertible redeemable preferred stock Series E 6,315,789 6,442,105 Convertible redeemable preferred stock Series F 1,333,333 Convertible redeemable preferred stock Series G 4,014,000 Stock options 6,506,843 5,376,969 4,057,296 Warrants 175,000 450,000 977,778 Total Potential Dilutive Securities 20,592,897 12,315,103 6,730,651 Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB FASB ASU No. 2014-09. ASU Revenue from Contracts with Customers FASB ASU No. 2014-15 Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern FASB ASU No. 2015-03 Simplifying the Presentation of Debt Issuance Costs. FASB ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330): Simplifying the Measurement of Inventory. FASB ASU No. 2016-01 Financial InstrumentsOverall - Recognition and Measurement of Financial Assets and Financial Liabilities. FASB ASU No. 2016-02 Leases FASB ASU No. 2016-06 Derivatives and Hedging (Topic 815) Contingent Put and Call Options in Debt Instruments FASB ASU No. 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) FASB ASU No. 2016-09 Compensation Stock Compensation (Topic 718) FASB ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing FASB ASU No. 2016-13 inancial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. FASB ASU No. 2016-15. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. The retrospective transition method, requiring adjustment to all comparative periods presented, is required unless it is impracticable for some of the amendments, in which case those amendments would be prospectively as of the earliest date practicable. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. FASB ASU No. 2017-04. Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments of this ASU eliminate step 2 from the goodwill impairment test. The annual, or interim test is performed by comparing the fair value of a reporting unit with its carrying amount. The amendments of this ASU also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and if it fails that qualitative test, to perform step 2 of the goodwill impairment test. ASU No. 2017-04 is effective for fiscal years beginning after December 15, 2019. |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE ACCOUNTING | The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The following table sets forth the Companys financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by ASC 820, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value at December 31, 2016 ($ in thousands) Total Level 1 Level 2 Level 3 Assets: Pension assets $ 1,645 $ 1,645 $ $ Totals $ 1,645 $ 1,645 $ $ Fair Value at December 31, 2015 ($ in thousands) Total Level 1 Level 2 Level 3 Assets: Pension assets $ 1,557 $ 1,557 $ $ Totals $ 1,557 $ 1,557 $ $ The Companys pension assets are classified within Level 1 of the fair value hierarchy because they are valued using market prices. The pension assets are primarily comprised of the cash surrender value of insurance contracts. All plan assets are managed in a policyholder pool in Germany by outside investment managers. The investment objectives for the plan are the preservation of capital, current income and long-term growth of capital. The Company monitors the activity within each level and any changes with the underlying valuation techniques or inputs utilized to recognize if any transfers between levels are necessary. That determination is made, in part, by working with outside valuation experts for Level 3 instruments and monitoring market related data and other valuation inputs for Level 1 and Level 2 instruments. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
INTANGIBLE ASSETS AND GOODWILL | The Company has intangible assets in the form of trademarks, trade names and patents. The carrying amount of the Companys acquired trademarks and trade names was $0 as of December 31, 2016 and 2015, respectively, which include accumulated amortization of $347,000 as of December 31, 2016 and 2015. Amortization expense related to trademarks and tradenames was $0, $15,000 and $15,000 for the years ended December 31, 2016, 2015 and 2014, respectively. All intangible assets are amortized over their estimated useful lives with no estimated residual values. Any costs incurred by the Company to renew or extend the life of intangible assets will be evaluated under ASC No. 350, Intangibles Goodwill and Other The carrying amounts of the Companys patent intangible assets were $105,000 and $117,000 as of December 31, 2016 and 2015, respectively, which includes accumulated amortization of $554,000 and $542,000 as of December 31, 2016 and 2015, respectively. Amortization expense for patent intangible assets was $12,000 for the years ended December 31, 2016, 2015 and 2014. Patent intangible assets are being amortized on a straight-line basis over their remaining life of approximately 9.5 years. There was no impairment of the Company's intangible assets during the years ended December 31, 2016, 2015 and 2014. The Company annually, or more frequently if events or circumstances indicate a need, tests the carrying amount of goodwill for impairment. The Company performs its annual impairment test in the fourth quarter of each year. A two-step impairment test is used to first identify potential goodwill impairment and then measure the amount of goodwill impairment loss, if any. The first step was conducted by determining and comparing the fair value, employing the market approach, of the Companys reporting unit to the carrying value of the reporting unit. The Company continues to have only one reporting unit, Identity Management. Based on the results of this impairment test, the Company determined that its goodwill was not impaired during the years ended December 31, 2016, 2015 and 2014. The estimated acquired intangible amortization expense for the next five fiscal years is as follows: Fiscal Year Ended December 31, Estimated Amortization Expense ($ in thousands) 2017 $ 12 2018 12 2019 12 2020 12 2021 12 Thereafter 45 Totals $ 105 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
RELATED PARTIES | Related Party Convertible Notes On November 14, 2008, the Company entered into a series of convertible promissory notes (the Related-Party Convertible Notes The Company did not repay the Related-Party Convertible Notes on the due date. In August 2009, the Company received from the Related-Party Convertible Note holders a waiver of default and extension to January 31, 2010 of the maturity date of the Related-Party Convertible Notes. As consideration for the waiver and note extension, the Company issued to the Related-Party Convertible Note holders an aggregate of 150,000 warrants to purchase shares of the Companys Common Stock. The warrants have an exercise price of $0.50 per share and expire on August 25, 2014, of which no warrants to purchase shares of Common Stock were outstanding and exercisable as of December 31, 2016. On January 21, 2013, the holders of the Related-Party Convertible Notes agreed to extend the due date on their respective convertible notes to be due and payable not later than June 30, 2015, however, the Related-Party Convertible Notes will be callable at any time, at the option of the note holder, prior to June 30, 2015. During the year ended December 31, 2014, holders of Related-Party Convertible Notes in the principal amount of $85,034 elected to convert their respective Related-Party Convertible Notes into 154,607 shares of Common Stock. Lines of Credit In March 2013, the Company and Holder entered into the Goldman Line of Credit with available borrowings of up to $2.5 million. In March 2014, the Goldman Line of Credits borrowing was increased to an aggregate total of $3.5 million (the Amendment As consideration for the initial Goldman Line of Credit, the Company issued a warrant to the Holder, exercisable for 1,052,632 shares of the Companys Common Stock (the " Line of Credit Warrant Amendment Warrant The Company estimated the fair value of the Line of Credit Warrant using the Black-Scholes option pricing model using the following assumptions: term of two years, a risk-free interest rate of 2.58%, a dividend yield of 0%, and volatility of 79%. The Company recorded the fair value of the Line of Credit Warrant as a deferred financing fee of approximately $580,000 to be amortized over the life of the Goldman Line of Credit. The Company estimated the fair value of the Amendment Warrant using the Black-Scholes option pricing model using the following assumptions: term on one year, a risk-free interest rate of 2.58%, a dividend yield of 0% and volatility of 74%. The Company recorded the fair value of the Amendment Warrant as an additional deferred financing fee of approximately $127,000 to be amortized over the life of the Goldman Line of Credit. During the years ended December 31, 2016, 2015 and 2014, the Company recorded an aggregate of approximately $48,000, $53,000 and $369,000, respectively in deferred financing fee amortization expense which is recorded as a component of interest expense in the Companys consolidated statements of operations. In April 2014, the Company and the Holder entered into a further amendment to the Goldman Line of Credit to decrease the available borrowings to $3.0 million (the Second Amendment In December 2014, the Company and the Holder entered into a further amendment to the Goldman Line of Credit to increase the available borrowing to $5.0 million and extend the maturity date of the Goldman Line of Credit to March 27, 2017 (the Third Amendment Outstanding Balance In February 2015, as a result of the Series E Financing, the Company issued 1,978 shares of Series E Preferred to the Holder to satisfy $1,950,000 in principal borrowings under the Goldman Line of Credit plus approximately $28,000 in accrued interest. As a result of the Series E Financing, the Companys borrowing capacity under the Goldman Line of Credit was reduced to $3,050,000 with the maturity date unchanged and the $500K Line of Credit was terminated in accordance with its terms. In March 2016, the Company and the Holder entered into a fourth amendment to the Goldman Line of Credit (the Fourth Amendment Contemporaneous with the execution of the Fourth Amendment, the Company entered into a new $500K Line of Credit with available borrowings of up to $500,000 with the Second Holder, which replaced the original $500K Line of Credit that terminated as a result of the consummation of the Series E Financing. Similar to the Fourth Amendment, the new $500K Line of Credit with the Second Holder matures on June 30, 2017, and provides for the conversion of the outstanding balance due under the terms of the $500K Line of Credit into that number of fully paid and non-assessable shares of the Companys Common Stock as is equal to the quotient obtained by dividing the outstanding balance by $1.25. On December 27, 2016, in connection with the consummation of the Series G Financing, the Company and Holder agreed to enter into the Fifth Amendment (the Line of Credit Amendment In addition, on January 23, 2017, the Company and the Second Holder amended the $500K Line of Credit to extend the maturity date thereof to December 31, 2017. No other amendments were made to the $500K Line of Credit. The Company evaluated the Lines of Credit and determined that the instruments contain a contingent beneficial conversion feature, i.e. an embedded conversion right that enables the holder to obtain the underlying Common Stock at a price below market value. The beneficial conversion feature is contingent as the terms of the conversion do not permit the Company to compute the number of shares that the holder would receive if the contingent event occurs (i.e. future borrowings under the Line of Credit). The Company has considered the accounting for this contingent beneficial conversion feature using the guidance in ASC 470, Debt. The guidance in ASC 470 states that a contingent beneficial conversion feature in an instrument shall not be recognized in earnings until the contingency is resolved. The beneficial conversion features of future borrowings under the Line of Credit will be measured using the intrinsic value calculated at the date the contingency is resolved using the conversion price and trading value of the Companys Common Stock at the date the Lines of Credit were issued (commitment date). Pursuant to borrowings made during the 2015 year, the Company recognized approximately $146,000 in beneficial conversion feature as debt discount. As a result of the retirement of all amounts outstanding under the Lines of Credit in 2015, the Company recognized all remaining unamortized debt discount of approximately $385,000 as a component of interest expense during the three months ended March 31, 2015. As there was $2,650,000 in borrowings under the Lines of Credit during the year ended December 31, 2016, the Company recorded approximately $146,000 in debt discount attributable to the beneficial conversion feature during the year ended December 31, 2016. During the year ended December 31, 2016, the Company accreted approximately $97,000, respectively, of debt discount as a component of interest expense. At December 31, 2016, unamortized note discount was approximately $122,000. The following table sets forth the Companys activity under its Lines of Credit for the periods indicated: Balance outstanding under Lines of Credit as of December 31, 2014 $ 1,550 Borrowing under Lines of Credit 750 Repayments (350 ) Exchange of Indebtedness for Series E Preferred Stock (1,950 ) Balance outstanding under Lines of Credit as of December 31, 2015 $ Borrowings under Lines of Credit 2,650 Repayments Balance outstanding under Lines of Credit as of December 31, 2016 $ 2,650 |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
INVENTORY | Inventories of $23,000 as of December 31, 2016 were comprised of work in process of $19,000 representing direct labor costs on in-process projects and finished goods of $4,000 net of reserves for obsolete and slow-moving items of $3,000. Inventories of $46,000 as of December 31, 2015 were comprised of work in process of $42,000, representing direct labor costs on in-process projects, approximately $21,000 of equipment related to in-process projects and finished goods of $4,000 net of reserves for obsolete and slow-moving items of $3,000. The balance of direct labor costs on in-process projects of $42,000 at December 31, 2015, reflects a write down of approximately $261,000 to net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration and other factors in evaluating net realizable value and required reserve levels. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
PROPERTY AND EQUIPMENT | Property and equipment at December 31, 2016 and 2015, consists of: ($ in thousands) 2016 2015 Equipment $ 935 $ 887 Leasehold improvements 11 11 Furniture 101 101 1,047 999 Less accumulated depreciation (954 ) (837 ) $ 93 $ 162 Total depreciation expense for the years ended December 31, 2016, 2015 and 2014 was approximately $117,000, $137,000 and $152,000, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
ACCRUED EXPENSES | Principal components of accrued expenses consist of: ($ in thousands) December 31, 2016 December 31, 2015 Compensated absences $ 313 $ 260 Wages, payroll taxes and sales commissions 28 11 Customer deposits 198 69 Liquidated damages 200 Royalties 147 147 Pension and employee benefit plans 7 6 Income and sales taxes 161 131 Dividends 27 261 Interest payable to related parties 102 Other 64 64 $ 1,047 $ 1,149 |
LINES OF CREDIT
LINES OF CREDIT | 12 Months Ended |
Dec. 31, 2016 | |
Line of Credit Facility [Abstract] | |
LINES OF CREDIT | Outstanding lines of credit consist of the following: ($ in thousands) December 31, 2016 December 31, 2015 Lines of Credit 8% convertible lines of credit. Face value of advances under lines of credit $2,650 at December 31, 2016 and $0 at December 31, 2015, respectively. Discount on advances under lines of credit is $122 at December 31, 2016 and $0 at December 31, 2015, respectively. Maturity date is December 31, 2017. $ 2,528 $ Total lines of credit to related parties 2,528 Less current portion (2,528 ) Long-term lines of credit to related parties $ $ Lines of Credit For a more detailed discussion of the Companys Lines of Credit, see Note 5 Related Parties. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
INCOME TAXES | 10. INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, ASC 740 requires a company to first determine whether it is more-likely-than-not (defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more-likely-than-not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. The amount accrued for uncertain tax positions was zero at December 31, 2016, 2015 and 2015, respectively. The Company’s uncertain position relative to unrecognized tax benefits and any potential increase in these liabilities relates primarily to the allocations of revenue and costs among the Company’s global operations and the impact of tax rulings made during the period affecting its tax positions. The Company’s existing tax position could result in liabilities for unrecognized tax benefits. The Company recognizes interest and/or penalties related to uncertain tax positions in income tax expense. The amount of interest and penalties accrued as of December 31, 2016 and 2015 was approximately $12,000 and $11,000, respectively. Significant judgment is required in evaluating the Company’s uncertain tax positions and determining the Company’s provision for income taxes. No assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the Company’s historical income tax provisions and accruals. The Company adjusts these items in light of changing facts and circumstances. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The significant components of the income tax provision are as follows: ($ in thousands) Year Ended December 31, Current 2016 2015 2014 Federal $ — $ — $ — State — — — Foreign 21 22 25 Deferred Federal — — — State — — — Foreign — — — $ 21 $ 22 $ 25 The principal components of the Company’s deferred tax assets at December 31, 2016, 2015 and 2014 are as follows: ($ in thousands) 2016 2015 2014 Net operating loss carryforwards $ 17,829 $ 15,948 $ 14,200 Intangible and fixed assets 102 220 427 Stock based compensation 2,324 1,861 1,565 Reserves and accrued expenses 8 8 6 Other — — (85 ) 20,263 18,037 16,113 Less valuation allowance (20,263 ) (18,037 ) (16,113 ) Net deferred tax assets $ — $ — $ — A reconciliation of the provision for income taxes to the amount computed by applying the statutory income tax rates to loss before income taxes is as follows: 2016 2015 2014 Amounts computed at statutory rates $ (3,239 ) $ (2,902 ) $ (2,699 ) State income tax, net of federal benefit (462 ) (262 ) (212 ) Expiration of net operating loss carryforwards 1,082 695 708 Non-deductible interest 49 149 145 Foreign taxes 362 413 386 Other 3 5 4 Net change in valuation allowance on deferred tax assets 2,226 1,924 1,693 $ 21 $ 22 $ 25 The Company has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. At December 31, 2016, 2015 and 2014, the Company had federal and state net operating loss carryforwards, a portion of which may be available to offset future taxable income for tax purposes. The federal net operating loss carryforwards expire at various dates from 2021 through 2036. The state net operating loss carryforwards expire at various dates from 2029 through 2036. The Internal Revenue Code (the "Code" Tax returns for the years 2012 through 2016 are subject to examination by taxing authorities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES | Employment Agreements The Company has employment agreements with its Chief Executive Officer, its Senior Vice President of Administration and Chief Financial Officer, and its Chief Technical Officer. The Company may terminate the agreements with or without cause. Subject to the conditions and other limitations set forth in each respective employment agreement, each executive will be entitled to the following severance benefits if the Company terminates the executives employment without cause or in the event of an involuntary termination (as defined in the employment agreements) by the Company or by the executive: Under the terms of the agreement, the Chief Executive Officer will be entitled to the following severance benefits if we terminate his employment without cause or in the event of an involuntary termination: (i) a lump sum cash payment equal to twenty-four months base salary; (ii) continuation of fringe benefits and medical insurance for a period of three years; and (iii) immediate vesting of 50% of outstanding stock options and restricted stock awards. In the event that the Chief Executive Officers employment is terminated within six months prior to or thirteen months following a change of control (as defined in the employment agreements), the Chief Executive Officer is entitled to the severance benefits described above, except that 100% of the Chief Executive Officers outstanding stock options and restricted stock awards will immediately vest. Under the terms of the employment agreements with our Senior Vice President of Administration and Chief Financial Officer, this executive will be entitled to the following severance benefits if we terminate their employment without cause or in the event of an involuntary termination: (i) a lump sum cash payment equal to six month’s of base salary; (ii) continuation of their fringe benefits and medical insurance for a period of six months; (iii) immediate vesting of 50% of their outstanding stock options and restricted stock awards. In the event that their employment is terminated within six months prior to or thirteen months following a change of control (as defined in the employment agreements), they are entitled to the severance benefits described above, except that 100% of their outstanding stock options and restricted stock awards will immediately vest. Under the terms of the employment agreement with our Chief Technical Officer, this executive will be entitled to the following severance benefits if we terminate his employment without cause or in the event of an involuntary termination: (i) a lump sum cash payment equal to six months of base salary; (ii) continuation of their fringe benefits and medical insurance for a period of six months. In the event that his employment is terminated within six months prior to or thirteen months following a change of control (as defined in the employment agreements), he is entitled to the severance benefits described above, except that 100% of his outstanding stock options and restricted stock awards will immediately vest. On December 28, 2016, the Company entered into amendments to the employment agreements for the Companys Chief Executive Officer, Chief Financial Officer, and Chief Technical Officer. Effective October 20, 2016, the term of each executive officer's employment agreement was extended until December 31, 2017. Litigation There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of our subsidiaries, threatened against or affecting the Company, our Common Stock, any of our subsidiaries or of the Companys or our subsidiaries officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. Leases The Companys corporate headquarters are located in San Diego, California where we occupy 9,927 square feet of office space. This facility is leased through October 2017 at a cost of approximately $18,000 per month. In addition to our corporate headquarters, we also occupied the following spaces at December 31, 2016: ● 1,508 square feet in Ottawa, Province of Ontario, Canada, at a cost of approximately $3,000 per month until the expiration of the lease on March 31, 2021. This lease was renewed in April 2016 for a five-year period ending on March 31, 2021. Renewal terms were substantially unchanged from the existing lease; ● 8,045 square feet in Portland, Oregon, at a cost of approximately $16,000 per month until the expiration of the lease on October 31, 2018; and ● 304 square feet of office space in Mexico City, Mexico, at a cost of approximately $3,000 per month until November 30, 2017. At December 31, 2016, future minimum lease payments are as follows: ($ in thousands) 2017 $ 450 2018 201 2019 34 2020 34 2021 9 Total $ 728 Rental expense incurred under operating leases for the years ended December 31, 2016, 2015 and 2014 was approximately $492,000, $477,000 and $430,000, respectively. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
EQUITY | The Companys Articles of Incorporation, as amended, authorize the issuance of two classes of stock to be designated Common Stock and Preferred Stock. The Preferred Stock may be divided into such number of series and with the rights, preferences, privileges and restrictions as the Board of Directors may determine. Series B Convertible Redeemable Preferred Stock The Company had 239,400 shares of Series B Convertible Redeemable Preferred Stock ( Series B Preferred Series E Convertible Redeemable Preferred Stock On January 29, 2015, the Company filed the Certificate of Designations of the Series E Preferred Stock with the Delaware Secretary of State, designating 12,000 shares of the Companys preferred stock, par value $0.01 per share, as Series E Preferred. Shares of Series E Preferred accrue dividends at a rate of 8% per annum if the Company chooses to pay accrued dividends in cash, and 10% per annum if the Company chooses to pay accrued dividends in shares of Common Stock. Each share of Series E Preferred has a liquidation preference of $1,000 per share and is convertible, at the option of the holder, into that number of shares of the Companys Common Stock equal to the Liquidation Preference, divided by $1.90. The Series E Preferred shall be subordinate to and rank junior to the Company's Series B Preferred and all indebtedness of the Company. Each holder of the Series E Preferred is entitled to vote on all matters, together with the holders of Common Stock, on an as converted basis. Any time after the six-month period following the issuance date, the Company may redeem all or a portion of the Series E Preferred outstanding upon thirty (30) calendar day’s prior written notice (the Company's Redemption Notice In February 2015, the Company consummated a registered direct offering conducted without an underwriter or placement agent. In connection therewith, the Company issued 12,000 shares of Series E Preferred to certain investors at a price of $1,000 per share, with each share convertible into 526.32 shares of the Companys Common Stock at $1.90 per share. On December 29, 2016, the Company filed Amendment No. 1 to the Certificate of Designations, Preferences and Rights of the Series E Convertible Preferred Stock (the “ Series E Amendment Director Appointment Provision T he Company had 12,000 shares of Series E Preferred outstanding as of December 31, 2016 and 2015, respectively. At December 31, 2016 and 2015, the Company had cumulative undeclared dividends of approximately $0 and $240,000, respectively. There were no conversions of Series E Preferred into Common Stock during the twelve months ended December 31, 2016. For the twelve-month period ended December 31, 2016, the Company issued the holders of Series E Preferred 950,362 shares of Common Stock as payment of dividends due, on a quarterly basis, for the twelve months ended December 31, 2016. For the twelve months ended December 31, 2015, the Company paid the holders of our Series E Preferred cash dividends of $240,000 and issued the holders of our Series E Preferred 478,664 shares of common stock as payment of quarterly dividends for the period of January 1, 2015 through September 30, 2016. Series F Convertible Redeemable Preferred Stock In September 2016, we filed the Certificate of Designations, Preferences, and Rights of the Series F Convertible Preferred Stock (the Certificate of Designations Series F Preferred Each share of Series F Preferred has a liquidation preference of $1,000 per share ( Liquidation Preferenc Series F Conversion Shares Any time after the six-month period following the issuance date, in the event the arithmetic average of the closing sales price of the Companys Common Stock is or was at least $2.50 for twenty (20) consecutive trading days, the Company may redeem all or a portion of the Series F Preferred outstanding upon thirty (30) calendar days prior written notice in cash at a price per share of Series F Preferred equal to 110% of the Series F Liquidation Preference, plus all accrued and unpaid dividends. Also, simultaneous with the occurrence of a Change of Control transaction (as defined in the Certificate of Designations), the Company, at its option, shall have the right to redeem all or a portion of the outstanding Series F Preferred in cash at a price per share of Series F Preferred equal to 110% of the Liquidation Preference Amount plus all accrued and unpaid dividends. In September 2016, the Company offered and sold 2,000 shares of Series F Preferred for $1,000 per share (the Series F Financing The Company had 2,000 shares of Series F Preferred outstanding as of December 31, 2016 and no shares outstanding at December 31, 2015. At December 31, 2016, the Company had cumulative undeclared dividends of $0. There were no conversions of Series F Preferred into Common Stock during the year ended December 31, 2016. The Company issued the holders of Series F Preferred 48,513 shares of Common Stock as payment of dividends due, on a quarterly basis, for the twelve months ended December 31, 2016. Series G Convertible Redeemable Preferred Stock In December, 2016, the Company filed the Certificate of Designations, Preferences, and Rights of the Series G Convertible Preferred Stock with the Delaware Division of Corporations, designating 6,120 shares of the Companys preferred stock, par value $0.01 per share, as Series G Convertible Preferred Stock ( Series G Preferred Series G Liquidation Preferenc On December 29, 2016, the Company accepted subscription forms from certain accredited investors to purchase a total of 1,625 shares of Series G Preferred for $1,000 per share (the Series G Financing The Company had 6,021 shares of Series G Preferred outstanding as of December 31, 2016 and no shares outstanding at December 31, 2015. At December 31, 2016, the Company had cumulative undeclared dividends of $0. There were no conversions of Series G Preferred into Common Stock during the year ended December 31, 2016. The Company issued the holders of Series G Preferred 3,770 shares of Common Stock as payment of dividends due, on a quarterly basis, for the twelve months ended December 31, 2016. Common Stock The following table summarizes outstanding Common Stock activity for the following periods: Common Stock Shares outstanding at December 31, 2013 87,548,613 Shares issued pursuant to warrants exercised for cash 4,742,632 Shares issued pursuant to cashless warrants exercised 868,565 Conversion of related-party notes payable into Common Stock 154,607 Shares issued as compensation in lieu of cash 94,116 Shares issued pursuant to option exercises 98,617 Shares outstanding at December 31, 2014 93,507,150 Shares issued pursuant to payment of stock dividend on Series E Preferred 478,664 Shares issued pursuant to cashless warrants exercised 45,376 Shares issued pursuant to option exercises 39,705 Shares outstanding at December 31, 2015 94,070,895 Shares issued pursuant to payment of stock dividend on Series E Preferred 950,362 Shares issued pursuant to payment of stock dividend on Series F Preferred 48,513 Shares issued pursuant to payment of stock dividend on Series G Preferred 3,770 Shares issued pursuant to cashless warrants exercised 144,459 Shares issued pursuant to option exercises 12,626 Exchange of common shares for Series G Preferred (3,383,830 ) Shares outstanding at December 31, 2016 91,846,795 Warrants As of December 31, 2016, warrants to purchase 175,000 The following table summarizes warrant activity for the following periods: Warrants Weighted- Average Exercise Price Balance at December 31, 2013 6,598,416 $ 0.63 Granted 302,778 $ 2.02 Expired / Canceled (55,000 ) $ 1.10 Exercised (5,868,416 ) $ 0.58 Balance at December 31, 2014 977,778 $ 1.22 Granted $ 0.00 Expired / Canceled (419,444 ) $ 1.86 Exercised (108,334 ) $ 1.01 Balance at December 31, 2015 450,000 $ 0.67 Exercised (275,000 ) Balance at December 31, 2016 175,000 During the year ended December 31, 2015, the Company modified 200,000 warrants previously issued to a consultant by eliminating certain performance condition requirements resulting in such warrants vesting pursuant to the passage of time. The Company determined the modification date fair value of the vested warrants using the Black-Scholes option valuation model and recorded approximately $80,000 in expense for the year ended December 31, 2015. The Company used the following assumptions in the application of the Black-Scholes option valuation modes: an exercise price of $1.72, a term of 0.77 years, a risk-free interest rate of 2.58%, a dividend yield of 0% and volatility of 64%. Such expense is recorded in the Companys consolidated statement of operations as a component of sales and marketing expense. There were no warrant modifications during the year ended December 31, 2016. During the year ended December 31, 2016, there were 275,000 warrants exercised pursuant to cashless transactions resulting in the issuance of 144,459 shares of Common Stock. The intrinsic value of warrants outstanding as of December 31, 2016 was approximately $85,000. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
STOCK-BASED COMPENSATION | Stock Options As of December 31, 2016, the Company had one active stock-based compensation plan: the 1999 Stock Option Plan (the 1999 Plan 1999 Plan The 1999 Plan was adopted by the Companys Board of Directors on December 17, 1999. Under the terms of the 1999 Plan, the Company could, originally, issue up to 350,000 non-qualified or incentive stock options to purchase Common Stock of the Company. During the year ended December 31, 2014, the Company subsequently amended and restated the 1999 Plan whereby it increased the share reserve for issuance to approximately 7.0 million shares of the Companys Common Stock. The 1999 Plan prohibits the grant of stock option or stock appreciation right awards with an exercise price less than fair market value of Common Stock on the date of grant. The 1999 Plan also generally prohibits the re-pricing of stock options or stock appreciation rights, although awards may be bought-out for a payment in cash or the Companys stock. The 1999 Plan permits the grant of stock based awards other than stock options, including the grant of full value awards such as restricted stock, stock units and performance shares. The 1999 Plan permits the qualification of awards under the plan (payable in either stock or cash) as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code. The number of options issued and outstanding and the number of options remaining available for future issuance are shown in the table below. On July 1, 2014, the Company began soliciting written consents from its shareholders to approve an amendment to the Companys 1999 Stock Option Plan to increase the number of shares authorized for issuance thereunder from approximately 4.0 million to approximately 7.0 million (the Amendment A summary of the activity under the Companys stock option plans is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Balance at December 31, 2013 3,783,411 $ 0.94 7.4 Granted 435,000 $ 2.13 Expired/Cancelled (62,498 ) $ 1.96 Exercised (98,617 ) $ 0.68 Balance at December 31, 2014 4,057,296 $ 1.06 6.8 Granted 2,110,000 $ 1.63 Expired/Cancelled (750,622 ) $ 1.86 Exercised (39,705 ) $ 0.87 Balance at December 31, 2015 5,376,969 $ 1.17 6.9 Granted 1,264,000 1.34 - Expired/Cancelled (121,500 ) 1.29 - Exercised (12,626 ) 0.21 - Balance at December 31, 2016 6,506,843 $ 1.21 6.6 At December 31, 2016, a total of 6,506,843 options were outstanding of which 4,366,374 were exercisable at a weighted average price of $1.08 per share with a remaining weighted average contractual term of approximately 6.8 years. The Company expects that, in addition to the 4,366,374 options that were exercisable as of December 31, 2016, another 2,140,469 will ultimately vest resulting in a combined total of 6,506,843. Those 6,506,843 shares have a weighted average exercise price of $1.08 and an aggregate intrinsic value of approximately $1,744,000 as of December 31, 2016. Stock-based compensation expense related to equity options was approximately $1,162,000, $744,000 and $618,000 for the years ended December 31, 2016, 2015 and 2014, respectively. The weighted-average grant-date fair value per share of options granted to employees during the years ended December 31, 2016, 2015 and 2014 was $0.82, $1.18 and $1.37, respectively. At December 31, 2016, the total remaining unrecognized compensation cost related to unvested stock options amounted to approximately $1,719,849, which will be amortized over the weighted-average remaining requisite service period of 2.1 years. During the year ended December 31, 2016, there were 12,626 options exercised for cash resulting in the issuance of 12,626 shares of the Companys Common Stock and proceeds of approximately $3,000. During the year ended December 31, 2015, there were 39,705 options exercised for cash resulting in the issuance of 39,705 shares of the Companys Common Stock and proceeds of approximately $34,000. The intrinsic value of options exercised during the years ended December 31, 2016 and 2015 was approximately $11,000 and $35,000, respectively. The intrinsic value of options exercisable at December 31, 2016 and 2015 was approximately $1,679,000 and $1,575,000, respectively. The intrinsic value of options that vested during 2016 was approximately 34,000. The aggregate intrinsic value for all options outstanding as of December 31, 2016 and 2015 was approximately $1,744,000 and $1,652,000, respectively. In September 2016, the Company issued an aggregate of 168,000 options to purchase shares of the Companys Common Stock to certain members of the Companys Board of Directors in return for their service from January 1, 2017 through December 31, 2017. Such options will vest at the rate of 12,000 options per month on the last day of each month during the 2017 year. The options have an exercise price of $1.37 per share and a term of 10 years. The Company will begin recognition of compensation based on the grant-date fair value ratably over the 2017 requisite service period. In September 2015, the Company issued an aggregate of 144,000 options to purchase shares of the Companys Common Stock to certain members of the Companys Board of Directors in return for their service from January 1, 2016 through December 31, 2016. Such options vest at the rate of 12,000 options per month on the last day of each month during the 2016 year. The options have an exercise price of $1.73 per share and a term of 10 years. Pursuant to this issuance, the Company recorded compensation expense of approximately $178,000 the twelve months ended December 31, 2016 based on the grant-date fair value of the options determined using the Black-Scholes option-valuation model. In May 2016, the Company issued an aggregate of 16,000 options to purchase shares of the Companys Common Stock to a new member of the Companys Board of Directors in return for their service from May 2016 through December 31, 2016. Such options vest at the rate of 2,000 options per month on the last day of each month during the 2016 year. The options have an exercise price of $1.29 per share and a term of 10 years. Pursuant to this issuance, the Company recorded compensation expense of approximately $12,000 for the twelve months ended December 31, 2016 based on the grant-date fair value of the options determined using the Black-Scholes option-valuation model. Restricted Stock Awards There were no restricted stock awards issued during the years ended December 31, 2016 and 2015. In December 2014, the Company issued 94,116 shares of its Common Stock to certain members of the Companys Board of Directors as compensation for services to be rendered through December 2015. Such shares vested monthly over the 12 months of 2015 with any unvested shares being forfeitable should the Board members service be terminated during 2015. For the year ended December 31, 2015, the Company recorded approximately $216,000 as compensation expense related to this stock issuance. In December 2013, the Company issued 144,000 shares of its Common Stock to certain members of the Company's Board of Directors as compensation for services to be rendered through December 2014. Such shares are forfeitable should the Board members' service be terminated. For the year ended December 31, 2014, the Company recorded approximately $238,000 as compensation expense. Stock-based Compensation Stock-based compensation related to equity options and restricted stock has been classified as follows in the accompanying consolidated statements of operations (in thousands): Year Ended December 31, 2016 2015 2014 Cost of revenues $ 20 $ 15 $ 12 General and administrative 714 618 572 Sales and marketing 224 171 142 Research and development 204 156 130 Total $ 1,162 $ 960 $ 856 Common Stock Reserved for Future Issuance The following table summarizes the Common Stock reserved for future issuance as of December 31, 2016: Common Stock Convertible preferred stock Series B, Series E, Series F and Series G 11,709,151 Convertible lines of credit 2,201,903 Stock options outstanding 6,506,843 Warrants outstanding 175,000 Authorized for future grant under stock option plans 55,938 20,648,835 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
EMPLOYEE BENEFIT PLAN | During 1995, the Company adopted a defined contribution 401(k) retirement plan (the Plan Employees are fully vested in their share of the Companys contributions after the completion of five years of service. In 2014, the Company authorized contributions of approximately $118,000 for the 2014 plan year of which $88,000 were paid prior to December 31, 2014. In 2015, the Company authorized contributions of approximately $119,000 for the 2015 plan year of which $83,000 were paid prior to December 31, 2015. In 2016, the Company authorized contributions of approximately $150,000 for the 2016 plan year of which $111,000 were paid prior to December 31, 2016. |
PENSION PLAN
PENSION PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
PENSION PLAN | One of the Companys dormant foreign subsidiaries maintains a defined benefit pension plan that provides benefits based on length of service and final average earnings. The following table sets forth the benefit obligation, fair value of plan assets, and the funded status of the Companys plan; amounts recognized in the Companys consolidated financial statements; and the assumptions used in determining the actuarial present value of the benefit obligations as of December 31: ($ in thousands) 2016 2015 2014 Change in benefit obligation: Benefit obligation at beginning of year $ 3,068 $ 3,488 $ 2,821 Service cost Interest cost 75 70 106 Actuarial (gain) loss 542 (123 ) 1,003 Effect of exchange rate changes (114 ) (356 ) (442 ) Effect of curtailment Benefits paid (31 ) (11 ) Benefit obligation at end of year 3,540 3,068 3,488 Change in plan assets: Fair value of plan assets at beginning of year 1,557 1,654 1,790 Actual return of plan assets 142 40 47 Company contributions 28 34 43 Benefits paid (31 ) Effect of exchange rate changes (51 ) (171 ) (226 ) Fair value of plan assets at end of year 1,645 1,557 1,654 Funded status (1,895 ) (1,511 ) (1,834 ) Unrecognized actuarial loss (gain) 1,831 1,413 1,911 Unrecognized prior service (benefit) cost Additional minimum liability (1,831 ) (1,413 ) (1,911 ) Unrecognized transition (asset) liability Net amount recognized $ (1,895 ) $ (1,511 ) $ (1,834 ) Plan Assets Pension plan assets were comprised of the following asset categories at December 31, Equity securities 5.7 % 5.0 % 6.4 % Debt securities 87.2 % 89.3 % 87.4 % Other 7.1 % 5.7 % 6.2 % Total 100 % 100 % 100 % Components of net periodic benefit cost are as follows: Service cost $ $ $ Interest cost on projected benefit obligations 75 70 106 Expected return on plan assets Amortization of prior service costs Amortization of actuarial loss Net periodic benefit costs $ 75 $ 70 $ 106 The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, were Discount rate 1.7 % 2.4 % 2.2 % Expected return on plan assets 4.0 % 4.0 % 4.0 % Rate of pension increases 2.0 % 2.0 % 2.0 % Rate of compensation increase N/A N/A N/A The following discloses information about the Companys defined benefit pension plan that had an accumulated benefit obligation in excess of plan assets as of December 31, Projected benefit obligation $ 3,540 $ 3,068 $ 3,488 Accumulated benefit obligation $ 3,540 $ 3,068 $ 3,488 Fair value of plan assets $ 1,645 $ 1,557 $ 1,654 As of December 31, 2016, the following benefit payments are expected to be paid as follows (in thousands): 2017 $ 76 2018 $ 78 2019 $ 80 2020 $ 81 2021 $ 97 2022 2026 $ 624 The Company made contributions to the plan of approximately $28,000 during year 2016, $34,000 during year 2015 and approximately $43,000 during 2014. The investment objectives for the plan are the preservation of capital, current income and long-term growth of capital. The Companys pension assets are classified within Level 1 of the fair value hierarchy, as defined under ASC 820, because they are valued using market prices. The pension assets are primarily comprised of the cash surrender value of insurance contracts. All plan assets are managed in a policyholder pool in Germany by outside investment managers. The measurement date used to determine the benefit information of the plan was January 1, 2017. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | Accumulated other comprehensive income is the combination of the additional minimum liability related to the Companys defined benefit pension plan, recognized pursuant to ASC 715-30, Compensation - Retirement Benefits - Defined Benefit Plans Pension As of December 31, 2016, 2015 and 2014, the components of accumulated other comprehensive loss were as follows: ($ in thousands) 2016 2015 2014 Additional minimum pension liability $ (1,338 ) $ (991 ) $ (1,323 ) Foreign currency translation adjustment (205 ) (204 ) (271 ) Ending balance $ (1,543 ) $ (1,195 ) $ (1,594 ) |
QUARTERLY INFORMATION (UNAUDITE
QUARTERLY INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY INFORMATION (UNAUDITED) | The following table sets forth selected quarterly financial data for 2016, 2015 and 2014 (in thousands, except share and per share data): 2016 (by quarter) 1 2 3 4 Revenues $ 1,043 $ 996 $ 848 $ 925 Cost of Sales 279 275 232 284 Operating expenses 3,028 2,995 2,955 3,226 Loss from Operations (2,264 ) (2,274 ) (2,339 ) (2,585 ) Interest expense (income), net 11 36 89 109 Other expense (income), net (1 ) (200 ) - - Income tax expense (benefit) 3 4 3 11 Net loss $ (2,277 ) $ (2,114 ) $ (2,431 ) $ (2,705 ) Net loss per share: Net loss $ (0.03 ) $ (0.02 ) $ (0.03 ) $ (0.03 ) Preferred dividends $ (0.00 ) $ (0.01 ) $ (0.00 ) $ (0.00 ) Basic loss per share to common shareholders $ (0.03 ) $ (0.03 ) $ (0.03 ) $ (0.00 ) Basic weighted-average shares outstanding 94,073,367 94,298,567 94,550,721 94,779,243 2015 (by quarter) 1 2 3 4 Revenues $ 991 $ 1,695 $ 1,181 $ 902 Cost of Sales 286 798 321 539 Operating expenses 2,641 2,660 2,813 2,921 Loss from Operations (1,936 ) (1,763 ) (1,953 ) (2,558 ) Interest expense (income), net 437 (2 ) 1 11 Other expense (income), net (46 ) (99 ) Income tax expense (benefit) 3 6 3 10 Net loss $ (2,330 ) $ (1,767 ) $ (1,858 ) $ (2,579 ) Net loss per share: Net loss $ (0.03 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) Preferred dividends $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Basic loss per share to common shareholders $ (0.03 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) Basic weighted-average shares outstanding 93,515,640 93,674,349 93,876,339 94,070,895 2014 (by quarter) 1 2 3 4 Revenues $ 1,063 $ 937 $ 919 $ 1,240 Cost of Sales 251 232 248 261 Operating expenses 2,706 2,667 2,793 2,797 Loss from Operations (1,894 ) (1,962 ) (2,122 ) (1,818 ) Interest expense (income), net 79 105 104 128 Other expense (income), net (283 ) (5 ) (1 ) (8 ) Income tax expense (benefit) 12 3 10 Net loss $ (1,690 ) $ (2,074 ) $ (2,228 ) $ (1,948 ) Net loss per share: Net loss $ (0.02 ) $ (0.02 ) $ (0.02 ) $ (0.02 ) Preferred dividends $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Basic loss per share to common shareholders $ (0.02 ) $ (0.02 ) $ (0.02 ) $ (0.02 ) Basic weighted-average shares outstanding 88,604,221 91,930,400 93,162,548 93,384,834 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
SUBSEQUENT EVENTS | Subsequent to December 31, 2016, the Company has borrowed an additional $500,000 through March 30, 2017 under the Lines of Credit. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Companys wholly-owned subsidiaries are XImage Corporation, a California Corporation, ImageWare Systems ID Group, Inc. a Delaware corporation (formerly Imaging Technology Corporation), I.W. Systems Canada Company, a Nova Scotia unlimited liability company, ImageWare Digital Photography Systems, Inc., LLC a Nevada limited liability company (formerly Castleworks LLC), Digital Imaging International GmbH, a company formed under German laws and Image Ware Mexico S de RL de CV, a company formed under Mexican laws. |
Operating Cycle | Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying consolidated balance sheets, although they will be liquidated in the normal course of contract completion which may take more than one operating cycle. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ( U.S. GAAP |
Cash and cash equivalents | The Company defines cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. |
Accounts receivable | In the normal course of business, the Company extends credit without collateral requirements to its customers that satisfy pre-defined credit criteria. Accounts receivable are recorded net of an allowance for doubtful accounts. Accounts receivable are considered delinquent when the due date on the invoice has passed. The Company records its allowance for doubtful accounts based upon its assessment of various factors. The Company considers historical experience, the age of the accounts receivable balances, the credit quality of its customers, current economic conditions and other factors that may affect customers ability to pay to determine the level of allowance required. Accounts receivable are written off against the allowance for doubtful accounts when all collection efforts by the Company have been unsuccessful. |
Inventories | Finished goods inventories are stated at the lower of cost, determined using the average cost method, or market. See Note 6. |
Property, Equipment and Leasehold Improvements | Property and equipment, consisting of furniture and equipment, are stated at cost and are being depreciated on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged to expense as incurred. Major renewals or improvements are capitalized. When assets are sold or abandoned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. Expenditures for leasehold improvements are capitalized. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. |
Fair Value of Financial Instruments | For certain of the Companys financial instruments, including accounts receivable, accounts payable, accrued expenses, deferred revenues and lines of credit payable to related parties, the carrying amounts approximate fair value due to their relatively short maturities. |
Derivative Financial Instruments | The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company reviews the terms of the common and preferred stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method. |
Revenue recognition | The Company recognizes revenue from the following major revenue sources: ● Long-term fixed-price contracts involving significant customization; ● Fixed-price contracts involving minimal customization; ● Software licensing; ● Sales of computer hardware and identification media; and ● Post-contract customer support ( PCS The Companys revenue recognition policies are consistent with U.S. GAAP including the Financial Accounting Standards Board ( FASB ASC Software Revenue Recognition Revenue Recognition, Construction-Type and Production-Type Contracts Securities and Exchange Commission Staff Accounting Bulletin 104 Revenue Recognition, Multiple Element Arrangements The Company recognizes revenue and profit as work progresses on long-term, fixed-price contracts involving significant amount of hardware and software customization using the percentage of completion method based on costs incurred to date compared to total estimated costs at completion. The primary components of costs incurred are third party software and direct labor cost including fringe benefits. Revenues recognized in excess of amounts billed are classified as current assets under Costs and estimated earnings in excess of billings on uncompleted contracts. Amounts billed to customers in excess of revenues recognized are classified as current liabilities under Billings in excess of costs and estimated earnings on uncompleted contracts. Revenue from contracts for which the Company cannot reliably estimate total costs or there are not significant amounts of customization are recognized upon completion. For contracts that require significant amounts of customization that the Company accounts for under the completed contract method of revenue recognition, the Company defers revenue recognition until customer acceptance is received. For contracts containing either extended or dependent payment terms, revenue recognition is deferred until such time as payment has been received by the Company. The Company also generates non-recurring revenue from the licensing of its software. Software license revenue is recognized upon the execution of a license agreement, upon deliverance, when fees are fixed and determinable, when collectability is probable, when all other significant obligations have been fulfilled a nd the Company has obtained vendor specific objective evidence ( VSOE ) of the fair value of the undelivered element. VSOE of fair value for customer support services is determined by reference to the price the customer pays for such element when sold separately; that is, the renewal rate offered to customers. In those instances when objective and reliable evidence of fair value exists for the undelivered items but not for the delivered items, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of arrangement consideration allocated to the delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items |
Goodwill | The Company accounts for its intangible assets under the provisions of ASC 350, Intangibles - Goodwill and Other Property, Plant and Equipment The Company did not record any goodwill impairment charges for the years ended December 31, 2016, 2015 or 2014. |
Intangible and Long Lived Assets | Intangible assets are carried at their cost less any accumulated amortization. Any costs incurred to renew or extend the life of an intangible or long lived asset are reviewed for capitalization. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Companys management currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Companys products under development will continue. Either of these could result in future impairment of long-lived assets. |
Concentration of Credit Risk | Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high quality financial institutions and at times during the years ended December 31, 2016 and 2015 exceeded the FDIC insurance limits of $250,000. Sales are typically made on credit and the Company generally does not require collateral. The Company performs ongoing credit evaluations of its customers financial condition and maintains an allowance for doubtful accounts. The Company considers historical experience, the age of the accounts receivable balances, the credit quality of its customers, current economic conditions and other factors that may affect customers ability to pay to determine the level of allowance required. Accounts receivable are presented net of an allowance for doubtful accounts of approximately $1,000 and $3,000 at December 31, 2016 and 2015, respectively. For the year ended December 31, 2016 two customers accounted for approximately 30% or $1,162,000 of total revenues and had trade receivables of $78,000 as of the end of the year. For the year ended December 31, 2015 two customers accounted for approximately 37% or $1,753,000 of total revenues and had trade receivables of $78,000 as of the end of the year. For the year ended December 31, 2014, one customer accounted for approximately 17% or $725,000 of total revenues and $0 trade receivables as of the end of the year. |
Stock-Based Compensation | At December 31, 2016, the Company had one stock-based compensation plan for employees and nonemployee directors, which authorize the granting of various equity-based incentives including stock options and restricted stock. The Company estimates the fair value of its stock options using a Black-Scholes option-pricing model, consistent with the provisions of ASC 718, Compensation Stock Compensation ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option-pricing model, which incorporates various assumptions including volatility, expected life, and interest rates. The Company is required to make various assumptions in the application of the Black-Scholes option-pricing model. The Company has determined that the best measure of expected volatility is based on the historical weekly volatility of the Companys Common Stock. Historical volatility factors utilized in the Companys Black-Scholes computations for options granted during the years ended December 31, 2016, 2015 and 2014 ranged from 65% to 116%. The Company has elected to estimate the expected life of an award based upon the SEC approved simplified method noted under the provisions of Staff Accounting Bulletin No. 110. The expected term used by the Company during the years ended December 31, 2016, 2015 and 2014 was 5.17 years. The difference between the actual historical expected life and the simplified method was immaterial. The interest rate used is the risk-free interest rate and is based upon U.S. Treasury rates appropriate for the expected term. Interest rates used in the Companys Black-Scholes calculations for the years ended December 31, 2016, 2015 and 2014 averaged 2.6%. Dividend yield is zero as the Company does not expect to declare any dividends on the Companys common shares in the foreseeable future. In addition to the key assumptions used in the Black-Scholes model, the estimated forfeiture rate at the time of valuation is a critical assumption. The Company has estimated an annualized forfeiture rate of approximately 0% for corporate officers, 4.1% for members of the Board of Directors and 6.0% for all other employees. The Company reviews the expected forfeiture rate annually to determine if that percent is still reasonable based on historical experience. Restricted stock units are recorded at the grant date fair value with corresponding compensation expense recorded ratably over the requisite service period. |
Income Taxes | Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is computed for the expected future impact of differences between the financial reporting and tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Foreign Currency Translation | The financial position and results of operations of the Companys foreign subsidiaries are measured using the foreign subsidiarys local currency as the functional currency. Revenues and expenses of such subsidiaries have been translated into U.S. dollars at weighted-average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of shareholders equity, unless there is a sale or complete liquidation of the underlying foreign investments. The Company translates foreign currencies of its German, Canadian and Mexican subsidiaries. The cumulative translation adjustment, which is recorded in accumulated other comprehensive loss, decreased approximately $1,000 for the year ended December 31, 2016, increased approximately $67,000 for the year ended December 31, 2015 and decreased approximately $20,000 for the year ended December 31, 2014. |
Comprehensive Loss | Comprehensive loss consists of net gains and losses affecting shareholders equity that, under generally accepted accounting principles, are excluded from net loss. For the Company, the only items are the cumulative translation adjustment and the additional minimum liability related to the Companys defined benefit pension plan, recognized pursuant to ASC 715-30, " Compensation - Retirement Benefits - Defined Benefit Plans Pension |
Advertising Costs | The Company expenses advertising costs as incurred. The Company incurred approximately $24,000 in advertising expenses during the year ended December 31, 2016, $12,000 in advertising expenses during the year ended December 31, 2015 and $9,000 during the year ended December 31, 2014. |
Loss Per Share | Basic loss per common share is calculated by dividing net loss available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing net loss available to common shareholders for the period by the weighted-average number of common shares outstanding during the period, adjusted to include, if dilutive, potential dilutive shares consisting of convertible preferred stock, convertible notes payable, stock options and warrants, calculated using the treasury stock and if-converted methods. For diluted loss per share calculation purposes, the net loss available to commons shareholders is adjusted to add back any preferred stock dividends and any interest on convertible debt reflected in the consolidated statement of operations for the respective periods. (Amounts in thousands, except share and per share amounts) Year Ended December 31, Numerator for basic and diluted loss per share: 2016 2015 2014 Net loss $ (9,527 ) $ (8,534 ) $ (7,940 ) Preferred dividends (1,347 ) (1,065 ) (51 ) Net loss available to common shareholders $ (10,874 ) $ (9,599 ) $ (7,991 ) Denominator for basic loss per share weighted-average shares outstanding 94,426,783 93,786,079 91,795,971 Effect of dilutive securities Denominator for diluted loss per share weighted-average shares outstanding 94,426,783 93,786,079 91,795,971 Basic and diluted loss per share: Net loss $ (0.10 ) $ (0.09 ) $ (0.09 ) Preferred dividends (0.02 ) (0.01 ) ( ) Net loss available to common shareholders $ (0.12 ) $ (0.10 ) $ (0.09 ) The following potential dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as their effect would have been antidilutive: Potential Dilutive Securities: Common Share Equivalents at December 31, 2016 Common Share Equivalents at December 31, 2015 Common Share Equivalents at December 31, 2014 Convertible lines of credit 2,201,903 1,649,548 Convertible redeemable preferred stock Series B 46,029 46,029 46,029 Convertible redeemable preferred stock Series E 6,315,789 6,442,105 Convertible redeemable preferred stock Series F 1,333,333 Convertible redeemable preferred stock Series G 4,014,000 Stock options 6,506,843 5,376,969 4,057,296 Warrants 175,000 450,000 977,778 Total Potential Dilutive Securities 20,592,897 12,315,103 6,730,651 |
Recently Issued Accounting Standards | From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB FASB ASU No. 2014-09. ASU Revenue from Contracts with Customers FASB ASU No. 2014-15 Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern FASB ASU No. 2015-03 Simplifying the Presentation of Debt Issuance Costs. FASB ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330): Simplifying the Measurement of Inventory. FASB ASU No. 2016-01 Financial InstrumentsOverall - Recognition and Measurement of Financial Assets and Financial Liabilities. FASB ASU No. 2016-02 Leases FASB ASU No. 2016-06 Derivatives and Hedging (Topic 815) Contingent Put and Call Options in Debt Instruments FASB ASU No. 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) FASB ASU No. 2016-09 Compensation Stock Compensation (Topic 718) FASB ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing FASB ASU No. 2016-13 inancial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. FASB ASU No. 2016-15. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. The retrospective transition method, requiring adjustment to all comparative periods presented, is required unless it is impracticable for some of the amendments, in which case those amendments would be prospectively as of the earliest date practicable. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. FASB ASU No. 2017-04. Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments of this ASU eliminate step 2 from the goodwill impairment test. The annual, or interim test is performed by comparing the fair value of a reporting unit with its carrying amount. The amendments of this ASU also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and if it fails that qualitative test, to perform step 2 of the goodwill impairment test. ASU No. 2017-04 is effective for fiscal years beginning after December 15, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Computation of basic and diluted loss per share | (Amounts in thousands, except share and per share amounts) Year Ended December 31, Numerator for basic and diluted loss per share: 2016 2015 2014 Net loss $ (9,527 ) $ (8,534 ) $ (7,940 ) Preferred dividends (1,347 ) (1,065 ) (51 ) Net loss available to common shareholders $ (10,874 ) $ (9,599 ) $ (7,991 ) Denominator for basic loss per share weighted-average shares outstanding 94,426,783 93,786,079 91,795,971 Effect of dilutive securities Denominator for diluted loss per share weighted-average shares outstanding 94,426,783 93,786,079 91,795,971 Basic and diluted loss per share: Net loss $ (0.10 ) $ (0.09 ) $ (0.09 ) Preferred dividends (0.02 ) (0.01 ) ( ) Net loss available to common shareholders $ (0.12 ) $ (0.10 ) $ (0.09 ) |
Potential Dilutive Securities | Potential Dilutive Securities: Common Share Equivalents at December 31, 2016 Common Share Equivalents at December 31, 2015 Common Share Equivalents at December 31, 2014 Convertible lines of credit 2,201,903 1,649,548 Convertible redeemable preferred stock Series B 46,029 46,029 46,029 Convertible redeemable preferred stock Series E 6,315,789 6,442,105 Convertible redeemable preferred stock Series F 1,333,333 Convertible redeemable preferred stock Series G 4,014,000 Stock options 6,506,843 5,376,969 4,057,296 Warrants 175,000 450,000 977,778 Total Potential Dilutive Securities 20,592,897 12,315,103 6,730,651 |
FAIR VALUE ACCOUNTING (Tables)
FAIR VALUE ACCOUNTING (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement of Assets and liability | Fair Value at December 31, 2016 ($ in thousands) Total Level 1 Level 2 Level 3 Assets: Pension assets $ 1,645 $ 1,645 $ $ Totals $ 1,645 $ 1,645 $ $ Fair Value at December 31, 2015 ($ in thousands) Total Level 1 Level 2 Level 3 Assets: Pension assets $ 1,557 $ 1,557 $ $ Totals $ 1,557 $ 1,557 $ $ |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets And Goodwill Tables | |
Intangible amortization expense | Fiscal Year Ended December 31, Estimated Amortization Expense ($ in thousands) 2017 $ 12 2018 12 2019 12 2020 12 2021 12 Thereafter 45 Total $ 105 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Parties Tables | |
Activity Under Lines Of Credit | The following table sets forth the Companys activity under its Lines of Credit for the periods indicated: Balance outstanding under Lines of Credit as of December 31, 2014 $ 1,550 Borrowing under Lines of Credit 750 Repayments (350 ) Exchange of Indebtedness for Series E Preferred Stock (1,950 ) Balance outstanding under Lines of Credit as of December 31, 2015 $ Borrowings under Lines of Credit 2,650 Repayments Balance outstanding under Lines of Credit as of December 31, 2016 $ 2,650 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property And Equipment Tables | |
Property and equipment | ($ in thousands) 2016 2015 Equipment $ 935 $ 887 Leasehold improvements 11 11 Furniture 101 101 1,047 999 Less accumulated depreciation (954 ) (837 ) $ 93 $ 162 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Consolidated Statements Of Comprehensive Loss | |
Accrued expenses | ($ in thousands) December 31, 2016 December 31, 2015 Compensated absences $ 313 $ 260 Wages, payroll taxes and sales commissions 28 11 Customer deposits 198 69 Liquidated damages 200 Royalties 147 147 Pension and employee benefit plans 7 6 Income and sales taxes 161 131 Dividends 27 261 Interest payable to related parties 102 Other 64 64 $ 1,047 $ 1,149 |
LINE OF CREDIT (Tables)
LINE OF CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Line Of Credit Tables | |
LINE OF CREDIT | ($ in thousands) December 31, 2016 December 31, 2015 Lines of Credit 8% convertible lines of credit. Face value of advances under lines of credit $2,650 at December 31, 2016 and $0 at December 31, 2015, respectively. Discount on advances under lines of credit is $122 at December 31, 2016 and $0 at December 31, 2015, respectively. Maturity date is December 31, 2017. $ 2,528 $ Total lines of credit to related parties 2,528 Less current portion (2,528 ) Long-term lines of credit to related parties $ $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes Tables | |
Income tax provision | ($ in thousands) Year Ended December 31, Current 2016 2015 2014 Federal $ — $ — $ — State — — — Foreign 21 22 25 Deferred Federal — — — State — — — Foreign — — — $ 21 $ 22 $ 25 |
Deferred tax assets | ($ in thousands) 2016 2015 2014 Net operating loss carryforwards $ 17,829 $ 15,948 $ 14,200 Intangible and fixed assets 102 220 427 Stock based compensation 2,324 1,861 1,565 Reserves and accrued expenses 8 8 6 Other — — (85 ) 20,263 18,037 16,113 Less valuation allowance (20,263 ) (18,037 ) (16,113 ) Net deferred tax assets $ — $ — $ — |
Reconciliation Income Tax Rate | 2016 2015 2014 Amounts computed at statutory rates $ (3,239 ) $ (2,902 ) $ (2,699 ) State income tax, net of federal benefit (462 ) (262 ) (212 ) Expiration of net operating loss carryforwards 1,082 695 708 Non-deductible interest 49 149 145 Foreign taxes 362 413 386 Other 3 5 4 Net change in valuation allowance on deferred tax assets 2,226 1,924 1,693 $ 21 $ 22 $ 25 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock issued in lieu of cash | |
Future minimum lease payments | ($ in thousands) 2017 $ 450 2018 201 2019 34 2020 34 2021 9 Total $ 728 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity Tables | |
Summary of common stock activity | Common Stock Shares outstanding at December 31, 2013 87,548,613 Shares issued pursuant to warrants exercised for cash 4,742,632 Shares issued pursuant to cashless warrants exercised 868,565 Conversion of related-party notes payable into Common Stock 154,607 Shares issued as compensation in lieu of cash 94,116 Shares issued pursuant to option exercises 98,617 Shares outstanding at December 31, 2014 93,507,150 Shares issued pursuant to payment of stock dividend on Series E Preferred 478,664 Shares issued pursuant to cashless warrants exercised 45,376 Shares issued pursuant to option exercises 39,705 Shares outstanding at December 31, 2015 94,070,895 Shares issued pursuant to payment of stock dividend on Series E Preferred 950,362 Shares issued pursuant to payment of stock dividend on Series F Preferred 48,513 Shares issued pursuant to payment of stock dividend on Series G Preferred 3,770 Shares issued pursuant to cashless warrants exercised 144,459 Shares issued pursuant to option exercises 12,626 Exchange of common shares for Series G Preferred (3,383,830 ) Shares outstanding at December 31, 2016 91,846,795 |
Summary of warrant activity | Warrants Weighted- Average Exercise Price Balance at December 31, 2013 6,598,416 $ 0.63 Granted 302,778 $ 2.02 Expired / Canceled (55,000 ) $ 1.10 Exercised (5,868,416 ) $ 0.58 Balance at December 31, 2014 977,778 $ 1.22 Granted $ 0.00 Expired / Canceled (419,444 ) $ 1.86 Exercised (108,334 ) $ 1.01 Balance at December 31, 2015 450,000 $ 0.67 Exercised (275,000 ) Balance at December 31, 2016 175,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Series B convertible preferred, shares outstanding | |
Stock option plan activity | Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Balance at December 31, 2013 3,783,411 $ 0.94 7.4 Granted 435,000 $ 2.13 Expired/Cancelled (62,498 ) $ 1.96 Exercised (98,617 ) $ 0.68 Balance at December 31, 2014 4,057,296 $ 1.06 6.8 Granted 2,110,000 $ 1.63 Expired/Cancelled (750,622 ) $ 1.86 Exercised (39,705 ) $ 0.87 Balance at December 31, 2015 5,376,969 $ 1.17 6.9 Granted 1,264,000 1.34 - Expired/Cancelled (121,500 ) 1.29 - Exercised (12,626 ) 0.21 - Balance at December 31, 2016 6,506,843 $ 1.21 6.6 |
Stock-based compensation related to equity options and restricted stock | Year Ended December 31, 2016 2015 2014 Cost of revenues $ 20 $ 15 $ 12 General and administrative 714 618 572 Sales and marketing 224 171 142 Research and development 204 156 130 Total $ 1,162 $ 960 $ 856 |
Common stock reserved for future issuance | Common Stock Convertible preferred stock Series B, Series E, Series F and Series G 11,709,151 Convertible lines of credit 2,201,903 Stock options outstanding 6,506,843 Warrants outstanding 175,000 Authorized for future grant under stock option plans 55,938 20,648,835 |
PENSION PLAN (Tables)
PENSION PLAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Pension Plan Tables | |
Actuarial present value of the benefit obligations | ($ in thousands) 2016 2015 2014 Change in benefit obligation: Benefit obligation at beginning of year $ 3,068 $ 3,488 $ 2,821 Service cost Interest cost 75 70 106 Actuarial (gain) loss 542 (123 ) 1,003 Effect of exchange rate changes (114 ) (356 ) (442 ) Effect of curtailment Benefits paid (31 ) (11 ) Benefit obligation at end of year 3,540 3,068 3,488 Change in plan assets: Fair value of plan assets at beginning of year 1,557 1,654 1,790 Actual return of plan assets 142 40 47 Company contributions 28 34 43 Benefits paid (31 ) Effect of exchange rate changes (51 ) (171 ) (226 ) Fair value of plan assets at end of year 1,645 1,557 1,654 Funded status (1,895 ) (1,511 ) (1,834 ) Unrecognized actuarial loss (gain) 1,831 1,413 1,911 Unrecognized prior service (benefit) cost Additional minimum liability (1,831 ) (1,413 ) (1,911 ) Unrecognized transition (asset) liability Net amount recognized $ (1,895 ) $ (1,511 ) $ (1,834 ) Plan Assets Pension plan assets were comprised of the following asset categories at December 31, Equity securities 5.7 % 5.0 % 6.4 % Debt securities 87.2 % 89.3 % 87.4 % Other 7.1 % 5.7 % 6.2 % Total 100 % 100 % 100 % Components of net periodic benefit cost are as follows: Service cost $ $ $ Interest cost on projected benefit obligations 75 70 106 Expected return on plan assets Amortization of prior service costs Amortization of actuarial loss Net periodic benefit costs $ 75 $ 70 $ 106 The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, were Discount rate 1.7 % 2.4 % 2.2 % Expected return on plan assets 4.0 % 4.0 % 4.0 % Rate of pension increases 2.0 % 2.0 % 2.0 % Rate of compensation increase N/A N/A N/A The following discloses information about the Companys defined benefit pension plan that had an accumulated benefit obligation in excess of plan assets as of December 31, Projected benefit obligation $ 3,540 $ 3,068 $ 3,488 Accumulated benefit obligation $ 3,540 $ 3,068 $ 3,488 Fair value of plan assets $ 1,645 $ 1,557 $ 1,654 |
Benefit payments | 2017 $ 76 2018 $ 78 2019 $ 80 2020 $ 81 2021 $ 97 2022 2026 $ 624 |
ACCUMULATED OTHER COMPREHENSI39
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Components of accumulated other comprehensive loss | ($ in thousands) 2016 2015 2014 Additional minimum pension liability $ (1,338 ) $ (991 ) $ (1,323 ) Foreign currency translation adjustment (205 ) (204 ) (271 ) Ending balance $ (1,543 ) $ (1,195 ) $ (1,594 ) |
QUARTERLY INFORMATION (UNAUDI40
QUARTERLY INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | 2016 (by quarter) 1 2 3 4 Revenues $ 1,043 $ 996 $ 848 $ 925 Cost of Sales 279 275 232 284 Operating expenses 3,028 2,995 2,955 3,226 Loss from Operations (2,264 ) (2,274 ) (2,339 ) (2,585 ) Interest expense (income), net 11 36 89 109 Other expense (income), net (1 ) (200 ) - - Income tax expense (benefit) 3 4 3 11 Net loss $ (2,277 ) $ (2,114 ) $ (2,431 ) $ (2,705 ) Net loss per share: Net loss $ (0.03 ) $ (0.02 ) $ (0.03 ) $ (0.03 ) Preferred dividends $ (0.00 ) $ (0.01 ) $ (0.00 ) $ (0.00 ) Basic loss per share to common shareholders $ (0.03 ) $ (0.03 ) $ (0.03 ) $ (0.03 ) Basic weighted-average shares outstanding 94,073,367 94,298,567 94,550,721 94,779,243 2015 (by quarter) 1 2 3 4 Revenues $ 991 $ 1,695 $ 1,181 $ 902 Cost of Sales 286 798 321 539 Operating expenses 2,641 2,660 2,813 2,921 Loss from Operations (1,936 ) (1,763 ) (1,953 ) (2,558 ) Interest expense (income), net 437 (2 ) 1 11 Other expense (income), net (46 ) (99 ) Income tax expense (benefit) 3 6 3 10 Net loss $ (2,330 ) $ (1,767 ) $ (1,858 ) $ (2,579 ) Net loss per share: Net loss $ (0.03 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) Preferred dividends $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Basic loss per share to common shareholders $ (0.03 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) Basic weighted-average shares outstanding 93,515,640 93,674,349 93,876,339 94,070,895 2014 (by quarter) 1 2 3 4 Revenues $ 1,063 $ 937 $ 919 $ 1,240 Cost of Sales 251 232 248 261 Operating expenses 2,706 2,667 2,793 2,797 Loss from Operations (1,894 ) (1,962 ) (2,122 ) (1,818 ) Interest expense (income), net 79 105 104 128 Other expense (income), net (283 ) (5 ) (1 ) (8 ) Income tax expense (benefit) 12 3 10 Net loss $ (1,690 ) $ (2,074 ) $ (2,228 ) $ (1,948 ) Net loss per share: Net loss $ (0.02 ) $ (0.02 ) $ (0.02 ) $ (0.02 ) Preferred dividends $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Basic loss per share to common shareholders $ (0.02 ) $ (0.02 ) $ (0.02 ) $ (0.02 ) Basic weighted-average shares outstanding 88,604,221 91,930,400 93,162,548 93,384,834 |
DESCRIPTION OF BUSINESS AND O41
DESCRIPTION OF BUSINESS AND OPERATIONS (Details Narrative) - USD ($) | Mar. 09, 2016 | Dec. 27, 2016 | Dec. 31, 2016 | Dec. 29, 2016 | Jul. 27, 2016 | Dec. 31, 2015 |
State of Incorporation | Delaware | |||||
LOC, amount outstanding | $ 2,528,000 | |||||
common stock per value | $ .01 | $ 0.01 | ||||
Lines of Credit Description | The Fourth Amendment (i) provides the Company with the ability to borrow up to $5.0 million under the terms of the Goldman LOC; (ii) permits Goldman to convert the outstanding principal, plus any accrued but unpaid interest due under the Goldman LOC (the " Outstanding Balance | |||||
Line of Credit principal amount | $ 500,000 | |||||
Line of Intrest | The New Crocker LOC accrues interest at a rate of 8% per annum, and matures on the earlier to occur of June 30, 2017 or such date that the Company consummates a debt and/or equity financing resulting in net proceeds to the Company of at least $3.5 million. All outstanding amounts due under the terms of the New Crocker LOC are convertible into shares of the Company's Common Stock at $1.25 per share. | |||||
Common stock shares | 91,853,499 | 94,077,599 | ||||
Series G Preferred Stock [Member] | ||||||
Series G Convertible Preferred Stock | 6,021 | 1,625 | 6,120 | 0 | ||
preferred stock par value | $ 0.01 | $ 0.01 | $ 0.01 | |||
Dividend rate | 10.00% | |||||
common stock per value | 0.01 | |||||
Liquidation preference per share value | $ 1,000 | $ 1,000 | ||||
Dividendm price | $ 1.50 | |||||
Common stock shares | 3,400,000 | |||||
Total share value | $ 1,625,000 | |||||
Net of issuance costs | $ 11,000 | |||||
Line Of Credit [Member] | ||||||
LOC, amount outstanding | $ 500,000 | |||||
Crocker [Member] | ||||||
LOC, amount outstanding | $ 2,150,000 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator for basic and diluted loss per share: | |||||||||||||||
Net loss | $ (2,705) | $ (2,431) | $ (2,114) | $ (2,277) | $ (2,579) | $ (1,858) | $ (1,767) | $ (2,330) | $ (1,948) | $ (2,228) | $ (2,074) | $ (1,690) | $ (9,527) | $ (8,534) | $ (7,940) |
Preferred dividends | (1,347) | (1,065) | (51) | ||||||||||||
Net loss available to common shareholders | $ (10,874) | $ (9,599) | $ (7,991) | ||||||||||||
Denominator for basic loss per share weighted-average shares outstanding | 94,779,243 | 94,550,721 | 94,298,567 | 94,073,367 | 94,070,895 | 93,876,339 | 93,674,349 | 93,515,640 | 93,384,834 | 93,162,548 | 91,930,400 | 88,604,221 | 94,426,783 | 93,786,079 | 91,795,971 |
Effect of dilutive securities | |||||||||||||||
Denominator for diluted loss per share weighted-average shares outstanding | 94,426,783 | 93,786,079 | 91,795,971 | ||||||||||||
Basic and diluted loss per share: | |||||||||||||||
Net loss | $ (0.10) | $ (0.09) | $ (0.09) | ||||||||||||
Preferred dividends | (0.02) | (0.01) | |||||||||||||
Net loss available to common shareholders | $ (0.12) | $ (0.10) | $ (0.09) |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 20,592,897 | 12,315,103 | 6,730,651 |
Series B Preferred Stock [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 46,029 | 46,029 | 46,029 |
Series E Preferred Stock [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 6,315,789 | 6,442,105 | |
Series F Preferred Stock [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 1,333,333 | ||
Series G Preferred Stock [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 4,014,000 | ||
Convertible notes payable and lines of credit [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 2,201,903 | 1,649,548 | |
Stock options [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 6,506,843 | 5,376,969 | 4,057,296 |
Warrants [Member] | |||
Potential Dilutive Securities: | |||
Potential Dilutive Securities | 175,000 | 450,000 | 977,778 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
FDIC insurance limits | $ 250,000 | $ 250,000 | |
Accounts receivable | $ 1,000 | $ 3,000 | |
Customer risk revenue percentage | 30.00% | 37.00% | 17.00% |
Customer accounted for revenue | $ 1,162,000 | $ 1,753,000 | $ 725,000 |
Trade receivables | 78,000 | 78,000 | 0 |
Stock based compensation expense | $ 1,162,000 | $ 744,000 | $ 618,000 |
Expected term | 5 years 2 months 1 day | 5 years 2 months 1 day | 5 years 2 months 1 day |
Interest rate | 2.60% | 2.60% | 2.60% |
Foreign currency translation adjustment | $ 1,000 | $ 67,000 | $ 20,000 |
Advertising expense | $ 24,000 | $ 12,000 | $ 9,000 |
Other Employees [Member] | |||
Forfeiture rate | 6.00% | ||
Officer [Member] | |||
Forfeiture rate | 0.00% | ||
Directors [Member] | |||
Forfeiture rate | 4.10% | ||
Maximum [Member] | |||
Volatility rate | 116.00% | ||
MinimumMember | |||
Volatility rate | 65.00% |
FAIR VALUE ACCOUNTING (Details)
FAIR VALUE ACCOUNTING (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | |||
Pension assets | $ 1,645 | $ 1,557 | $ 1,654 |
Totals | 1,645 | 1,557 | |
Level 1 | |||
Assets: | |||
Pension assets | 1,645 | 1,557 | |
Totals | 1,645 | 1,557 | |
Level 2 | |||
Assets: | |||
Pension assets | |||
Totals | |||
Level 3 | |||
Assets: | |||
Pension assets | |||
Totals |
INTANGIBLE ASSETS AND GOODWIL46
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
2,017 | $ 12 | |
2,018 | 12 | |
2,019 | 12 | |
2,020 | 12 | |
2,021 | 12 | |
Thereafter | 45 | |
Totals | $ 105 | $ 117 |
INTANGIBLE ASSETS AND GOODWIL47
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Patents [Member] | |||
Amortization expense | $ 12,000 | $ 12,000 | $ 12,000 |
Accumulated amortization | 554,000 | 554,000 | |
Carrying amount of Finite Lived Patents Gross | $ 105,000 | $ 117,000 | |
Weighted-average remaining life of acquired patents | 9 years 6 months | 9 years 6 months | 9 years 6 months |
Trademarks And Trade Names [Member] | |||
Amortization expense | $ 0 | $ 15,000 | $ 15,000 |
Carrying amount of acquired trademarks and trade names | 0 | 0 | |
Accumulated amortization | $ 347,000 | $ 347,000 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Parties Details | ||
Balance outstanding under Lines of Credit as of December 31, 2014 | $ 1,550,000 | |
Borrowing under Lines of Credit | 2,650,000 | 750,000 |
Repayments | (350,000) | |
Exchange of Indebtedness for Series E Preferred Stock | (1,950,000) | |
Balance outstanding under Lines of Credit as of December 31, 2015 | $ 2,650,000 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narratives) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
LOC Borrowings | $ 2,650,000 | $ 400,000 | $ 1,550,000 | |
Repayment of line of credit | $ (350,000) | |||
Warrant issued | 0 | |||
Warrant Outstanding | 200,000 | |||
Warrant term | 6 years 10 months 24 days | 6 years 9 months 18 days | ||
Amortization of debt discount | $ 385,000,000 | 145,000 | $ 438,000 | $ 426,000 |
Unamortized of Note Discount | $ 122,000,000 | |||
Common Stock Exercisable Per Share | $ .01 | $ 0.01 | ||
Accreted | $ 97,000,000 | |||
Line of Credit 1 [Member] | ||||
Line of Credit Borrowing capacity | $ 2,650,000 | |||
Amortization of debt discount | $ 146,000,000 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Inventory Details Narrative | |||
Inventory | $ 23 | $ 46 | |
Work in process | 19,000 | 42,000 | |
Direct labor cost, in-process projects | 42,000 | ||
Equipment cost, in-process projects | 21,000 | ||
Finished goods | 4,000 | 4,000 | |
Reserves for obsolete and slow-moving items | 3,000 | 3,000 | |
Inventory write down | $ 281 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
Equipment | $ 935 | $ 887 |
Leasehold improvements | 11 | 11 |
Furniture | 101 | 101 |
Property and equipment total | 1,047 | 999 |
Less accumulated depreciation | (954) | (837) |
Property and equipment net | $ 93 | $ 162 |
PROPERTY AND EQUIPMENT (Detai52
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property And Equipment Details Narrative | |||
Depreciation expense | $ 117,000 | $ 137,000 | $ 152,000 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
Compensated absences | $ 313 | $ 260 |
Wages, payroll taxes and sales commissions | 28 | 11 |
Customer deposits | 198 | 69 |
Liquidated damages | 200 | |
Royalties | 147 | 147 |
Pension and employee benefit plans | 7 | 6 |
Income and sales taxes | 161 | 131 |
Dividends | 27 | 261 |
Interest | 102 | |
Other | 64 | 64 |
Accrued liabilities | $ 1,047 | $ 1,149 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Lines of credit to a related party | $ 2,528 | |
Line of credit rate | 8.00% | |
LOC Maturity Date | Dec. 31, 2017 | |
Line Of Credit [Member] | ||
Lines of credit to a related party | $ 500 | |
Total lines of credit to related parties | 2,528 | |
Less current portion | (2,528) | |
Long-term notes payable and line of credit to related parties | ||
Advances under line of credit | 2,650 | 0 |
Discount on advances | $ 122 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
Federal | |||
State | |||
Foreign | 21 | 22 | 25 |
Deferred | |||
Federal | |||
State | |||
Foreign | |||
Total | $ 21 | $ 22 | $ 25 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | |||
Net operating loss carryforwards | $ 17,829 | $ 15,948 | $ 14,200 |
Intangible and fixed assets | 102 | 220 | 427 |
Stock based compensation | 2,324 | 1,861 | 1,565 |
Reserves and accrued expenses | 8 | 8 | 6 |
Other | (85) | ||
Deferred tax assets total | 20,263 | 18,037 | 16,113 |
Less valuation allowance | (20,263) | (18,037) | (16,113) |
Net deferred tax assets |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Notes to Financial Statements | |||
Amounts computed at statutory rates | $ (3,239) | $ (2,902) | $ (2,699) |
State income tax, net of federal benefit | (462) | (262) | (212) |
Expiration of net operating loss carryforwards | 1,082 | 695 | 708 |
Non-deductible interest | 49 | 149 | 145 |
Foreign taxes | 362 | 413 | 386 |
Other | 3 | 5 | 4 |
Net change in valuation allowance on deferred tax assets | 2,226 | 1,924 | 1,693 |
Reconciliation of the provision-benefit) for income taxes | $ 21 | $ 22 | $ 25 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes Details Narrative | ||
Interest and penalties accrued | $ 0 | $ 11,000 |
COMMITMENTS AND CONTINGENCIES59
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Notes to Financial Statements | |
2,017 | $ 450 |
2,018 | 201 |
2,019 | 34 |
2,020 | 34 |
2021 and thereafter | 9 |
Total | $ 728 |
COMMITMENTS AND CONTINGENCIES60
COMMITMENTS AND CONTINGENCIES (Details Narratives) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments And Contingencies Details Narratives | |||
Rent expense | $ 492,000 | $ 477,000 | $ 430,000 |
EQUITY (Details)
EQUITY (Details) - shares | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity Details | ||||||
At beginning of period | 94,070,895 | 93,507,150 | 94,070,895 | 93,507,150 | 87,548,613 | |
Shares issued pursuant to payment of stock dividend on Series E Preferred | 950,362 | 478,664 | ||||
Shares issued pursuant to payment of stock dividend on Series F Preferred | 48,513 | |||||
Shares issued pursuant to payment of stock dividend on Series G Preferred | 3,770 | |||||
Shares issued pursuant to warrants exercised for cash | 4,742,632 | |||||
Shares issued pursuant to cashless warrants exercised | 144,459 | 45,376 | 868,565 | |||
Conversion of related-party notes payable into common stock | 154,607 | |||||
Shares issued as compensation in lieu of cash | 94,116 | |||||
Shares issued pursuant to option exercises | 16,000 | 16,000 | 144,000 | 12,626 | 39,705 | 98,617 |
Exchange of common shares for Series G Preferred | (3,383,830) | |||||
At end of period | 91,846,795 | 94,070,895 | 93,507,150 |
EQUITY (Details 1)
EQUITY (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity Details 1 | |||
Begining Balance | 450,000 | 977,778 | 6,598,416 |
Granted | 302,778 | ||
Expired/Cancelled | (419,444) | (55,000) | |
Exercised | (275,000) | (108,334) | (5,868,416) |
Ending Balance | 175,000 | 450,000 | 977,778 |
Begining Balance, Weighted-Average Exercise Price | $ 0.67 | $ 1.22 | $ 0.63 |
Granted, Weighted-Average Exercise Price | 0 | 2.02 | |
Expired/Cancelled, Weighted-Average Exercise Price | 1.86 | 1.1 | |
Exercised, Weighted-Average Exercise Price | 1.01 | 0.58 | |
Ending Balance, Weighted-Average Exercise Price | $ 0.67 | $ 1.22 |
EQUITY (Details Narratives)
EQUITY (Details Narratives) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 27, 2016 | |
Cumulative dividends | $ 8,000 | $ 8,000 | |||||
Shares issued pursuant to options exercised | 16,000 | 16,000 | 144,000 | 12,626 | 39,705 | 98,617 | |
Cash proceeds from option exercises | $ 3,000 | $ 33,000 | $ 67,000 | ||||
Warrants outstanding | 200,000 | ||||||
Compensation expense | $ 1,162,000 | $ 96,000 | 856,000 | ||||
Warrants not yet exercisable | 175,000 | ||||||
Warrants exercised pursuant to cashless transactions | 150,000 | ||||||
Series E Preferred Stock [Member] | |||||||
Preferred stock outstanding | 12,000 | 12,000 | |||||
Preferred par value | $ 0.01 | $ 0.1 | |||||
Cumulative dividends | $ 0 | ||||||
Liquidation preference | $ 1,000 | ||||||
Series B Preferred Stock [Member] | |||||||
Preferred stock outstanding | 239,400 | 239,400 | |||||
Preferred par value | $ 0.1 | $ 0.1 | |||||
Cumulative dividends | $ 51,000 | $ 240,000 | |||||
Series F Preferred Stock [Member] | |||||||
Preferred stock outstanding | 2,000 | 2,000 | |||||
Preferred par value | $ 0.1 | $ 0.1 | |||||
Cumulative dividends | $ 0 | ||||||
Shares issued dividends, amount | $ 48,513 | ||||||
Series G Preferred Stock [Member] | |||||||
Preferred stock outstanding | 6,021 | 0 | |||||
Preferred par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Cumulative dividends | $ 0 | ||||||
Shares issued dividends, amount | $ 3,770 | ||||||
Series E Preferred Stock [Member] | |||||||
Shares issued payment of dividends | 950,362 | ||||||
Additional Paid-In Capital | |||||||
Compensation expense | $ 1,162,000 | $ 96,000 | 855,000 | ||||
Series B Preferred Stock [Member] | |||||||
Cumulative dividends | 51,000 | ||||||
Common Stock | |||||||
Compensation expense | $ 1,000 | ||||||
MinimumMember | |||||||
Warrant exercise price | $ 0.8 | ||||||
Maximum [Member] | |||||||
Warrant exercise price | $ 1.1 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - $ / shares | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of the activity Under stock option plans | ||||||
Begining Balance | 5,376,969 | 4,057,296 | 5,376,969 | 4,057,296 | 3,783,411 | |
Granted, Options | 1,264,000 | 2,110,000 | 435,000 | |||
Expired/Cancelled | (121,500) | (750,622) | (62,498) | |||
Exercised, Options | (12,626) | (39,705) | (98,617) | |||
Ending Balance | 6,506,843 | 5,376,969 | 4,057,296 | |||
Begining Balance, Weighted-Average Exercise Price | $ 1.17 | $ 1.06 | $ 1.17 | $ 1.06 | $ 0.94 | |
Granted, Weighted-Average Exercise Price | $ 1.29 | $ 1.37 | $ 1.73 | 1.34 | 1.63 | 2.13 |
Expired/Cancelled, Weighted-Average Exercise Price | 1.29 | 1.86 | 1.96 | |||
Exercised, Weighted-Average Exercise Price | 0.21 | 0.87 | 0.68 | |||
Ending Balance, Weighted-Average Exercise Price | $ 1.21 | $ 1.17 | $ 1.06 | |||
Begining Balance,Weighted-Average Remaining Contractual Term | 6 years 10 months 24 days | 6 years 9 months 18 days | 7 years 4 months 24 days | |||
Ending Balance,Weighted-Average Remaining Contractual Term | 6 years 10 months 24 days | 6 years 9 months 18 days |
STOCK-BASED COMPENSATION (Det65
STOCK-BASED COMPENSATION (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | $ 1,162 | $ 960 | $ 856 |
Cost of Revenues [Member] | |||
Stock-based compensation | 20 | 15 | 12 |
General and Administrative Expense [Member] | |||
Stock-based compensation | 714 | 618 | 572 |
Selling And Marketing Expense [Member] | |||
Stock-based compensation | 224 | 171 | 142 |
Research and Development Expense [Member] | |||
Stock-based compensation | $ 204 | $ 156 | $ 130 |
STOCK-BASED COMPENSATION (Det66
STOCK-BASED COMPENSATION (Details 2) | Dec. 31, 2016shares |
Common stock reserved for future issuance | 20,648,835 |
Authorized Future Grant Under Stock Option Plans [Member] | |
Common stock reserved for future issuance | 55,938 |
Convertible Preferred Stock [Member] | Common Stock | |
Common stock reserved for future issuance | 11,709,151 |
Convertible lines of credit [Member] | Common Stock | |
Common stock reserved for future issuance | 2,201,903 |
Stock options outstanding | Common Stock | |
Common stock reserved for future issuance | 6,506,843 |
Warrants outstanding | |
Common stock reserved for future issuance | 175,000 |
STOCK-BASED COMPENSATION (Det67
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options outstanding | 6,506,843 | 5,376,969 | 4,057,296 | 3,783,411 | |||
Weighted average exercise price | $ 1.08 | ||||||
Options not yet vested | 4,366,374 | ||||||
Options vested and expected to vest | 2,140,469 | ||||||
Options vested and expected to vest, weighted average exercise price | $ 1.08 | ||||||
Intrinsic value vested and expected to vest | $ 1,744,000 | ||||||
Exercised | 12,626 | 39,705 | 98,617 | ||||
Shares issued pursuant to options exercised | 16,000 | 16,000 | 144,000 | 12,626 | 39,705 | 98,617 | |
Proceeds from option exercise | $ 2,000 | $ 12,000 | $ 12,000 | ||||
Options excercised, intrinsic value | $ 11,000 | $ 35,000 | |||||
Exercisable, intrinsic value | 1,679,000 | $ 1,575,000 | |||||
Outstanding, intrinsic value | $ 34,000 | ||||||
Options granted exercise price | $ 1.29 | $ 1.37 | $ 1.73 | $ 1.34 | $ 1.63 | $ 2.13 | |
Option term | 10 years | 10 years | 10 years | 6 years 9 months 18 days | |||
Unrecognized compensation cost related to unvested stock options | $ 12,000 | $ 178,000 | |||||
Weighted-average remaining requisite service period | 12 months | ||||||
Stock-based compensation expense related to restricted stock grants | $ 1,162,000 | $ 744,000 | $ 618,000 | ||||
Restricted stock issued | 0 | 0 | |||||
1999 Plan [Member] | |||||||
Options authorized under plan | 7,000,000 | ||||||
Options outstanding | 55,938 |
EMPLOYEE BENEFIT PLAN (Details
EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Benefit Plan Details Narrative | |||
Company contribution rate | 50.00% | ||
Maximum percent of employee compensation | 100.00% | ||
Discretionary contribution to employee benefit plan | $ 150,000 | $ 119,000 | $ 118,000 |
Paid subsequent year | $ 111,000 | $ 83,000 | $ 88,000 |
PENSION PLAN (Details)
PENSION PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 3,068 | $ 3,488 | $ 2,821 |
Service cost | |||
Interest cost | 75 | 70 | 106 |
Actuarial (gain) loss | 542 | (123) | 1,003 |
Effect of exchange rate changes | (114) | (356) | (442) |
Effect of curtailment | |||
Benefits paid | (31) | (11) | |
Benefit obligation at end of year | 3,540 | 3,068 | 3,488 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 1,557 | 1,654 | 1,790 |
Actual return of plan assets | 142 | 40 | 47 |
Company contributions | 28,000 | 34,000 | 43,000 |
Benefits paid | (31) | ||
Effect of exchange rate changes | (51) | (171) | (226) |
Fair value of plan assets at end of year | 1,645 | 1,557 | 1,654 |
Funded status | (1,895) | (1,511) | (1,834) |
Unrecognized actuarial loss (gain) | 1,831 | 1,413 | 1,911 |
Unrecognized prior service (benefit) cost | |||
Additional minimum liability | (1,831) | (1,413) | (1,911) |
Unrecognized transition (asset) liability | |||
Net amount recognized | $ (1,895) | $ (1,511) | $ (1,834) |
Plan Assets Pension plan assets were comprised of the following asset categories at December 31, | |||
Equity securities | 5.70% | 5.00% | 6.40% |
Debt securities | 87.20% | 89.30% | 87.40% |
Other | 7.10% | 5.70% | 6.20% |
Total | 100.00% | 100.00% | 100.00% |
Components of net periodic benefit cost are as follows: | |||
Service cost | |||
Interest cost on projected benefit obligations | 75 | 70 | 106 |
Expected return on plan assets | |||
Amortization of prior service costs | |||
Amortization of actuarial loss | |||
Net periodic benefit costs | $ 75 | $ 70 | $ 106 |
The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, were | |||
Discount rate | 1.70% | 2.40% | 2.20% |
Expected return on plan assets | 4.00% | 4.00% | 4.00% |
Rate of pensionincrease | 2.00% | 2.00% | 2.00% |
Rate of compensation increase | |||
The following discloses information about the Companys defined benefit pension plan that had an accumulated benefit obligation in excess of plan assets as of December 31, | |||
Projected benefit obligation | $ 3,540 | $ 3,068 | $ 3,488 |
Accumulated benefit obligation | 3,540 | 3,068 | 3,488 |
Fair value of plan assets | $ 1,645 | $ 1,557 | $ 1,654 |
PENSION PLAN (Details 1)
PENSION PLAN (Details 1) $ in Thousands | Dec. 31, 2016USD ($) |
Notes to Financial Statements | |
2,017 | $ 76 |
2,018 | 78 |
2,019 | 80 |
2,020 | 81 |
2,021 | 97 |
2022-2026 | $ 624 |
PENSION PLAN (Details Narrative
PENSION PLAN (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plan Details Narrative | |||
Contributions to the plan | $ 28,000 | $ 34,000 | $ 43,000 |
ACCUMULATED OTHER COMPREHENSI72
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Note 8 - FAIR VALUE ACCOUNTING | |||
Additional minimum pension liability | $ (1,338) | $ (991) | $ (1,323) |
Foreign currency translation adjustment | (205) | (204) | (271) |
Ending Balance | $ (1,543) | $ (1,195) | $ (1,594) |
QUARTERLY INFORMATION (UNAUDI73
QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Revenues | $ 925 | $ 848 | $ 996 | $ 1,043 | $ 902 | $ 1,181 | $ 1,695 | $ 991 | $ 1,240 | $ 919 | $ 937 | $ 1,063 | |||
Cost of Sales | 284 | 232 | 275 | 279 | 539 | 321 | 798 | 286 | 261 | 248 | 232 | 251 | |||
Operating expenses | 3,226 | 2,955 | 2,995 | 3,028 | 2,921 | 2,813 | 2,660 | 2,641 | 2,797 | 2,793 | 2,667 | 2,706 | $ 12,204 | $ 11,035 | $ 10,963 |
Loss from Operations | (2,585) | (2,339) | (2,274) | (2,264) | (2,558) | (1,953) | (1,763) | (1,936) | (1,818) | (2,122) | (1,962) | (1,894) | |||
Interest expense (income), net | 109 | 89 | 36 | 11 | 11 | 1 | (2) | 437 | 128 | 104 | 105 | 79 | 245 | 447 | 416 |
Other expense (income), net | (200) | (1) | (99) | (46) | (8) | (1) | (5) | (283) | |||||||
Income tax expense (benefit) | 11 | 3 | 4 | 3 | 10 | 3 | 6 | 3 | 10 | 3 | 12 | 21 | 22 | 25 | |
Net income (loss) | $ (2,705) | $ (2,431) | $ (2,114) | $ (2,277) | $ (2,579) | $ (1,858) | $ (1,767) | $ (2,330) | $ (1,948) | $ (2,228) | $ (2,074) | $ (1,690) | $ (9,527) | $ (8,534) | $ (7,940) |
Net income (loss) per share: | |||||||||||||||
Net income (loss) | $ (.03) | $ (0.03) | $ (0.02) | $ (0.03) | $ (0.03) | $ (0.02) | $ (0.02) | $ (0.03) | $ (0.02) | $ (0.02) | $ (0.02) | $ (0.02) | $ (0.1) | $ (0.09) | $ (0.09) |
Preferred dividends | (.00) | 0 | (0.01) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (0.02) | (0.01) | |
Basic income (loss) per share to common shareholders | $ (0.03) | $ (0.03) | $ (0.03) | $ (0.03) | $ (0.03) | $ (0.02) | $ (0.02) | $ (0.03) | $ (0.02) | $ (0.02) | $ (0.02) | $ (0.02) | $ (0.12) | $ (0.1) | $ (0.09) |
Basic weighted-average shares outstanding | 94,779,243 | 94,550,721 | 94,298,567 | 94,073,367 | 94,070,895 | 93,876,339 | 93,674,349 | 93,515,640 | 93,384,834 | 93,162,548 | 91,930,400 | 88,604,221 | 94,426,783 | 93,786,079 | 91,795,971 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Dec. 31, 2016USD ($) |
Subsequent Events Details Narrative | |
Additional borrowed | $ 1,000,000 |