Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 11, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AWARE INC /MA/ | ||
Entity Central Index Key | 1,015,739 | ||
Trading Symbol | awre | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 21,571,150 | ||
Entity Public Float | $ 53,303,310 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 51,612 | $ 51,608 |
Accounts receivable (less allowance for doubtful accounts of $20 at December 31, 2018 and 2017) | 2,010 | 2,389 |
Unbilled receivables | 3,279 | 1,429 |
Prepaid expenses and other current assets | 284 | 216 |
Total current assets | 57,185 | 55,642 |
Property and equipment, net | 4,085 | 4,304 |
Deferred tax assets | 5,171 | 5,071 |
Other assets | 18 | |
Total assets | 66,441 | 65,035 |
Current liabilities: | ||
Accounts payable | 126 | 166 |
Accrued expenses | 1,319 | 1,401 |
Accrued income taxes | 2 | |
Deferred revenue | 3,024 | 2,805 |
Total current liabilities | 4,469 | 4,374 |
Long-term deferred revenue | 75 | 127 |
Commitments and contingent liabilities (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $1.00 par value; 1,000,000 shares authorized, none outstanding | ||
Common stock, $.01 par value; shares authorized, 70,000,000 in 2018 and 2017; issued and outstanding 21,515,872 as of December 31, 2018 and 21,493,440 as of December 31, 2017 | 215 | 215 |
Additional paid-in capital | 96,376 | 96,246 |
Accumulated deficit | (34,694) | (35,927) |
Total stockholders' equity | 61,897 | 60,534 |
Total liabilities and stockholders' equity | $ 66,441 | $ 65,035 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in dollars) | $ 20 | $ 20 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, shares issued | 21,515,872 | 21,493,440 |
Common stock, shares outstanding | 21,515,872 | 21,493,440 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | ||
Total revenue | $ 16,131 | $ 15,465 |
Costs and expenses: | ||
Research and development | 7,105 | 7,769 |
Selling and marketing | 4,178 | 3,907 |
General and administrative | 3,296 | 3,389 |
Total costs and expenses | 15,819 | 15,940 |
Patent related income | 69 | 1,582 |
Operating income | 381 | 1,107 |
Other income | 36 | |
Interest income | 844 | 401 |
Income before provision (benefit) for income taxes | 1,225 | 1,544 |
Provision (benefit) for income taxes | (8) | 543 |
Net income | $ 1,233 | $ 1,001 |
Net income per share - basic (in dollars per share) | $ 0.06 | $ 0.05 |
Net income per share - diluted (in dollars per share) | $ 0.06 | $ 0.05 |
Weighted-average shares - basic (in shares) | 21,544 | 21,814 |
Weighted-average shares - diluted (in shares) | 21,605 | 21,877 |
Comprehensive income: | ||
Net income | $ 1,233 | $ 1,001 |
Other comprehensive income (net of tax): | ||
Unrealized gain on available for sale securities | 19 | |
Comprehensive income | 1,233 | 1,020 |
Software licenses | ||
Revenue: | ||
Total revenue | 8,038 | 9,139 |
Costs and expenses: | ||
Cost of software licenses and services | 20 | 274 |
Software maintenance | ||
Revenue: | ||
Total revenue | 5,397 | 4,923 |
Services | ||
Revenue: | ||
Total revenue | 2,696 | 1,259 |
Costs and expenses: | ||
Cost of software licenses and services | $ 1,220 | 601 |
Royalties | ||
Revenue: | ||
Total revenue | $ 144 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 1,233 | $ 1,001 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 443 | 519 |
Stock-based compensation | 580 | 663 |
Amortization of discount on investments | (4) | |
Gain on sale of investments | (36) | |
Deferred tax expense on other comprehensive income | (10) | |
Increase (decrease) from changes in assets and liabilities: | ||
Accounts receivable | 379 | 602 |
Unbilled receivables | (1,850) | 830 |
Prepaid expenses and other current assets | (68) | 74 |
Deferred tax assets | (100) | 13 |
Accounts payable | (40) | 31 |
Accrued expenses | (82) | (15) |
Accrued income taxes | (2) | 2 |
Deferred revenue | 167 | (1) |
Net cash provided by operating activities | 660 | 3,669 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (206) | (82) |
Sales of investments | 1,019 | |
Net cash provided by (used in) investing activities | (206) | 937 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 50 | 61 |
Proceeds from exercise of stock options | 13 | |
Payments made for taxes of employees who surrendered shares related to unrestricted stock | (107) | (186) |
Repurchase of common stock | (393) | (4,799) |
Net cash used in financing activities | (450) | (4,911) |
Increase/(decrease) in cash and cash equivalents | 4 | (305) |
Cash and cash equivalents, beginning of year | 51,608 | 51,913 |
Cash and cash equivalents, end of year | 51,612 | 51,608 |
Supplemental disclosure: | ||
Cash paid for income taxes | $ 96 | $ 488 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | (Accumulated Deficit) | Total |
Balance at Dec. 31, 2016 | $ 224 | $ 100,485 | $ (19) | $ (41,686) | $ 59,004 |
Balance (in shares) at Dec. 31, 2016 | 22,371,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect on adoption of ASC 2016-09 (see Note 2) | 4,758 | 4,758 | |||
Exercise of common stock options | 13 | 13 | |||
Exercise of common stock (in shares) | 4,000 | ||||
Issuance of unrestricted stock | $ 1 | (1) | |||
Issuance of unrestricted stock (in shares) | 143,000 | ||||
Shares surrendered by employees to pay taxes related to unrestricted stock | (186) | (186) | |||
Shares surrendered by employees to pay taxes related to unrestricted stock (in shares) | (33,000) | ||||
Issuance of common stock under employee stock purchase plan | 61 | 61 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 13,000 | ||||
Stock-based compensation expense | 663 | 663 | |||
Repurchase of common stock | $ (10) | (4,789) | (4,799) | ||
Repurchase of common stock (in shares) | (1,005,000) | ||||
Accumulated other comprehensive loss: | |||||
Unrealized gain on securities | 28 | 28 | |||
Deferred tax expense on unrealized gain | $ (9) | (9) | |||
Net income | 1,001 | 1,001 | |||
Balance at Dec. 31, 2017 | $ 215 | 96,246 | (35,927) | $ 60,534 | |
Balance (in shares) at Dec. 31, 2017 | 21,493,000 | 21,493,440 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of unrestricted stock | $ 1 | (1) | |||
Issuance of unrestricted stock (in shares) | 136,000 | ||||
Shares surrendered by employees to pay taxes related to unrestricted stock | (107) | $ (107) | |||
Shares surrendered by employees to pay taxes related to unrestricted stock (in shares) | (25,000) | ||||
Issuance of common stock under employee stock purchase plan | 50 | 50 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 14,000 | ||||
Stock-based compensation expense | 580 | 580 | |||
Repurchase of common stock | $ (1) | (392) | (393) | ||
Repurchase of common stock (in shares) | (102,000) | ||||
Accumulated other comprehensive loss: | |||||
Net income | 1,233 | 1,233 | |||
Balance at Dec. 31, 2018 | $ 215 | $ 96,376 | $ (34,694) | $ 61,897 | |
Balance (in shares) at Dec. 31, 2018 | 21,516,000 | 21,515,872 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |
NATURE OF BUSINESS | 1. NATURE OF BUSINESS We are a leading provider of software and services to the biometrics industry. Our software products are used in government and commercial biometrics systems, which are capable of determining or verifying an individual’s identity. We also offer engineering services related to software customization, integration, and installation, as well as complete systems development. We sell our biometrics software products and services globally through systems integrators, OEMs, and directly to end user customers. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Use of Estimates Fair Value Measurements Cash and cash equivalents, which primarily include money market mutual funds, were $51.6 million at December 31, 2018 and December 31, 2017. We classified our cash equivalents of $47.9 million and $50.0 million as of December 31, 2018 and 2017, respectively, within Level 1 of the fair value hierarchy because they are valued using quoted market prices. As of December 31, 2018, our assets that are measured at fair value on a recurring basis and whose carrying values approximate their respective fair values include the following (in thousands): Fair Value Measurement at December 31, 2018 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Money market funds (included in cash and cash equivalents) $ 47,939 Total $ 47,939 $ - $ - As of December 31, 2017, our assets that are measured at fair value on a recurring basis and whose carrying values approximate their respective fair values include the following (in thousands): Fair Value Measurement at December 31, 2017 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Money market funds (included in cash and cash equivalents) $ 49,986 - - Total $ 49,986 $ - $ - Cash and Cash Equivalents Investments Realized gains on investments were $36,000 in the year ended December 31, 2017. There were no unrealized gains or losses on investments for the years ended December 31, 2018 and 2017. Allowance for Doubtful Accounts For the years ended December 31, 2018 and 2017, changes to and ending balances of the allowance for doubtful accounts were as follows (in thousands): Years ended December 31, 2018 2017 Allowance for doubtful accounts balance - beginning of year $ 20 $ 20 Additions to the allowance for doubtful accounts - 19 Deductions against the allowance for doubtful accounts - (19 ) Allowance for doubtful accounts balance - end of year $ 20 $ 20 Property and Equipment The estimated useful lives of assets used by us are: Building 30 years Building improvements 5 to 20 years Furniture and fixtures 5 years Computer, office & manufacturing equipment 3 years Purchased software 3 years Impairment of Long-Lived Assets Revenue recognition In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods and services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods and services. In addition, ASC 606 requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle of the standard is that we should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To achieve that core principle, we should apply the following five step model: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when (or as) each performance obligation is satisfied. 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s intent and ability to pay, which is based on a variety of factors including the customer’s historical payment experience, or in the case of a new customer, published credit and financial information pertaining to the customer. We evaluate contract modifications for the impact on revenue recognition if they have been approved by both parties such that the enforceable rights and obligations under the contract have changed. Contract modifications are either accounted for using a cumulative effect adjustment or prospectively over the remaining term of the arrangement. The determination of which method is more appropriate depends on the nature of the modification, which we evaluate on a case-by-case basis. We combine two or more contracts entered into at or near the same time with the same customer and account for them as a single contract if (i) the contracts are negotiated as a package with a common commercial objective, (ii) the amount of consideration to be paid in one contract depends on the price or performance of the other contract, or (iii) some or all of the goods or services in one contract would be combined with some or all of the goods and services in the other contract into a single performance obligation. If two or more contracts are combined, the consideration to be paid is aggregated and allocated to the individual performance obligations without regard to the consideration specified in the individual contracts. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. To identify performance obligations, we consider all of the goods or services promised in a contract regardless of whether they are explicitly stated or are implied by customary business practices. 3) Determine the transaction price The transaction price is determined based on the consideration we expect to be entitled in exchange for transferring promised goods and services to the customer. Determining the transaction price requires significant judgment. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period. The amount of consideration is not adjusted for a significant financing component if the time between payment and the transfer of the related good or service is expected to be one year or less under the practical expedient in ASC 606-10-32-18. Our revenue arrangements are typically accounted for under such expedient, as payment is typically due within 30 to 60 days. As of December 31, 2018, none of our contracts contained a significant financing component. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The consideration to be received is allocated among the separate performance obligations based on relative SSPs. The SSP is the price at which we would sell a promised good or service separately to a customer. The best estimate of SSP is the observable price of a good or service when we sell that good or service separately. A contractually stated price or a list price for a good or service may be the SSP of that good or service. We use a range of amounts to estimate SSP when we sell each of the goods and services separately and need to determine whether there is a discount that needs to be allocated based on the relative SSP of the various goods and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we typically determine the SSP using an adjusted market assessment approach using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual goods and services due to the stratification of those goods and services by customers and circumstances. In these instances, we may use information such as the nature of the customer and distribution channel in determining the SSP. 5) Recognize revenue when or as we satisfy a performance obligation We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized over time if 1) the customer simultaneously receives and consumes the benefits provided by our performance, 2) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. If we do not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. We categorize revenue as software licenses, software maintenance, services, or royalties. In addition to the general revenue recognition policies described above, specific revenue recognition policies apply to each category of revenue. Software licenses Software licenses consist of revenue from the sale of software licenses for biometrics and imaging applications. Our software licenses are functional intellectual property and typically provide customers with the right to use our software in perpetuity as it exists when made available to the customer. We recognize revenue from software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. Software maintenance Software maintenance consists of revenue from the sale of software maintenance contracts for biometrics and imaging software. Software maintenance contracts entitle customers to receive software support and software updates, if and when they become available, during the term of the maintenance contract. Software support and software updates are considered distinct services. However, these distinct services are considered a single performance obligation consisting of a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. We recognize software maintenance revenue over time on a straight-line basis over the contract period. Services Service revenue consists of fees from biometrics customers for software engineering services we provide to them. We recognize services revenue over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted), provided all other revenue recognition criteria are met. Royalties Royalties consist primarily of royalty payments we receive under DSL silicon contracts with two customers that incorporate our silicon intellectual property (“IP”) in their DSL chipsets. We sold the assets of our DSL IP business in 2009, but we continued to receive royalty payments from these customers. We recognize revenue from sales-based royalties at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Refer to Note 8 – Business Segments and Major Customers for further information on the disaggregation of revenue, including revenue by geography and category. Arrangements with multiple performance obligations In addition to selling software licenses, software maintenance and software services on a standalone basis, a significant portion of our contracts include multiple performance obligations. The various combinations of multiple performance obligations and our revenue recognition for each are described as follows: • Software licenses and software maintenance. When software licenses and software maintenance contracts are sold together, the software licenses and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to the software licenses and the software maintenance based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the software maintenance is recognized over time on a straight-line basis over the contract period. • Software licenses and services. When software licenses and significant customization engineering services are sold together, they are accounted for as a combined performance obligation, as the software licenses are generally highly dependent on, and interrelated with, the associated services and therefore are not distinct performance obligations. Revenue for the combined performance obligation is recognized over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). When software licenses and standard implementation or consulting-type services are sold together, they are generally considered distinct performance obligations, as the software licenses are not dependent on or interrelated with the associated services. The transaction price in these arrangements is allocated to the software licenses and services based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). In arrangements with both software licenses and services, the software license portion of the arrangement is classified as software license revenue and the services portion is classified as services revenue in our consolidated statements of income and comprehensive income. • Software licenses, software maintenance and services. When we sell software licenses, software maintenance and software services together, we account for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period. However, if the software services are significant customization engineering services, they are accounted for with the software licenses as a combined performance obligation, as stated above. Revenue for the combined performance obligation is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Returns We do not offer rights of return for our products and services in the normal course of business. Customer Acceptance Our contracts with customers generally do not include customer acceptance clauses. Contract Balances When the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by the deferred revenue below until the performance obligation is satisfied. Contract assets represent arrangements in which the good or service has been delivered but payment is not yet due. Our contract assets consist of unbilled receivables. Our contract liabilities consisted of deferred (unearned) revenue, which is generally related to software maintenance contracts. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The following table presents changes in our contract assets and liabilities during the years ended December 31, 2017 and 2018 (in thousands): Revenue Balance at Recognized Beginning of In Advance of Balance at End of Period Billings Billings Period Year ended December 31, 2017 Contract assets: Unbilled receivables $ 2,259 $ 198 $ (1,028 ) $ 1,429 Year ended December 31, 2018 Contract assets: Unbilled receivables $ 1,429 $ 3,278 $ (1,428 ) $ 3,279 Balance at Beginning of Revenue Balance at End of Period Billings Recognized Period Year ended December 31, 2017 Contract liabilities: Deferred revenue $ 2,933 $ 4,933 $ (4,934 ) $ 2,932 Year ended December 31, 2018 Contract liabilities: Deferred revenue $ 2,932 $ 5,564 $ (5,397 ) $ 3,099 Remaining Performance Obligations Remaining performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 97% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. As of December 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations with a duration greater than one year, comprised of software maintenance contracts, was $0.1 million. Contract Costs We recognize an other asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales commissions meet the requirements to be capitalized, and we amortize these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. These costs include sales commissions on software maintenance contracts with a contract period of one year or less as sales commissions paid on contract renewals are commensurate with those paid on the initial contract. Income Taxes We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax position. The evaluation of an uncertain tax position is based on factors that include, but are not limited to, changes in the tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, and changes in facts or circumstances related to a tax position. Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could impact our tax provision in future periods. Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in the consolidated statements of income and comprehensive income. Capitalization of Software Costs Research and Development Costs Concentration of Credit Risk Concentration of credit risk with respect to net accounts receivable and unbilled receivables consisted of amounts owed by the following customers that comprised more than 10% of net accounts receivable and unbilled receivables at December 31: 2018 2017 Customer A 46 % - % Customer B 19 % 43 % Stock-Based Compensation For stock awards, we determine the fair value of the award by using the fair market value of our stock on the date of grant; provided the number of shares in the grant is fixed on the grant date. For stock options, we use the Black-Scholes option valuation model to estimate the fair value of the award. This valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. Computation of Earnings per Share Fair Value of Financial Instruments Advertising Costs – Recent Accounting Pronouncements: Recently Adopted Accounting Pronouncements FASB ASU No. 2014-09 We implemented new internal controls for the implementation and modified and augmented our existing internal controls that enabled the preparation of financial information on adoption. The most significant impacts of adopting the new standard related to the following: i) DSL royalty contracts ii) Minimum license/royalty payment contract iii) Sales commissions and other third-party acquisition costs Revenue recognition related to our other arrangements for software licenses, software maintenance, services, and hardware will remain substantially unchanged. As a practical expedient, for contracts that were modified before the earliest reporting period of application of the standard, we have not retrospectively restated the contracts for those contract modifications. Instead we have reflected the aggregate effect of all modifications that occurred before the earliest reporting period of application when (i) identifying the satisfied and unsatisfied performance obligations, (ii) determining the transaction price, and (iii) allocating the transaction price to the satisfied and unsatisfied performance obligations. We have not restated contracts that began and were completed within the same annual reporting period. For completed contracts that have variable consideration, we have used the transaction price at the date the contract was completed rather than estimating variable consideration amounts in comparative reporting periods. For fiscal years 2017, adoption of the standard resulted in an aggregate decrease in revenue of $0.8 million, a decrease in costs and expenses of $0.1 million, a decrease in the provision for income taxes of $0.4 million, and an increase in opening stockholders’ equity of $0.9 million primarily due to the changes noted above. In addition, adoption of the standard resulted in an increase in unbilled receivables of $1.4 million as of December 31, 2017 driven by unbilled receivables from recognition of revenue from the estimate of variable consideration related to the minimum license/royalty payments in one of our contracts; a decrease in deferred tax assets of $0.3 million as of December 31, 2017 driven primarily by a difference in timing of revenue recognition and expenses for book and tax purposes; and an increase in accrued expenses of $0.2 million as of December 31, 2017 driven by sales commissions related to recognition of revenue from the estimate of variable consideration related to the minimum license/royalty payments in one of our contracts. Also, the 2017 opening stockholders’ equity balance increased by $1.2 million related to the effect of adoption of the standard from prior periods. See Impacts of Topic 606 Adoption to Reported Results below for the impact of the adoption of the new standard on our consolidated financial statements. Impacts of Topic 606 Adoption to Reported Results Adoption of the new revenue standard impacted our reported results as follows: Year Ended (In thousands, except per share data) December 31, 2017 As Reported Adjustment As Adjusted Consolidated Statements of Income: Revenue $ 16,282 $ (817 ) $ 15,465 Costs and expenses 16,054 (114 ) 15,940 Provision for income taxes 965 (422 ) 543 Net income 1,282 (281 ) 1,001 Net income per share - basic 0.06 (0.01 ) 0.05 Net income per share - diluted 0.06 (0.01 ) 0.05 (In thousands) December 31, 2017 As Reported Adjustment As Adjusted Consolidated Balance Sheets: Accounts and unbilled receivables, net $ 2,401 $ 1,417 $ 3,818 Prepaid expenses and other current assets 203 13 216 Deferred tax assets 5,402 (331 ) 5,071 Accrued expenses 1,184 217 1,401 Stockholders' equity 59,652 882 60,534 Adoption of the new revenue standard had no impact to cash from or used in operating, financing, or investing on our consolidated statements of cash flows. FASB ASU No. 2016-09. The new standard contains several amendments that will simplify the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. In addition, the new standard eliminates the limitation on recognition of excess stock compensation benefits until such benefits are actually realized, and instead applies the general recognition standard to these deferred tax assets. We adopted ASU 2016-09 in 2017 which was applied using a modified retrospective approach. Upon adoption, we recorded a deferred tax asset of $4.8 million with an offsetting adjustment to retained earnings related to excess stock compensation deductions that were not previously recorded as tax assets. For the year ended December 31, 2017, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit Recent Accounting Pronouncements Not Yet Adopted FASB ASU No. 2016-13. With the exception of the standards discussed above, there have been no other recently issued accounting pronouncements that are of significance or potential significance to us that we have not adopted as of December 31, 2018. Segments |
PATENT RELATED INCOME
PATENT RELATED INCOME | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENT RELATED INCOME | 3. PATENT RELATED INCOME The composition of patent related income in 2018 and 2017 was as follows: Years ended December 31, 2018 and 2017. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31 (in thousands): 2018 2017 Land $ 1,056 $ 1,056 Building and improvements 9,060 9,060 Computer equipment 795 638 Purchased software 81 83 Furniture and fixtures 778 778 Office equipment 138 138 Total 11,908 11,753 Less accumulated depreciation and amortization (7,823 ) (7,449 ) Property and equipment, net $ 4,085 $ 4,304 Depreciation expense was $0.4 million for the years ended December 31, 2018 and 2017. In 2018 and 2017, we identified $0.1 million of assets no longer in use and retired the assets and related accumulated depreciation. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 5. INCOME TAXES We recorded a benefit from income taxes of $8,000 in the year ended December 31, 2018. We made provisions for income taxes in the year ended December 31, 2017 of $0.5 million. The components of the provision for income taxes are as follows (in thousands): Year ended December 31, 2018 2017 Current: Federal 54 470 State 38 70 92 540 Deferred: Federal (22 ) 71 State (78 ) (68 ) (100 ) 3 Provision for (benefit from) income taxes $ (8 ) $ 543 A reconciliation of the U.S. federal statutory rate to the effective tax rate is as follows: Year ended December 31, 2018 2017 Federal statutory rate 21 % 34 % Enactment of the Tax Cuts and Jobs Act - 14 State rate, net of federal benefit 6 4 Tax credits (26 ) (15 ) Permanent adjustments 1 - FDII deduction (4 ) - Other 1 (2 ) Effective tax rate (1 )% 35 % Total income tax benefit for the year ended December 31, 2018 was $8,000. Income tax benefit for 2018 was based on: i) the U.S. statutory rate of 21%, ii) increased by state income taxes and permanent adjustments; and iii) reduced by Foreign-Derived Intangible Income (“FDII”) deduction and research tax credits. Total income tax expense for the year ended December 31, 2017 was $0.5 million. Income tax expense for 2017 was based on: i) the U.S. statutory rate of 34%, ii) increased by the impact of the federal rate change on deferred tax assets due to enactment of the Tax Cuts and Jobs Act, iii) increased by state income taxes; and iv) reduced by research tax credits. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act. This legislation makes significant changes in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the then-current rate of 34% to 21%. As a result of the enacted law, the Company was required to revalue deferred tax assets and liabilities at the enacted rate. For the year ended December 31, 2017, this revaluation resulted in a provision of $0.4 million to income tax expense and a corresponding reduction in the deferred tax assets. As of December 31, 2018 and 2017, we had deferred tax assets for which we had recorded no valuation allowance. The principal components of deferred tax assets were as follows at December 31 (in thousands): 2018 2017 Depreciation $ 327 $ 330 Stock compensation 87 103 Federal research and development credits 4,689 4,602 Other 68 36 Total 5,171 5,071 Less valuation allowance (-) (-) Deferred tax assets, net $ 5,171 $ 5,071 As of December 31, 2018, we had a total of $5.2 million of deferred tax assets for which we had recorded no valuation allowance. We have assessed the need for a valuation allowance on our deferred tax assets. Based on our assessment of future sources of income, including reversing deferred tax liabilities, and future earnings, we have determined that it is more likely than not that the deferred tax assets will be realized, and therefore there is no valuation allowance required for the deferred tax assets. We will continue to assess the level of valuation allowance in future periods. Should evidence regarding the realizability of tax assets change at a future point in time, a valuation allowance will be required. A rollforward of the uncertain tax position related to our research and development tax credits is as follows (in thousands): Uncertain tax positions at December 31, 2016 1,032 Decrease due to positions taken in prior periods (34 ) Uncertain tax positions at December 31, 2017 998 Decrease due to positions taken in prior periods - Uncertain tax positions at December 31, 2018 $ 998 Uncertain tax positions of $0.8 million will impact our tax rate if realized. The difference between this amount and the total uncertain tax positions in the table above is the federal tax effect on state tax credits. We adopted ASU 2016-09 in 2017 which was applied using a modified retrospective approach. Upon adoption, we recorded a deferred tax asset of $4.8 million with an offsetting adjustment to retained earnings related to excess stock compensation deductions that were not previously recorded as tax assets. The tax years from 2015 through 2018 are subject to examination by the IRS and the tax years 2002 through 2018 are subject to examination by state tax authorities. In the second quarter of 2017, the Internal Revenue Service commenced an examination of our tax return for the year ended December 31, 2015. In February 2018, the IRS notified us that it had completed its examination and that it had no changes to our reported tax. |
EQUITY AND STOCK COMPENSATION P
EQUITY AND STOCK COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY AND STOCK COMPENSATION PLANS | 6. EQUITY AND STOCK COMPENSATION PLANS Fixed Stock Option Plan Options are granted at exercise prices as determined by the Board of Directors and have terms ranging from four to a maximum of ten years. Options generally vest over three to five years. The following table presents stock-based employee compensation expenses included in our consolidated statements of income and comprehensive income (in thousands): Years ended 2018 2017 Cost of services $ 25 $ 9 Research and development 101 119 Selling and marketing 13 15 General and administrative 441 520 Stock-based compensation expense $ 580 $ 663 Stock-based compensation expense in the preceding table includes expenses associated with grants of: i) stock options; and ii) unrestricted shares of our common stock. The methods used to determine stock-based compensation expense for each type of equity grant are described in the following paragraphs. Stock Option Grants. Unrestricted Stock Grants The accounting treatment of unrestricted stock awards in 2018 and 2017 is described below: Year ended December 31, 2018. We issued shares of common stock related to the March 2018 grant as follows: i) 57,592 net shares of common stock were issued in early July 2018 after employees surrendered 11,408 shares for which we paid $51,000 of withholding taxes on their behalf; and ii) 55,278 net shares of common stock were issued in early January 2019 after employees surrendered 13,722 shares for which we paid $50,000 of withholding taxes on their behalf. Year ended December 31, 2017. We issued shares of common stock related to the February 2017 grant as follows: i) 54,014 net shares of common stock were issued in early July 2017 after employees surrendered 12,986 shares for which we paid $67,000 of withholding taxes on their behalf; and ii) 53,378 net shares of common stock were issued in early January 2018 after employees surrendered 13,622 shares for which we paid $64,000 of withholding taxes on their behalf. A summary of stock option transactions for our fixed stock option plan for the years ended December 31, 2018, and 2017 are presented below: 2018 2017 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of year 28,000 $ 2.97 86,202 $ 4.37 Granted - - - - Exercised - - (4,168 ) 3.09 Forfeited or cancelled (10,000 ) 3.77 (54,034 ) 5.20 Outstanding at end of year 18,000 $ 2.52 28,000 $ 2.97 Exercisable at year end 18,000 $ 2.52 28,000 $ 2.97 Total options outstanding at December 31, 2018 were 18,000. All of those options were vested and had a weighted average exercise price of $2.52. No stock options were granted in the years ended December 31, 2018, and 2017. No options were exercised in the year ended December 31, 2018. For the year ended December 31, 2017, 4,168 options were exercised which generated proceeds of $13,000. At December 31, 2018, the weighted average remaining contractual term for total options outstanding and total options exercisable was approximately 0.4 years for each. At December 31, 2018, the aggregate intrinsic value of options outstanding and options exercisable was $20,000. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The following table summarizes the stock options outstanding at December 31, 2018: Options Outstanding Options Exercisable Exercise Price Range Number Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Number Weighted Average Exercise Price $2 to $3 18,000 $ 2.52 .39 18,000 $ 2.52 At December 31, 2018, there was no unrecognized compensation expense related to non-vested stock options as there were no non-vested stock options. We issue common stock from previously authorized but unissued shares to satisfy option exercises and purchases under our Employee Stock Purchase Plan. Employee Stock Purchase Plan Share Purchases Dividends – |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | 7. COMMITMENTS AND CONTINGENT LIABILITIES Lease Commitments Litigation Guarantees and Indemnification Obligations We enter into agreements in the ordinary course of business that require us: i) to perform under the terms of the contracts, ii) to protect the confidentiality of our customers’ intellectual property, and iii) to indemnify customers, including indemnification against third party claims alleging infringement of intellectual property rights. We also have agreements with each of our directors and executive officers to indemnify such directors or executive officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or officer of the Company. Given the nature of the above obligations and agreements, we are unable to make a reasonable estimate of the maximum potential amount that we could be required to pay. Historically, we have not made any significant payments on the above guarantees and indemnifications and no amount has been accrued in the accompanying consolidated financial statements with respect to these guarantees and indemnifications. |
BUSINESS SEGMENTS AND MAJOR CUS
BUSINESS SEGMENTS AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS AND MAJOR CUSTOMERS | 8. BUSINESS SEGMENTS AND MAJOR CUSTOMERS We organize ourselves into a single segment that reports to the chief operating decision makers. We conduct our operations in the United States and sell our products and services to domestic and international customers. Revenues were generated from the following geographic regions (in thousands): Year ended December 31, 2018 2017 United States $ 7,439 $ 12,413 United Kingdom 4,004 417 Brazil 2,473 279 Rest of world 2,215 2,356 $ 16,131 $ 15,465 Revenue by product group was (in thousands): Year ended December 31, 2018 2017 Biometrics $ 15,042 $ 11,953 Imaging 1,089 3,368 DSL royalties - 144 $ 16,131 $ 15,465 The portion of total revenue that was derived from major customers was as follows: Year ended December 31, 2018 2017 Customer A 20 % - % Customer B 13 % - % Customer C - % 17 % Revenue by timing of transfer of goods or services for the years ended December 31, 2018 and 2017 was (in thousands): Year ended December 31, 2018 2017 Goods or services transferred at a point in time $ 5,972 $ 9,283 Goods or services transferred over time 10,159 6,182 $ 16,131 $ 15,465 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLAN | 9. EMPLOYEE BENEFIT PLAN In 1994, we established a qualified 401(k) Retirement Plan (the “Plan”) under which employees are allowed to contribute certain percentages of their pay, up to the maximum allowed under Section 401(k) of the Internal Revenue Code. Our contributions to the Plan are at the discretion of the Board of Directors. Our contributions were approximately $238,000, and $223,000 in 2018 and 2017, respectively. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | 10. NET INCOME PER SHARE Net income per share is calculated as follows (in thousands, except per share data): Year ended December 31, 2018 2017 Net income $ 1,233 $ 1,001 Shares outstanding: Weighted-average common shares outstanding 21,544 21,814 Additional dilutive common stock equivalents 61 63 Diluted shares outstanding 21,605 21,877 Net income per share – basic $ 0.06 $ 0.05 Net income per share - diluted $ 0.06 $ 0.05 |
OFF-BALANCE SHEET ARRANGEMENTS
OFF-BALANCE SHEET ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Off Balance Sheet Arrangements [Abstract] | |
OFF-BALANCE SHEET ARRANGEMENTS | 11. OFF-BALANCE SHEET ARRANGEMENTS We do not currently have any arrangements with unconsolidated entities, such as entities often referred to as structured finance, special purpose entities, or variable interest entities which are often established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Accordingly, we are not exposed to any financing, liquidity, market or credit risk if we had such relationships. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED | 12. QUARTERLY RESULTS OF OPERATIONS – UNAUDITED The following table is a summary of certain items in the consolidated statements of income and comprehensive income for each of our quarters in the two-year period ended December 31, 2018 (in thousands, except per share data). 2018 Quarters Ended March 31 June 30 September 30 December 31 Revenue $ 2,911 $ 3,760 $ 5,401 $ 4,058 Operating income (loss) (723 ) (381 ) 1,142 343 Net income (loss) (495 ) (188 ) 1,277 639 Net income (loss) per share – basic $ (0.02 ) $ (0.01 ) $ 0.06 $ 0.03 Net income (loss) per share – diluted $ (0.02 ) $ (0.01 ) $ 0.06 $ 0.03 2017 Quarters Ended March 31 June 30 September 30 December 31 Revenue $ 4,156 $ 2,542 $ 5,707 $ 3,060 Operating income (loss) 222 64 1,492 (671 ) Net income (loss) 301 114 1,145 (559 ) Net income (loss) per share – basic $ 0.01 $ 0.01 $ 0.05 $ (0.03 ) Net income (loss) per share – diluted $ 0.01 $ 0.01 $ 0.05 $ (0.03 ) Quarterly amounts may not sum to annual amounts due to rounding and dilution. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
Use of Estimates | Use of Estimates |
Fair Value Measurements | Fair Value Measurements Cash and cash equivalents, which primarily include money market mutual funds, were $51.6 million at December 31, 2018 and December 31, 2017. We classified our cash equivalents of $47.9 million and $50.0 million as of December 31, 2018 and 2017, respectively, within Level 1 of the fair value hierarchy because they are valued using quoted market prices. As of December 31, 2018, our assets that are measured at fair value on a recurring basis and whose carrying values approximate their respective fair values include the following (in thousands): Fair Value Measurement at December 31, 2018 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Money market funds (included in cash and cash equivalents) $ 47,939 Total $ 47,939 $ - $ - As of December 31, 2017, our assets that are measured at fair value on a recurring basis and whose carrying values approximate their respective fair values include the following (in thousands): Fair Value Measurement at December 31, 2017 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Money market funds (included in cash and cash equivalents) $ 49,986 - - Total $ 49,986 $ - $ - |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Investments | Investments Realized gains on investments were $36,000 in the year ended December 31, 2017. There were no unrealized gains or losses on investments for the years ended December 31, 2018 and 2017. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts For the years ended December 31, 2018 and 2017, changes to and ending balances of the allowance for doubtful accounts were as follows (in thousands): Years ended December 31, 2018 2017 Allowance for doubtful accounts balance - beginning of year $ 20 $ 20 Additions to the allowance for doubtful accounts - 19 Deductions against the allowance for doubtful accounts - (19 ) Allowance for doubtful accounts balance - end of year $ 20 $ 20 |
Property and Equipment | Property and Equipment The estimated useful lives of assets used by us are: Building 30 years Building improvements 5 to 20 years Furniture and fixtures 5 years Computer, office & manufacturing equipment 3 years Purchased software 3 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Revenue recognition | Revenue recognition In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods and services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods and services. In addition, ASC 606 requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle of the standard is that we should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To achieve that core principle, we should apply the following five step model: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when (or as) each performance obligation is satisfied. 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s intent and ability to pay, which is based on a variety of factors including the customer’s historical payment experience, or in the case of a new customer, published credit and financial information pertaining to the customer. We evaluate contract modifications for the impact on revenue recognition if they have been approved by both parties such that the enforceable rights and obligations under the contract have changed. Contract modifications are either accounted for using a cumulative effect adjustment or prospectively over the remaining term of the arrangement. The determination of which method is more appropriate depends on the nature of the modification, which we evaluate on a case-by-case basis. We combine two or more contracts entered into at or near the same time with the same customer and account for them as a single contract if (i) the contracts are negotiated as a package with a common commercial objective, (ii) the amount of consideration to be paid in one contract depends on the price or performance of the other contract, or (iii) some or all of the goods or services in one contract would be combined with some or all of the goods and services in the other contract into a single performance obligation. If two or more contracts are combined, the consideration to be paid is aggregated and allocated to the individual performance obligations without regard to the consideration specified in the individual contracts. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, we apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. To identify performance obligations, we consider all of the goods or services promised in a contract regardless of whether they are explicitly stated or are implied by customary business practices. 3) Determine the transaction price The transaction price is determined based on the consideration we expect to be entitled in exchange for transferring promised goods and services to the customer. Determining the transaction price requires significant judgment. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period. The amount of consideration is not adjusted for a significant financing component if the time between payment and the transfer of the related good or service is expected to be one year or less under the practical expedient in ASC 606-10-32-18. Our revenue arrangements are typically accounted for under such expedient, as payment is typically due within 30 to 60 days. As of December 31, 2018, none of our contracts contained a significant financing component. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The consideration to be received is allocated among the separate performance obligations based on relative SSPs. The SSP is the price at which we would sell a promised good or service separately to a customer. The best estimate of SSP is the observable price of a good or service when we sell that good or service separately. A contractually stated price or a list price for a good or service may be the SSP of that good or service. We use a range of amounts to estimate SSP when we sell each of the goods and services separately and need to determine whether there is a discount that needs to be allocated based on the relative SSP of the various goods and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we typically determine the SSP using an adjusted market assessment approach using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual goods and services due to the stratification of those goods and services by customers and circumstances. In these instances, we may use information such as the nature of the customer and distribution channel in determining the SSP. 5) Recognize revenue when or as we satisfy a performance obligation We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized over time if 1) the customer simultaneously receives and consumes the benefits provided by our performance, 2) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. If we do not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. We categorize revenue as software licenses, software maintenance, services, or royalties. In addition to the general revenue recognition policies described above, specific revenue recognition policies apply to each category of revenue. Software licenses Software licenses consist of revenue from the sale of software licenses for biometrics and imaging applications. Our software licenses are functional intellectual property and typically provide customers with the right to use our software in perpetuity as it exists when made available to the customer. We recognize revenue from software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. Software maintenance Software maintenance consists of revenue from the sale of software maintenance contracts for biometrics and imaging software. Software maintenance contracts entitle customers to receive software support and software updates, if and when they become available, during the term of the maintenance contract. Software support and software updates are considered distinct services. However, these distinct services are considered a single performance obligation consisting of a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. We recognize software maintenance revenue over time on a straight-line basis over the contract period. Services Service revenue consists of fees from biometrics customers for software engineering services we provide to them. We recognize services revenue over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted), provided all other revenue recognition criteria are met. Royalties Royalties consist primarily of royalty payments we receive under DSL silicon contracts with two customers that incorporate our silicon intellectual property (“IP”) in their DSL chipsets. We sold the assets of our DSL IP business in 2009, but we continued to receive royalty payments from these customers. We recognize revenue from sales-based royalties at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Refer to Note 8 – Business Segments and Major Customers for further information on the disaggregation of revenue, including revenue by geography and category. Arrangements with multiple performance obligations In addition to selling software licenses, software maintenance and software services on a standalone basis, a significant portion of our contracts include multiple performance obligations. The various combinations of multiple performance obligations and our revenue recognition for each are described as follows: • Software licenses and software maintenance. When software licenses and software maintenance contracts are sold together, the software licenses and software maintenance are generally considered distinct performance obligations. The transaction price is allocated to the software licenses and the software maintenance based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the software maintenance is recognized over time on a straight-line basis over the contract period. • Software licenses and services. When software licenses and significant customization engineering services are sold together, they are accounted for as a combined performance obligation, as the software licenses are generally highly dependent on, and interrelated with, the associated services and therefore are not distinct performance obligations. Revenue for the combined performance obligation is recognized over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). When software licenses and standard implementation or consulting-type services are sold together, they are generally considered distinct performance obligations, as the software licenses are not dependent on or interrelated with the associated services. The transaction price in these arrangements is allocated to the software licenses and services based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery, provided all other revenue recognition criteria are met. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). In arrangements with both software licenses and services, the software license portion of the arrangement is classified as software license revenue and the services portion is classified as services revenue in our consolidated statements of income and comprehensive income. • Software licenses, software maintenance and services. When we sell software licenses, software maintenance and software services together, we account for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on relative SSP. Revenue allocated to the software licenses is recognized at a point in time upon delivery. Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period. However, if the software services are significant customization engineering services, they are accounted for with the software licenses as a combined performance obligation, as stated above. Revenue for the combined performance obligation is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted). Returns We do not offer rights of return for our products and services in the normal course of business. Customer Acceptance Our contracts with customers generally do not include customer acceptance clauses. Contract Balances When the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by the deferred revenue below until the performance obligation is satisfied. Contract assets represent arrangements in which the good or service has been delivered but payment is not yet due. Our contract assets consist of unbilled receivables. Our contract liabilities consisted of deferred (unearned) revenue, which is generally related to software maintenance contracts. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The following table presents changes in our contract assets and liabilities during the years ended December 31, 2017 and 2018 (in thousands): Revenue Balance at Recognized Beginning of In Advance of Balance at End of Period Billings Billings Period Year ended December 31, 2017 Contract assets: Unbilled receivables $ 2,259 $ 198 $ (1,028 ) $ 1,429 Year ended December 31, 2018 Contract assets: Unbilled receivables $ 1,429 $ 3,278 $ (1,428 ) $ 3,279 Balance at Beginning of Revenue Balance at End of Period Billings Recognized Period Year ended December 31, 2017 Contract liabilities: Deferred revenue $ 2,933 $ 4,933 $ (4,934 ) $ 2,932 Year ended December 31, 2018 Contract liabilities: Deferred revenue $ 2,932 $ 5,564 $ (5,397 ) $ 3,099 Remaining Performance Obligations Remaining performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 97% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. As of December 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations with a duration greater than one year, comprised of software maintenance contracts, was $0.1 million. Contract Costs We recognize an other asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales commissions meet the requirements to be capitalized, and we amortize these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. These costs include sales commissions on software maintenance contracts with a contract period of one year or less as sales commissions paid on contract renewals are commensurate with those paid on the initial contract. |
Income Taxes | Income Taxes We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax position. The evaluation of an uncertain tax position is based on factors that include, but are not limited to, changes in the tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, and changes in facts or circumstances related to a tax position. Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could impact our tax provision in future periods. Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in the consolidated statements of income and comprehensive income. |
Capitalization of Software Costs | Capitalization of Software Costs |
Research and Development Costs | Research and Development Costs |
Concentration of Credit Risk | Concentration of Credit Risk Concentration of credit risk with respect to net accounts receivable and unbilled receivables consisted of amounts owed by the following customers that comprised more than 10% of net accounts receivable and unbilled receivables at December 31: 2018 2017 Customer A 46 % - % Customer B 19 % 43 % |
Stock-based compensation | Stock-Based Compensation For stock awards, we determine the fair value of the award by using the fair market value of our stock on the date of grant; provided the number of shares in the grant is fixed on the grant date. For stock options, we use the Black-Scholes option valuation model to estimate the fair value of the award. This valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. |
Computation of Earnings per Share | Computation of Earnings per Share |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Advertising Costs | Advertising Costs – |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: Recently Adopted Accounting Pronouncements FASB ASU No. 2014-09 We implemented new internal controls for the implementation and modified and augmented our existing internal controls that enabled the preparation of financial information on adoption. The most significant impacts of adopting the new standard related to the following: i) DSL royalty contracts ii) Minimum license/royalty payment contract iii) Sales commissions and other third-party acquisition costs Revenue recognition related to our other arrangements for software licenses, software maintenance, services, and hardware will remain substantially unchanged. As a practical expedient, for contracts that were modified before the earliest reporting period of application of the standard, we have not retrospectively restated the contracts for those contract modifications. Instead we have reflected the aggregate effect of all modifications that occurred before the earliest reporting period of application when (i) identifying the satisfied and unsatisfied performance obligations, (ii) determining the transaction price, and (iii) allocating the transaction price to the satisfied and unsatisfied performance obligations. We have not restated contracts that began and were completed within the same annual reporting period. For completed contracts that have variable consideration, we have used the transaction price at the date the contract was completed rather than estimating variable consideration amounts in comparative reporting periods. For fiscal years 2017, adoption of the standard resulted in an aggregate decrease in revenue of $0.8 million, a decrease in costs and expenses of $0.1 million, a decrease in the provision for income taxes of $0.4 million, and an increase in opening stockholders’ equity of $0.9 million primarily due to the changes noted above. In addition, adoption of the standard resulted in an increase in unbilled receivables of $1.4 million as of December 31, 2017 driven by unbilled receivables from recognition of revenue from the estimate of variable consideration related to the minimum license/royalty payments in one of our contracts; a decrease in deferred tax assets of $0.3 million as of December 31, 2017 driven primarily by a difference in timing of revenue recognition and expenses for book and tax purposes; and an increase in accrued expenses of $0.2 million as of December 31, 2017 driven by sales commissions related to recognition of revenue from the estimate of variable consideration related to the minimum license/royalty payments in one of our contracts. Also, the 2017 opening stockholders’ equity balance increased by $1.2 million related to the effect of adoption of the standard from prior periods. See Impacts of Topic 606 Adoption to Reported Results below for the impact of the adoption of the new standard on our consolidated financial statements. Impacts of Topic 606 Adoption to Reported Results Adoption of the new revenue standard impacted our reported results as follows: Year Ended (In thousands, except per share data) December 31, 2017 As Reported Adjustment As Adjusted Consolidated Statements of Income: Revenue $ 16,282 $ (817 ) $ 15,465 Costs and expenses 16,054 (114 ) 15,940 Provision for income taxes 965 (422 ) 543 Net income 1,282 (281 ) 1,001 Net income per share - basic 0.06 (0.01 ) 0.05 Net income per share - diluted 0.06 (0.01 ) 0.05 (In thousands) December 31, 2017 As Reported Adjustment As Adjusted Consolidated Balance Sheets: Accounts and unbilled receivables, net $ 2,401 $ 1,417 $ 3,818 Prepaid expenses and other current assets 203 13 216 Deferred tax assets 5,402 (331 ) 5,071 Accrued expenses 1,184 217 1,401 Stockholders' equity 59,652 882 60,534 Adoption of the new revenue standard had no impact to cash from or used in operating, financing, or investing on our consolidated statements of cash flows. FASB ASU No. 2016-09. The new standard contains several amendments that will simplify the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. In addition, the new standard eliminates the limitation on recognition of excess stock compensation benefits until such benefits are actually realized, and instead applies the general recognition standard to these deferred tax assets. We adopted ASU 2016-09 in 2017 which was applied using a modified retrospective approach. Upon adoption, we recorded a deferred tax asset of $4.8 million with an offsetting adjustment to retained earnings related to excess stock compensation deductions that were not previously recorded as tax assets. For the year ended December 31, 2017, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit Recent Accounting Pronouncements Not Yet Adopted FASB ASU No. 2016-13. With the exception of the standards discussed above, there have been no other recently issued accounting pronouncements that are of significance or potential significance to us that we have not adopted as of December 31, 2018. |
Segments | Segments |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | Fair Value Measurement at December 31, 2018 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Money market funds (included in cash and cash equivalents) $ 47,939 Total $ 47,939 $ - $ - Fair Value Measurement at December 31, 2017 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Money market funds (included in cash and cash equivalents) $ 49,986 - - Total $ 49,986 $ - $ - |
Schedule of allowance for doubtful accounts | Years ended December 31, 2018 2017 Allowance for doubtful accounts balance - beginning of year $ 20 $ 20 Additions to the allowance for doubtful accounts - 19 Deductions against the allowance for doubtful accounts - (19 ) Allowance for doubtful accounts balance - end of year $ 20 $ 20 |
Schedule of estimated useful lives assets | Building 30 years Building improvements 5 to 20 years Furniture and fixtures 5 years Computer, office & manufacturing equipment 3 years Purchased software 3 years |
Schedule of changes in contract assets and liabilities | Revenue Balance at Recognized Beginning of In Advance of Balance at End of Period Billings Billings Period Year ended December 31, 2017 Contract assets: Unbilled receivables $ 2,259 $ 198 $ (1,028 ) $ 1,429 Year ended December 31, 2018 Contract assets: Unbilled receivables $ 1,429 $ 3,278 $ (1,428 ) $ 3,279 Balance at Beginning of Revenue Balance at End of Period Billings Recognized Period Year ended December 31, 2017 Contract liabilities: Deferred revenue $ 2,933 $ 4,933 $ (4,934 ) $ 2,932 Year ended December 31, 2018 Contract liabilities: Deferred revenue $ 2,932 $ 5,564 $ (5,397 ) $ 3,099 |
Schedules of concentration of credit risk with respect to net accounts receivable | 2018 2017 Customer A 46 % - % Customer B 19 % 43 % |
Schedule of adoption of the new revenue standard | Year Ended (In thousands, except per share data) December 31, 2017 As Reported Adjustment As Adjusted Consolidated Statements of Income: Revenue $ 16,282 $ (817 ) $ 15,465 Costs and expenses 16,054 (114 ) 15,940 Provision for income taxes 965 (422 ) 543 Net income 1,282 (281 ) 1,001 Net income per share - basic 0.06 (0.01 ) 0.05 Net income per share - diluted 0.06 (0.01 ) 0.05 (In thousands) December 31, 2017 As Reported Adjustment As Adjusted Consolidated Balance Sheets: Accounts and unbilled receivables, net $ 2,401 $ 1,417 $ 3,818 Prepaid expenses and other current assets 203 13 216 Deferred tax assets 5,402 (331 ) 5,071 Accrued expenses 1,184 217 1,401 Stockholders' equity 59,652 882 60,534 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | 2018 2017 Land $ 1,056 $ 1,056 Building and improvements 9,060 9,060 Computer equipment 795 638 Purchased software 81 83 Furniture and fixtures 778 778 Office equipment 138 138 Total 11,908 11,753 Less accumulated depreciation and amortization (7,823 ) (7,449 ) Property and equipment, net $ 4,085 $ 4,304 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | Year ended December 31, 2018 2017 Current: Federal 54 470 State 38 70 92 540 Deferred: Federal (22 ) 71 State (78 ) (68 ) (100 ) 3 Provision for (benefit from) income taxes $ (8 ) $ 543 |
Schedule of reconciliation of the U.S. federal statutory rate to the effective tax rate | Year ended December 31, 2018 2017 Federal statutory rate 21 % 34 % Enactment of the Tax Cuts and Jobs Act - 14 State rate, net of federal benefit 6 4 Tax credits (26 ) (15 ) Permanent adjustments 1 - FDII deduction (4 ) - Other 1 (2 ) Effective tax rate (1 )% 35 % |
Schedule of components of deferred tax assets | 2018 2017 Depreciation $ 327 $ 330 Stock compensation 87 103 Federal research and development credits 4,689 4,602 Other 68 36 Total 5,171 5,071 Less valuation allowance (-) (-) Deferred tax assets, net $ 5,171 $ 5,071 |
Schedule of roll forward of the uncertain tax position related to research and development tax credits | Uncertain tax positions at December 31, 2016 1,032 Decrease due to positions taken in prior periods (34 ) Uncertain tax positions at December 31, 2017 998 Decrease due to positions taken in prior periods - Uncertain tax positions at December 31, 2018 $ 998 |
EQUITY AND STOCK COMPENSATION_2
EQUITY AND STOCK COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based employee compensation expense included in consolidated statements of income and comprehensive income | Years ended 2018 2017 Cost of services $ 25 $ 9 Research and development 101 119 Selling and marketing 13 15 General and administrative 441 520 Stock-based compensation expense $ 580 $ 663 |
Schedule of the summary of stock option transactions for one fixed stock option plans | 2018 2017 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of year 28,000 $ 2.97 86,202 $ 4.37 Granted - - - - Exercised - - (4,168 ) 3.09 Forfeited or cancelled (10,000 ) 3.77 (54,034 ) 5.20 Outstanding at end of year 18,000 $ 2.52 28,000 $ 2.97 Exercisable at year end 18,000 $ 2.52 28,000 $ 2.97 |
Schedule of the summary of stock options outstanding | Options Outstanding Options Exercisable Exercise Price Range Number Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Number Weighted Average Exercise Price $2 to $3 18,000 $ 2.52 .39 18,000 $ 2.52 |
BUSINESS SEGMENTS AND MAJOR C_2
BUSINESS SEGMENTS AND MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of revenues generated from geographic regions | Year ended December 31, 2018 2017 United States $ 7,439 $ 12,413 United Kingdom 4,004 417 Brazil 2,473 279 Rest of world 2,215 2,356 $ 16,131 $ 15,465 |
Schedule of revenue by product group | Year ended December 31, 2018 2017 Biometrics $ 15,042 $ 11,953 Imaging 1,089 3,368 DSL royalties - 144 $ 16,131 $ 15,465 |
Schedule of total revenue that was derived from major customers | Year ended December 31, 2018 2017 Customer A 20 % - % Customer B 13 % - % Customer C - % 17 % |
Schedule of revenue by timing of transfer of goods or services | Year ended December 31, 2018 2017 Goods or services transferred at a point in time $ 5,972 $ 9,283 Goods or services transferred over time 10,159 6,182 $ 16,131 $ 15,465 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of net income per share | Year ended December 31, 2018 2017 Net income $ 1,233 $ 1,001 Shares outstanding: Weighted-average common shares outstanding 21,544 21,814 Additional dilutive common stock equivalents 61 63 Diluted shares outstanding 21,605 21,877 Net income per share – basic $ 0.06 $ 0.05 Net income per share - diluted $ 0.06 $ 0.05 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | 2018 Quarters Ended March 31 June 30 September 30 December 31 Revenue $ 2,911 $ 3,760 $ 5,401 $ 4,058 Operating income (loss) (723 ) (381 ) 1,142 343 Net income (loss) (495 ) (188 ) 1,277 639 Net income (loss) per share – basic $ (0.02 ) $ (0.01 ) $ 0.06 $ 0.03 Net income (loss) per share – diluted $ (0.02 ) $ (0.01 ) $ 0.06 $ 0.03 2017 Quarters Ended March 31 June 30 September 30 December 31 Revenue $ 4,156 $ 2,542 $ 5,707 $ 3,060 Operating income (loss) 222 64 1,492 (671 ) Net income (loss) 301 114 1,145 (559 ) Net income (loss) per share – basic $ 0.01 $ 0.01 $ 0.05 $ (0.03 ) Net income (loss) per share – diluted $ 0.01 $ 0.01 $ 0.05 $ (0.03 ) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Assets measured at fair value on recurring basis (Details) - Fair value on recurring basis - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total assets measured at fair value | $ 47,939 | $ 49,986 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds (included in cash and cash equivalents) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Money market funds (included in cash and cash equivalents) | 47,939 | 49,986 |
Significant Other Observable Inputs (Level 2) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Money market funds (included in cash and cash equivalents) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Money market funds (included in cash and cash equivalents) | 0 | |
Significant Unobservable Inputs (Level 3) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total assets measured at fair value | $ 0 | 0 |
Significant Unobservable Inputs (Level 3) | Money market funds (included in cash and cash equivalents) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Money market funds (included in cash and cash equivalents) | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for doubtful accounts (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance for doubtful accounts balance - beginning of year | $ 20 | $ 20 |
Additions to the allowance for doubtful accounts | 0 | 19 |
Deductions against the allowance for doubtful accounts | 0 | (19) |
Allowance for doubtful accounts balance - end of year | $ 20 | $ 20 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated useful lives of assets (Details 2) | 12 Months Ended |
Dec. 31, 2018 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 30 years |
Building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 20 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Computer, office & manufacturing equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 3 years |
Purchased software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of assets | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract assets (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unbilled Receivables Current [Roll Forward] | ||
Unbilled receivables, Balance at Beginning of Period | $ 1,429 | $ 2,259 |
Unbilled receivables, Revenue Recognized In Advance of Billings | 3,278 | 198 |
Unbilled receivables, Billings | (1,428) | (1,028) |
Unbilled receivables, Balance at End of Period | $ 3,279 | $ 1,429 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract liabilities (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue, Balance at Beginning of Period | $ 2,932 | $ 2,933 |
Deferred revenue, Billings | 5,564 | 4,933 |
Deferred revenue recognized | (5,397) | (4,934) |
Deferred revenue, Balance at End of Period | $ 3,099 | $ 2,932 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of credit risk (Details 5) - Accounts Receivable - Credit Concentration Risk | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 46.00% | 0.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 19.00% | 43.00% |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption of the new revenue standard Income Statement (Details 6) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Revenue | $ 4,058 | $ 5,401 | $ 3,760 | $ 2,911 | $ 3,060 | $ 5,707 | $ 2,542 | $ 4,156 | $ 16,131 | $ 15,465 |
Costs and expenses | 15,819 | 15,940 | ||||||||
Provision for income taxes | (8) | 543 | ||||||||
Net income | $ 639 | $ 1,277 | $ (188) | $ (495) | $ (559) | $ 1,145 | $ 114 | $ 301 | $ 1,233 | $ 1,001 |
Net income per share - basic (in dollars per share) | $ 0.03 | $ 0.06 | $ (0.01) | $ (0.02) | $ (0.03) | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.06 | $ 0.05 |
Net income per share - diluted (in dollars per share) | $ 0.03 | $ 0.06 | $ (0.01) | $ (0.02) | $ (0.03) | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.06 | $ 0.05 |
Accounting Standards Update 2014-09 | As Reported | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Revenue | $ 16,282 | |||||||||
Costs and expenses | 16,054 | |||||||||
Provision for income taxes | 965 | |||||||||
Net income | $ 1,282 | |||||||||
Net income per share - basic (in dollars per share) | $ 0.06 | |||||||||
Net income per share - diluted (in dollars per share) | $ 0.06 | |||||||||
Accounting Standards Update 2014-09 | Adjustment | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Revenue | $ (817) | |||||||||
Costs and expenses | (114) | |||||||||
Provision for income taxes | (422) | |||||||||
Net income | $ (281) | |||||||||
Net income per share - basic (in dollars per share) | $ (0.01) | |||||||||
Net income per share - diluted (in dollars per share) | $ (0.01) |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption of the new revenue standard Balance Sheet (Details 7) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts and unbilled receivables, net | $ 3,818 | ||
Prepaid expenses and other current assets | $ 284 | 216 | |
Deferred tax assets | 5,171 | 5,071 | |
Accrued expenses | 1,319 | 1,401 | |
Stockholders' equity | $ 61,897 | 60,534 | $ 59,004 |
Accounting Standards Update 2014-09 | As Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts and unbilled receivables, net | 2,401 | ||
Prepaid expenses and other current assets | 203 | ||
Deferred tax assets | 5,402 | ||
Accrued expenses | 1,184 | ||
Stockholders' equity | 59,652 | ||
Accounting Standards Update 2014-09 | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts and unbilled receivables, net | 1,417 | ||
Prepaid expenses and other current assets | 13 | ||
Deferred tax assets | (331) | ||
Accrued expenses | 217 | ||
Stockholders' equity | $ 882 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents, which primarily include money market funds | $ 51,612 | $ 51,608 | $ 51,913 |
Fair value on recurring basis | Fair Value Measurement, Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds (included in cash and cash equivalents) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents, fair value | $ 47,939 | $ 49,986 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 1) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Realized gains on investments | $ 36 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Percentage of remaining performance obligations expected to be recognized as revenue | 97.00% | |
Minimum period of remaining performance obligations | 12 months | |
Revenue recognition performance obligation transaction price | $ 0.1 | |
Cash and cash equivalents, in excess of federally insured deposit limits | $ 51.4 | $ 51.4 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 3) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | $ 4,058,000 | $ 5,401,000 | $ 3,760,000 | $ 2,911,000 | $ 3,060,000 | $ 5,707,000 | $ 2,542,000 | $ 4,156,000 | $ 16,131,000 | $ 15,465,000 | |
Costs and expenses | 15,819,000 | 15,940,000 | |||||||||
Provision for income taxes | (8,000) | 543,000 | |||||||||
Stockholders' equity | 61,897,000 | 60,534,000 | 61,897,000 | 60,534,000 | $ 59,004,000 | ||||||
Deferred tax assets | 5,171,000 | 5,071,000 | 5,171,000 | 5,071,000 | |||||||
Accrued expenses | $ 1,319,000 | 1,401,000 | $ 1,319,000 | 1,401,000 | |||||||
Accounting Standards Update 2014-09 | New Revenue Standard Adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | (800,000) | ||||||||||
Increase in unbilled receivables | 1,400,000 | 1,400,000 | |||||||||
Costs and expenses | (100,000) | ||||||||||
Provision for income taxes | (400,000) | ||||||||||
Stockholders' equity | 900,000 | 900,000 | |||||||||
Deferred tax assets | (300,000) | (300,000) | |||||||||
Accrued expenses | 200,000 | 200,000 | |||||||||
Increase in stockholders' equity due to adoption of standard | 1,200,000 | 1,200,000 | |||||||||
Accounting Standards Update 2014-09 | DSL royalty contracts | New Revenue Standard Adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | (17,000) | ||||||||||
Accounting Standards Update 2014-09 | Minimum license/royalty payment contract | New Revenue Standard Adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | (800,000) | ||||||||||
Increase in unbilled receivables | 1,400,000 | 1,400,000 | |||||||||
Accounting Standards Update 2014-09 | Sales commissions and other third-party acquisition costs | New Revenue Standard Adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Costs and expenses | (114,000) | ||||||||||
ASU 2016-09 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Deferred tax asset offsetting adjustment to retained earnings related to excess stock compensation deductions | $ 4,800,000 | $ 4,800,000 |
PATENT RELATED INCOME (Detail T
PATENT RELATED INCOME (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Patent Related Income [Abstract] | ||
Income From Patent Arrangement | $ 0.1 | $ 1.6 |
PROPERTY AND EQUIPMENT - Summar
PROPERTY AND EQUIPMENT - Summary of property and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | $ 11,908 | $ 11,753 |
Less accumulated depreciation and amortization | (7,823) | (7,449) |
Property and equipment, net | 4,085 | 4,304 |
Land | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | 1,056 | 1,056 |
Building and improvements | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | 9,060 | 9,060 |
Computer equipment | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | 795 | 638 |
Purchased software | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | 81 | 83 |
Furniture and fixtures | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | 778 | 778 |
Office equipment | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Total | $ 138 | $ 138 |
PROPERTY AND EQUIPMENT (Detail
PROPERTY AND EQUIPMENT (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 0.4 | $ 0.4 |
Retired assets | $ 0.1 | $ 0.1 |
INCOME TAXES - Components of pr
INCOME TAXES - Components of provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||
Federal | $ 54 | $ 470 |
State | 38 | 70 |
Total current tax | 92 | 540 |
Deferred: | ||
Federal | (22) | 71 |
State | (78) | (68) |
Total deferred tax | (100) | 3 |
Provision for (benefit from) income taxes | $ (8) | $ 543 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of U.S. federal statutory rate (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 34.00% |
Enactment of the Tax Cuts and Jobs Act | 0.00% | 14.00% |
State rate, net of federal benefit | 6.00% | 4.00% |
Tax credits | (26.00%) | (15.00%) |
Permanent adjustments | 1.00% | 0.00% |
FDII deduction | (4.00%) | 0.00% |
Other | 1.00% | (2.00%) |
Effective tax rate | (1.00%) | 35.00% |
INCOME TAXES - Principal compon
INCOME TAXES - Principal components of deferred tax assets (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Depreciation | $ 327 | $ 330 |
Stock compensation | 87 | 103 |
Federal research and development credits | 4,689 | 4,602 |
Other | 68 | 36 |
Total | 5,171 | 5,071 |
Less valuation allowance | 0 | 0 |
Deferred tax assets, net | $ 5,171 | $ 5,071 |
INCOME TAXES - Rollforward of u
INCOME TAXES - Rollforward of uncertain tax position (Details 3) - Research and development tax credits - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Uncertain tax positions [Roll Forward] | ||
Uncertain tax positions at December 31 | $ 998 | $ 1,032 |
Decrease due to positions taken in prior periods | 0 | (34) |
Uncertain tax positions at December 31 | $ 998 | $ 998 |
INCOME TAXES (Detail Textuals)
INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Income tax expense (benefit) of continuing operations | $ (8) | $ 543 | |
U.S. statutory rate | 21.00% | 34.00% | |
Reduction in deferred tax assets | $ 400 | ||
Deferred tax assets | $ 5,171 | 5,071 | |
Uncertain tax positions | $ 800 | ||
2,017 | |||
Tax Credit Carryforward [Line Items] | |||
U.S. statutory rate | 34.00% | ||
2,018 | |||
Tax Credit Carryforward [Line Items] | |||
U.S. statutory rate | 21.00% | ||
ASU 2016-09 | |||
Tax Credit Carryforward [Line Items] | |||
Deferred tax asset offsetting adjustment to retained earnings related to excess stock compensation deductions | $ 4,800 |
EQUITY AND STOCK COMPENSATION_3
EQUITY AND STOCK COMPENSATION PLANS - Stock-based employee compensation expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 580 | $ 663 |
Cost of services | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 25 | 9 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 101 | 119 |
Selling and marketing | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 13 | 15 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 441 | $ 520 |
EQUITY AND STOCK COMPENSATION_4
EQUITY AND STOCK COMPENSATION PLANS - Summary of stock option transactions (Details 1) - Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Outstanding at beginning of year | 28,000 | 86,202 |
Granted | 0 | 0 |
Exercised | 0 | (4,168) |
Forfeited or cancelled | (10,000) | (54,034) |
Outstanding at end of year | 18,000 | 28,000 |
Exercisable at year end | 18,000 | 28,000 |
Weighted Average Exercise Price | ||
Outstanding at beginning of year | $ 2.97 | $ 4.37 |
Granted | 0 | 0 |
Exercised | 0 | 3.09 |
Forfeited or cancelled | 3.77 | 5.2 |
Outstanding at end of year | 2.52 | 2.97 |
Exercisable at year end | $ 2.52 | $ 2.97 |
EQUITY AND STOCK COMPENSATION_5
EQUITY AND STOCK COMPENSATION PLANS - Summarizes of stock options outstanding (Details 2) - Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding, Number | 18,000 | 28,000 | 86,202 |
Options outstanding, Weighted average exercise price | $ 2.52 | $ 2.97 | $ 4.37 |
Options exercisable, Number | 18,000 | 28,000 | |
Options exercisable, Weighted average exercise price | $ 2.52 | $ 2.97 | |
Exercise price range $2 to $3 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price range (lower) | 2 | ||
Exercise price range (upper) | $ 3 | ||
Options outstanding, Number | 18,000 | ||
Options outstanding, Weighted average exercise price | $ 2.52 | ||
Options outstanding, Weighted average remaining contractual term (in years) | 4 months 21 days | ||
Options exercisable, Number | 18,000 | ||
Options exercisable, Weighted average exercise price | $ 2.52 |
EQUITY AND STOCK COMPENSATION_6
EQUITY AND STOCK COMPENSATION PLANS (Detail Textuals) - 2001 Nonqualified Stock Plan - Stock Options | 12 Months Ended |
Dec. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of stock awards authorized to grant | 8,000,000 |
Number of stock awards available for grant | 4,700,269 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Term of options granted at exercise prices | 4 years |
Term of options vested | 3 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Term of options granted at exercise prices | 10 years |
Term of options vested | 5 years |
EQUITY AND STOCK COMPENSATION_7
EQUITY AND STOCK COMPENSATION PLANS (Detail Textuals 1) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2019USD ($)shares | Jul. 31, 2018USD ($)shares | Jan. 31, 2018USD ($)shares | Jul. 31, 2017USD ($)shares | Dec. 31, 2018USD ($)Installmentshares | Dec. 31, 2017USD ($)Installmentshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ | $ 580 | $ 663 | ||||
2001 Nonqualified Stock Plan | Unrestricted Stock | Directors, Officers and Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (in shares) | 138,000 | 134,000 | ||||
2001 Nonqualified Stock Plan | Unrestricted Stock | March 2018 grant | Directors, Officers and Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (in shares) | 57,592 | 138,000 | ||||
Number of equal installments for shares issuance | Installment | 2 | |||||
Stock-based compensation expense | $ | $ 580 | |||||
Number of common stock shares surrendered by employees withholding taxes | 11,408 | |||||
Common stock value surrendered by employees withholding taxes | $ | $ 51 | |||||
2001 Nonqualified Stock Plan | Unrestricted Stock | March 2018 grant | Directors, Officers and Employees | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (in shares) | 55,278 | |||||
Number of common stock shares surrendered by employees withholding taxes | 13,722 | |||||
Common stock value surrendered by employees withholding taxes | $ | $ 50 | |||||
2001 Nonqualified Stock Plan | Unrestricted Stock | February 2017 grant | Directors, Officers and Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted (in shares) | 53,378 | 54,014 | 134,000 | |||
Number of equal installments for shares issuance | Installment | 2 | |||||
Stock-based compensation expense | $ | $ 663 | |||||
Number of common stock shares surrendered by employees withholding taxes | 13,622 | 12,986 | ||||
Common stock value surrendered by employees withholding taxes | $ | $ 64 | $ 67 |
EQUITY AND STOCK COMPENSATION_8
EQUITY AND STOCK COMPENSATION PLANS (Detail Textuals 2) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 18,000 | |
Weighted average exercise price of options outstanding | $ 2.52 | |
Exercised | (4,168) | |
Proceeds from stock options | $ 13 | |
Weighted average remaining contractual term | 4 months 24 days | |
Aggregate intrinsic value of options outstanding | $ 20 | |
Aggregate intrinsic value of options exercisable | $ 20 |
EQUITY AND STOCK COMPENSATION_9
EQUITY AND STOCK COMPENSATION PLANS (Detail Textuals 3) - Employee Stock Purchase Plan - shares | 1 Months Ended | 12 Months Ended | ||
Nov. 29, 2005 | Jun. 30, 1996 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of common stock at a price lower of the fair market value | 95.00% | 85.00% | ||
Period of common stock offering | 6 months | 6 months | ||
Minimal discount of fair market value of the common stock | 5.00% | |||
Percentage of employee's compensation | 6.00% | |||
Total number of common stock shares reserved for issuance | 350,000 | |||
Number of common stock shares reserved for issuance | 52,722 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 13,667 | 13,514 |
EQUITY AND STOCK COMPENSATIO_10
EQUITY AND STOCK COMPENSATION PLANS (Detail Textuals 4) - Share Purchases - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Apr. 24, 2018 | Dec. 31, 2018 | |
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items] | ||
Number of common stock authorized for repurchase | $ 10 | |
Number of stock repurchased (in shares) | 102,205 | |
Value of stock repurchased | $ 0.4 | |
Stock repurchase program expiration date | Dec. 31, 2019 |
BUSINESS SEGMENTS AND MAJOR C_3
BUSINESS SEGMENTS AND MAJOR CUSTOMERS - Revenues generated from geographic regions (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ 4,058 | $ 5,401 | $ 3,760 | $ 2,911 | $ 3,060 | $ 5,707 | $ 2,542 | $ 4,156 | $ 16,131 | $ 15,465 |
Operating Segments | United States | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 7,439 | 12,413 | ||||||||
Operating Segments | United Kingdom | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 4,004 | 417 | ||||||||
Operating Segments | Brazil | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 2,473 | 279 | ||||||||
Operating Segments | Rest of World | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ 2,215 | $ 2,356 |
BUSINESS SEGMENTS AND MAJOR C_4
BUSINESS SEGMENTS AND MAJOR CUSTOMERS - Summary of revenue by product group (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ 4,058 | $ 5,401 | $ 3,760 | $ 2,911 | $ 3,060 | $ 5,707 | $ 2,542 | $ 4,156 | $ 16,131 | $ 15,465 |
Operating Segments | Biometrics | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 15,042 | 11,953 | ||||||||
Operating Segments | Imaging | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 1,089 | 3,368 | ||||||||
Operating Segments | DSL royalties | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ 0 | $ 144 |
BUSINESS SEGMENTS AND MAJOR C_5
BUSINESS SEGMENTS AND MAJOR CUSTOMERS - Revenue derived from major customers (Details 2) - Sales revenue | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Customer A | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 20.00% | 0.00% |
Customer B | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 13.00% | 0.00% |
Customer C | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 0.00% | 17.00% |
BUSINESS SEGMENTS AND MAJOR C_6
BUSINESS SEGMENTS AND MAJOR CUSTOMERS (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||
Total revenue | $ 4,058 | $ 5,401 | $ 3,760 | $ 2,911 | $ 3,060 | $ 5,707 | $ 2,542 | $ 4,156 | $ 16,131 | $ 15,465 |
Goods or services transferred at a point in time | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Total revenue | 5,972 | 9,283 | ||||||||
Goods or services transferred over time | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Total revenue | $ 10,159 | $ 6,182 |
BUSINESS SEGMENTS AND MAJOR C_7
BUSINESS SEGMENTS AND MAJOR CUSTOMERS (Detail Textuals) | 12 Months Ended |
Dec. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of operating segment | 1 |
EMPLOYEE BENEFIT PLAN (Detail T
EMPLOYEE BENEFIT PLAN (Detail Textuals) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Plans 401 K Defined Benefit | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Discretionary contribution by employer | $ 238,000 | $ 223,000 |
NET INCOME PER SHARE - Calculat
NET INCOME PER SHARE - Calculation of net income per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||||||||||
Net income | $ 639 | $ 1,277 | $ (188) | $ (495) | $ (559) | $ 1,145 | $ 114 | $ 301 | $ 1,233 | $ 1,001 |
Shares outstanding: | ||||||||||
Weighted-average common shares outstanding (in shares) | 21,544 | 21,814 | ||||||||
Additional dilutive common stock equivalents (in shares) | 61 | 63 | ||||||||
Diluted shares outstanding (in shares) | 21,605 | 21,877 | ||||||||
Net income per share - basic (in dollars per share) | $ 0.03 | $ 0.06 | $ (0.01) | $ (0.02) | $ (0.03) | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.06 | $ 0.05 |
Net income per share - diluted (in dollars per share) | $ 0.03 | $ 0.06 | $ (0.01) | $ (0.02) | $ (0.03) | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.06 | $ 0.05 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED - Summary of consolidated statements of comprehensive income (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Revenue | $ 4,058 | $ 5,401 | $ 3,760 | $ 2,911 | $ 3,060 | $ 5,707 | $ 2,542 | $ 4,156 | $ 16,131 | $ 15,465 |
Operating income (loss) | 343 | 1,142 | (381) | (723) | (671) | 1,492 | 64 | 222 | 381 | 1,107 |
Net income (loss) | $ 639 | $ 1,277 | $ (188) | $ (495) | $ (559) | $ 1,145 | $ 114 | $ 301 | $ 1,233 | $ 1,001 |
Net income (loss) per share - basic (in dollars per share) | $ 0.03 | $ 0.06 | $ (0.01) | $ (0.02) | $ (0.03) | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.06 | $ 0.05 |
Net income (loss) per share - diluted (in dollars per share) | $ 0.03 | $ 0.06 | $ (0.01) | $ (0.02) | $ (0.03) | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.06 | $ 0.05 |