Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 28, 2017 | Jun. 30, 2016 | |
Document Information [Line Items] | |||
Entity Registrant Name | BIO KEY INTERNATIONAL INC | ||
Entity Central Index Key | 1,019,034 | ||
Trading Symbol | bkyi | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding (in shares) | 6,096,920 | ||
Entity Public Float | $ 15,629,687 | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | This Amendment No. 1 (the “Amendment”) hereby amends our Annual Report on Form 10-K for the year ended December 31, 2016, which was originally filed with the Securities and Exchange Commission on March 31, 2017 (the “Original 10-K”). This Amendment is being filed solely to include the properly dated audit report. Except as described above, the Company has not modified or updated disclosures presented in this Amendment No. 1. Accordingly, this Amendment No. 1 does not reflect events occurring after the Original 10-K or modify or update those disclosures affected by subsequent events, except as specifically referenced herein. All other information contained in the Original 10-K is unchanged and reflects the disclosures made at the time of filing of the Original 10-K. This Amendment has been signed as of a current date and all certifications of the Company’s Chief Executive Officer/Principal Executive Officer and Chief Financial Officer/Principal Accounting and Financial Officer are given as of a current date. Accordingly, this Amendment should be read in conjunction with the Company’s filings with the Securities and Exchange Commission subsequent to the filing of the Original 10-K, including any amendments to those filings. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 1,061,307 | $ 4,321,078 |
Accounts receivable, net | 1,563,246 | 3,391,405 |
Due from factor | 53,638 | 37,421 |
Inventory | 465,428 | 168,645 |
Software license rights | 1,560,000 | 5,000,000 |
Prepaid expenses and other | 206,677 | 97,203 |
Total current assets | 4,910,296 | 13,015,752 |
Software license rights, net | 10,598,411 | 7,180,000 |
Accounts receivable, net | 1,570,000 | |
Equipment and leasehold improvements, net | 67,814 | 63,877 |
Deposits and other assets | 8,712 | 8,712 |
Intangible assets, net | 134,132 | 147,738 |
Total non-current assets | 12,379,069 | 7,400,327 |
TOTAL ASSETS | 17,289,365 | 20,416,079 |
LIABILITIES | ||
Accounts payable | 466,842 | 1,158,555 |
Accrued liabilities | 335,323 | 493,067 |
Dividends payable | 401,250 | 133,851 |
Deferred revenue | 633,062 | 376,405 |
Warrant liabilities | 104,284 | |
Total current liabilities | 1,836,477 | 2,266,162 |
TOTAL LIABILITIES | 1,836,477 | 2,266,162 |
Commitments and Contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Common stock — authorized, 170,000,000 shares; issued and outstanding; 6,093,843 and 5,508,261 of $.0001 par value at December 31, 2016 and December 31, 2015, respectively | 609 | 551 |
Additional paid-in capital | 78,253,413 | 76,760,796 |
Accumulated deficit | (62,801,154) | (58,611,450) |
TOTAL STOCKHOLDERS’ EQUITY | 15,452,888 | 18,149,917 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 17,289,365 | 20,416,079 |
Convertible Preferred Stock [Member] | Series A-1 Shares [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock | 9 | 9 |
TOTAL STOCKHOLDERS’ EQUITY | 9 | 9 |
Convertible Preferred Stock [Member] | Series B-1 Shares [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock | 11 | 11 |
TOTAL STOCKHOLDERS’ EQUITY | $ 11 | $ 11 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) | 12 Months Ended | |
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Preferred stock, shares authorized (in shares) | 5,000,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 170,000,000 | 170,000,000 |
Common stock, shares issued (in shares) | 6,093,843 | 5,508,261 |
Common stock, shares outstanding (in shares) | 6,093,843 | 5,508,261 |
Reverse Stock Split [Member] | ||
Common stock, reverse stock split, shares | 12 | 2 |
Convertible Preferred Stock [Member] | Series A-1 Shares [Member] | ||
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock, liquidation value | $ | $ 100 | $ 100 |
Preferred stock, shares issued (in shares) | 90,000 | 90,000 |
Preferred stock, shares outstanding (in shares) | 90,000 | 90,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Convertible Preferred Stock [Member] | Series B-1 Shares [Member] | ||
Preferred stock, shares authorized (in shares) | 105,000 | 105,000 |
Preferred stock, liquidation value | $ | $ 100 | $ 100 |
Preferred stock, shares issued (in shares) | 105,000 | 105,000 |
Preferred stock, shares outstanding (in shares) | 105,000 | 105,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | ||
Services | $ 821,178 | $ 931,394 |
License fees and other | 2,154,578 | 4,329,831 |
2,975,756 | 5,261,225 | |
Costs and other expenses | ||
Cost of services | 216,465 | 260,436 |
Cost of license fees and other | 513,218 | 1,019,085 |
729,683 | 1,279,521 | |
Gross Profit | 2,246,073 | 3,981,704 |
Operating expenses | ||
Selling, general and administrative | 4,438,950 | 4,121,942 |
Research, development and engineering | 2,008,942 | 1,556,025 |
6,447,892 | 5,677,967 | |
Operating loss | (4,201,819) | (1,696,263) |
Other income (deductions) | ||
Interest income | 30 | 14 |
Interest expense | (192,199) | |
Gain on derivative liabilities | 12,085 | 31,142 |
12,115 | (161,043) | |
Net loss | (4,189,704) | (1,857,306) |
Convertible preferred stock dividends | (802,500) | (133,851) |
Net loss available to common stockholders | $ (4,992,204) | $ (1,991,157) |
Basic and Diluted Loss per Common Share (in dollars per share) | $ (0.89) | $ (0.36) |
Weighted Average Shares Outstanding: | ||
Basic and Diluted (in shares) | 5,587,144 | 5,502,778 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Convertible Preferred Stock [Member]Series A-1 Shares [Member] | Convertible Preferred Stock [Member]Series B-1 Shares [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2014 | $ 550 | $ 57,512,655 | $ (56,754,144) | $ 759,061 | ||
Balance (in shares) at Dec. 31, 2014 | 5,500,159 | |||||
Issuance of common stock for directors’ fees | $ 1 | 16,999 | 17,000 | |||
Issuance of common stock for directors’ fees (in shares) | 8,102 | |||||
Issuance of series A-1 and B-1 preferred stock (in shares) | 90,000 | 105,000 | ||||
Issuance of series A-1 and B-1 preferred stock | $ 9 | $ 11 | 19,499,980 | 19,500,000 | ||
Dividends declared on preferred stock | (133,851) | (133,851) | ||||
Issuance of warrants for investment advisor | 51,026 | 51,026 | ||||
Stock issuance costs | (459,102) | (459,102) | ||||
Share-based compensation | 273,089 | 273,089 | ||||
Net loss | (1,857,306) | (1,857,306) | ||||
Balance (in shares) at Dec. 31, 2015 | 90,000 | 105,000 | 5,508,261 | |||
Balance at Dec. 31, 2015 | $ 9 | $ 11 | $ 551 | 76,760,796 | (58,611,450) | 18,149,917 |
Issuance of common stock for directors’ fees and CEO stock award | $ 1 | 16,999 | 17,000 | |||
Issuance of common stock for directors’ fees and CEO stock award (in shares) | 8,102 | |||||
Issuance of common stock for directors’ fees | $ 2 | 61,998 | 62,000 | |||
Issuance of common stock for directors’ fees (in shares) | 27,248 | |||||
Issuance of series A-1 and B-1 preferred stock (in shares) | 516,667 | |||||
Issuance of series A-1 and B-1 preferred stock | $ 52 | 1,859,948 | 1,860,000 | |||
Dividends declared on preferred stock | (802,500) | (802,500) | ||||
Stock issuance costs | (84,866) | (84,866) | ||||
Share-based compensation | 260,842 | 260,842 | ||||
Net loss | (4,189,704) | (4,189,704) | ||||
Balance (in shares) at Dec. 31, 2016 | 90,000 | 105,000 | 6,093,843 | |||
Balance at Dec. 31, 2016 | $ 9 | $ 11 | 15,452,888 | |||
Issuance of common stock for directors’ fees and CEO stock award | $ 2 | 61,998 | 62,000 | |||
Issuance of common stock for directors’ fees and CEO stock award (in shares) | 27,248 | |||||
Issuance of stock for consultants | $ 4 | 104,996 | 105,000 | |||
Issuance of stock for consultants (in shares) | 41,667 | |||||
Reclassification of derivative liability | $ 92,199 | $ 92,199 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,189,704) | $ (1,857,306) |
Adjustments to reconcile net loss to cash used for operating activities: | ||
Allowance for doubtful accounts | 500,000 | (6,741) |
Depreciation | 49,038 | 42,996 |
Intangible assets | 13,606 | 13,606 |
Software license rights | 21,589 | |
Debt discount | 92,199 | |
Share and warrant-based compensation for employees and consultants | 260,842 | 324,115 |
Gain on derivative liabilities | (12,085) | (31,142) |
Stock based fees to Directors and consultants | 167,000 | 17,000 |
Change in assets and liabilities: | ||
Accounts receivable | (241,841) | (2,759,323) |
Due from factor | (16,217) | 39,236 |
Inventory | (296,783) | (336,820) |
Software license rights | (12,000,000) | |
Prepaid expenses and other | (109,474) | 139,226 |
Accounts payable | (691,713) | 811,244 |
Accrued liabilities | (157,745) | 4,450 |
Deferred revenue | 256,657 | (52,828) |
Net cash used for operating activities | (4,446,830) | (15,560,088) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (52,975) | (3,364) |
Net cash used for investing activities | (52,975) | (3,364) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Preferred dividends paid | (535,100) | |
Proceeds from issuances of preferred stock | 19,500,000 | |
Proceeds from issuances of common stock | 1,860,000 | |
Proceeds from issuance of note payable | 250,000 | |
Repayment of note payable | (250,000) | |
Costs to issue preferred and common stock and note payable | (84,866) | (459,102) |
Net cash provided by financing activities | 1,240,034 | 19,040,898 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (3,259,771) | 3,477,446 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 4,321,078 | 843,632 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 1,061,307 | 4,321,078 |
Cash paid for: | ||
Interest | 100,000 | |
Noncash investing and financing activities: | ||
Reclassification of derivative liability to additional paid-in capital | 92,199 | |
Issuance of warrants for financing raise | 92,199 | |
Accrual of dividends | $ 401,250 | $ 133,851 |
Note A - The Company and Summar
Note A - The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Business Description and Accounting Policies [Text Block] | NOTE A —THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company, founded in 1993, Basis of Presentation The Company has incurred significant losses to date, and at December 31, 2016, $62.8 December 31, 2016, $1,061,000, $4,321,000 December 31, 2015. As discussed below, the Company has financed itself in the past through access to the capital markets by issuing secured and convertible debt securities, convertible preferred stock, common stock, and through factoring receivables. The Company currently requires approximately $592,000 If the Company is unable to generate sufficient revenue to meet our goals, it will need to obtain additional third The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which contemplate continuation of the Company as a going concern, and assumes continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The matters described in the preceding paragraphs raise substantial doubt about the Company’s ability to continue as a going concern. Recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, and become profitable in its future operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. Effective February 3, 2015, 1 2 December 29, 2016, 1 12 Summary of Significant Accounting Policies A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: 1. Basis of Consolidation The accompanying consolidated financial statements include the accounts of BIO-key International, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Intercompany accounts and transactions have been eliminated in consolidation. 2. Use of Estimates Our consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by the U.S. Securities and Exchange Commission (SEC). These accounting principles require us to make certain estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions upon which it relies are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, its consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. 3. Revenue Recognition Revenues from software licensing are recognized in accordance with ASC 985 605, The Company intends to enter into arrangements with end users for items which may Multiple-Element Arrangements: For multiple-element arrangements, the Company applies the residual method in accordance with ASC 985 605. License Revenues: Amounts allocated to license revenues are recognized at the time of delivery of the software and all other revenue recognition criteria discussed above have been met. Revenue from licensing software, which requires significant customization and modification, is recognized using the percentage of completion method, based on the hours of effort incurred by the Company in relation to the total estimated hours to complete. In instances where third third may Service Revenues: Revenues from services are comprised of maintenance and consulting and implementation services. Maintenance revenues include providing for unspecified when-and-if available product updates and customer telephone support services, and are recognized ratably over the term of the service period. Consulting services are generally sold on a time-and-materials basis and include a range of services including installation of software and assisting in the design of interfaces to allow the software to operate in customized environments. Services are generally separable from other elements under the arrangement since performance of the services are not essential to the functionality of any other element of the transaction and are described in the contract such that the total price of the arrangement would be expected to vary as the result of the inclusion or exclusion of the services. Revenues from services are generally recognized as the services are performed. The Company provides customers, free of charge or at a minimal cost, testing kits which potential licensing customers may Costs and other expenses: Includes professional compensation and other direct contract expenses, as well as costs attributable to the support of client service professional staff, depreciation and amortization costs related to assets used in revenue-generating activities, and other costs attributable to serving the Company’s client base. Professional compensation consists of payroll costs and related benefits including stock-based compensation and bonuses. Other direct contract expenses include costs directly attributable to client engagements, such as out-of-pocket costs including travel and subsistence for client service professional staff, costs of hardware and software and costs of subcontractors. The allocation of lease and facilities charges for occupied offices is included in costs of service. The Company accounts for its warranties under the FASB ASC 450, one one third 4. Cash Equivalents Cash equivalents consist of liquid investments with original maturities of three December 31, 2016 2015, 5. Accounts Receivable Accounts receivable are carried at original amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. Accounts receivable are written off when deemed uncollectible. During the quarter ended September 30, 2016, may December 31, 2016, $500,000 24% Recoveries of accounts receivable previously written off are recorded when received. Accounts receivable at December 31, 2016 2015 December 31, 2016 2015 Accounts receivable - current $ 1,577,031 $ 3,405,190 Accounts receivable - non current 2,070,000 - 3,647,031 3,405,190 Allowance for doubtful accounts - current (13,785 ) (13,785 ) Allowance for doubtful accounts - non current (500,000 ) - Accounts receivable, net of allowances for doubtful accounts $ 3,133,246 $ 3,391,405 The allowance for doubtful accounts for the years ended December 31, 2016 2015 Balance at Beginning of Year Charged to Costs and Expenses Deductions From Reserves Balance at End of Year Year Ended December 31, 2016 Allowance for Doubtful Accounts $ 13,785 $ 500,000 $ - $ 513,785 Year Ended December 31, 2015 Allowance for Doubtful Accounts $ 20,526 $ - $ (6,741 ) $ 13,785 The bad debt expense is recorded in selling, general, and administrative expense. 6. Software License Rights Software license rights acquired for re-sale to end users are recorded as assets when purchased and are stated at the lower of cost or estimated net realizable value. The cost of the software license rights has been initially allocated pro-rata to the maximum number of resalable end-user licenses in the rights contract. Licenses are amortized to cost of sales over the greater of the following: 1) 10 2) ten 3) twelve The rights are also evaluated by management on a periodic basis to determine if estimated future net revenues, on a per sub-license basis, support the recorded basis of each license. If the estimated net revenues are less than the current carrying value of the capitalized software license rights, the Company will reduce the rights to their net realizable value. 7. Equipment and Leasehold Improvements, Intangible Assets and Depreciation and Amortization Equipment and leasehold improvements are stated at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over the estimated service lives, principally using straight-line methods. Leasehold improvements are amortized over the shorter of the life of the improvement or the lease term, using the straight-line method. The estimated useful lives used to compute depreciation and amortization for financial reporting purposes are as follows: Years Equipment and leasehold improvements Equipment (years) 3 - 5 Furniture and fixtures (years) 3 - 5 Software (years) 3 Leasehold improvements life or lease term Intangible assets consist of patents. Patent costs are capitalized until patents are awarded. Upon award, such costs are amortized using the straight-line method over their respective economic lives. If a patent is denied, all costs are charged to operations in that year. 8. Impairment or Disposal of Long Lived Assets, including Intangible Assets The Company reviews long-lived assets, including intangible assets subject to amortization, whenever events or changes in circumstances indicate that the carrying amount of such an asset may may 9. Advertising Expense The Company expenses the costs of advertising as incurred. Advertising expenses for 2016 2015 $299,000 $339,000, 10. Deferred Revenue Deferred revenue includes customer advances and amounts that have been billed per the contractual terms but have not been recognized as revenue. The majority of these amounts are related to maintenance contracts for which the revenue is recognized ratably over the applicable term, which generally is 12 11. Research and Development Expenditures Research and development expenses include costs directly attributable to the conduct of research and development programs primarily related to the development of our software products and improving the efficiency and capabilities of our existing software. Such costs include salaries, payroll taxes, employee benefit costs, materials, supplies, depreciation on research equipment, services provided by outside contractors, and the allocable portions of facility costs, such as rent, utilities, insurance, repairs and maintenance, depreciation and general support services. All costs associated with research and development are expensed as incurred. 12. Earnings Per Share of Common Stock (“EPS”) The Company’s EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuances of common stock, such as stock issuable pursuant to the conversion of preferred stock, exercise of stock options and warrants, when the effect of their inclusion is dilutive. See Note S - Earnings Per Share “EPS” for additional information. 13. Accounting for Stock-Based Compensation The Company accounts for share based compensation in accordance with the provisions of ASC 718 10, three four may The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations: Year ended December 31, 2016 2015 Selling, general and administrative $ 265,555 $ 202,073 Research, development and engineering 74,786 139,042 $ 340,341 $ 341,115 Valuation Assumptions for Stock Options For 2016 2015, 27,087 119,000 Year ended December 31, 2016 2015 Weighted average Risk free interest rate 1.11 % 1.46 % Expected life of options (in years) 4.5 4.5 Expected dividends 0 % 0 % Weighted average Volatility of stock price 93 % 117 % The stock volatility for each grant is determined based on the review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term. The expected term was determined using the simplified method for estimating expected option life, which qualify as “plain-vanilla” options; and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. 14. Derivative Liabilities In connection with the issuances of equity instruments or debt, the Company may may may may 815, 15. Deferred Costs Costs incurred with obtaining and executing debt arrangements are capitalized and amortized to interest expense using the effective interest method over the term of the related debt. 16. Income Taxes The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Such temporary differences result primarily from the differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. The Company evaluates, on a quarterly basis whether, based on all available evidence, if it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740 10, may The Company accounts for uncertain tax provisions in accordance with ASC 740 10 05, 17. Recent Accounting Pronouncements In May 2014, 2014 09, two one one December 15, 2017 August 2015, 2015 14, 606): 2015 14") 2014 09 one 2014 09 December 15, 2017 In April 2015, 2015 03, 835 30): 2015 03 2015 03 January 1, 2016 2015 03 In July 2015 2015 11, 330): 2015 11"). 2015 11 2015 11 December 15, 2016, In September 2015, 2015 16, 2015 16”). 2015 16 2015 16 January 1, 2016 In November 2015, 2015 17, 2015 17”). 2015 17 December 15, 2016. may In the fourth 2015, In January 2016, 2016 01, 2016 01”). 2016 01 December 15, 2017. 2016 01 In February 2016, 2016 02, 12 December 15, 2018, In March 2016, 2016 09, 2016 09”). 2016 09 2016 09 December 15, 2016. The Company does not believe that this will have a material impact on its consolidated financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements. 18. Reclassifications occurred to certain prior year amounts in order to conform to the current year classifications. The reclassifications have no effect on the reported net loss. |
Note B - Factoring
Note B - Factoring | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Factoring [Text Block] | NOTE B—FACTORING Due from factor consisted of the following as of December 31: Original Invoice Value Factored Amount Factored Balance due Year Ended December 31, 2016 Factored accounts receivable $ 214,556 $ 160,918 $ 53,638 Year Ended December 31, 2015 Factored accounts receivable $ 149,680 $ 112,259 $ 37,421 As of December 2011, 24 October 31, 2017. 35% 75% 2.75% 21% Years Ended December 31, 2016 2015 Factoring fees $ 341,023 $ 383,629 |
Note C - Fair Values of Financi
Note C - Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | NOTE C—FAIR VALUES OF FINANCIAL INSTRUMENTS Cash and cash equivalents, accounts receivable, inventory, due from factor, accounts payable and accrued liabilities are carried at, or approximate, fair value because of their short-term nature. For the embedded derivatives that were bifurcated from the associated host instruments, the Company utilized the Monte Carlo simulation. The stock volatility for each grant is determined based on the review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected term and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the derivative. The warrant and derivative liabilities are considered Level 3 The table below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3). December 31, 2016 2015 Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Warrants issued Under October and November 2013 PI SPA (Note O2c) Fair value at January 1, 2016 $ 7,478 Gain on derivative (7,478 ) Value at December 31, 2016 (expired) $ - Warrant issued under September 2015 SPA (Note I) Fair value at January 1, 2016 $ 96,806 Gain on derivative (4,607 ) Transfer grant date fair value to additional paid-in-capital (92,199 ) Value at December 31, 2016 $ - Total warrant balance, December 31, 2016 $ - |
Note D- Concentration of Risk
Note D- Concentration of Risk | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | NOTE D—CONCENTRATION OF RISK Financial instruments which potentially subject the Company to risk primarily consist of cash and accounts receivables. The Company maintains its cash and cash equivalents with various financial institutions, which, at times may December 31, 2016 2015, $811,000 $4,073,000, The Company extends credit to customers on an unsecured basis in the normal course of business. The Company’s policy is to perform an analysis of the recoverability of its receivables at the end of each reporting period and to establish allowances where appropriate. The Company analyzes historical bad debts and contract losses, customer concentrations, and customer credit-worthiness when evaluating the adequacy of the allowances. The Company had certain customers whose revenue individually represented 10% Years Ended December 31, 2016 2015 Customer A 34 % * Customer B 12 % * Customer C * 37 % * Less than 10% The Company had certain customers whose accounts receivable balances individually represented 10% As of December 31, 2016 2015 Customer A 35 % * Customer C 56 % 62 % Customer D * 14 % Customer E * 11 % * Less than 10% Customer C’s receivable of $2,070,000 eighteen December 31, 2016. $500,000 24% |
Note E - Inventory
Note E - Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | NOTE E—INVENTORY Inventory is stated at the lower of cost, determined on a first first December 31: 2016 2015 Current Finished goods 381,762 66,475 Fabricated assemblies 83,666 102,170 Total current inventory $ 465,428 $ 168,645 The Company reclassified resalable software license rights of $180,000 |
Note F - Software Licenses and
Note F - Software Licenses and Rights | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Research, Development, and Computer Software Disclosure [Text Block] | NOTE F—SOFTWARE LICENSE S AND RIGHTS On November 11, 2015, $12,000,000. 12 $1,560,000 The Company has determined the software license rights to be a finite lived intangible asset, and estimated that the software license rights shall be economically used over a 10 fourth 2015, January 2017. first 2017. 2016 $1,909. 2015. 1) 2) ten 3) On December 31, 2015, third $180,000 2016 $19,680. 2016, 2016 2015 Current software license rights $ 1,560,000 $ 5,000,000 Non-current software license rights 10,598,411 7,000,000 Total software license rights $ 12,158,411 $ 12,000,000 During the year ended December 31, 2016, may December 31, 2016 2015. Estimated amortization expense based on economic use of the software license rights for each of the next five Years ending December 31 2017 $ 1,560,000 2018 2,640,000 2019 3,000,000 2020 2,400,000 2021 1,200,000 Thereafter 1,358,411 |
Note G - Equipment and Leasehol
Note G - Equipment and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE G—EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment and leasehold improvements consisted of the following as of December 31: 2016 2015 Equipment $ 403,425 $ 398,910 Furniture and fixtures 162,067 139,779 Software 32,045 28,624 Leasehold improvements 23,403 53,948 620,940 621,261 Less accumulated depreciation and amortization (553,126 ) (557,384 ) Total $ 67,814 $ 63,877 Depreciation and amortization were $49,038 $42,996 2016 2015, |
Note H - Intangible Assets
Note H - Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | NOTE H—INTANGIBLE ASSETS Intangible assets consisted of the following as of December 31: 2016 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and patents pending $ 287,248 $ (153,116 ) $ 134,132 $ 287,248 $ (139,510 ) $ 147,738 Total $ 287,248 $ (153,116 ) $ 134,132 $ 287,248 $ (139,510 ) $ 147,738 Aggregate amortization expense for both 2016 2015 $13,606 December 31, 2016 $13,000 2017 2021, $35,000 |
Note I - Note Payable
Note I - Note Payable | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE I—NOTE PAYABLE Securities Purchase Agreement dated September 23, 2015 On September 23, 2015 seven 69,445 $250,000. $250,000 20% one 12% October 2015 1 $3.60 five The warrants have customary anti-dilution protections including a "full ratchet" anti-dilution adjustment provision which are triggered in the event the Company sells or $3.60 Based on an evaluation as discussed in FASB ASC 815 15, 815 40 15, The Company did not value the derivative liability. One of the key determinants of the Company’s decision to not value the derivative liability was the high likelihood that a future financing would not occur that would trigger the down round feature. Whether a future equity financing would occur would be determined by the cash needs of the Company and management’s willingness to trigger the down round feature. The Company’s reasons were based on the issuance of Series A- 1 1 October November 2015, $3.60 The cashless exercise features contained in the warrants were initially considered to be derivatives and the Company recorded a warrant liability of $92,199 2016 December 31, 2016 $4,607 $96,806 December 31, 2015. The fair value of the warrants was initially estimated on the date of grant at $92,199 1.47%, 5, 0, 115.7%. |
Note J - Accrued Liabilities
Note J - Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | NOTE J—ACCRUED LIABILITIES Accrued liabilities consisted of the following as of December 31: 2016 2015 Compensation $ 66,152 $ 78,016 Compensated absences 154,368 113,996 Accrued legal and accounting fees 79,633 141,000 Sales tax payable 26,988 48,255 Other 8,182 111,800 Total $ 335,323 $ 493,067 |
Note K - Related Party
Note K - Related Party | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | NOTE K—RELATED PARTY Licensing Agreement with Subsidiaries of China Goldjoy Group Limited. On November 11, 2015 one $12,000,000 October 2016 17.2% Securities Purchase Agreement with Wong Kwok Fong On November 18, 2016, 516,667 $3.60 $1,860,000. |
Note L - Deferred Revenue
Note L - Deferred Revenue | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Deferred Revenue Disclosure [Text Block] | NOTE L—DEFERRED REVENUE Deferred revenue represents unearned revenue on maintenance contracts. Maintenance contracts include provisions for unspecified when-and-if available product updates and customer telephone support services, and are recognized ratably over the term of the service period. At December 31, 2016 2015, $633,000 $376,000, |
Note M - Segment Information
Note M - Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | NOTE M—SEGMENT INFORMATION The Company has determined that its continuing operations are one 78% 51% 2016 2015, |
Note N - Commitments and Contin
Note N - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Commitments Disclosure [Text Block] | NOTE N—COMMITMENTS AND CONTINGENCIES Operating Leases The Company does not own any real estate but conducts operations from three 2018. Future minimum rental commitments of non-cancelable operating leases are approximately as follows: Years ending December 31, 2017 165,111 2018 103,829 $ 268,940 Rental expense was approximately $193,000 $170,000 2016 2015, Contingency On or about March 13, 2014, 1042 14) $718,500. August 21, 2015, |
Note O - Equity
Note O - Equity | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE O— EQUITY 1. Within the limits and restrictions provided in the Company’s Certificate of Incorporation, the Board of Directors has the authority, without further action by the shareholders, to issue up to 5,000,000 $.0001 one December 31, 2016, 100,000 1 90,000 105,000 1 Series A- 1 On October 22 29, 2015, 84,500 1 $100.00 $8,450,000. November 11, 2015, 5,500 1 $100.00 $550,000. 1 1 $3.60 9.99% 1 6% April 1, July, 1, October 1, January 1 October 1, 2017, ten (10) January 1, 2018, The holders of the Series A- 1 one 1 1 1 $100.00 1 December 31, 2016, $270,000 1 October 1, 2016 January 1, 2017 The Series A- 1 815 15, 815 40 15, 1 $3.60 December 31, 2017, 1 may ten (10) Series B- 1 On November 11, 2015, 105,000 1 $100.00 $10,500,000. 1 1 $3.60 9.99% 1 2.5% April 1, July, 1, October 1, January 1 1 ten (10) The holders of the Series B- 1 one 1 1 1 $100.00 1 December 31, 2016 $131,250 1 October 1, 2016 January 1, 2017 The Series B- 1 815 15, 815 40 15, 1 $3.60 1 may ten (10) Stock Issuance Costs Costs of approximately $85,000 2016 2. Effective February 3, 2015, 1 2. February 6, 2015. Effective December 29, 2016, 1 12. December 29, 2016. Holders of common stock have equal rights to receive dividends when, as and if declared by the Board of Directors, out of funds legally available therefor. Holders of common stock have one Holders of common stock are entitled, upon liquidation of the Company, to share ratably in the net assets available for distribution, subject to the rights, if any, of holders of any preferred stock then outstanding. Shares of common stock are not redeemable and have no preemptive or similar rights. All outstanding shares of common stock are fully paid and nonassessable. Issuances of Common Stock a) Securities Purchase Agreement dated November 11, 2016 Pursuant to a Securities Purchase Agreement, dated November 11, 2016, 516,667 $1,860,000. b) Securities Purchase Agreement dated November 13, 2014 Pursuant to a Securities Purchase Agreement, dated November 13, 2014, “November 2014 664,584 996,877 $1,595,000. The common stock has a purchase price reset feature. If at any time prior to the two (January 29, 2015), $2.40 The Company valued the purchase price reset feature using a Monte Carlo simulation at the date of issuance, and at quarterly reporting intervals until the expiration of the feature in January 2017, 1 1 October November 2015, $3.60, November 2016 $3.60. The warrants have a term of five $3.60 February 2015. $3.60 Based on an evaluation as discussed in FASB ASC 815 15, 815 40 15, The Company did not value the derivative liabilities. One of the key determinants of the Company’s decision to not value the derivative liability was the high likelihood that a future financing would not occur that would trigger the down round feature or the purchase price reset feature. Whether a future equity financing would occur would be determined by the cash needs of the Company and management’s willingness to trigger the down round feature or purchase price reset feature. The Company’s reason was based on the issuance of Series A- 1 1 October November 2015, $3.60, November 2016, $3.60. Under GAAP, the Company is required to mark-to-market the derivative liabilities at the end of each reporting period. The Company did not value the derivative liabilities at the date of issuance, December 31, 2016 December 31, 2015. c) Derivative Liabilities: Securities Purchase Agreements dated October 25, 2013 November 8, 2013 Pursuant to a series of Private Investors Securities Purchase Agreements (the “PI SPA”), on October 25, 2013 November 8, 2013, 1,026,972 1,026,972 1,026,972 $3,697,100. $6.00 three 2016. In connection with the share issuances described above, and pursuant to a placement agency letter agreement, the Company paid the placement agent cash commissions equal to 8% 82,158 The cashless exercise features contained in the warrants were considered to be derivatives and the Company recorded warrant liabilities on the consolidated balance sheet. The Company initially recorded the warrant liabilities equal to their estimated fair value of $325,891. December 31, 2016, $7,478. December 31, 2016, $0 fourth 2016. $7,478 December 31, 2015. (d) Issuances to Directors, Executive Officers and Consultants During the year ended December 31, 2016, 18,914 $45,000, 8,334 $17,000. On December 13, 2016, 41,667 $2.52 $105,000 e) Employees’ exercise options No stock options were exercised during the years ended December 31, 2016 2015. 3. The Company has issued warrants to certain creditors, investors, investment bankers and consultants. A summary of warrant activity is as follows: Total Warrants Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding, as of January 1, 2015 1,587,266 4.44 3.91 Granted 117,362 3.16 Exercised — — Forfeited — — Expired — — Outstanding, as of December 31, 2015 1,704,628 4.40 3.02 — Granted — — Exercised — — Forfeited — — Expired (444,548 ) 6.00 Outstanding, as of December 31, 2016 1,260,080 3.84 2.78 — Vested or expected to vest at December 31, 2016 1,260,080 3.84 2.78 — Exercisable at December 31, 2016 1,260,080 3.84 2.78 — On March 9, 2015, 47,917 one $2.52 March 8, 2020. The fair value of the warrants was initially estimated on the date of grant at $98,065 1.66%, 5, 0, 115.7%. Share based expense related to the value of the stock warrants is recorded over the requisite service period, which is generally the vesting period for each tranche. For the years ended December 31, 2016 December 31, 2015, $11,625 $51,026 2016 On September 23, 2015, 69,445 |
Note P - Stock Options
Note P - Stock Options | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | NOTE P —STOCK OPTIONS 1999 During 1999, 1999 1999 1999 1999 83,334 may 85% may ten 1999 1999 August 2009. 2004 On October 12, 2004, 2004 2004 2004 166,667 may 85% may ten 2004 2004 October 2014. 2015 On January 27, 2016, 2015 2015 666,667 may 100 110% may ten 2015 may may 2015 December 2025. Non-Plan Stock Options Periodically, the Company has granted options outside of the 1999, 2004 2015 Stock Option Activity Information summarizing option activity is as follows: Number of Options Weighted average exercise Weighted average remaining life Aggregate intrinsic 1999 Plan 2004 Plan 2015 Plan Non Plan Total price (in years) value Outstanding, as of December 31, 2014 20,834 136,276 — 184,167 341,277 $ 4.32 Granted — — — 119,000 119,000 2.16 Exercised — — — — — Forfeited — (3,473 ) — (38,531 ) (42,004 ) 3.72 Expired — (47,795 ) — (5,548 ) (53,343 ) 3.00 Outstanding, as of December 31, 2015 20,834 85,008 — 259,088 364,930 $ 3.87 4.57 $ 240 Granted — — 27,087 — 27,087 2.74 Exercised — — — — — Forfeited — — (2,084 ) (8,335 ) (10,419 ) 2.16 Expired (20,834 ) (15,628 ) — (3,473 ) (39,935 ) 2.50 Outstanding, as of December 31, 2016 — 69,380 25,003 247,280 341,663 $ 3.99 4.23 $ 53,936 Vested or expected to vest at December 31, 2016 307,164 $ 4.16 4.04 $ 41,816 Exercisable at December 31, 2016 216,566 $ 4.56 3.51 $ 17,367 The options outstanding and exercisable at December 31, 2016 Options Outstanding Options Exercisable Range of exercise prices Number of shares Weighted average exercise price Weighted average remaining life (in years) Number exercisable Weighted average exercise price $ 1.90 - 3.00 122,485 $ 2.24 5.81 34,815 $ 2.15 3.01 - 5.00 197,927 4.47 3.66 160,500 4.41 5.01 - 11.04 21,251 9.67 0.72 21,251 9.67 $ 1.90 - 11.04 341,663 216,566 The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $2.65 December 31, 2016, December 31, 2016 34,815. The weighted average fair value of options granted during the years ended December 31, 2016 2015 $1.86 $1.68 December 31, 2016 2015 $0 $0, December 31, 2016 2015 $285,430 $265,247 As of December 31, 2016, $166,146 1.18 |
Note Q - Income Taxes
Note Q - Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | NOTE Q—INCOME TAXES There was no December 31, 2016 2015. The Company has deferred taxes due to income tax credits, net operating loss carryforwards, and the effect of temporary differences between the carrying values of certain assets and liabilities for financial reporting and income tax purposes. Significant components of deferred taxes are as follows at December 31: 2016 2015 Current asset: Accrued compensation $ 67,000 $ 75,000 Accounts receivable allowance 202,000 5,000 Non-current asset (liability): Stock-based compensation 360,000 258,000 Basis differences in fixed assets (8,000 ) (16,000 ) Basis differences in intangible assets 60,000 55,000 Net operating loss and credit carryforwards 18,597,000 17,994,000 Valuation allowances (19,278,000 ) (18,371,000 ) $ — $ — The Company has a valuation allowance against the full amount of its net deferred taxes due to the uncertainty of realization of the deferred tax assets due to operating loss history of the Company. The Company currently provides a valuation allowance against deferred taxes when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. The valuation allowance could be reduced or eliminated based on future earnings and future estimates of taxable income. Similarly, income tax benefits related to stock options exercised have not been recognized in the financial statements. As of December 31, 2016, $54,300,000 2020 2036. 382 A reconciliation of the effective income tax rate on operations reflected in the Statements of Operations to the US Federal statutory income tax rate is presented below. 2016 2015 Federal statutory income tax rate 34 % 34 % Permanent differences — — ) Effect of net operating loss (34 ) (34 ) Effective tax rate — % — % The Company has not been audited by the Internal Revenue Service (“IRS”) or any states in connection with income taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The periods from 2013 2016 not December 31, 2016 2015. |
Note R - Profit Sharing Plan
Note R - Profit Sharing Plan | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | NOTE R—PROFIT SHARING PLAN The Company has established a savings plan under section 401(k) one 401(k) may may no December 31, 2016 2015. |
Note S - Earnings Per Share (EP
Note S - Earnings Per Share (EPS) | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | NOTE S—EARNINGS PER SHARE (EPS) The Company’s basic EPS is calculated using net income (loss) available to common shareholders and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and warrants and the assumed conversion of preferred stock. The reconciliation of the numerator of the basic and diluted EPS calculations, due to the inclusion of preferred stock dividends was as follows for the following fiscal years ended December 31: 2016 2015 Basic Numerator: Loss from continuing operations $ (4,189,704 ) $ (1,857,306 ) Convertible preferred stock dividends (802,500 ) (133,851 ) Net loss available to common stockholders (basic and diluted EPS) $ (4,992,204 ) $ (1,991,157 ) The following table summarizes the weighted average securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive. Years ended December 31, 2016 2015 Preferred stock 5,416,667 859,095 Stock options 17,657 4,639 Warrants 1,018 - Potentially dilutive securities 5,435,342 863,734 Items excluded from the diluted per share calculation because the exercise price was greater than the average market price of the common shares: Years ended December 31, 2016 2015 Stock options 235,845 236,528 Warrants 1,212,163 1,704,618 Total 1,448,008 1,941,146 |
Note T - Subsequent Events
Note T - Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | NOTE T—SUBSEQUENT EVENTS On March 15, 2017, 1,895 On March 15, 2017, 40,000 four three seven $2.64. On March 16, 2017, 1,120,000 three seven $2.65. The Company has reviewed subsequent events through the date of this filing. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The Company has incurred significant losses to date, and at December 31, 2016, $62.8 December 31, 2016, $1,061,000, $4,321,000 December 31, 2015. As discussed below, the Company has financed itself in the past through access to the capital markets by issuing secured and convertible debt securities, convertible preferred stock, common stock, and through factoring receivables. The Company currently requires approximately $592,000 If the Company is unable to generate sufficient revenue to meet our goals, it will need to obtain additional third The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which contemplate continuation of the Company as a going concern, and assumes continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The matters described in the preceding paragraphs raise substantial doubt about the Company’s ability to continue as a going concern. Recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, and become profitable in its future operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. Effective February 3, 2015, 1 2 December 29, 2016, 1 12 |
Consolidation, Policy [Policy Text Block] | 1. Basis of Consolidation The accompanying consolidated financial statements include the accounts of BIO-key International, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | 2. Use of Estimates Our consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by the U.S. Securities and Exchange Commission (SEC). These accounting principles require us to make certain estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions upon which it relies are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, its consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. |
Revenue Recognition, Policy [Policy Text Block] | 3. Revenue Recognition Revenues from software licensing are recognized in accordance with ASC 985 605, The Company intends to enter into arrangements with end users for items which may Multiple-Element Arrangements: For multiple-element arrangements, the Company applies the residual method in accordance with ASC 985 605. License Revenues: Amounts allocated to license revenues are recognized at the time of delivery of the software and all other revenue recognition criteria discussed above have been met. Revenue from licensing software, which requires significant customization and modification, is recognized using the percentage of completion method, based on the hours of effort incurred by the Company in relation to the total estimated hours to complete. In instances where third third may Service Revenues: Revenues from services are comprised of maintenance and consulting and implementation services. Maintenance revenues include providing for unspecified when-and-if available product updates and customer telephone support services, and are recognized ratably over the term of the service period. Consulting services are generally sold on a time-and-materials basis and include a range of services including installation of software and assisting in the design of interfaces to allow the software to operate in customized environments. Services are generally separable from other elements under the arrangement since performance of the services are not essential to the functionality of any other element of the transaction and are described in the contract such that the total price of the arrangement would be expected to vary as the result of the inclusion or exclusion of the services. Revenues from services are generally recognized as the services are performed. The Company provides customers, free of charge or at a minimal cost, testing kits which potential licensing customers may Costs and other expenses: Includes professional compensation and other direct contract expenses, as well as costs attributable to the support of client service professional staff, depreciation and amortization costs related to assets used in revenue-generating activities, and other costs attributable to serving the Company’s client base. Professional compensation consists of payroll costs and related benefits including stock-based compensation and bonuses. Other direct contract expenses include costs directly attributable to client engagements, such as out-of-pocket costs including travel and subsistence for client service professional staff, costs of hardware and software and costs of subcontractors. The allocation of lease and facilities charges for occupied offices is included in costs of service. The Company accounts for its warranties under the FASB ASC 450, one one third |
Cash and Cash Equivalents, Policy [Policy Text Block] | 4. Cash Equivalents Cash equivalents consist of liquid investments with original maturities of three December 31, 2016 2015, |
Receivables, Policy [Policy Text Block] | 5. Accounts Receivable Accounts receivable are carried at original amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. Accounts receivable are written off when deemed uncollectible. During the quarter ended September 30, 2016, may December 31, 2016, $500,000 24% Recoveries of accounts receivable previously written off are recorded when received. Accounts receivable at December 31, 2016 2015 December 31, 2016 2015 Accounts receivable - current $ 1,577,031 $ 3,405,190 Accounts receivable - non current 2,070,000 - 3,647,031 3,405,190 Allowance for doubtful accounts - current (13,785 ) (13,785 ) Allowance for doubtful accounts - non current (500,000 ) - Accounts receivable, net of allowances for doubtful accounts $ 3,133,246 $ 3,391,405 The allowance for doubtful accounts for the years ended December 31, 2016 2015 Balance at Beginning of Year Charged to Costs and Expenses Deductions From Reserves Balance at End of Year Year Ended December 31, 2016 Allowance for Doubtful Accounts $ 13,785 $ 500,000 $ - $ 513,785 Year Ended December 31, 2015 Allowance for Doubtful Accounts $ 20,526 $ - $ (6,741 ) $ 13,785 The bad debt expense is recorded in selling, general, and administrative expense. |
Inventory, Policy [Policy Text Block] | 6. Software License Rights Software license rights acquired for re-sale to end users are recorded as assets when purchased and are stated at the lower of cost or estimated net realizable value. The cost of the software license rights has been initially allocated pro-rata to the maximum number of resalable end-user licenses in the rights contract. Licenses are amortized to cost of sales over the greater of the following: 1) 10 2) ten 3) twelve The rights are also evaluated by management on a periodic basis to determine if estimated future net revenues, on a per sub-license basis, support the recorded basis of each license. If the estimated net revenues are less than the current carrying value of the capitalized software license rights, the Company will reduce the rights to their net realizable value. |
Property, Plant and Equipment, Policy [Policy Text Block] | 7. Equipment and Leasehold Improvements, Intangible Assets and Depreciation and Amortization Equipment and leasehold improvements are stated at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over the estimated service lives, principally using straight-line methods. Leasehold improvements are amortized over the shorter of the life of the improvement or the lease term, using the straight-line method. The estimated useful lives used to compute depreciation and amortization for financial reporting purposes are as follows: Years Equipment and leasehold improvements Equipment (years) 3 - 5 Furniture and fixtures (years) 3 - 5 Software (years) 3 Leasehold improvements life or lease term Intangible assets consist of patents. Patent costs are capitalized until patents are awarded. Upon award, such costs are amortized using the straight-line method over their respective economic lives. If a patent is denied, all costs are charged to operations in that year. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | 8. Impairment or Disposal of Long Lived Assets, including Intangible Assets The Company reviews long-lived assets, including intangible assets subject to amortization, whenever events or changes in circumstances indicate that the carrying amount of such an asset may may |
Advertising Costs, Policy [Policy Text Block] | 9. Advertising Expense The Company expenses the costs of advertising as incurred. Advertising expenses for 2016 2015 $299,000 $339,000, |
Revenue Recognition, Deferred Revenue [Policy Text Block] | 10. Deferred Revenue Deferred revenue includes customer advances and amounts that have been billed per the contractual terms but have not been recognized as revenue. The majority of these amounts are related to maintenance contracts for which the revenue is recognized ratably over the applicable term, which generally is 12 |
Research and Development Expense, Policy [Policy Text Block] | 11. Research and Development Expenditures Research and development expenses include costs directly attributable to the conduct of research and development programs primarily related to the development of our software products and improving the efficiency and capabilities of our existing software. Such costs include salaries, payroll taxes, employee benefit costs, materials, supplies, depreciation on research equipment, services provided by outside contractors, and the allocable portions of facility costs, such as rent, utilities, insurance, repairs and maintenance, depreciation and general support services. All costs associated with research and development are expensed as incurred. |
Earnings Per Share, Policy [Policy Text Block] | 12. Earnings Per Share of Common Stock (“EPS”) The Company’s EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuances of common stock, such as stock issuable pursuant to the conversion of preferred stock, exercise of stock options and warrants, when the effect of their inclusion is dilutive. See Note S - Earnings Per Share “EPS” for additional information. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | 13. Accounting for Stock-Based Compensation The Company accounts for share based compensation in accordance with the provisions of ASC 718 10, three four may The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations: Year ended December 31, 2016 2015 Selling, general and administrative $ 265,555 $ 202,073 Research, development and engineering 74,786 139,042 $ 340,341 $ 341,115 Valuation Assumptions for Stock Options For 2016 2015, 27,087 119,000 Year ended December 31, 2016 2015 Weighted average Risk free interest rate 1.11 % 1.46 % Expected life of options (in years) 4.5 4.5 Expected dividends 0 % 0 % Weighted average Volatility of stock price 93 % 117 % The stock volatility for each grant is determined based on the review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term. The expected term was determined using the simplified method for estimating expected option life, which qualify as “plain-vanilla” options; and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. |
Derivatives, Embedded Derivatives [Policy Text Block] | 14. Derivative Liabilities In connection with the issuances of equity instruments or debt, the Company may may may may 815, |
Deferred Charges, Policy [Policy Text Block] | 15. Deferred Costs Costs incurred with obtaining and executing debt arrangements are capitalized and amortized to interest expense using the effective interest method over the term of the related debt. |
Income Tax, Policy [Policy Text Block] | 16. Income Taxes The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Such temporary differences result primarily from the differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. The Company evaluates, on a quarterly basis whether, based on all available evidence, if it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740 10, may The Company accounts for uncertain tax provisions in accordance with ASC 740 10 05, |
New Accounting Pronouncements, Policy [Policy Text Block] | 17. Recent Accounting Pronouncements In May 2014, 2014 09, two one one December 15, 2017 August 2015, 2015 14, 606): 2015 14") 2014 09 one 2014 09 December 15, 2017 In April 2015, 2015 03, 835 30): 2015 03 2015 03 January 1, 2016 2015 03 In July 2015 2015 11, 330): 2015 11"). 2015 11 2015 11 December 15, 2016, In September 2015, 2015 16, 2015 16”). 2015 16 2015 16 January 1, 2016 In November 2015, 2015 17, 2015 17”). 2015 17 December 15, 2016. may In the fourth 2015, In January 2016, 2016 01, 2016 01”). 2016 01 December 15, 2017. 2016 01 In February 2016, 2016 02, 12 December 15, 2018, In March 2016, 2016 09, 2016 09”). 2016 09 2016 09 December 15, 2016. The Company does not believe that this will have a material impact on its consolidated financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements. |
Reclassification, Policy [Policy Text Block] | 18. Reclassifications occurred to certain prior year amounts in order to conform to the current year classifications. The reclassifications have no effect on the reported net loss. |
Note A - The Company and Summ28
Note A - The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, 2016 2015 Accounts receivable - current $ 1,577,031 $ 3,405,190 Accounts receivable - non current 2,070,000 - 3,647,031 3,405,190 Allowance for doubtful accounts - current (13,785 ) (13,785 ) Allowance for doubtful accounts - non current (500,000 ) - Accounts receivable, net of allowances for doubtful accounts $ 3,133,246 $ 3,391,405 |
Summary of Valuation Allowance [Table Text Block] | Balance at Beginning of Year Charged to Costs and Expenses Deductions From Reserves Balance at End of Year Year Ended December 31, 2016 Allowance for Doubtful Accounts $ 13,785 $ 500,000 $ - $ 513,785 Year Ended December 31, 2015 Allowance for Doubtful Accounts $ 20,526 $ - $ (6,741 ) $ 13,785 |
Useful Lives of Property Plan and Equipment [Table Text Block] | Years Equipment and leasehold improvements Equipment (years) 3 - 5 Furniture and fixtures (years) 3 - 5 Software (years) 3 Leasehold improvements life or lease term |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | Year ended December 31, 2016 2015 Selling, general and administrative $ 265,555 $ 202,073 Research, development and engineering 74,786 139,042 $ 340,341 $ 341,115 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Year ended December 31, 2016 2015 Weighted average Risk free interest rate 1.11 % 1.46 % Expected life of options (in years) 4.5 4.5 Expected dividends 0 % 0 % Weighted average Volatility of stock price 93 % 117 % |
Note B - Factoring (Tables)
Note B - Factoring (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, 2016 2015 Accounts receivable - current $ 1,577,031 $ 3,405,190 Accounts receivable - non current 2,070,000 - 3,647,031 3,405,190 Allowance for doubtful accounts - current (13,785 ) (13,785 ) Allowance for doubtful accounts - non current (500,000 ) - Accounts receivable, net of allowances for doubtful accounts $ 3,133,246 $ 3,391,405 |
Factoring Fees [Table Text Block] | Years Ended December 31, 2016 2015 Factoring fees $ 341,023 $ 383,629 |
Factored Accounts Receivable [Member] | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Original Invoice Value Factored Amount Factored Balance due Year Ended December 31, 2016 Factored accounts receivable $ 214,556 $ 160,918 $ 53,638 Year Ended December 31, 2015 Factored accounts receivable $ 149,680 $ 112,259 $ 37,421 |
Note C - Fair Values of Finan30
Note C - Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Warrants issued Under October and November 2013 PI SPA (Note O2c) Fair value at January 1, 2016 $ 7,478 Gain on derivative (7,478 ) Value at December 31, 2016 (expired) $ - Warrant issued under September 2015 SPA (Note I) Fair value at January 1, 2016 $ 96,806 Gain on derivative (4,607 ) Transfer grant date fair value to additional paid-in-capital (92,199 ) Value at December 31, 2016 $ - Total warrant balance, December 31, 2016 $ - |
Note D- Concentration of Risk (
Note D- Concentration of Risk (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Years Ended December 31, 2016 2015 Customer A 34 % * Customer B 12 % * Customer C * 37 % |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | As of December 31, 2016 2015 Customer A 35 % * Customer C 56 % 62 % Customer D * 14 % Customer E * 11 % |
Note E - Inventory (Tables)
Note E - Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | 2016 2015 Current Finished goods 381,762 66,475 Fabricated assemblies 83,666 102,170 Total current inventory $ 465,428 $ 168,645 |
Note F - Software Licenses an33
Note F - Software Licenses and Rights (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Software License Rights [Table Text Block] | 2016 2015 Current software license rights $ 1,560,000 $ 5,000,000 Non-current software license rights 10,598,411 7,000,000 Total software license rights $ 12,158,411 $ 12,000,000 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Years ending December 31 2017 $ 1,560,000 2018 2,640,000 2019 3,000,000 2020 2,400,000 2021 1,200,000 Thereafter 1,358,411 |
Note G - Equipment and Leaseh34
Note G - Equipment and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | 2016 2015 Equipment $ 403,425 $ 398,910 Furniture and fixtures 162,067 139,779 Software 32,045 28,624 Leasehold improvements 23,403 53,948 620,940 621,261 Less accumulated depreciation and amortization (553,126 ) (557,384 ) Total $ 67,814 $ 63,877 |
Note H - Intangible Assets (Tab
Note H - Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 2016 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and patents pending $ 287,248 $ (153,116 ) $ 134,132 $ 287,248 $ (139,510 ) $ 147,738 Total $ 287,248 $ (153,116 ) $ 134,132 $ 287,248 $ (139,510 ) $ 147,738 |
Note J - Accrued Liabilities (T
Note J - Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | 2016 2015 Compensation $ 66,152 $ 78,016 Compensated absences 154,368 113,996 Accrued legal and accounting fees 79,633 141,000 Sales tax payable 26,988 48,255 Other 8,182 111,800 Total $ 335,323 $ 493,067 |
Note N - Commitments and Cont37
Note N - Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Years ending December 31, 2017 165,111 2018 103,829 $ 268,940 |
Note O - Equity (Tables)
Note O - Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Total Warrants Weighted average exercise price Weighted average remaining life (in years) Aggregate intrinsic value Outstanding, as of January 1, 2015 1,587,266 4.44 3.91 Granted 117,362 3.16 Exercised — — Forfeited — — Expired — — Outstanding, as of December 31, 2015 1,704,628 4.40 3.02 — Granted — — Exercised — — Forfeited — — Expired (444,548 ) 6.00 Outstanding, as of December 31, 2016 1,260,080 3.84 2.78 — Vested or expected to vest at December 31, 2016 1,260,080 3.84 2.78 — Exercisable at December 31, 2016 1,260,080 3.84 2.78 — |
Note P - Stock Options (Tables)
Note P - Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Options Weighted average exercise Weighted average remaining life Aggregate intrinsic 1999 Plan 2004 Plan 2015 Plan Non Plan Total price (in years) value Outstanding, as of December 31, 2014 20,834 136,276 — 184,167 341,277 $ 4.32 Granted — — — 119,000 119,000 2.16 Exercised — — — — — Forfeited — (3,473 ) — (38,531 ) (42,004 ) 3.72 Expired — (47,795 ) — (5,548 ) (53,343 ) 3.00 Outstanding, as of December 31, 2015 20,834 85,008 — 259,088 364,930 $ 3.87 4.57 $ 240 Granted — — 27,087 — 27,087 2.74 Exercised — — — — — Forfeited — — (2,084 ) (8,335 ) (10,419 ) 2.16 Expired (20,834 ) (15,628 ) — (3,473 ) (39,935 ) 2.50 Outstanding, as of December 31, 2016 — 69,380 25,003 247,280 341,663 $ 3.99 4.23 $ 53,936 Vested or expected to vest at December 31, 2016 307,164 $ 4.16 4.04 $ 41,816 Exercisable at December 31, 2016 216,566 $ 4.56 3.51 $ 17,367 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | Options Outstanding Options Exercisable Range of exercise prices Number of shares Weighted average exercise price Weighted average remaining life (in years) Number exercisable Weighted average exercise price $ 1.90 - 3.00 122,485 $ 2.24 5.81 34,815 $ 2.15 3.01 - 5.00 197,927 4.47 3.66 160,500 4.41 5.01 - 11.04 21,251 9.67 0.72 21,251 9.67 $ 1.90 - 11.04 341,663 216,566 |
Note Q - Income Taxes (Tables)
Note Q - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 2016 2015 Current asset: Accrued compensation $ 67,000 $ 75,000 Accounts receivable allowance 202,000 5,000 Non-current asset (liability): Stock-based compensation 360,000 258,000 Basis differences in fixed assets (8,000 ) (16,000 ) Basis differences in intangible assets 60,000 55,000 Net operating loss and credit carryforwards 18,597,000 17,994,000 Valuation allowances (19,278,000 ) (18,371,000 ) $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 2016 2015 Federal statutory income tax rate 34 % 34 % Permanent differences — — ) Effect of net operating loss (34 ) (34 ) Effective tax rate — % — % |
Note S - Earnings Per Share (41
Note S - Earnings Per Share (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 2016 2015 Basic Numerator: Loss from continuing operations $ (4,189,704 ) $ (1,857,306 ) Convertible preferred stock dividends (802,500 ) (133,851 ) Net loss available to common stockholders (basic and diluted EPS) $ (4,992,204 ) $ (1,991,157 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Years ended December 31, 2016 2015 Preferred stock 5,416,667 859,095 Stock options 17,657 4,639 Warrants 1,018 - Potentially dilutive securities 5,435,342 863,734 Years ended December 31, 2016 2015 Stock options 235,845 236,528 Warrants 1,212,163 1,704,618 Total 1,448,008 1,941,146 |
Note A - The Company and Summ42
Note A - The Company and Summary of Significant Accounting Policies (Details Textual) | Dec. 29, 2016 | Feb. 03, 2015 | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) |
Retained Earnings (Accumulated Deficit) | $ (62,801,154) | $ (58,611,450) | |||
Cash and Cash Equivalents, at Carrying Value | 1,061,307 | 4,321,078 | $ 843,632 | ||
Operational Costs Per Month | 592,000 | ||||
Allowance for Doubtful Accounts Receivable, Noncurrent | $ 500,000 | ||||
Percentage of Remaining Balance Owned Reserved | 24.00% | ||||
Advertising Expense | $ 299,000 | $ 339,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 27,087 | 119,000 | |||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||||
Licensing Agreements [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||
Reverse Stock Split [Member] | |||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 12 | 2 | 12 | 2 |
Note A - The Company and Summ43
Note A - The Company and Summary of Significant Accounting Policies - Summary of Accounts Receivable (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts receivable - current | $ 1,577,031 | $ 3,405,190 |
Accounts receivable - non current | 2,070,000 | |
3,647,031 | 3,405,190 | |
Allowance for doubtful accounts - current | (13,785) | (13,785) |
Allowance for doubtful accounts - non current | (500,000) | |
Accounts receivable, net of allowances for doubtful accounts | $ 3,133,246 | $ 3,391,405 |
Note A - The Company and Summ44
Note A - The Company and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Balance at beginning of year | $ 13,785 | $ 20,526 |
Charges to costs and expenses | 500,000 | |
Deductions from reserves | (6,741) | |
Balance at end of year | $ 513,785 | $ 13,785 |
Note A - The Company and Summ45
Note A - The Company and Summary of Significant Accounting Policies - Estimated Useful Lives for Depreciation and Amortization (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Equipment [Member] | Minimum [Member] | |
Property, Plant, and Equipment (Year) | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant, and Equipment (Year) | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant, and Equipment (Year) | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant, and Equipment (Year) | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant, and Equipment (Year) | 5 years |
Software Development [Member] | Minimum [Member] | |
Property, Plant, and Equipment (Year) | |
Software Development [Member] | Maximum [Member] | |
Property, Plant, and Equipment (Year) | |
Leasehold Improvements [Member] | |
Property, Plant, and Equipment, useful life | life or lease term |
Note A - The Company and Summ46
Note A - The Company and Summary of Significant Accounting Policies - Share-based Compensation Expenses for Continuing Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation expense | $ 340,341 | $ 341,115 |
Selling, General and Administrative Expenses [Member] | ||
Share-based compensation expense | 265,555 | 202,073 |
Research and Development Expense [Member] | ||
Share-based compensation expense | $ 74,786 | $ 139,042 |
Note A - The Company and Summ47
Note A - The Company and Summary of Significant Accounting Policies - Valuation Assumptions for Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted average Risk free interest rate | 1.11% | 1.46% |
Expected life of options (in years) (Year) | 4 years 182 days | 4 years 182 days |
Expected dividends | 0.00% | 0.00% |
Weighted average Volatility of stock price | 93.00% | 117.00% |
Note B - Factoring (Details Tex
Note B - Factoring (Details Textual) | 1 Months Ended |
Dec. 31, 2011 | |
Factoring Arrangement Term | 2 years |
Minimum [Member] | |
Factoring Fees Percent | 2.75% |
Maximum [Member] | |
Factoring Fees Percent | 21.00% |
Geographic Distribution, Foreign [Member] | |
Percentage Of Accounts Receivable Remitted By Factor | 35.00% |
Geographic Distribution, Domestic [Member] | |
Percentage Of Accounts Receivable Remitted By Factor | 75.00% |
Note B - Factoring - Due From F
Note B - Factoring - Due From Factor (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Original invoice value | $ 214,556 | $ 149,680 |
Factored amount | 160,918 | 112,259 |
Factored balance due | $ 53,638 | $ 37,421 |
Note B - Factoring - Fees (Deta
Note B - Factoring - Fees (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Factoring fees | $ 341,023 | $ 383,629 |
Note C - Fair Values of Finan51
Note C - Fair Values of Financial Instruments - Fair Value Measurements Using Significant Unobservable Inputs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Value at December 31, 2016 | ||
Warrants Issued Under PISPA [Member] | ||
Fair value | 7,478 | |
Gain on derivative | (7,478) | |
Value at December 31, 2016 | 0 | $ 7,478 |
Warrant Issued Under September 2015 SPA [Member] | ||
Fair value | 96,806 | |
Gain on derivative | (4,607) | |
Value at December 31, 2016 | ||
Transfer grant date fair value to additional paid-in-capital | $ (92,199) |
Note D- Concentration of Risk52
Note D- Concentration of Risk (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash, Uninsured Amount | $ 811,000 | $ 4,073,000 |
Accounts Receivable, Net | 3,133,246 | 3,391,405 |
Allowance for Doubtful Accounts Receivable, Noncurrent | $ 500,000 | |
Percentage of Remaining Balance Owned Reserved | 24.00% | |
Customer C [Member] | ||
Accounts Receivable, Net | $ 2,070,000 | |
Allowance for Doubtful Accounts Receivable, Noncurrent | $ 500,000 | |
Percentage of Remaining Balance Owned Reserved | 24.00% |
Note D - Concentration of Risk
Note D - Concentration of Risk - Revenue Concentration Risk by Major Customer (Details) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Customer A [Member] | ||||
Percentage of revenues | 34.00% | [1] | ||
Customer B [Member] | ||||
Percentage of revenues | 12.00% | [1] | ||
Customer C [Member] | ||||
Percentage of revenues | [1] | 37.00% | ||
[1] | Less than 10% of total revenue |
Note D - Concentration of Ris54
Note D - Concentration of Risk - Accounts Receivable Concentration Risk by Major Customer (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Customer A [Member] | ||||
Accounts receivable, concentration | 35.00% | [1] | ||
Customer B [Member] | ||||
Accounts receivable, concentration | 56.00% | 62.00% | ||
Customer C [Member] | ||||
Accounts receivable, concentration | [1] | 14.00% | ||
Customer D [Member] | ||||
Accounts receivable, concentration | [1] | 11.00% | ||
[1] | Less than 10% of total accounts receivable |
Note E - Inventory (Details Tex
Note E - Inventory (Details Textual) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
December 31, 2015 [Member] | Reclassification from Finished Goods Inventory to Software License Rights [Member] | |
Prior Period Reclassification Adjustment | $ 180,000 |
Note E - Inventory - Components
Note E - Inventory - Components of Inventory (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Finished goods | $ 381,762 | $ 66,475 |
Fabricated assemblies | 83,666 | 102,170 |
Total current inventory | $ 465,428 | $ 168,645 |
Note F - Software Licenses an57
Note F - Software Licenses and Rights (Details Textual) - USD ($) | Dec. 31, 2015 | Nov. 11, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Software License Rights, Current | $ 5,000,000 | $ 1,560,000 | $ 5,000,000 | |
License Costs | 513,218 | 1,019,085 | ||
Payments to Acquire Software | $ 180,000 | |||
Amortization of Intangible Assets | $ 13,606 | 13,606 | ||
Licensing Agreements [Member] | ||||
Payments to Acquire Intangible Assets | $ 12,000,000 | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
License Costs | $ 1,909 | |||
Amortization of Intangible Assets | $ 0 | |||
Software License Rights [Member] | ||||
License Costs | $ 19,680 |
Note F - Software Licenses an58
Note F - Software Licenses and Rights - Summary of Software License Rights (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Software license rights | $ 1,560,000 | $ 5,000,000 |
Software license rights, net | 10,598,411 | 7,180,000 |
Total software license rights | $ 12,158,411 | $ 12,000,000 |
Note F - Software Licenses an59
Note F - Software Licenses and Rights - Amortization Expense (Details) | Dec. 31, 2016USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 13,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 13,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 13,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 13,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 13,000 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 35,000 |
Licensing Agreements [Member] | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 1,560,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 2,640,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 3,000,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 2,400,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,200,000 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $ 1,358,411 |
Note G - Equipment and Leaseh60
Note G - Equipment and Leasehold Improvements (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Selling, General and Administrative Expenses [Member] | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 49,038 | $ 42,996 |
Note G - Equipment and Leaseh61
Note G - Equipment and Leasehold Improvements - Summary of Equipment and Leasehold Improvements (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, plant, and equipment, gross | $ 620,940 | $ 621,261 |
Less accumulated depreciation and amortization | (553,126) | (557,384) |
Total | 67,814 | 63,877 |
Equipment [Member] | ||
Property, plant, and equipment, gross | 403,425 | 398,910 |
Furniture and Fixtures [Member] | ||
Property, plant, and equipment, gross | 162,067 | 139,779 |
Software Development [Member] | ||
Property, plant, and equipment, gross | 32,045 | 28,624 |
Leasehold Improvements [Member] | ||
Property, plant, and equipment, gross | $ 23,403 | $ 53,948 |
Note H - Intangible Assets (Det
Note H - Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amortization of Intangible Assets | $ 13,606 | $ 13,606 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 13,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 13,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 13,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 13,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 13,000 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 35,000 | |
Research, Development, and Engineering Expense [Member] | ||
Amortization of Intangible Assets | $ 13,606 | $ 13,606 |
Note H - Intangible Assets - Su
Note H - Intangible Assets - Summary of Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Gross carrying amount | $ 287,248 | $ 287,248 |
Accumulated amortization | (153,116) | (139,510) |
Net carrying amount | 134,132 | 147,738 |
Patents [Member] | ||
Gross carrying amount | 287,248 | 287,248 |
Accumulated amortization | (153,116) | (139,510) |
Net carrying amount | $ 134,132 | $ 147,738 |
Note I - Note Payable (Details
Note I - Note Payable (Details Textual) - USD ($) | Sep. 23, 2015 | Mar. 09, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 11, 2015 | Oct. 31, 2015 | Oct. 29, 2015 |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 47,917 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.52 | ||||||
Term Of Warrant | 1 year | ||||||
Warrants and Rights Outstanding | $ 104,284 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | |||||
Convertible Preferred Stock [Member] | Series A-1 Shares [Member] | |||||||
Initial Conversion Price | $ 3.60 | $ 3.60 | $ 3.60 | ||||
Convertible Preferred Stock [Member] | Series B-1 Shares [Member] | |||||||
Initial Conversion Price | $ 3.60 | ||||||
September 2015 Warrants [Member] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.60 | ||||||
Term Of Warrant | 5 years | ||||||
Debt Instrument, Unamortized Discount | $ 92,199 | ||||||
Fair Value Adjustment of Warrants | $ 4,607 | ||||||
Warrants and Rights Outstanding | $ 96,806 | ||||||
Fair Value Assumptions, Risk Free Interest Rate | 1.47% | ||||||
Fair Value Assumptions, Expected Term | 5 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||||||
Fair Value Assumptions, Expected Volatility Rate | 115.70% | ||||||
Promissory Note [Member] | |||||||
Debt Instrument, Term | 210 days | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 69,445 | ||||||
Proceeds from Issuance of Debt | $ 250,000 | ||||||
Debt Instrument, Discount Rate | 20.00% | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% |
Note J - Accrued Liabilities -
Note J - Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Compensation | $ 66,152 | $ 78,016 |
Compensated absences | 154,368 | 113,996 |
Accrued legal and accounting fees | 79,633 | 141,000 |
Sales tax payable | 26,988 | 48,255 |
Other | 8,182 | 111,800 |
Total | $ 335,323 | $ 493,067 |
Note K - Related Party (Details
Note K - Related Party (Details Textual) - USD ($) | Nov. 18, 2016 | Nov. 11, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 11, 2015 |
Share Price | $ 2.65 | ||||
Proceeds from Issuance of Common Stock | $ 1,860,000 | ||||
Director [Member] | |||||
Software License, Total | $ 12,000,000 | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 17.20% | ||||
Wong Kwok Fong [Member] | |||||
Stock Issued During Period, Shares, New Issues | 516,667 | 516,667 | |||
Share Price | $ 3.60 | ||||
Proceeds from Issuance of Common Stock | $ 1,860,000 | $ 1,860,000 |
Note L - Deferred Revenue (Deta
Note L - Deferred Revenue (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Maintenance Contracts [Member] | ||
Deferred Revenue, Current | $ 633,000 | $ 376,000 |
Note M - Segment Information (D
Note M - Segment Information (Details Textual) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Reportable Segments | 1 | |
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | North America [Member] | ||
Concentration Risk, Percentage | 78.00% | 51.00% |
Note N - Commitments and Cont69
Note N - Commitments and Contingencies (Details Textual) - USD ($) | Mar. 13, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Life South [Member] | |||
Loss Contingency, Damages Sought, Value | $ 718,500 | ||
Selling, General and Administrative Expenses [Member] | |||
Operating Leases, Rent Expense | $ 193,000 | $ 170,000 |
Note N - Commitments and Cont70
Note N - Commitments and Contingencies - Future Minimum Rental Commitments of Non-cancelable Operating Leases (Details) | Dec. 31, 2016USD ($) |
2,017 | $ 165,111 |
2,018 | 103,829 |
$ 268,940 |
Note O - Equity (Details Textua
Note O - Equity (Details Textual) | Dec. 29, 2016 | Dec. 13, 2016USD ($)$ / sharesshares | Nov. 18, 2016USD ($)$ / sharesshares | Nov. 11, 2016USD ($)shares | Nov. 11, 2015USD ($)$ / sharesshares | Oct. 29, 2015USD ($)$ / sharesshares | Mar. 09, 2015USD ($)$ / sharesshares | Feb. 03, 2015 | Nov. 13, 2014USD ($)$ / sharesshares | Nov. 08, 2013USD ($)$ / sharesshares | Oct. 25, 2013shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Nov. 30, 2016$ / shares | Nov. 30, 2015$ / shares | Oct. 31, 2015$ / shares | Sep. 23, 2015shares |
Preferred Stock, Shares Authorized | shares | 5,000,000 | ||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | ||||||||||||||||
Share Price | $ / shares | $ 2.65 | ||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 19,500,000 | ||||||||||||||||
Dividends Payable | 401,250 | 133,851 | |||||||||||||||
Payments of Stock Issuance Costs | 84,866 | 459,102 | |||||||||||||||
Proceeds from Issuance of Common Stock | 1,860,000 | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 47,917 | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.52 | ||||||||||||||||
Term Of Warrant | 1 year | ||||||||||||||||
Stock Issued During Period, Value, New Issues | 1,860,000 | 19,500,000 | |||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | |||||||||||||||||
Stock Issued During Period, Value, Issued for Services | 105,000 | ||||||||||||||||
Class of Warrant or Right, Nonemployee Compensation Expense | $ 11,625 | $ 51,026 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | shares | 0 | 0 | |||||||||||||||
Promissory Note [Member] | |||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 69,445 | ||||||||||||||||
Consultancy Firm [Member] | |||||||||||||||||
Share Price | $ / shares | $ 2.52 | ||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | shares | 41,667 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 105,000 | ||||||||||||||||
Director [Member] | |||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | shares | 18,914 | ||||||||||||||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | $ 45,000 | ||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | shares | 8,334 | ||||||||||||||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | $ 17,000 | ||||||||||||||||
Warrants Issued Under PISPA [Member] | |||||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Issuances | 7,478 | ||||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 7,478 | ||||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | $ 0 | $ 7,478 | |||||||||||||||
Warrants Issued Under PISPA [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Issuances | $ 325,891 | ||||||||||||||||
Private Investor SPA [Member] | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 664,584 | 1,026,972 | 1,026,972 | ||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 996,877 | ||||||||||||||||
Proceeds from Issuance of Private Placement | $ 1,595,000 | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.60 | $ 3.60 | |||||||||||||||
Term Of Warrant | 5 years | ||||||||||||||||
Wong Kwok Fong [Member] | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 516,667 | 516,667 | |||||||||||||||
Share Price | $ / shares | $ 3.60 | ||||||||||||||||
Proceeds from Issuance of Common Stock | $ 1,860,000 | $ 1,860,000 | |||||||||||||||
Reverse Stock Split [Member] | |||||||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 12 | 2 | 12 | 2 | |||||||||||||
Convertible Preferred Stock [Member] | Series A-1 Shares [Member] | |||||||||||||||||
Preferred Stock, Shares Authorized | shares | 100,000 | 100,000 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||||||
Preferred Stock, Shares Outstanding | shares | 90,000 | 90,000 | |||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 5,500 | 84,500 | 90,000 | ||||||||||||||
Share Price | $ / shares | $ 100 | $ 100 | |||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 550,000 | $ 8,450,000 | |||||||||||||||
Initial Conversion Price | $ / shares | $ 3.60 | $ 3.60 | $ 3.60 | ||||||||||||||
Preferred Stock, Dividend Rate, Percentage | 6.00% | ||||||||||||||||
Period Preceding the Dividend Payment Date | 10 days | ||||||||||||||||
Liquidation Value Per Share | $ / shares | $ 100 | ||||||||||||||||
Dividends Payable | $ 270,000 | ||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 9 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | |||||||||||||||||
Preferred Stock, Shares Issued | shares | 90,000 | 90,000 | |||||||||||||||
Convertible Preferred Stock [Member] | Series A-1 Shares [Member] | Maximum [Member] | |||||||||||||||||
Maximum Ownership as a Result of Conversion | 9.99% | ||||||||||||||||
Convertible Preferred Stock [Member] | Series B-1 Shares [Member] | |||||||||||||||||
Preferred Stock, Shares Authorized | shares | 105,000 | 105,000 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||||||
Preferred Stock, Shares Outstanding | shares | 105,000 | 105,000 | |||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 105,000 | 105,000 | |||||||||||||||
Share Price | $ / shares | $ 100 | ||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 10,500,000 | ||||||||||||||||
Initial Conversion Price | $ / shares | $ 3.60 | ||||||||||||||||
Preferred Stock, Dividend Rate, Percentage | 2.50% | ||||||||||||||||
Period Preceding the Dividend Payment Date | 10 days | ||||||||||||||||
Liquidation Value Per Share | $ / shares | $ 100 | ||||||||||||||||
Dividends Payable | $ 131,250 | ||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 11 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | |||||||||||||||||
Preferred Stock, Shares Issued | shares | 105,000 | 105,000 | |||||||||||||||
Convertible Preferred Stock [Member] | Series B-1 Shares [Member] | Maximum [Member] | |||||||||||||||||
Maximum Ownership as a Result of Conversion | 9.99% | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 516,667 | ||||||||||||||||
Share Price | $ / shares | $ 3.60 | ||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 52 | ||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | shares | 27,248 | 8,102 | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | shares | 41,667 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 4 | ||||||||||||||||
Common Stock [Member] | Private Investor SPA [Member] | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 1,026,972 | 1,026,972 | |||||||||||||||
Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3 | $ 98,065 | ||||||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 1.66% | ||||||||||||||||
Fair Value Assumptions, Expected Term | 5 years | ||||||||||||||||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||||||||||||||||
Fair Value Assumptions, Expected Volatility Rate | 115.70% | ||||||||||||||||
Warrant [Member] | Private Investor SPA [Member] | |||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 1,026,972 | 1,026,972 | |||||||||||||||
Private Investor SPA [Member] | |||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 6 | ||||||||||||||||
Term Of Warrant | 3 years | ||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 3,697,100 | ||||||||||||||||
Placement Agent Warrants [Member] | |||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 82,158 | ||||||||||||||||
Commissions and Fees, Percent of Gross Proceeds | 8.00% |
Note O - Equity - Summary of Wa
Note O - Equity - Summary of Warrant Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total warrants (in shares) | 1,704,628 | 1,587,266 | |
Weighted average exercise price (in dollars per share) | $ 4.40 | $ 4.44 | |
Weighted average remaining contractual life (Year) | 2 years 284 days | 3 years 7 days | 3 years 332 days |
Granted (in shares) | 117,362 | ||
Granted, weighted average exercise price (in dollars per share) | $ 3.16 | ||
Exercised (in shares) | |||
Exercised, weighted average exercise price (in dollars per share) | |||
Forfeited (in shares) | |||
Forfeited, weighted average exercise price (in dollars per share) | |||
Expired (in shares) | (444,548) | ||
Expired, weighted average exercise price (in dollars per share) | $ 6 | ||
Total warrants (in shares) | 1,260,080 | 1,704,628 | 1,587,266 |
Weighted average exercise price (in dollars per share) | $ 3.84 | $ 4.40 | $ 4.44 |
Vested or expected to vest at December 31, 2016 (in shares) | 1,260,080 | ||
Vested or expected to vest at December 31, 2016 (in dollars per share) | $ 3.84 | ||
Vested or expected to vest at December 31, 2016 (Year) | 2 years 284 days | ||
Exercisable at December 31, 2016 (in shares) | 1,260,080 | ||
Exercisable at December 31, 2016 (in dollars per share) | $ 3.84 | ||
Exercisable at December 31, 2016 (Year) | 2 years 284 days |
Note P - Stock Options (Details
Note P - Stock Options (Details Textual) - USD ($) | Jan. 27, 2016 | Oct. 12, 2004 | Aug. 31, 2009 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 4 years 83 days | 4 years 208 days | |||
Share Price | $ 2.65 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 216,566 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.86 | $ 1.68 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 | $ 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 285,430 | $ 265,247 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 166,146 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 65 days | ||||
In The Money Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 34,815 | ||||
The1999 Stock Option Plan [Member] | |||||
Common Stock, Capital Shares Reserved for Future Issuance | 83,334 | ||||
The1999 Stock Option Plan [Member] | Nonstatutory Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 10 years | ||||
The1999 Stock Option Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% | ||||
The2004 Stock Option Plan [Member] | |||||
Common Stock, Capital Shares Reserved for Future Issuance | 166,667 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 10 years | ||||
The2004 Stock Option Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% | ||||
The 2015 Equity Incentive Plan [Member] | |||||
Common Stock, Capital Shares Reserved for Future Issuance | 666,667 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||||
The 2015 Equity Incentive Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | ||||
The 2015 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 110.00% |
Note P - Stock Options - Option
Note P - Stock Options - Option Activity (Details) - USD ($) | Oct. 12, 2004 | Dec. 31, 2016 | Dec. 31, 2015 |
Outstanding (in shares) | 364,930 | 341,277 | |
Outstanding, weighted average exercise price (in dollars per share) | $ 3.87 | $ 4.32 | |
Granted (in shares) | 27,087 | 119,000 | |
Granted, weighted average exercise price (in dollars per share) | $ 2.74 | $ 2.16 | |
Exercised (in shares) | 0 | 0 | |
Exercised, weighted average exercise price (in dollars per share) | |||
Forfeited (in shares) | (10,419) | (42,004) | |
Forfeited, weighted average exercise price (in dollars per share) | $ 2.16 | $ 3.72 | |
Expired (in shares) | (39,935) | (53,343) | |
Expired, weighted average exercise price (in dollars per share) | $ 2.50 | $ 3 | |
Outstanding (in shares) | 341,663 | 364,930 | |
Outstanding, weighted average exercise price (in dollars per share) | $ 3.99 | $ 3.87 | |
Outstanding, weighted average remaining life (Year) | 4 years 83 days | 4 years 208 days | |
Outstanding, aggregate intrinsic value | $ 53,936 | $ 240 | |
Vested or expected to vest at December 31, 2016 (in shares) | 307,164 | ||
Vested or expected, weighted average exercise price (in dollars per share) | $ 4.16 | ||
Vested or expected to vest, weighted average remaining life (Year) | 4 years 14 days | ||
Vested or expected to vest, aggregate intrinsic value | $ 41,816 | ||
Exercisable at December 31, 2016 (in shares) | 216,566 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 4.56 | ||
Exercisable, weighted average remaining life (Year) | 3 years 186 days | ||
Exercisable, aggregate intrinsic value | $ 17,367 | ||
The1999 Stock Option Plan [Member] | |||
Outstanding (in shares) | 20,834 | 20,834 | |
Granted (in shares) | |||
Exercised (in shares) | |||
Forfeited (in shares) | |||
Expired (in shares) | (20,834) | ||
Outstanding (in shares) | 20,834 | ||
The2004 Stock Option Plan [Member] | |||
Outstanding (in shares) | 85,008 | 136,276 | |
Granted (in shares) | |||
Exercised (in shares) | |||
Forfeited (in shares) | (3,473) | ||
Expired (in shares) | (15,628) | (47,795) | |
Outstanding (in shares) | 69,380 | 85,008 | |
Outstanding, weighted average remaining life (Year) | 10 years | ||
The 2015 Equity Incentive Plan [Member] | |||
Outstanding (in shares) | |||
Granted (in shares) | 27,087 | ||
Exercised (in shares) | |||
Forfeited (in shares) | (2,084) | ||
Expired (in shares) | |||
Outstanding (in shares) | 25,003 | ||
Non Plan [Member] | |||
Outstanding (in shares) | 259,088 | 184,167 | |
Granted (in shares) | 119,000 | ||
Exercised (in shares) | |||
Forfeited (in shares) | (8,335) | (38,531) | |
Expired (in shares) | (3,473) | (5,548) | |
Outstanding (in shares) | 247,280 | 259,088 |
Note P - Stock Options - Opti75
Note P - Stock Options - Options Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Range of exercise prices, lower range (in dollars per share) | $ 1.90 |
Range of exercise prices, upper range (in dollars per share) | $ 11.04 |
Options outstanding (in shares) | shares | 341,663 |
Options exercisable (in shares) | shares | 216,566 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 4.56 |
Exercise Price Range 1 [Member] | |
Range of exercise prices, lower range (in dollars per share) | 1.90 |
Range of exercise prices, upper range (in dollars per share) | $ 3 |
Options outstanding (in shares) | shares | 122,485 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 2.24 |
Options outstanding, weighted average remaining remaining life (Year) | 5 years 295 days |
Options exercisable (in shares) | shares | 34,815 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 2.15 |
Exercise Price Range 2 [Member] | |
Range of exercise prices, lower range (in dollars per share) | 3.01 |
Range of exercise prices, upper range (in dollars per share) | $ 5 |
Options outstanding (in shares) | shares | 197,927 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 4.47 |
Options outstanding, weighted average remaining remaining life (Year) | 3 years 240 days |
Options exercisable (in shares) | shares | 160,500 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 4.41 |
Exercise Price Range 3 [Member] | |
Range of exercise prices, lower range (in dollars per share) | 5.01 |
Range of exercise prices, upper range (in dollars per share) | $ 11.04 |
Options outstanding (in shares) | shares | 21,251 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 9.67 |
Options outstanding, weighted average remaining remaining life (Year) | 262 days |
Options exercisable (in shares) | shares | 21,251 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 9.67 |
Note Q - Income Taxes (Details
Note Q - Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Expense (Benefit) | $ (12,115) | $ 161,043 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | 0 |
Earliest Tax Year [Member] | ||
Open Tax Year | 2,013 | |
Latest Tax Year [Member] | ||
Open Tax Year | 2,016 | |
Domestic Tax Authority [Member] | ||
Income Tax Expense (Benefit) | $ 0 | 0 |
Operating Loss Carryforwards | 54,300,000 | |
State and Local Jurisdiction [Member] | ||
Income Tax Expense (Benefit) | $ 0 | $ 0 |
Note Q - Income Taxes - Compone
Note Q - Income Taxes - Components of Deferred Taxes (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current asset: | ||
Accrued compensation | $ 67,000 | $ 75,000 |
Accounts receivable allowance | 202,000 | 5,000 |
Stock-based compensation | 360,000 | 258,000 |
Basis differences in fixed assets | (8,000) | (16,000) |
Basis differences in intangible assets | 60,000 | 55,000 |
Net operating loss and credit carryforwards | 18,597,000 | 17,994,000 |
Valuation allowances | $ (19,278,000) | $ (18,371,000) |
Note Q - Income Taxes - Reconci
Note Q - Income Taxes - Reconciliation of the Effective Income Tax Rate to US Federal Statutory Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal statutory income tax rate | 34.00% | 34.00% |
Permanent differences | ||
Effect of net operating loss | (34.00%) | (34.00%) |
Effective tax rate |
Note R - Profit Sharing Plan (D
Note R - Profit Sharing Plan (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0 | $ 0 |
Note S - Earnings Per Share (80
Note S - Earnings Per Share (EPS) - Reconciliation of Numerator of Basic and Diluted EPS Calculations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Basic Numerator: | ||
Loss from continuing operations | $ (4,189,704) | $ (1,857,306) |
Convertible preferred stock dividends | (802,500) | (133,851) |
Net loss available to common stockholders (basic and diluted EPS) | $ (4,992,204) | $ (1,991,157) |
Note S - Earnings Per Share (81
Note S - Earnings Per Share (EPS) - Securities Excluded From the Diluted Per Share Calculation (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Exercise Price Less Than Average Market Price Of Common Shares [Member] | ||
Antidilutive securities (in shares) | 5,435,342 | 863,734 |
Exercise Price Less Than Average Market Price Of Common Shares [Member] | Preferred Stock [Member] | ||
Antidilutive securities (in shares) | 5,416,667 | 859,095 |
Exercise Price Less Than Average Market Price Of Common Shares [Member] | Employee Stock Option [Member] | ||
Antidilutive securities (in shares) | 17,657 | 4,639 |
Exercise Price Less Than Average Market Price Of Common Shares [Member] | Warrant [Member] | ||
Antidilutive securities (in shares) | 1,018 | |
Exercise Price Greater Than Average Market Price Of Common Shares [Member] | ||
Antidilutive securities (in shares) | 1,448,008 | 1,941,146 |
Exercise Price Greater Than Average Market Price Of Common Shares [Member] | Employee Stock Option [Member] | ||
Antidilutive securities (in shares) | 235,845 | 236,528 |
Exercise Price Greater Than Average Market Price Of Common Shares [Member] | Warrant [Member] | ||
Antidilutive securities (in shares) | 1,212,163 | 1,704,618 |
Note T - Subsequent Events (Det
Note T - Subsequent Events (Details Textual) - $ / shares | Mar. 16, 2017 | Mar. 15, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 2.74 | $ 2.16 | ||
Director [Member] | ||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 18,914 | |||
Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 1,120,000 | |||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 2.65 | |||
Subsequent Event [Member] | Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | |||
Subsequent Event [Member] | Director [Member] | ||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 1,895 | |||
Subsequent Event [Member] | Four Members of the Board of Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 40,000 | |||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 2.64 | |||
Subsequent Event [Member] | Four Members of the Board of Directors [Member] | Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years |