Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | May 30, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | ||||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Period End Date | Dec. 31, 2022 | |||
Document Transition Report | false | |||
Entity File Number | 1-13463 | |||
Entity Registrant Name | BIO-KEY INTERNATIONAL, INC. | |||
Entity Incorporation, State or Country Code | DE | |||
Entity Tax Identification Number | 41-1741861 | |||
Entity Address, Address Line One | 3349 HIGHWAY 138, BUILDING A, SUITE E | |||
Entity Address, City or Town | WALL | |||
Entity Address, State or Province | NJ | |||
Entity Address, Postal Zip Code | 07719 | |||
City Area Code | 732 | |||
Local Phone Number | 359-1100 | |||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |||
Trading Symbol | BKYI | |||
Security Exchange Name | NASDAQ | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | No | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | false | |||
ICFR Auditor Attestation Flag | false | |||
Document Financial Statement Error Correction [Flag] | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 13,509,134 | |||
Entity Common Stock, Shares Outstanding (in shares) | 9,234,833 | |||
Auditor Name | Marcum LLC. | Rotenberg Meril Solomon Bertiger & Guttilla, P.C. | ||
Auditor Location | Saddle Brook, NJ | Saddle Brook, NJ | ||
Auditor Firm ID | 688 | 361 | ||
Entity Central Index Key | 0001019034 | |||
Current Fiscal Year End Date | --12-31 | |||
Document Fiscal Year Focus | 2022 | |||
Document Fiscal Period Focus | FY | |||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 2,635,522 | $ 7,754,046 |
Accounts receivable, net | 1,522,784 | 970,626 |
Due from factor | 49,500 | 49,500 |
Note receivable, net of allowance | 0 | 82,000 |
Inventory, net of reserve | 4,434,369 | 4,940,660 |
Prepaid expenses and other | 342,706 | 216,041 |
Total current assets | 8,984,881 | 14,012,873 |
Resalable software license rights | 0 | 48,752 |
Investment – debt security, net | 0 | 452,821 |
Equipment and leasehold improvements, net | 107,413 | 69,168 |
Capitalized contract costs, net | 283,069 | 249,012 |
Deposits and other assets | 8,712 | 8,712 |
Note receivable, net of allowance | 0 | 113,000 |
Operating lease right-of-use assets | 197,355 | 254,100 |
Intangible assets, net | 1,762,825 | 1,298,077 |
Goodwill | 0 | 1,262,526 |
Total non-current assets | 2,359,374 | 3,756,168 |
TOTAL ASSETS | 11,344,255 | 17,769,041 |
LIABILITIES | ||
Accounts payable | 1,108,279 | 427,772 |
Accrued liabilities | 1,009,123 | 828,997 |
Convertible note payable, net of debt discount | 2,596,203 | 0 |
Government loan – BBVA Bank, current portion | 120,000 | 0 |
Deferred revenue - current | 462,418 | 565,355 |
Operating lease liabilities, current portion | 159,665 | 177,188 |
Total current liabilities | 5,455,688 | 1,999,312 |
Deferred revenue, net of current portion | 52,134 | 67,300 |
Deferred tax liability | 170,281 | 0 |
Government loan – BBVA Bank, net of current portion | 326,767 | 0 |
Operating lease liabilities, net of current portion | 37,829 | 86,974 |
Total non-current liabilities | 587,011 | 154,274 |
TOTAL LIABILITIES | 6,042,699 | 2,153,586 |
Commitments and Contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Common stock — authorized, 170,000,000 shares; issued and outstanding; 9,190,504 and 7,853,759 of $.0001 par value at December 31, 2022 and December 31, 2021, respectively | 919 | 786 |
Additional paid-in capital | 122,028,612 | 120,190,139 |
Accumulated other comprehensive loss | (242,602) | 0 |
Accumulated deficit | (116,485,373) | (104,575,470) |
TOTAL STOCKHOLDERS’ EQUITY | 5,301,556 | 15,615,455 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 11,344,255 | $ 17,769,041 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Common stock, shares authorized (in shares) | 170,000,000 | 170,000,000 |
Common stock, shares issued (in shares) | 9,190,504 | 7,853,759 |
Common stock, shares outstanding (in shares) | 9,190,504 | 7,853,759 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | ||
Services | $ 7,020,258 | $ 5,114,489 |
Costs and other expenses | ||
Cost of services | 2,439,570 | 1,672,929 |
Gross Profit | 4,580,688 | 3,441,560 |
Operating expenses | ||
Selling, general and administrative | 9,364,887 | 6,028,360 |
Research, development and engineering | 3,252,236 | 2,355,056 |
Reversal of earnout payable – Swivel acquisition | (500,000) | 0 |
Impairment of goodwill | 2,387,193 | 0 |
Total operating expenses | 14,504,316 | 8,383,416 |
Operating loss | (9,923,628) | (4,941,856) |
Other income (expense) | ||
Interest income | 233 | 4,075 |
Loss on foreign currency transactions | 0 | (50,000) |
Investment-debt security reserve | (452,821) | (60,000) |
Loan transaction costs | (1,147,456) | 0 |
Change in fair value of convertible note | (396,203) | 0 |
Interest expense | (10,462) | (18,000) |
Total other income (expense) | (2,006,709) | (123,925) |
Loss before provision for income tax benefit | (11,930,337) | 0 |
Provision for income tax benefit | 20,434 | 0 |
Net loss | (11,909,903) | (5,065,781) |
Comprehensive loss: | ||
Net loss | (11,909,903) | (5,065,781) |
Other comprehensive loss- Foreign translation adjustment | (242,602) | 0 |
Comprehensive loss | $ (12,152,505) | $ (5,065,781) |
Basic and Diluted Loss per Common Share (in dollars per share) | $ (1.47) | $ (0.65) |
Weighted Average Shares Outstanding: | ||
Basic and Diluted (in shares) | 8,100,785 | 7,791,741 |
Service [Member] | ||
Revenues | ||
Services | $ 1,789,720 | $ 1,273,354 |
Costs and other expenses | ||
Cost of services | 722,152 | 686,175 |
License [Member] | ||
Revenues | ||
Services | 4,584,052 | 2,555,809 |
Costs and other expenses | ||
Cost of services | 906,417 | 183,199 |
Hardware [Member] | ||
Revenues | ||
Services | 646,486 | 1,285,326 |
Costs and other expenses | ||
Cost of services | $ 811,001 | $ 803,555 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance (in shares) at Dec. 31, 2020 | 7,814,572 | ||||
Balance at Dec. 31, 2020 | $ 782 | $ 119,844,026 | $ 0 | $ (99,509,689) | $ 20,335,119 |
Issuance of common stock for directors’ fees (in shares) | 7,828 | ||||
Issuance of common stock for directors’ fees | $ 1 | 25,535 | 0 | 0 | 25,536 |
Issuance of restricted common stock to employees (in shares) | 13,125 | ||||
Issuance of restricted common stock to employees | $ 1 | (1) | 0 | 0 | 0 |
Forfeiture of restricted stock (in shares) | (1,250) | ||||
Forfeiture of restricted stock | $ 0 | 0 | 0 | 0 | 0 |
Legal fees | $ 0 | (5,228) | 0 | 0 | (5,228) |
Issuance of common stock for Employee stock purchase plan (in shares) | 19,484 | ||||
Issuance of common stock for Employee stock purchase plan | $ 2 | 36,628 | 0 | 0 | 36,630 |
Share based compensation for employee stock purchase plan | 0 | 10,680 | 0 | 0 | 10,680 |
Share-based compensation | 0 | 278,499 | 0 | 0 | 278,499 |
Net loss | $ 0 | 0 | 0 | (5,065,781) | (5,065,781) |
Other comprehensive loss- Foreign translation adjustment | 0 | ||||
Balance as of December 31, 2021 (in shares) at Dec. 31, 2021 | 7,853,759 | ||||
Balance as of December 31, 2021 at Dec. 31, 2021 | $ 786 | 120,190,139 | 0 | (104,575,470) | 15,615,455 |
Issuance of common stock for directors’ fees (in shares) | 39,636 | ||||
Issuance of common stock for directors’ fees | $ 4 | 76,039 | 0 | 0 | 76,043 |
Issuance of restricted common stock to employees (in shares) | 278,000 | ||||
Issuance of restricted common stock to employees | $ 27 | (27) | 0 | 0 | 0 |
Forfeiture of restricted stock (in shares) | (10,500) | ||||
Forfeiture of restricted stock | $ (1) | 0 | 0 | 0 | (1) |
Issuance of common stock for Employee stock purchase plan (in shares) | 60,549 | ||||
Issuance of common stock for Employee stock purchase plan | $ 6 | 56,374 | 0 | 0 | 56,380 |
Share based compensation for employee stock purchase plan | 0 | 18,787 | 0 | 0 | 18,787 |
Share-based compensation | 0 | 293,077 | 0 | 0 | 293,077 |
Net loss | $ 0 | 0 | 0 | (11,909,903) | (11,909,903) |
Issuance of common stock pursuant to Swivel purchase agreement (in shares) | 269,060 | ||||
Issuance of common stock pursuant to Swivel purchase agreement | $ 27 | 599,977 | 0 | 0 | 600,004 |
Issuance of common stock for note issuance fees (in shares) | 700,000 | ||||
Issuance of common stock for note issuance fees | $ 70 | 699,930 | 0 | 0 | 700,000 |
Issuance of warrant in conjunction with note payable | 0 | 94,316 | 0 | 94,316 | |
Other comprehensive loss- Foreign translation adjustment | $ 0 | (242,602) | 0 | (242,602) | |
Balance as of December 31, 2021 (in shares) at Dec. 31, 2022 | 9,190,504 | ||||
Balance as of December 31, 2021 at Dec. 31, 2022 | $ 919 | $ 122,028,612 | $ (242,602) | $ (116,485,373) | $ 5,301,556 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net loss | $ (11,909,903) | $ (5,065,781) |
Adjustments to reconcile net loss to cash used for operating activities: | ||
Depreciation | 43,794 | 54,649 |
Impairment of goodwill | 2,387,193 | 0 |
Reversal of earnout payable – Swivel acquisition | (500,000) | 0 |
Amortization of intangible assets and write-off | 298,113 | 216,069 |
Amortization of resalable software license rights | 48,752 | 10,130 |
Amortization of note discount | 1,147,456 | 0 |
Loss on foreign currency | 0 | 50,000 |
Reserve for investment security | 452,821 | 60,000 |
Reserve for inventory | 400,000 | 0 |
Reserve for note receivable | 186,000 | 100,000 |
Allowance for doubtful account | 360,000 | 200,000 |
Amortization of debt discount | 0 | 18,000 |
Amortization of capitalized contract costs | 106,624 | 110,681 |
Share based and warrant compensation for employees and consultants | 311,864 | 289,179 |
Stock based fees to directors | 76,043 | 25,536 |
Bad debt expense | 130,111 | 0 |
Change in fair value of convertible note | 396,203 | 0 |
Deferred income tax benefit | (20,434) | 0 |
Amortization of operating lease right-of-use assets | 155,353 | 233,225 |
Change in operating assets and liabilities: | ||
Accounts receivable | (339,383) | (672,577) |
Due from factor | 0 | 10,953 |
Capitalized contract costs | (140,681) | (194,378) |
Inventory | 106,291 | (4,609,713) |
Prepaid expenses and other | (46,655) | (14,534) |
Accounts payable | 239,144 | 183,614 |
Accrued liabilities | 167,614 | 320,510 |
Deferred revenue | (120,078) | (69,681) |
Operating lease liabilities | (165,276) | (234,310) |
Net cash used for operating activities | (6,229,034) | (8,978,428) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of Swivel Secure, net of cash acquired of $729,905 | (623,578) | 0 |
Receipt of cash from note receivable | 9,000 | 0 |
Capital expenditures | 82,040 | 42,024 |
Net cash used for investing activities | (696,618) | (42,024) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of convertible notes, net of OID | 2,002,000 | 0 |
Costs incurred for issuance of convertible note | (155,140) | 0 |
Proceeds from Employee Stock Purchase Plan | 56,380 | 36,630 |
Repayment of note payable - PistolStar | 0 | (250,000) |
Legal fees | 0 | (5,228) |
Net cash (used in) provided by financing activities | 1,903,240 | (218,598) |
Effect of exchange rate changes | (96,112) | 0 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (5,118,524) | (9,239,050) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 7,754,046 | 16,993,096 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 2,635,522 | 7,754,046 |
Cash paid for: | ||
Taxes | 25,682 | 0 |
Interest | 10,462 | 0 |
Noncash investing and financing activities: | ||
Accounts receivable acquired from Swivel Secure | 702,886 | 0 |
Equipment acquired from Swivel Secure | 65,640 | 0 |
Other assets acquired from Swivel Secure | 20,708 | 0 |
Intangible assets acquired from Swivel Secure | 762,860 | 0 |
Goodwill resulting from the acquisition from Swivel Secure | 1,258,087 | 0 |
Accounts payable and accrued expenses acquired from Swivel Secure | 431,884 | 0 |
Government loan acquired from Swivel Secure | 544,000 | 0 |
Deferred tax liability from the acquisition of Swivel Secure | 190,715 | 0 |
Common stock issued for acquisition of Swivel Secure | 600,004 | 0 |
Common stock issued for acquisition of note payable | 700,000 | 0 |
Issuance of warrant in conjunction with note payable | 94,316 | 0 |
Operating lease right-of-use asset and liability for new lease | $ 105,893 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parentheticals) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Receipt of cash from note receivable | $ 9,000 |
Swivel Secure Europe [Member] | |
Receipt of cash from note receivable | $ 729,905 |
Note A - The Company and Summar
Note A - The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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, develops and markets proprietary fingerprint identification biometric technology and software solutions enterprise-ready identity access management solutions to commercial, government and education customers throughout the United States and internationally. The Company was a pioneer in developing automated, finger identification technology that supplements or compliments other methods of identification and verification, such as personal inspection identification, passwords, tokens, smart cards, ID cards, PKI, credit cards, passports, driver’s licenses, OTP or other form of possession or knowledge-based credentialing. Additionally, advanced BIO-key® technology has been, and is, used to improve both the accuracy and speed of competing finger-based biometrics. Going Concern and Basis of Presentation The Company has historically financed our operations through access to the capital markets by issuing convertible debt securities, convertible preferred stock, common stock, and through factoring receivables. As of the date of this report, the Company does not have enough cash for twelve months of operations. The history of significant losses, the negative cash flow from operations, the limited cash resources on hand and the dependence by the Company on its ability, to obtain additional financing to fund its operations after the current cash resources are exhausted raises substantial doubt about the Company's ability to continue as a going concern. The Company has lowered our expenses through decreasing spending in marketing, and research and development. In addition, the Company has purchased inventory for projects in Nigeria, which have been delayed in deployment, and therefore is looking into other markets and opportunities to sell or return the product to generate additional cash. 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 Company has suffered substantial net losses and negative cash flows from operations in recent years and is dependent on debt and equity financing to fund its operations all of which 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 increase its revenue and 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. Foreign Currency The Company accounts for foreign currency transactions pursuant to ASC 830, Foreign Currency Matters The functional currency of Swivel Secure Europe, SA is the Euro. Under ASC 830, all assets and liabilities are translated into U. S. dollars using the current exchange rate at the end of each fiscal period. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective periods. All transaction gains and losses from the measurement of monetary balance sheet items denominated in Euros are reflected in the statement of operations as appropriate. Translation adjustments are included in accumulated other comprehensive loss. 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. Principles 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 accounting principles generally accepted in the United States of America (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. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to accounts receivable, inventory, intangible assets and goodwill, fair value of convertible note payable, and income taxes. 3. Revenue Recognition In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps: ● Identify the contract with a customer ● Identify the performance obligations in the contract ● Determine the transaction price ● Allocate the transaction price to performance obligations in the contract ● Recognize revenue when or as the Company satisfies a performance obligation All of the Company's performance obligations, and associated revenues, are generally transferred to customers at a point in time, with the exception of support and maintenance, and professional services, which are generally transferred to the customer over time. Software licenses Software license revenue consists of fees for perpetual and subscription licenses for one or more of the Company’s biometric fingerprint solutions or identity access management solutions. Revenue is recognized at a point in time once the software is available to the customer for download. Software license contracts are generally invoiced in full on execution of the arrangement. Hardware Hardware revenue consists of fees for associated equipment sold with or without a software license arrangement, such as servers, locks and fingerprint readers. Customers are not obligated to buy third party hardware from the Company, and may procure these items from a number of suppliers. Revenue is recognized at a point in time once the hardware is shipped to the customer. Hardware items are generally invoiced in full on execution of the arrangement. Support and Maintenance Support and maintenance revenue consists of fees for unspecified upgrades, telephone assistance and bug fixes. The Company satisfies its support and maintenance performance obligation by providing “stand-ready” assistance as required over the contract period. The Company records deferred revenue (contract liability) at time of prepayment until the term of the contract begins. Revenue is recognized over time on a ratable basis over the contract term. Support and maintenance contracts are one to five years in length and are generally invoiced in advance at the beginning of the term. Support and Maintenance revenue for subscription licenses is carved out of the total license cost at 18% and recognized on a ratable basis over the license term. Professional Services Professional services revenues consist primarily of fees for deployment and optimization services, as well as training. The majority of the Company’s consulting contracts are billed on a time and materials basis, and revenue is recognized based on the amount billable to the customer in accordance with practical expedient ASC 606-10-55-18. For other professional services contracts, the Company utilizes an input method and recognizes revenue based on labor hours expended to date relative to the total labor hours expected to be required to satisfy its performance obligation. Contracts with Multiple Performance Obligations Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The standalone selling prices are determined based on overall pricing objectives, taking into consideration market conditions and other factors, including the value of the contracts, the cloud applications sold, customer demographics, geographic locations, and the number and types of users within the contracts. The Company considered several factors in determining that control transfers to the customer upon shipment of hardware and availability of download of software. These factors include that legal title transfers to the customer, the Company has a present right to payment, and the customer has assumed the risks and rewards of ownership. Accounts receivable from customers are typically due within 30 days of invoicing. The Company does not record a reserve for product returns or warranties as amounts are deemed immaterial based on historical experience. Costs to Obtain and Fulfill a Contract Costs to obtain and fulfill a contract are predominantly sales commissions earned by the sales force and are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit determined to be four Deferred Revenue Deferred revenue includes customer advances and amounts that have been paid by customers for which the contractual maintenance terms have not yet occurred. The majority of these amounts are related to maintenance contracts for which the revenue is recognized ratably over the applicable term, which generally is 12-60 months. Contracts greater than 12 months are segregated as long term deferred revenue. Maintenance contracts include provisions for unspecified when-and-if available product updates and customer telephone support services. At December 31, 2022 and 2021, amounts in deferred revenue were approximately $515,000 and $633,000, respectively. 4. Business Combinations In accordance with ASC 805, Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair value. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net acquisition date fair value of the assets acquired and the liabilities assumed and represents the expected future economic benefits arising from other assets acquired that are not individually identified and separately recognized. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, its estimates are inherently uncertain and subject to refinement. Assumptions may be incomplete or inaccurate, and unanticipated events or circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates or actual results. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. 5. Goodwill and acquired intangible assets Goodwill is not amortized, but is evaluated for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that there is a single reporting unit for the purpose of conducting this goodwill impairment assessment. For purposes of assessing potential impairment, the Company estimates the fair value of the reporting unit, based on the Company’s market capitalization, and compares this amount to the carrying value of the reporting unit. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge would be required. The annual goodwill impairment test will be performed as of December 31st of each year. Refer Note K for more information regarding the impairment of goodwill in 2022. Intangible assets acquired in a business combination are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired definite-lived intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis. 6. Cash Equivalents Cash equivalents consist of liquid investments with original maturities of three months or less. At December 31, 2022 and 2021, cash equivalents consisted of a money market account. 7. 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. Accounts receivable at December 31, 2022 and 2021 consisted of the following: December 31, 2022 2021 Accounts receivable $ 2,096,569 $ 1,234,411 Loss on foreign currency - (50,000 ) Allowance for doubtful accounts (573,785 ) (213,785 ) Accounts receivable, net of allowances for doubtful accounts $ 1,522,784 $ 970,626 Bad debt expenses (if any) are recorded in selling, general, and administrative expense. The allowance for doubtful accounts for the years ended December 31, 2022 and 2021 is as follows: Balance at Beginning of Year Charged to Costs and Expenses Deductions from Reserves Balance at End of Year Year ended December 31, 2022 Allowance for Doubtful Accounts $ 213,785 $ 360,000 $ - $ 573,785 Year ended December 31, 2021 Allowance for Doubtful Accounts $ 1,733,785 $ 200,000 $ (1,720,000 ) $ 213,785 8. 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 3 - 5 Furniture and fixtures 3 - 5 Software 3 Leasehold improvements life or lease term Intangible assets other than goodwill consist of patents, trade name, proprietary software, and customer relationships. 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. Trade names, proprietary software, and customer relationships are amortized over the economic useful life. 9. 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 not be recoverable. Recoverability of these assets is measured by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate. If such assets are considered impaired, the impairment to be recognized is equal to the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. In assessing recoverability, the Company must make assumptions regarding estimated future cash flows and discount factors. If these estimates or related assumptions change in the future, the Company may be required to record impairment charges. Intangible assets with determinable lives are amortized over their estimated useful lives, based upon the pattern in which the expected benefits will be realized, or on a straight-line basis, whichever is greater. There were no impairments in 2022 and 2021. 10. Advertising Expense The Company expenses the costs of advertising as incurred. Advertising expenses for 2022 and 2021 were approximately $842,000 and $527,000, respectively. 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 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 exercise of stock options and warrants, when the effect of their inclusion is dilutive. 13. Accounting for Stock-Based Compensation The Company accounts for share based compensation in accordance with the provisions of ASC 718-10, “Compensation — Stock Compensation,” which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The majority of its share-based compensation arrangements vest over a three The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations: Year ended December 31, 2022 2021 Selling, general and administrative $ 310,017 $ 269,368 Research, development and engineering 77,890 45,347 $ 387,907 $ 314,715 14. 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, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. Because of the Company’s historical performance and estimated future taxable income, a full valuation allowance has been established. The Company accounts for uncertain tax provisions in accordance with ASC 740. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. 15 . Leases In accordance with ASC 842, Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease including whether the contract involves the use of a distinct identified asset, whether the Company obtains the right to substantially all the economic benefit from the use of the asset, and whether the Company has the right to direct the use of the asset. Leases with a term greater than one year are recognized on the balance sheet as ROU assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less under practical expedient in paragraph ASC 842-20-25-2. For contracts with lease and non-lease components, the Company has elected not to allocate the contract consideration, and to account for the lease and non-lease components as a single lease component. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rate within our operating leases are generally not determinable and, therefore, the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate for each lease using our estimated borrowing rate, adjusted for various factors including level of collateralization, term and currency to align with the terms of the lease. The operating lease ROU asset also includes any lease prepayments, offset by lease incentives. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option. An option to terminate is considered unless it is reasonably certain we will not exercise the option. 16. The Fair Value Measurement Option The Company has elected the fair value measurement option for convertible debt with embedded derivatives that require bifurcation, and record the entire hybrid financing instrument at fair value under the guidance of ASC 825, Financial Instruments 17. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The following table summarizes our financial instruments measured at fair value at December 31, 2022: Total Level 1 Level 2 Level 3 Convertible note at fair value $ 2,596,203 $ - $ - $ 2,596,203 The Company issued a convertible note to which included an original issue discount, conversion features and a detachable warrant, as further discussed in Note M. The detachable warrant represents a freestanding, separable equity-linked financial instrument recorded at fair value. The fair value of the detachable warrant was calculated using a Black-Scholes valuation model. The Company elected the fair value option for the convertible debt which was determined based on significant unobservable inputs including the likelihood of default, the estimated date at which the default could take place, and the present value discount rate, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The fair value option requires recognition at fair value upon issuance and on each balance sheet date thereafter. Changes in the estimated fair value are recognized as change in fair value of convertible note in the consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the issuance of the convertible note were expensed and not deferred. The Company estimated the fair value of the convertible note using a probability-weighted discounted cash flow model with the following assumptions and significant terms of the convertible note at December 22, 2022: 1. Face amount - $2,200,000 2. Nominal interest rate – 10% - 12% 3. Default interest rate – 18% 4. Increase in principal upon a default – 30% 5. Present value discount rate – 15.18% 6. Likelihood of default – estimated to be 50% at the extended maturity date The following table shows the changes in fair value measurements for the convertible note using significant unobservable inputs (Level 3) during the year ended December 31, 2022: Beginning balance $ - Purchases and issuances 2,200,000 Day one loss on value of hybrid instrument 396,203 Ending balance $ 2,596,203 18. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), referred to herein as ASU 2016- 13, which significantly changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the existing incurred loss model with an expected credit loss model that requires entities to estimate an expected lifetime credit loss on most financial assets and certain other instruments. Under ASU 2016-13 credit impairment is recognized as an allowance for credit losses, rather than as a direct writedown of the amortized cost basis of a financial asset. The impairment allowance is a valuation account deducted from the amortized cost basis of financial assets to present the net amount expected to be collected on the financial asset. Once the new pronouncement is adopted by the Company, the allowance for credit losses must be adjusted for management’s current estimate at each reporting date. The new guidance provides no threshold for recognition of impairment allowance. Therefore, entities must also measure expected credit losses on assets that have a low risk of loss. For instance, trade receivables that are either current or not yet due may not require an allowance reserve under currently generally accepted accounting principles, but under the new standard, the Company will have to estimate an allowance for expected credit losses on trade receivables under ASU 2016-13. ASU 2016-13 is effective for the Company for annual periods, including interim periods within those annual periods, beginning on January 1, 2023. The Company is currently assessing the impact ASU 2016-13 will have 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. |
Note B - Revenue From Contracts
Note B - Revenue From Contracts With Customers | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | NOTE B REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the years ended December 31, 2022 and 2021: North America Africa EMESA* Asia December 31, 2022 License fees $ 1,856,814 $ 517,161 $ 2,124,088 $ 85,989 $ 4,584,052 Hardware 422,275 25,833 19,914 178,464 646,486 Services 1,270,067 83,306 436,293 54 1,789,720 Total Revenues $ 3,549,156 $ 626,300 $ 2,580,295 $ 264,507 $ 7,020,258 North America Africa EMESA* Asia December 31, 2021 License fees $ 1,854,088 $ 521,751 $ 105,314 $ 74,656 $ 2,555,809 Hardware 278,655 698,264 265,996 42,411 1,285,326 Services 1,162,526 42,000 54,918 13,910 1,273,354 Total Revenues $ 3,295,269 $ 1,262,015 $ 426,228 $ 130,977 $ 5,114,489 * EMESA – Europe, Middle East, South America Revenue recognized during the year ended December 31, 2022 from amounts included in deferred revenue at the beginning of the year was approximately $489,000. Revenue recognized during the year ended December 31, 2021 from amounts included in deferred revenue at the beginning of the year was approximately $529,000. Total deferred revenue (contract liability) was approximately $515,000 and $633,000 at December 31, 2022 and 2021, respectively. Transaction Price Allocated to the Remaining Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. The guidance provides certain practical expedients that limit this requirement, which the Company’s contracts meet as follows: ● The performance obligation is part of a contract that has an original expected duration of one year or less, in accordance with ASC 606-10-50-14. Deferred revenue represents the Company’s remaining performance obligations related to prepaid support and maintenance, all of which is expected to be recognized from one to five years. |
Note C - Swivel Secure Europe,
Note C - Swivel Secure Europe, SA Acquisition | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | NOTE C SWIVEL SECURE EUROPE, SA ACQUISITION On March 8, 2022, the Company completed the acquisition of 100% of the issued and outstanding capital stock of Swivel Secure based in Madrid, Spain, pursuant to the terms of a stock purchase agreement. The aggregate purchase price consisted of a base purchase price of $1.75 million, subject to closing adjustments based on the closing date working capital, indebtedness and unpaid transaction expenses, and an earn-out of $500,000. The earn-out was payable based on Swivel Secure generating $3,000,000 of revenue and $1,000,000 of operating profit during an earn-out period commencing on the closing date and ending on January 31, 2023, which was not attained. At the closing, the Company made a cash payment of $1.27 million and issued 269,060 shares of common stock of which 89,687 shares were held back by the Company to secure certain indemnification obligations under the stock purchase agreement. The shares of Company common stock were priced at $2.23, the contractual 20 day volume-weighted average price of the Company’s common stock immediately prior to the payment date as reported on the Nasdaq Capital Market. The business combination has been accounted for as an acquisition and, in accordance with ASC 805. The Company recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The following table summarizes the purchase price allocation, with no earnout payment: Purchase consideration: Total cash paid, including working capital adjustment $ 1,273,483 Earnout payable 500,000 Common stock issued 600,004 Total purchase price consideration $ 2,373,487 Fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 729,905 Accounts receivable 702,886 Equipment acquired 65,640 Other assets 20,708 Intangible assets 762,860 Goodwill 1,258,087 Total estimated assets acquired 3,540,086 Accounts payable and accrued expenses 431,884 Government loan 544,000 Deferred tax liability 190,715 Total liabilities assumed 1,166,599 Total estimated fair value of assets acquired and liabilities assumed $ 2,373,487 The fair value of the assets acquired and liabilities assumed was less than the purchase price, resulting in the recognition of goodwill. The goodwill reflected the value of the synergies the Company expected to realize and the assembled workforce. Refer to Note K for more information regarding the impairment of goodwill. The significant intangible asset identified in the purchase price allocation discussed above was Customer Relationships. To value the Customer Relationships, the Company utilized the Excess Earnings Method, which isolates the value of the specific intangible asset by discounting its income stream to present value. The government loan was issued through BBVA Bank during the COVID-19 pandemic. The loan bears interest at the rate of 1.75% per annum and is payable in monthly installments of approximately $11,900 inclusive of interest from May 2022 through April 2026. The installment payments have been paid monthly as per the schedule, as of the date of this report. The following table presents the final fair values and useful lives of the identifiable intangible assets acquired: Amount Estimated useful life (in years) Customer relationships $ 762,860 7 Total identifiable intangible assets $ 762,860 As discussed above, the earnout payable was not achieved. As such, the Company reversed the earnout payable of $500,000 and recognized the income on the reversal of the earnout payable. For the period from March 8, 2022 to December 31, 2022, revenue from Swivel Secure amounted to $2,351,975 and net loss amounted to $720,691. |
Note D - Fair Values of Financi
Note D - Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | NOTE D FAIR VALUES OF FINANCIAL INSTRUMENTS Cash and cash equivalents, accounts receivable, due from factor, accounts payable and accrued liabilities are carried at, or approximate, fair value because of their short-term nature. The carrying value of the Company’s notes and loan payables approximated fair value as the interest rates related to the financial instruments approximated market. |
Note E - Concentration of Risk
Note E - Concentration of Risk | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | NOTE E CONCENTRATION OF RISK Financial instruments which potentially subject the Company to risk primarily consist of cash, and cash equivalents, investment in debt security, and accounts receivables. The Company maintains its cash and cash equivalents with various financial institutions, which, at times may exceed insured limits. The exposure to the Company is solely dependent upon daily bank balances and the respective strength of the financial institutions. The Company was in excess of coverage of approximately $2,000,000 and $7,057,000 at December 31, 2022 and 2021, respectively. The Company has not incurred any losses on these accounts. 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. For the year ended December 31, 2022 no one At December 31, 2022, one three |
Note F - Note Receivable
Note F - Note Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Notes Receivable [Text Block] | NOTE F NOTE RECEIVABLE During the third quarter of 2020, the Company loaned $295,000 as an advance to Technology Transfer Institute (“TTI”) to aid in fulfilling the African contracts. The note did not bear any interest if paid within the nine (9) monthly installments beginning December 31, 2020. The note bore a default rate of 5%. Due to the ongoing delays in payment, the Company reserved $186,000 of the note as an allowance. On February 17, 2022, the Company amended the note to modify the payment terms to provide for lower monthly payments, with an updated maturity date on or before December 6, 2023. On May 5, 2022, the Company amended the note to modify the payment terms to eight biweekly installments of $1,000 beginning February 25, 2022, nineteen consecutive monthly installments of $15,000 beginning on July 6, 2022, and $2,000 on or before February 6, 2024. Currently, the payments are several months behind schedule. Due to the delay in payments, the Company has increased the allowance for the remainder of the balance owed under the note. We are continuing to pursue payment and expect that we will start to receive funds in the second quarter of 2023. A member of our board of directors served as Chief Executive Officer of TTI until August 12, 2020. December 31, December 31, 2022 2021 Note receivable $ 195,000 $ 295,000 Repayment of note (9,000 ) - Allowance for doubtful account (186,000 ) (100,000 ) Note receivable, net of allowance - 195,000 Current portion, net of allowance $ - $ 82,000 Noncurrent portion, net of allowance $ - $ 113,000 |
Note G - Inventory
Note G - Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | NOTE G INVENTORY Inventory is stated at the lower of cost, determined on a first in, first out basis, or realizable value. The Company periodically evaluates inventory items and establishes reserves for obsolescence accordingly. The Company also reserves for excess quantities, slow moving goods, and for other impairment of value based upon assumptions of future demand and market conditions. The $400,000 reserve on inventory is due to slow moving inventory purchased for projects in Nigeria. The Company is looking into other markets and opportunities to sell or return the product. Inventory is comprised of the following as of December 31: 2022 2021 Finished goods $ 4,764,643 $ 4,798,203 Fabricated assemblies 69,726 142,457 Reserve on finished goods (400,000 ) - Total inventory $ 4,434,369 $ 4,940,660 |
Note H - Resalable Software Lic
Note H - Resalable Software Licenses Rights | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Research, Development, and Computer Software Disclosure [Text Block] | NOTE H RESALABLE SOFTWARE LICENSES RIGHTS On December 31, 2015, the Company purchased third-party software licenses in the amount of $180,000 in anticipation of a large pending deployment that has yet to materialize. The Company was amortizing the total cost at the greater of the actual unit cost per license sold or straight-line amortization over 10 years. Since the license purchase, the actual per unit cost (actual usage) of such license rights in the cumulative amount of $141,190 has been charged to cost of sales. Since we have not received any sales for the license within the last two years, we accelerated the amortization for the balance of the license in 2022, leaving a carrying balance of $0 and $48,752 as of December 31, 2022 and 2021, respectively. A total of $48,752 and $10,130 was charged to cost of sales during the years ended December 31, 2022 and 2021, respectively. |
Note I - Investment in Debt Sec
Note I - Investment in Debt Security | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | NOTE I INVESTMENT IN DEBT SECURITY The Company purchased a 4,000,000 Hong Kong dollar denominated Bond Certificate with a financial institution in Hong Kong in September 2020 bearing interest at 5% per annum. The Bond Certificate translated to $512,821 U.S. Dollars, based on the exchange rate at the purchase date. The investment was originally recorded at amortized cost and was scheduled to mature in June 2021. The Company never received the proceeds and accrued interest from the investment and as such, wrote off the investment during 2022 as the bond issuer defaulted on repayment, and the Company had no recourse. |
Note J - Equipment and Leasehol
Note J - Equipment and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE J EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment and leasehold improvements consisted of the following as of December 31: 2022 2021 Equipment $ 825,058 $ 831,784 Furniture and fixtures 225,978 164,079 Software 49,143 32,045 Leasehold improvements 34,903 25,135 1,135,082 1,053,043 Less accumulated depreciation and amortization (1,027,669 ) (983,875 ) Total $ 107,413 $ 69,168 Depreciation was $43,794 and $54,649 for 2022 and 2021, respectively. Amounts are recorded in selling, general, and administrative expense as well as in cost of services. |
Note K - Intangible Assets and
Note K - Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE K INTANGIBLE ASSETS AND GOODWILL Intangible assets consisted of the following as of December 31: 2022 2021 Trade name $ 130,000 $ 130,000 Proprietary software 420,000 420,000 Customer relationships 1,692,860 930,000 Patents and patents pending 365,080 365,080 2,607,940 1,845,080 Less accumulated amortization (845,115 ) (547,003 ) Total $ 1,762,825 $ 1,298,077 Aggregate amortization expense for 2022 and 2021 was approximately $298,000 and $216,000, respectively. Estimated minimum amortization expense based on straight line amortization of the software license rights for each of the next five years and thereafter approximates the following: Years ending December 31 2023 $ 320,000 2024 320,000 2025 280,000 2026 230,000 2027 220,000 Thereafter 392,825 Total $ 1,762,825 Goodwill The Company conducted its annual impairment analysis of its goodwill balances as at December 31, 2022. The Company noted the noted the cyclical downturn in technology stock values over the 2022 period, since our previous annual impairment assessment. The analysis showed the carrying value of the Company’s reporting segment was in excess of the Company’s market valuation as at December 31, 2022 based on a fair valuation measure as the quoted market price for the Company’s publicly traded stock as of that date. Accordingly, the Company concluded the amounts in goodwill had been fully impaired and accordingly wrote-off the entire balance in full as at December 31, 2022. |
Note L - Accrued Liabilities
Note L - Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | NOTE L ACCRUED LIABILITIES Accrued liabilities consisted of the following as of December 31: 2022 2021 Compensation $ 377,958 $ 254,433 Compensated absences 378,874 293,297 Accrued legal and accounting fees 110,008 95,738 Franchise taxes 7,000 40,000 Employee expenses reimbursement 114,209 76,000 Sales tax payable 17,594 18,548 Other 3,480 50,981 Total $ 1,009,123 $ 828,997 |
Note M - Convertible Note Payab
Note M - Convertible Note Payable | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE M CONVERTIBLE NOTE PAYABLE Securities Purchase Agreement dated December 22, 2022 On December 22, 2022, the Company entered into and closed a securities purchase agreement (the “Purchase Agreement”) which issued a $2,200,000 principal amount senior secured promissory note (the “Note”). At closing, a total of $2,002,000 was funded, with the proceeds to be used for general working capital. The principal amount of the Note is due six months following the date of issuance, subject to one six-month extension by the Company. Interest under the Note accrues at a rate of 10% per annum, payable monthly through month six. In the event the maturity date of the Note is extended, interest will accrue at the rate of 12% per annum in months seven through twelve, payable monthly. The Note is secured by a lien on substantially all of the Company’s assets and properties can be prepaid in whole or in part without penalty at any time. In connection with the issuance of the Note, the Company issued to the investor 700,000 shares of Common Stock (the “Commitment Shares”) valued at $1.00 per share and a warrant (the “Warrant”) to purchase 200,000 shares of common stock (the “Warrant Shares”) at an exercise price of $3.00 per share, exercisable commencing on the date of issuance with a term of five years. The warrant was valued at $94,316 (see Note P. #3). In the event the Note is paid in full within six months after the date of issuance, the Company will exercise its right to repurchase 350,000 of the Commitment Shares for aggregate payment to the Investor of $1.00. Upon issuance, the Note is not convertible into common stock or any other securities of the Company. Only after a date that is six (6) months following the issuance date of the Note and upon the occurrence of any events of default (as defined) and expiration of any applicable cure periods, all amounts due under the Note will immediately and automatically become due and payable in full, interest will accrue at the higher of 18% per annum or the maximum amount permitted by applicable law, the outstanding principal amount due under the Note will be increased by 30%, and the Investor will have the right to convert all amounts due under the Note into shares of common stock (the “Conversion Shares”) at a conversion price equal to the 10 day volume weighted average sales price of the Company’s common stock on the date of conversion, subject to the Share Cap described in the paragraph below. The aggregate number of shares of common stock issuable in the forgoing transaction consisting of the Commitment Shares, the Warrant Shares, and the Conversion Shares are capped at 1,684,576 which is 19.9% of the Company’s issued and outstanding shares of common stock on December 22, 2022, the date the definitive transaction documents were executed (the “Share Cap”). During April 2023, we were in default under the Note due to our failure to timely file this annual report and timely file a registration statement covering the public resale of the shares issued to the holder of the Note in connection with the financing. We have obtained a waiver and, therefore, as of the date of this report we are not in default. As of December 31, 2022, the Note with principal balance of $2,200,000, at fair value, was recorded at $2,596,203. |
Note N - Leases
Note N - Leases | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Lessee, Operating Leases [Text Block] | NOTE N LEASES The Company’s leases office space in New Jersey, Minnesota, New Hampshire, Madrid and Hong-Kong with lease termination dates in 2023 and 2024. The property leased in China is paid monthly as used, without a formal agreement. The following tables present the components of lease expense and supplemental balance sheet information related to the operating leases were: Year ended December 31, 2022 Year ended December 31, 2021 Lease cost Operating lease cost $ 254,649 $ 255,892 Total lease cost $ 254,649 $ 255,892 Balance sheet information Operating right-of-use assets $ 197,355 $ 254,100 Operating lease liabilities, current portion $ 159,665 $ 177,188 Operating lease liabilities, non-current portion 37,829 86,974 Total operating lease liabilities $ 197,494 $ 264,162 Weighted average remaining lease term (in years) – operating leases 0.96 1.45 Weighted average discount rate – operating leases 5.50 % 5.50 % Supplemental cash flow information related to leases were as follows: Cash paid for amounts included in the measurement of operating lease liabilities $ 259,558 $ 256,977 Maturities of operating lease liabilities were as follows as of December 31, 2022: 2023 $ 164,596 2024 38,808 Total future lease payments $ 203,404 Less: imputed interest (5,910 ) Total $ 197,494 |
Note O - Commitments and Contin
Note O - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Commitments Disclosure [Text Block] | NOTE O COMMITMENTS AND CONTINGENCIES Distribution Agreement Swivel Secure has a distribution agreement with Swivel Secure Limited (“SSL”). Terms of the agreement include the following: 1. The initial term of the agreement ends on January 31, 2027 and will be automatically extended for additional one-year terms thereafter unless either party provides written notice to the other party not later than 30 days before the end of the term that it does not wish to extend the term. 2. SSL appoints Swivel Secure as the exclusive distributor of SSL’s products, to market, sell and distribute in the EMEA (Europe, Middle East and Africa), excluding the United Kingdom and Republic of Ireland, for a defined discount on the sale price. 3. Swivel Secure is expected to generate a certain minimum level of orders of SSL products each year during the term of the agreement. If Swivel Secure fails to meet such minimum level of orders in any year, the exclusive distribution rights will terminate and Swivel Secure will serve as a non-exclusive distributer of SSL Products. The Company expects the revenue targets to continue to be met based on historical performance and increasing distribution by Swivel Secure. Litigation From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. As of December 31, 2022, the Company was not a party to any pending lawsuits. |
Note P - Equity
Note P - Equity | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Equity [Text Block] | NOTE P EQUITY 1. Preferred Stock 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 shares of preferred stock, $ .0001 2. Common Stock 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 vote for each share held of record and do not have cumulative voting rights. 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. On June 18, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan (“ESPP”). Under the terms of this plan, 789,000 shares of common stock are reserved for issuance to employees and officers of the Company at 85% of the lower of the closing price of the common stock as reported on the Nasdaq Capital Market at the first day or the last day of the offering period. Eligible employees are granted an option to purchase shares under the plan funded by payroll deductions. The Board may suspend or terminate the plan at any time, otherwise the plan expires June 17, 2031. Issuances of Common Stock On December 22, 2022, the Company issued the Commitment Shares. See Note M - Convertible Note Payable for more information. On March 8, 2022, the Company issued 269,060 shares of common stock of which 89,687 shares were held back by the Company to secure certain indemnification obligations under the Swivel Secure stock purchase agreement. The shares of Company common stock were issued at a total cost of $600,004, priced at $2.23, based on the contractual 20-day volume-weighted average price of the Company’s common stock immediately prior to the payment date as reported on the Nasdaq Capital Market On June 18, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan. Under the terms of this plan, 789,000 shares of common stock are reserved for issuance to employees and officers of the Company at 85% of the lower of the closing price of the common stock as reported on the Nasdaq Capital Market at the first day or the last day of the offering period. Eligible employees are granted an option to purchase shares under the plan funded by payroll deductions. The Board may suspend or terminate the plan at any time, otherwise the plan expires June 17, 2031. During 2022 and 2021, 60,549, and 19,484 shares respectively were issued under the ESPP to employees, which resulted in a $18,787, and $10,680 non-cash compensation expense respectively for the Company. Issuances of Restricted Stock Restricted stock consists of shares of common stock that are subject to restrictions on transfer and risk of forfeiture until the fulfillment of specified conditions. The fair value of nonvested shares is determined based on the market price of the Company's common stock on the grant date. Restricted stock is expensed ratably over the term of the restriction period. The Company issued 278,000 shares of restricted common stock to certain employees of the Company and 10,500 of shares of restricted common stock were forfeited during fiscal year 2022. The Company issued 13,125 shares of restricted common stock to certain employees of the Company and 1,250 of shares of restricted common stock were forfeited during fiscal year 2021. These shares vest in equal annual installments over a three-year Restricted stock compensation for the years ended December 31, 2022 and 2021 was $218,552 and $71,819, respectively. Issuances to Directors, Executive Officers & Consultants During the 2022 and 2021 years, the Company issued 39,636 and 7,828 shares of common stock respectively to its directors in lieu of payment of board fees, valued at $76,043 and $25,536 respectively. 3. Warrants There were no Warrants Issued with Convertible Note: See Note M - Convertible Note Payable for the warrant issued with a convertible note in 2022. Valuation Assumptions for Warrants: The Company records the warrants at their fair value which is determined using the Black-Scholes valuation model on the date of the grant. The fair value of the warrant issued in 2022 was estimated with the following assumptions: Years ended December 31, 2022 2021 Weighted average risk-free interest rate 3.70 % - % Weighted average exercise price $ 3.00 $ - Weighted average exercise period 5 - Weighted average Volatility of stock price 108.60 % - % The volatility for each issuance 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 exercise period. 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 years to maturity. 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 December 31, 2020 4,689,387 $ 6.04 4.48 — Granted — — Exercised — — Forfeited — — Expired — — Outstanding, as of December 31, 2021 4,689,387 6.04 3.48 — Granted 200,000 3.00 Exercised — — Forfeited — — Expired (17,362 ) 28.80 Outstanding, as of December 31, 2022 4,872,025 $ 5.83 2.59 — The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.59, $2.21, and $3.52 as of December 31, 2022, 2021 and 2020, respectively, which would have been received by the warrant holders had all warrant holders exercised their options as of that date. There were no |
Note Q - Stock Options
Note Q - Stock Options | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | NOTE Q STOCK OPTIONS 2015 Stock Option Plan On January 27, 2016, the stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan initially reserved 187,500 shares of common stock for issuance of options, restricted stock, and other equity based awards to employees, officers, directors, and consultants of the Company. In 2021, the stockholders approved an amendment to the 2015 to increase the shares of common stock authorized for issuance under the 2015 Plan from 187,500 shares to 789,000 shares together with other technical changes. The term of stock options granted under the 2015 Plan, may not exceed ten Non-Plan Stock Options Periodically, the Company has granted options outside of the 2015 Plan to various employees and consultants. In the event of change in control, as defined, certain of the non-plan options outstanding vest immediately. Stock Option Activity Information summarizing option activity is as follows: Number of Options Weighted average Weighted average remaining Aggregate 2015 Plan Non Plan Total exercise price life (in years) intrinsic value Outstanding, as of December 31, 2020 94,183 133,091 227,274 $ 17.61 3.87 $ 0 Granted — — — — Exercised — — — — Forfeited (3,291 ) — (3,291 ) 3.87 Expired (84 ) (11,438 ) (11,522 ) 39.13 Outstanding, as of December 31, 2021 90,808 121,653 212,461 $ 16.65 3.03 $ 0 Granted — — — — Exercised — — — — Forfeited — — — — Expired — (9,465 ) (9,465 ) 17.28 Outstanding, as of December 31, 2022 90,808 112,188 202,996 $ 16.63 2.14 $ 0 Vested or expected to vest at December 31, 2022 201,271 $ 16.72 2.12 $ 0 Exercisable at December 31, 2022 194,561 $ 17.12 2.03 $ 0 The options outstanding and exercisable at December 31, 2022 were in the following exercise price ranges: 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 $ 4.08 - 5.84 25,565 $ 5.20 4.63 17,130 $ 5.20 $ 5.85 - 28.00 177,431 18.27 1.81 177,431 18.27 $ 4.08 - 28.00 202,996 194,561 The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.59, $2.21, and $3.52 as of December 31, 2022, 2021 and 2020, respectively, which would have been received by the option holders had all option holders exercised their options as of that date. There were no The weighted average fair value of options granted during the years ended December 31, 2022 and 2021 was $0 as no no As of December 31, 2022, future forfeiture adjusted compensation cost related to nonvested stock options is $17,630 and will be recognized over an estimated weighted average period of 0.64 years. |
Note R - Income Taxes
Note R - Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | NOTE R INCOME TAXES The components of net loss consist of the following: Year ended December 31, 2022 Year ended December 31, 2021 United States $ (10,416,593 ) $ (4,507,071 ) Hong Kong (458,839 ) (439,814 ) Nigeria (143,499 ) (118,896 ) Spain (890,972 ) - Total $ (11,909,903 ) $ (5,065,781 ) There was no provision for current federal, foreign or state taxes for both of the years ended December 31, 2022 and 2021 as a result of taxable losses incurred in these jurisdictions. The provision for income tax benefits consist of the following (in thousands): Year ended December 31, 2022 Year ended December 31, 2021 Current – federal, states, and foreign $ - $ - Deferred- Federal 1,175,000 128,000 Deferred - States 122,000 47,000 Deferred - Foreign (20,000 ) - Total 1,277.000 175,000 Change in valuation allowance (1,297,000 ) (175,000 ) Provision for income tax benefits $ (20,434 ) $ — Significant components of deferred tax assets and liabilities are as follows at December 31, 2022 and 2021 (in thousands): December 31, 2022 December 31, 2021 As Revised Accrued compensation $ 113,000 $ 110,000 Allowance for doubtful accounts 169,000 70,000 Research and development expenses 633,000 - Capital loss carry forward 114,000 - Stock-based compensation 456,000 486,000 Equipment and leasehold improvements (19,000 ) 1,000 Intangible assets - US 341,000 61,000 Intangible assets - Foreign (170,000 ) - Inventory reserve 89,000 - Interest expense 44,000 - Operating lease liabilities 44,000 59,000 Reserve on debt security - 13,000 Operating lease right-of-use assets (44,000 ) (57,000 ) Net operating loss and research and credit carryforwards 15,248,000 15,148,000 Valuation allowance (17,188,000 ) (15,891,000 ) Net deferred tax liability $ (170,000 ) $ — During the year ended December 31, 2022, the Company determined that certain attributes of deferred tax assets and liabilities were incorrect for December 31, 2021 and 2020. See Note S for further information. 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. With a full valuation allowance, any change in the deferred tax asset or liability is fully offset by a corresponding change in the valuation allowance. At December 31, 2022 and 2021, the Company provided a valuation allowance on its net deferred tax assets of $17,188,000 and $15,891,000, respectively. As of December 31, 2022, the Company has U.S. federal net operating loss carryforwards of approximately $61.3 million. Approximately $43.1 million are subject to expiration between 2023 and 2037, and $18.2 million net operating loss carryforwards have no expiration date. These net operating loss carryforwards could be subject to the limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. In addition, the Company has net operating loss carry forwards from various states of approximately $6.87 million which expire from 2026 through 2042. 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. Year ended December 31, 2022 Year ended December 31, 2021 As Revised Federal statutory income tax rate 21.0 % 21.0 % State taxes, net of federal benefit 0.9 1.1 Permanent differences (4.7 ) (1.0 ) Expiration of net operating loss and research credit carryforwards (5.7 ) (13.8 ) Expiration and forfeiture of stock options (0.3 ) (1.5 ) Other (0.5 ) (2.4 ) Valuation allowance (10.9 ) (3.4 ) Effective tax rate (0.2 )% — % 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 2019 Our subsidiary in Nigeria has not filed its required returns since inception. Management believes that when the returns are filed, no taxes will be owed due to the losses incurred during those periods. We are also not subject to minimum tax during the first four years of operations. As a result, management could not calculate the amount of net operating loss carryforwards that are available to offset future taxable income. Our subsidiary in Hong Kong has not filed its required returns in several years. Management believes that when the returns are filed, no taxes will be owed due to losses incurred during those periods. As a result, management could not calculate the amount of net operating loss carryforwards are available to offset future taxable income. The Company believes it is not subject to any tax audit risk beyond those periods. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not In August 2022, the Inflation Reduction Act of 2022 was signed into law which includes a stock buyback excise tax of 1% on share repurchases, which will apply to net stock buybacks after December 31, 2022. We do not expect this to have a material impact if and when share repurchases occur. |
Note S - Revision of Previously
Note S - Revision of Previously Issued Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Error Correction [Text Block] | NOTE S REVISION OF PREVIOUSLY ISSUED CONSOLDATED FINANCIAL STATEMENTS Due to errors discovered in the Company’s 2020 and 2021 tax provisions, the Company revised certain previously issued disclosures related to the components of its deferred tax assets and liabilities and valuation allowance as of December 31, 2021 and 2020. Additionally, the Company has revised the reconciliation of its income tax rate computed using the federal statutory rate for the year ended December 31, 2021. The errors related primarily to the calculation of available net operating loss carryforwards and to stock based compensation. Since the Company provided a full valuation allowance on its net deferred tax assets, there was no impact to the Consolidated Balance Sheet as of December 31, 2021 and the consolidated statements of operations, stockholders’ equity and cash flows as of and for the year ended December 31, 2021. The Company further reviewed its disclosure of the rate reconciliation and deferred tax calculation along with the valuation allowance of its net deferred tax assets. Other items that were corrected in the disclosure included allowance for doubtful accounts, equipment and leasehold improvements and operating lease liability along with the associated operating lease ROU assets. The below table summarizes the revisions to the reconciliation of our income tax rate computed using the federal statutory rate to our actual income tax rate for the year ended December 31, 2021: December 31, 2021 As Reported Adjustments 2021 As Revised U.S. statutory income tax rate 21.0 % - % 21.0 % State taxes, net of federal benefit - 1.1 1.1 Permanent differences - (1.0 ) (1.0 ) Expiration of net operating loss and research credit carryforwards - (13.8 ) (13.8 ) Expiration and forfeiture of stock options - (1.5 ) (1.5 ) Other - (2.4 ) (2.4 ) Valuation allowance - (3.4 ) (3.4 ) Effect of net operating loss (21.0 )% 21.0 - Total - % - % - % The table below summarizes the revisions to the attributes of the deferred tax assets and liabilities as of December 31, 2021 (in thousands): December 31, 2021 As Reported Adjustments 2021 As Revised Accrued compensation $ 135,000 $ (25,000 ) $ 110,000 Allowance for doubtful accounts 75,000 (5,000 ) 70,000 Stock based compensation 1,149,000 (663,000 ) 486,000 Equipment and leasehold improvements (10,000 ) 11,000 1,000 Intangible assets 75,000 (14,000 ) 61,000 Operating lease liability - 59,000 59,000 Reserve on debt security - 13,000 13,000 Operating lease right-of -use assets - (57,000 ) (57,000 ) Net operating loss and research credit carryforwards 14,467,000 681,000 15,148,000 Valuation allowance (15,891,000 ) - (15,891,000 ) Net deferred tax assets $ - $ - $ - The table below summarizes the revisions to the attributes of the deferred tax assets and liabilities as of December 31, 2020 (in thousands): December 31, 2020 As Reported Adjustments 2020 As Revised Accrued compensation $ 81,000 $ (15,000 ) $ 66,000 Allowance for doubtful accounts 474,000 (471,000 ) 3,000 Stock based compensation 1,073,000 (511,000 ) 562,000 Equipment and leasehold improvements (14,000 ) 19,000 5,000 Intangible assets 65,000 (12,000 ) 53,000 Operating lease liability - 111,000 111,000 Operating lease right-of -use assets - (109,000 ) (109,000 ) Net operating loss and research credit carryforwards 13,337,000 1,688,000 15,025,000 Valuation allowance (15,016,000 ) (700,000 ) (15,716,000 ) Net deferred tax assets $ - $ - $ - |
Note T - Profit Sharing Plan
Note T - Profit Sharing Plan | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Retirement Benefits [Text Block] | NOTE T PROFIT SHARING PLAN The Company has established a savings plan under section 401(k) of the Internal Revenue Code. All employees of the Company, after completing one day of service, are eligible to enroll in the 401(k) plan. Participating employees may elect to defer a portion of their salary on a pre-tax basis up to the limits as provided by the IRS Code. The Company is not required to match employee contributions but may do so at its discretion. The Company made no |
Note U - Earnings Per Share (EP
Note U - Earnings Per Share (EPS) | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | NOTE U EARNINGS PER SHARE (EPS) 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, 2022 2021 Stock options 202,996 212,461 Warrants 4,872,025 4,689,387 Total 5,075,021 4,901,848 |
Note V - Subsequent Events
Note V - Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | NOTE V SUBSEQUENT EVENTS On March 16, 2023, the Company issued 15,388 shares of common stock to its directors in payment of board fees. On March 16, 2023, the Company issued an aggregate of 40,000 shares of restricted common stock to new employees which vest in equal annual installments over a three-year On May 5, 2023, the Company issued 2,858 shares of common stock to its directors in payment of board committee fees. On May 5, 2023, the Company received 14,375 shares of restricted common stock from employees who left the Company before the vesting period was completed. On May 11, 2023, the Company issued 17,392 shares of common stock to its directors in payment of board fees. On May 11, 2023, the Company issued 2,900 shares of common stock to its directors in payment of board committee fees. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Going Concern and Basis of Presentation |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Foreign Currency Matters |
Consolidation, Policy [Policy Text Block] | 1. Principles of Consolidation |
Use of Estimates, Policy [Policy Text Block] | 2. Use of Estimates |
Revenue from Contract with Customer [Policy Text Block] | 3. Revenue Recognition ● Identify the contract with a customer ● Identify the performance obligations in the contract ● Determine the transaction price ● Allocate the transaction price to performance obligations in the contract ● Recognize revenue when or as the Company satisfies a performance obligation Software licenses Hardware Support and Maintenance Professional Services Contracts with Multiple Performance Obligations Costs to Obtain and Fulfill a Contract four Deferred Revenue |
Business Combinations Policy [Policy Text Block] | 4. Business Combinations Business Combinations |
Goodwill and Intangible Assets, Policy [Policy Text Block] | 5. Goodwill and acquired intangible assets |
Cash and Cash Equivalents, Policy [Policy Text Block] | 6. Cash Equivalents |
Receivable [Policy Text Block] | 7. 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. Accounts receivable at December 31, 2022 and 2021 consisted of the following: December 31, 2022 2021 Accounts receivable $ 2,096,569 $ 1,234,411 Loss on foreign currency - (50,000 ) Allowance for doubtful accounts (573,785 ) (213,785 ) Accounts receivable, net of allowances for doubtful accounts $ 1,522,784 $ 970,626 Bad debt expenses (if any) are recorded in selling, general, and administrative expense. The allowance for doubtful accounts for the years ended December 31, 2022 and 2021 is as follows: Balance at Beginning of Year Charged to Costs and Expenses Deductions from Reserves Balance at End of Year Year ended December 31, 2022 Allowance for Doubtful Accounts $ 213,785 $ 360,000 $ - $ 573,785 Year ended December 31, 2021 Allowance for Doubtful Accounts $ 1,733,785 $ 200,000 $ (1,720,000 ) $ 213,785 |
Property, Plant and Equipment, Policy [Policy Text Block] | 8. Equipment and Leasehold Improvements, Intangible Assets and Depreciation and Amortization Years Equipment and leasehold improvements Equipment 3 - 5 Furniture and fixtures 3 - 5 Software 3 Leasehold improvements life or lease term |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | 9. Impairment or Disposal of Long Lived Assets, including Intangible Assets |
Advertising Cost [Policy Text Block] | 10. Advertising Expense |
Research and Development Expense, Policy [Policy Text Block] | 11. Research and Development Expenditures |
Earnings Per Share, Policy [Policy Text Block] | 12. Earnings Per Share of Common Stock ( EPS ) |
Share-Based Payment Arrangement [Policy Text Block] | 13. Accounting for Stock-Based Compensation three Year ended December 31, 2022 2021 Selling, general and administrative $ 310,017 $ 269,368 Research, development and engineering 77,890 45,347 $ 387,907 $ 314,715 |
Income Tax, Policy [Policy Text Block] | 14. Income Taxes |
Lessee, Leases [Policy Text Block] | 15 . Leases Leases |
Derivatives, Policy [Policy Text Block] | 16. The Fair Value Measurement Option The Company has elected the fair value measurement option for convertible debt with embedded derivatives that require bifurcation, and record the entire hybrid financing instrument at fair value under the guidance of ASC 825, Financial Instruments |
Fair Value Measurement, Policy [Policy Text Block] | 17. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The following table summarizes our financial instruments measured at fair value at December 31, 2022: Total Level 1 Level 2 Level 3 Convertible note at fair value $ 2,596,203 $ - $ - $ 2,596,203 The Company issued a convertible note to which included an original issue discount, conversion features and a detachable warrant, as further discussed in Note M. The detachable warrant represents a freestanding, separable equity-linked financial instrument recorded at fair value. The fair value of the detachable warrant was calculated using a Black-Scholes valuation model. The Company elected the fair value option for the convertible debt which was determined based on significant unobservable inputs including the likelihood of default, the estimated date at which the default could take place, and the present value discount rate, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The fair value option requires recognition at fair value upon issuance and on each balance sheet date thereafter. Changes in the estimated fair value are recognized as change in fair value of convertible note in the consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the issuance of the convertible note were expensed and not deferred. The Company estimated the fair value of the convertible note using a probability-weighted discounted cash flow model with the following assumptions and significant terms of the convertible note at December 22, 2022: 1. Face amount - $2,200,000 2. Nominal interest rate – 10% - 12% 3. Default interest rate – 18% 4. Increase in principal upon a default – 30% 5. Present value discount rate – 15.18% 6. Likelihood of default – estimated to be 50% at the extended maturity date The following table shows the changes in fair value measurements for the convertible note using significant unobservable inputs (Level 3) during the year ended December 31, 2022: Beginning balance $ - Purchases and issuances 2,200,000 Day one loss on value of hybrid instrument 396,203 Ending balance $ 2,596,203 |
New Accounting Pronouncements, Policy [Policy Text Block] | 18. Recent Accounting Pronouncements |
Note A - The Company and Summ_2
Note A - The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, 2022 2021 Accounts receivable $ 2,096,569 $ 1,234,411 Loss on foreign currency - (50,000 ) Allowance for doubtful accounts (573,785 ) (213,785 ) Accounts receivable, net of allowances for doubtful accounts $ 1,522,784 $ 970,626 Balance at Beginning of Year Charged to Costs and Expenses Deductions from Reserves Balance at End of Year Year ended December 31, 2022 Allowance for Doubtful Accounts $ 213,785 $ 360,000 $ - $ 573,785 Year ended December 31, 2021 Allowance for Doubtful Accounts $ 1,733,785 $ 200,000 $ (1,720,000 ) $ 213,785 |
Useful Lives of Property Plan and Equipment [Table Text Block] | Years Equipment and leasehold improvements Equipment 3 - 5 Furniture and fixtures 3 - 5 Software 3 Leasehold improvements life or lease term |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] | Year ended December 31, 2022 2021 Selling, general and administrative $ 310,017 $ 269,368 Research, development and engineering 77,890 45,347 $ 387,907 $ 314,715 |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis [Table Text Block] | Total Level 1 Level 2 Level 3 Convertible note at fair value $ 2,596,203 $ - $ - $ 2,596,203 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Beginning balance $ - Purchases and issuances 2,200,000 Day one loss on value of hybrid instrument 396,203 Ending balance $ 2,596,203 |
Note B - Revenue From Contrac_2
Note B - Revenue From Contracts With Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Disaggregation of Revenue [Table Text Block] | North America Africa EMESA* Asia December 31, 2022 License fees $ 1,856,814 $ 517,161 $ 2,124,088 $ 85,989 $ 4,584,052 Hardware 422,275 25,833 19,914 178,464 646,486 Services 1,270,067 83,306 436,293 54 1,789,720 Total Revenues $ 3,549,156 $ 626,300 $ 2,580,295 $ 264,507 $ 7,020,258 North America Africa EMESA* Asia December 31, 2021 License fees $ 1,854,088 $ 521,751 $ 105,314 $ 74,656 $ 2,555,809 Hardware 278,655 698,264 265,996 42,411 1,285,326 Services 1,162,526 42,000 54,918 13,910 1,273,354 Total Revenues $ 3,295,269 $ 1,262,015 $ 426,228 $ 130,977 $ 5,114,489 |
Note C - Swivel Secure Europe_2
Note C - Swivel Secure Europe, SA Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Purchase consideration: Total cash paid, including working capital adjustment $ 1,273,483 Earnout payable 500,000 Common stock issued 600,004 Total purchase price consideration $ 2,373,487 Fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 729,905 Accounts receivable 702,886 Equipment acquired 65,640 Other assets 20,708 Intangible assets 762,860 Goodwill 1,258,087 Total estimated assets acquired 3,540,086 Accounts payable and accrued expenses 431,884 Government loan 544,000 Deferred tax liability 190,715 Total liabilities assumed 1,166,599 Total estimated fair value of assets acquired and liabilities assumed $ 2,373,487 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Amount Estimated useful life (in years) Customer relationships $ 762,860 7 Total identifiable intangible assets $ 762,860 |
Note F - Note Receivable (Table
Note F - Note Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, 2022 2021 Accounts receivable $ 2,096,569 $ 1,234,411 Loss on foreign currency - (50,000 ) Allowance for doubtful accounts (573,785 ) (213,785 ) Accounts receivable, net of allowances for doubtful accounts $ 1,522,784 $ 970,626 Balance at Beginning of Year Charged to Costs and Expenses Deductions from Reserves Balance at End of Year Year ended December 31, 2022 Allowance for Doubtful Accounts $ 213,785 $ 360,000 $ - $ 573,785 Year ended December 31, 2021 Allowance for Doubtful Accounts $ 1,733,785 $ 200,000 $ (1,720,000 ) $ 213,785 |
Notes Receivable [Member] | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, December 31, 2022 2021 Note receivable $ 195,000 $ 295,000 Repayment of note (9,000 ) - Allowance for doubtful account (186,000 ) (100,000 ) Note receivable, net of allowance - 195,000 Current portion, net of allowance $ - $ 82,000 Noncurrent portion, net of allowance $ - $ 113,000 |
Note G - Inventory (Tables)
Note G - Inventory (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | 2022 2021 Finished goods $ 4,764,643 $ 4,798,203 Fabricated assemblies 69,726 142,457 Reserve on finished goods (400,000 ) - Total inventory $ 4,434,369 $ 4,940,660 |
Note J - Equipment and Leaseh_2
Note J - Equipment and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | 2022 2021 Equipment $ 825,058 $ 831,784 Furniture and fixtures 225,978 164,079 Software 49,143 32,045 Leasehold improvements 34,903 25,135 1,135,082 1,053,043 Less accumulated depreciation and amortization (1,027,669 ) (983,875 ) Total $ 107,413 $ 69,168 |
Note K - Intangible Assets an_2
Note K - Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 2022 2021 Trade name $ 130,000 $ 130,000 Proprietary software 420,000 420,000 Customer relationships 1,692,860 930,000 Patents and patents pending 365,080 365,080 2,607,940 1,845,080 Less accumulated amortization (845,115 ) (547,003 ) Total $ 1,762,825 $ 1,298,077 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Years ending December 31 2023 $ 320,000 2024 320,000 2025 280,000 2026 230,000 2027 220,000 Thereafter 392,825 Total $ 1,762,825 |
Note L - Accrued Liabilities (T
Note L - Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | 2022 2021 Compensation $ 377,958 $ 254,433 Compensated absences 378,874 293,297 Accrued legal and accounting fees 110,008 95,738 Franchise taxes 7,000 40,000 Employee expenses reimbursement 114,209 76,000 Sales tax payable 17,594 18,548 Other 3,480 50,981 Total $ 1,009,123 $ 828,997 |
Note N - Leases (Tables)
Note N - Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Lessee, Operating Lease, Costs, Assets and Liabilities [Table Text Block] | Year ended December 31, 2022 Year ended December 31, 2021 Lease cost Operating lease cost $ 254,649 $ 255,892 Total lease cost $ 254,649 $ 255,892 Balance sheet information Operating right-of-use assets $ 197,355 $ 254,100 Operating lease liabilities, current portion $ 159,665 $ 177,188 Operating lease liabilities, non-current portion 37,829 86,974 Total operating lease liabilities $ 197,494 $ 264,162 Weighted average remaining lease term (in years) – operating leases 0.96 1.45 Weighted average discount rate – operating leases 5.50 % 5.50 % Supplemental cash flow information related to leases were as follows: Cash paid for amounts included in the measurement of operating lease liabilities $ 259,558 $ 256,977 Maturities of operating lease liabilities were as follows as of December 31, 2022: 2023 $ 164,596 2024 38,808 Total future lease payments $ 203,404 Less: imputed interest (5,910 ) Total $ 197,494 |
Note P - Equity (Tables)
Note P - Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Warrants Valuation Assumptions [Table Text Block] | Years ended December 31, 2022 2021 Weighted average risk-free interest rate 3.70 % - % Weighted average exercise price $ 3.00 $ - Weighted average exercise period 5 - Weighted average Volatility of stock price 108.60 % - % |
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 December 31, 2020 4,689,387 $ 6.04 4.48 — Granted — — Exercised — — Forfeited — — Expired — — Outstanding, as of December 31, 2021 4,689,387 6.04 3.48 — Granted 200,000 3.00 Exercised — — Forfeited — — Expired (17,362 ) 28.80 Outstanding, as of December 31, 2022 4,872,025 $ 5.83 2.59 — |
Note Q - Stock Options (Tables)
Note Q - Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Number of Options Weighted average Weighted average remaining Aggregate 2015 Plan Non Plan Total exercise price life (in years) intrinsic value Outstanding, as of December 31, 2020 94,183 133,091 227,274 $ 17.61 3.87 $ 0 Granted — — — — Exercised — — — — Forfeited (3,291 ) — (3,291 ) 3.87 Expired (84 ) (11,438 ) (11,522 ) 39.13 Outstanding, as of December 31, 2021 90,808 121,653 212,461 $ 16.65 3.03 $ 0 Granted — — — — Exercised — — — — Forfeited — — — — Expired — (9,465 ) (9,465 ) 17.28 Outstanding, as of December 31, 2022 90,808 112,188 202,996 $ 16.63 2.14 $ 0 Vested or expected to vest at December 31, 2022 201,271 $ 16.72 2.12 $ 0 Exercisable at December 31, 2022 194,561 $ 17.12 2.03 $ 0 |
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 $ 4.08 - 5.84 25,565 $ 5.20 4.63 17,130 $ 5.20 $ 5.85 - 28.00 177,431 18.27 1.81 177,431 18.27 $ 4.08 - 28.00 202,996 194,561 |
Note R - Income Taxes (Tables)
Note R - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Net Income (Loss) by Geographic Areas [Table Text Block] | Year ended December 31, 2022 Year ended December 31, 2021 United States $ (10,416,593 ) $ (4,507,071 ) Hong Kong (458,839 ) (439,814 ) Nigeria (143,499 ) (118,896 ) Spain (890,972 ) - Total $ (11,909,903 ) $ (5,065,781 ) |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Year ended December 31, 2022 Year ended December 31, 2021 Current – federal, states, and foreign $ - $ - Deferred- Federal 1,175,000 128,000 Deferred - States 122,000 47,000 Deferred - Foreign (20,000 ) - Total 1,277.000 175,000 Change in valuation allowance (1,297,000 ) (175,000 ) Provision for income tax benefits $ (20,434 ) $ — |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | December 31, 2022 December 31, 2021 As Revised Accrued compensation $ 113,000 $ 110,000 Allowance for doubtful accounts 169,000 70,000 Research and development expenses 633,000 - Capital loss carry forward 114,000 - Stock-based compensation 456,000 486,000 Equipment and leasehold improvements (19,000 ) 1,000 Intangible assets - US 341,000 61,000 Intangible assets - Foreign (170,000 ) - Inventory reserve 89,000 - Interest expense 44,000 - Operating lease liabilities 44,000 59,000 Reserve on debt security - 13,000 Operating lease right-of-use assets (44,000 ) (57,000 ) Net operating loss and research and credit carryforwards 15,248,000 15,148,000 Valuation allowance (17,188,000 ) (15,891,000 ) Net deferred tax liability $ (170,000 ) $ — |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Year ended December 31, 2022 Year ended December 31, 2021 As Revised Federal statutory income tax rate 21.0 % 21.0 % State taxes, net of federal benefit 0.9 1.1 Permanent differences (4.7 ) (1.0 ) Expiration of net operating loss and research credit carryforwards (5.7 ) (13.8 ) Expiration and forfeiture of stock options (0.3 ) (1.5 ) Other (0.5 ) (2.4 ) Valuation allowance (10.9 ) (3.4 ) Effective tax rate (0.2 )% — % |
Note S - Revision of Previous_2
Note S - Revision of Previously Issued Consolidated Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | December 31, 2021 As Reported Adjustments 2021 As Revised U.S. statutory income tax rate 21.0 % - % 21.0 % State taxes, net of federal benefit - 1.1 1.1 Permanent differences - (1.0 ) (1.0 ) Expiration of net operating loss and research credit carryforwards - (13.8 ) (13.8 ) Expiration and forfeiture of stock options - (1.5 ) (1.5 ) Other - (2.4 ) (2.4 ) Valuation allowance - (3.4 ) (3.4 ) Effect of net operating loss (21.0 )% 21.0 - Total - % - % - % December 31, 2021 As Reported Adjustments 2021 As Revised Accrued compensation $ 135,000 $ (25,000 ) $ 110,000 Allowance for doubtful accounts 75,000 (5,000 ) 70,000 Stock based compensation 1,149,000 (663,000 ) 486,000 Equipment and leasehold improvements (10,000 ) 11,000 1,000 Intangible assets 75,000 (14,000 ) 61,000 Operating lease liability - 59,000 59,000 Reserve on debt security - 13,000 13,000 Operating lease right-of -use assets - (57,000 ) (57,000 ) Net operating loss and research credit carryforwards 14,467,000 681,000 15,148,000 Valuation allowance (15,891,000 ) - (15,891,000 ) Net deferred tax assets $ - $ - $ - December 31, 2020 As Reported Adjustments 2020 As Revised Accrued compensation $ 81,000 $ (15,000 ) $ 66,000 Allowance for doubtful accounts 474,000 (471,000 ) 3,000 Stock based compensation 1,073,000 (511,000 ) 562,000 Equipment and leasehold improvements (14,000 ) 19,000 5,000 Intangible assets 65,000 (12,000 ) 53,000 Operating lease liability - 111,000 111,000 Operating lease right-of -use assets - (109,000 ) (109,000 ) Net operating loss and research credit carryforwards 13,337,000 1,688,000 15,025,000 Valuation allowance (15,016,000 ) (700,000 ) (15,716,000 ) Net deferred tax assets $ - $ - $ - |
Note U - Earnings Per Share (_2
Note U - Earnings Per Share (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Years ended December 31, 2022 2021 Stock options 202,996 212,461 Warrants 4,872,025 4,689,387 Total 5,075,021 4,901,848 |
Note A - The Company and Summ_3
Note A - The Company and Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 22, 2022 | |
Percentage of Support and Maintenance Revenue to License Cost | 18% | ||
Capitalized Contract Cost, Amortization Period (Year) | 4 years | ||
Contract with Customer, Liability, Total | $ 515,000 | $ 633,000 | |
Advertising Expense | $ 842,000 | $ 527,000 | |
Debt Instrument, Face Amount | $ 2,200,000 | ||
Measurement Input, Default Rate [Member] | |||
Debt Instrument, Measurement Input | 0.18 | ||
Principal Upon Default [Member] | |||
Debt Instrument, Measurement Input | 0.30 | ||
Measurement Input, Discount Rate [Member] | |||
Debt Instrument, Measurement Input | 0.1518 | ||
Measurement Input, Likelihood of Default [Member] | |||
Debt Instrument, Measurement Input | 0.50 | ||
Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | ||
Debt Instrument, Interest Rate, Stated Percentage | 10% | ||
Maximum [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 12% |
Note A - The Company and Summ_4
Note A - The Company and Summary of Significant Accounting Policies - Summary of Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable | $ 2,096,569 | $ 1,234,411 |
Accounts Receivable, Allowance for Credit Loss, Current | 213,785 | 1,733,785 |
Allowance for doubtful accounts, charged to costs and expenses | (360,000) | (200,000) |
Loss on foreign currency transactions | 0 | (50,000) |
Accounts Receivable, Credit Loss Expense (Reversal) | 0 | (1,720,000) |
Accounts Receivable, Allowance for Credit Loss, Current | 573,785 | 213,785 |
Allowance for doubtful accounts | (573,785) | (213,785) |
Accounts receivable, net of allowances for doubtful accounts | $ 1,522,784 | $ 970,626 |
Note A - The Company and Summ_5
Note A - The Company and Summary of Significant Accounting Policies - Estimated Useful Lives for Depreciation and Amortization (Details) | Dec. 31, 2022 |
Equipment [Member] | Minimum [Member] | |
Property, Plant, and Equipment, useful life (Year) | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant, and Equipment, useful life (Year) | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant, and Equipment, useful life (Year) | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant, and Equipment, useful life (Year) | 5 years |
Software Development [Member] | |
Property, Plant, and Equipment, useful life (Year) | 3 years |
Note A - The Company and Summ_6
Note A - The Company and Summary of Significant Accounting Policies - Share-based Compensation Expenses for Continuing Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based compensation expense | $ 387,907 | $ 314,715 |
Selling, General and Administrative Expenses [Member] | ||
Share-based compensation expense | 310,017 | 269,368 |
Research and Development Expense [Member] | ||
Share-based compensation expense | $ 77,890 | $ 45,347 |
Note A - The Company and Summ_7
Note A - The Company and Summary of Significant Accounting Policies - Fair Value (Details) - Convertible Debt [Member] | Dec. 31, 2022 USD ($) |
Convertible note at fair value | $ 2,596,203 |
Fair Value, Inputs, Level 1 [Member] | |
Convertible note at fair value | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Convertible note at fair value | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Convertible note at fair value | $ 2,596,203 |
Note A - The Company and Summ_8
Note A - The Company and Summary of Significant Accounting Policies - Significant Unobservable Inputs (Details) - Convertible Debt [Member] | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Beginning balance | $ 0 |
Purchases and issuances | 2,200,000 |
Day one loss on value of hybrid instrument | 396,203 |
Ending balance | $ 2,596,203 |
Note B - Revenue From Contrac_3
Note B - Revenue From Contracts With Customers (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contract with Customer, Liability, Revenue Recognized | $ 489,000 | $ 529,000 |
Contract with Customer, Liability, Total | $ 515,000 | $ 633,000 |
Note B - Revenue From Contrac_4
Note B - Revenue From Contracts With Customers - Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Services | $ 7,020,258 | $ 5,114,489 |
North America [Member] | ||
Services | 3,549,156 | 3,295,269 |
Africa [Member] | ||
Services | 626,300 | 1,262,015 |
EMEA [Member] | ||
Services | 2,580,295 | 426,228 |
Asia [Member] | ||
Services | 264,507 | 130,977 |
License [Member] | ||
Services | 4,584,052 | 2,555,809 |
License [Member] | North America [Member] | ||
Services | 1,856,814 | 1,854,088 |
License [Member] | Africa [Member] | ||
Services | 517,161 | 521,751 |
License [Member] | EMEA [Member] | ||
Services | 2,124,088 | 105,314 |
License [Member] | Asia [Member] | ||
Services | 85,989 | 74,656 |
Hardware [Member] | ||
Services | 646,486 | 1,285,326 |
Hardware [Member] | North America [Member] | ||
Services | 422,275 | 278,655 |
Hardware [Member] | Africa [Member] | ||
Services | 25,833 | 698,264 |
Hardware [Member] | EMEA [Member] | ||
Services | 19,914 | 265,996 |
Hardware [Member] | Asia [Member] | ||
Services | 178,464 | 42,411 |
Service [Member] | ||
Services | 1,789,720 | 1,273,354 |
Service [Member] | North America [Member] | ||
Services | 1,270,067 | 1,162,526 |
Service [Member] | Africa [Member] | ||
Services | 83,306 | 42,000 |
Service [Member] | EMEA [Member] | ||
Services | 436,293 | 54,918 |
Service [Member] | Asia [Member] | ||
Services | $ 54 | $ 13,910 |
Note C - Swivel Secure Europe_3
Note C - Swivel Secure Europe, SA Acquisition (Details Textual) - USD ($) | 10 Months Ended | 12 Months Ended | 47 Months Ended | |||
Mar. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 30, 2026 | Dec. 31, 2020 | |
Payments to Acquire Businesses, Gross | $ 623,578 | $ 0 | ||||
Share Price | $ 0.59 | $ 0.59 | $ 2.21 | $ 3.52 | ||
Forecast [Member] | Government Loan [Member] | BBVA Bank [Member] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | |||||
Debt Instrument, Periodic Payment, Principal | $ 11,900 | |||||
Swivel Secure Europe [Member] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | |||||
Business Combination, Base Purchase Price | $ 1,750,000 | |||||
Business Combination, Contingent Consideration, Liability | 500,000 | |||||
Business Combination, Contingent Consideration Earnout Payable, Revenue to Trigger Payment | 3,000,000 | |||||
Business Combination, Contingent Consideration Earnout Payable, Operating Profit to Trigger Payment | 1,000,000 | |||||
Payments to Acquire Businesses, Gross | $ 1,270,000 | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 269,060 | |||||
Business Combination, Indemnification Assets, Shares as of Acquisition Date | 89,687 | |||||
Share Price | $ 2.23 | |||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 500,000 | |||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 2,351,975 | |||||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 720,691 |
Note C - Swivel Secure Europe_4
Note C - Swivel Secure Europe, SA Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill | $ 0 | $ 1,262,526 |
Deferred tax liability | 190,715 | |
Swivel Secure Europe [Member] | ||
Total cash paid, including working capital adjustment | 1,273,483 | |
Earnout payable | 500,000 | |
Cash and cash equivalents | 729,905 | |
Accounts receivable | 702,886 | |
Equipment acquired | 65,640 | |
Other assets | 20,708 | |
Intangible assets | 762,860 | |
Goodwill | 1,258,087 | |
Total estimated assets acquired | 3,540,086 | |
Accounts payable and accrued expenses | 431,884 | |
Government loan | 544,000 | |
Total liabilities assumed | 1,166,599 | |
Total estimated fair value of assets acquired and liabilities assumed | 2,373,487 | |
Swivel Secure Europe [Member] | Restricted [Member] | ||
Common stock issued | 600,004 | |
Total purchase price consideration | $ 2,373,487 |
Note C - Swivel Secure Europe_5
Note C - Swivel Secure Europe, SA Acquisition - Identifiable Intangible Assets Acquired (Details) - Swivel Secure Europe [Member] | Mar. 08, 2022 USD ($) |
Intangible Assets, Amount | $ 762,860 |
Customer Relationships [Member] | |
Intangible Assets, Amount | $ 762,860 |
Estimated useful life (Year) | 7 years |
Note E - Concentration of Risk
Note E - Concentration of Risk (Details Textual) | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Cash, Uninsured Amount | $ 2,000,000 | $ 7,057,000 |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Concentration Risk, Number of Major Customers | 1 | 1 |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member] | ||
Concentration Risk, Percentage | 10% | 13% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk, Number of Major Customers | 0 | 3 |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | ||
Concentration Risk, Percentage | 35% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Three Customers [Member] | ||
Concentration Risk, Percentage | 87% |
Note F - Note Receivable (Detai
Note F - Note Receivable (Details Textual) - USD ($) | 3 Months Ended | |||||
Feb. 06, 2024 | Jul. 06, 2022 | Feb. 25, 2022 | Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Note receivable, net of allowance | $ 295,000 | $ 0 | $ 82,000 | |||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 5% | |||||
Accounts Receivable, Allowance for Credit Loss | $ 186,000 | |||||
Notes Receivable, Periodic Payment | $ 15,000 | $ 1,000 | ||||
Forecast [Member] | ||||||
Notes Receivable, Periodic Payment | $ 2,000 |
Note F - Note Receivable - Summ
Note F - Note Receivable - Summary of Note Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2020 | |
Note receivable | $ 195,000 | $ 295,000 | |
Repayment of note | (9,000) | 0 | |
Allowance for doubtful account | (186,000) | (100,000) | |
Note receivable, net of allowance | 0 | 195,000 | |
Note receivable, net of allowance | 0 | 82,000 | $ 295,000 |
Noncurrent portion, net of allowance | $ 0 | $ 113,000 |
Note G - Inventory (Details Tex
Note G - Inventory (Details Textual) | Dec. 31, 2022 USD ($) |
NIGERIA | |
Inventory Valuation Reserves | $ 400,000 |
Note G - Inventory - Components
Note G - Inventory - Components of Inventory (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finished goods | $ 4,764,643 | $ 4,798,203 |
Fabricated assemblies | 69,726 | 142,457 |
Reserve on finished goods | (400,000) | 0 |
Total inventory | $ 4,434,369 | $ 4,940,660 |
Note H - Resalable Software L_2
Note H - Resalable Software Licenses Rights (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | |
Amortization of Intangible Assets | $ 298,113 | $ 216,069 | |
Software License Rights [Member] | |||
Payments to Acquire Software | $ 180,000 | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||
The 2015 Software License [Member] | |||
Cumulative Amount of Amortization Expense, Net of Credits | 141,190 | ||
Software License Rights | 0 | 48,752 | |
Amortization of Intangible Assets | $ 48,752 | $ 10,130 |
Note I - Investment in Debt S_2
Note I - Investment in Debt Security (Details Textual) - Debt Security, Corporate, Non-US [Member] | Sep. 30, 2020 USD ($) | Sep. 30, 2020 HKD ($) | Jun. 30, 2020 |
Debt Securities, Held-to-Maturity, Amortized Cost, before Allowance for Credit Loss, Current | $ 512,821 | $ 4,000,000 | |
Investment in Held-to-maturity Debt Securities, Interest Rate | 500% |
Note J - Equipment and Leaseh_3
Note J - Equipment and Leasehold Improvements (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Selling, General and Administrative Expenses [Member] | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 43,794 | $ 54,649 |
Note J - Equipment and Leaseh_4
Note J - Equipment and Leasehold Improvements - Summary of Equipment and Leasehold Improvements (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, plant, and equipment, gross | $ 1,135,082 | $ 1,053,043 |
Less accumulated depreciation and amortization | (1,027,669) | (983,875) |
Total | 107,413 | 69,168 |
Equipment [Member] | ||
Property, plant, and equipment, gross | 825,058 | 831,784 |
Furniture and Fixtures [Member] | ||
Property, plant, and equipment, gross | 225,978 | 164,079 |
Software Development [Member] | ||
Property, plant, and equipment, gross | 49,143 | 32,045 |
Leasehold Improvements [Member] | ||
Property, plant, and equipment, gross | $ 34,903 | $ 25,135 |
Note K - Intangible Assets an_3
Note K - Intangible Assets and Goodwill (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Amortization of Intangible Assets | $ 298,113 | $ 216,069 |
Research, Development, and Engineering Expense [Member] | ||
Amortization of Intangible Assets | $ 298,000 | $ 216,000 |
Note K - Intangible Assets an_4
Note K - Intangible Assets and Goodwill - Summary of Intangible Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Gross carrying amount | $ 2,607,940 | $ 1,845,080 |
Less accumulated amortization | (845,115) | (547,003) |
Total | 1,762,825 | 1,298,077 |
Trade Names [Member] | ||
Gross carrying amount | 130,000 | 130,000 |
Proprietary Software [Member] | ||
Gross carrying amount | 420,000 | 420,000 |
Customer Relationships [Member] | ||
Gross carrying amount | 1,692,860 | 930,000 |
Patents [Member] | ||
Gross carrying amount | $ 365,080 | $ 365,080 |
Note K - Intangible Assets an_5
Note K - Intangible Assets and Goodwill - Amortization Expense (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
2023 | $ 320,000 | |
2024 | 320,000 | |
2025 | 280,000 | |
2026 | 230,000 | |
2027 | 220,000 | |
Thereafter | 392,825 | |
Total | $ 1,762,825 | $ 1,298,077 |
Note L - Accrued Liabilities -
Note L - Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Compensation | $ 377,958 | $ 254,433 |
Compensated absences | 378,874 | 293,297 |
Accrued legal and accounting fees | 110,008 | 95,738 |
Franchise taxes | 7,000 | 40,000 |
Employee expenses reimbursement | 114,209 | 76,000 |
Sales tax payable | 17,594 | 18,548 |
Other | 3,480 | 50,981 |
Total | $ 1,009,123 | $ 828,997 |
Note M - Convertible Note Pay_2
Note M - Convertible Note Payable (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 22, 2022 | Dec. 31, 2021 | Jun. 23, 2023 | Dec. 31, 2022 | |
Debt Instrument, Face Amount | $ 2,200,000 | |||
Class of Warrant or Right, Issued During Period | 0 | |||
Maximum [Member] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 12% | |||
Warrants Issued in Connection With Note [Member] | ||||
Class of Warrant or Right, Issued During Period | 200,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3 | |||
Warrants and Rights Outstanding | $ 94,316 | |||
The Note [Member] | ||||
Debt Instrument, Face Amount | $ 2,200,000 | |||
Debt Instrument, Fair Value Disclosure | $ 2,596,203 | |||
The Note [Member] | Senior Secured Promissory Note [Member] | ||||
Debt Instrument, Face Amount | 2,200,000 | |||
Proceeds from Debt, Net of Issuance Costs | $ 2,002,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 10% | |||
Stock Issued During Period, Shares, Commitment Fee | 700,000 | |||
Shares Issued, Price Per Share | $ 1 | |||
Right to Repurchase Shares if Debt Instrument Paid in Full Within Six Months | 350,000 | |||
Debt Instrument, Interest Rate, Default | 18% | |||
Debt Instrument, Default, Percentage Increase In Principal | 30% | |||
The Note [Member] | Senior Secured Promissory Note [Member] | Maximum [Member] | ||||
Debt Instrument, Convertible, Number of Equity Instruments | 1,684,576 | |||
Debt Instrument, Convertible, Percentage of Outstanding Stock | 19.90% | |||
The Note [Member] | Senior Secured Promissory Note [Member] | Forecast [Member] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 12% |
Note N - Leases - Operating Lea
Note N - Leases - Operating Lease Balance Sheet Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating lease cost | $ 254,649 | $ 255,892 |
Total lease cost | 254,649 | 255,892 |
Operating lease right-of-use assets | 197,355 | 254,100 |
Operating lease liabilities, current portion | 159,665 | 177,188 |
Operating lease liabilities, non-current portion | 37,829 | 86,974 |
Total operating lease liabilities | $ 197,494 | $ 264,162 |
Weighted average remaining lease term (in years) – operating leases (Year) | 11 months 15 days | 1 year 5 months 12 days |
Weighted average discount rate – operating leases | 5.50% | 5.50% |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 259,558 | $ 256,977 |
Lessee, Operating Lease, Liability, to be Paid, Year One | 164,596 | |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 38,808 | |
Total future lease payments | 203,404 | |
Less: imputed interest | (5,910) | |
Total | $ 197,494 | $ 264,162 |
Note P - Equity (Details Textua
Note P - Equity (Details Textual) - USD ($) | 12 Months Ended | |||
Mar. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Preferred Stock, Shares Authorized | 5,000,000 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |||
Stock Issued During Period, Value, Acquisitions | $ 600,004 | |||
Share-Based Payment Arrangement, Expense | 387,907 | $ 314,715 | ||
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | $ 76,043 | $ 25,536 | ||
Class of Warrant or Right, Issued During Period | 0 | |||
Share Price | $ 0.59 | $ 2.21 | $ 3.52 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | 194,561 | |||
Common Stock [Member] | ||||
Stock Issued During Period, Value, Acquisitions | $ 27 | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 60,549 | 19,484 | ||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 278,000 | 13,125 | ||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 10,500 | 1,250 | ||
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture | 39,636 | 7,828 | ||
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | $ 4 | $ 1 | ||
Director [Member] | Common Stock [Member] | ||||
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture | 39,636 | 7,828 | ||
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | $ 76,043 | $ 25,536 | ||
Restricted Stock [Member] | ||||
Share-Based Payment Arrangement, Expense | $ 218,552 | $ 71,819 | ||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 278,000 | 13,125 | ||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 10,500 | 1,250 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||
In The Money Options [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | 0 | 0 | 0 | |
Swivel Secure Europe [Member] | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 269,060 | |||
Business Combination, Indemnification Assets, Shares as of Acquisition Date | 89,687 | |||
Stock Issued During Period, Value, Acquisitions | $ 600,004 | |||
Business Acquisition, Share Price | $ 2.23 | |||
Share-Based Payment Arrangement, Expense | $ 18,787 | $ 10,680 | ||
Share Price | $ 2.23 | |||
Employee Stock Purchase Plan [Member] | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 789,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Purchase Price of Common Stock, Percent | 85% | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 60,549 | 19,484 |
Note P - Equity - Valuation Ass
Note P - Equity - Valuation Assumptions for Warrants (Details) - Referral Fee Warrants [Member] | Dec. 31, 2022 | Dec. 31, 2021 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Weighted average risk-free interest rate | 0.0370 | 0 |
Measurement Input, Exercise Price [Member] | ||
Weighted average risk-free interest rate | 3 | 0 |
Measurement Input, Expected Term [Member] | ||
Weighted average risk-free interest rate | 5 | 0 |
Measurement Input, Price Volatility [Member] | ||
Weighted average risk-free interest rate | 1.0860 | 0 |
Note P - Equity - Summary of Wa
Note P - Equity - Summary of Warrant Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Outstanding, warrants (in shares) | 4,689,387 | 4,689,387 | |
Outstanding, weighted average exercise price, warrants (in dollars per share) | $ 6.04 | $ 6.04 | |
Outstanding, weighted average remaining contractual life, warrants (Year) | 2 years 7 months 2 days | 3 years 5 months 23 days | 4 years 5 months 23 days |
Granted, warrants (in shares) | 200,000 | ||
Granted, weighted average exercise price, warrants (in dollars per share) | $ 3 | ||
Exercised, warrants (in shares) | 0 | ||
Exercised, weighted average exercise price, warrants (in dollars per share) | $ 0 | $ 0 | |
Forfeited, warrants (in shares) | 0 | 0 | |
Forfeited, weighted average exercise price, warrants (in dollars per share) | $ 0 | $ 0 | |
Expired, warrants (in shares) | (17,362) | 0 | |
Expired, weighted average exercise price, warrants (in dollars per share) | $ 28.80 | $ 0 | |
Forfeited, weighted average exercise price, warrants (in dollars per share) | $ 0 | $ 0 | |
Outstanding, warrants (in shares) | 4,872,025 | 4,689,387 | 4,689,387 |
Outstanding, weighted average exercise price, warrants (in dollars per share) | $ 5.83 | $ 6.04 | $ 6.04 |
Public Offering Warrants [Member] | |||
Granted, warrants (in shares) | 0 | ||
Granted, weighted average exercise price, warrants (in dollars per share) | $ 0 | ||
Pre-Funded Warrants [Member] | |||
Exercised, warrants (in shares) | 0 |
Note Q - Stock Options (Details
Note Q - Stock Options (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 27, 2016 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 1 month 20 days | 3 years 10 days | 3 years 10 months 13 days | |
Share Price | $ 0.59 | $ 2.21 | $ 3.52 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | 194,561 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 | $ 0 | $ 0 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) | 0 | 0 | 0 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested in Period, Fair Value | $ 100,668 | $ 252,874 | ||
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 17,630 | |||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 7 months 20 days | |||
In The Money Options [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number | 0 | 0 | 0 | |
The 2015 Equity Incentive Plan [Member] | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 789,000 | 187,500 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 10 years | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) | 0 | 0 | ||
The 2015 Equity Incentive Plan [Member] | Minimum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Purchase Price of Common Stock, Percent | 100% | |||
The 2015 Equity Incentive Plan [Member] | Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Purchase Price of Common Stock, Percent | 110% |
Note Q - Stock Options - Option
Note Q - Stock Options - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Outstanding (in shares) | 212,461 | 227,274 | |
Outstanding, weighted average exercise price (in dollars per share) | $ 16.65 | $ 17.61 | |
Outstanding, weighted average remaining life (Year) | 2 years 1 month 20 days | 3 years 10 days | 3 years 10 months 13 days |
Outstanding, aggregate intrinsic value | $ 0 | $ 0 | $ 0 |
Granted (in shares) | 0 | 0 | |
Granted, weighted average exercise price (in dollars per share) | $ 0 | $ 0 | |
Exercised (in shares) | 0 | 0 | 0 |
Exercised, weighted average exercise price (in dollars per share) | $ 0 | $ 0 | |
Forfeited (in shares) | 0 | (3,291) | |
Forfeited, weighted average exercise price (in dollars per share) | $ 0 | $ 3.87 | |
Expired (in shares) | (9,465) | (11,522) | |
Expired, weighted average exercise price (in dollars per share) | $ 17.28 | $ 39.13 | |
Outstanding (in shares) | 202,996 | 212,461 | 227,274 |
Outstanding, weighted average exercise price (in dollars per share) | $ 16.63 | $ 16.65 | $ 17.61 |
Vested or expected to vest (in shares) | 201,271 | ||
Vested or expected to vest, weighted average exercise price (in dollars per share) | $ 16.72 | ||
Vested or expected to vest, weighted average remaining life (Year) | 2 years 1 month 13 days | ||
Vested or expected to vest, aggregate intrinsic value | $ 0 | ||
Exercisable (in shares) | 194,561 | ||
Exercisable, weighted average exercise price (in dollars per share) | $ 17.12 | ||
Exercisable, weighted average remaining life (Year) | 2 years 10 days | ||
Exercisable, aggregate intrinsic value | $ 0 | ||
The 2015 Equity Incentive Plan [Member] | |||
Outstanding (in shares) | 90,808 | 94,183 | |
Outstanding, weighted average remaining life (Year) | 10 years | ||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | 0 | |
Forfeited (in shares) | 0 | (3,291) | |
Expired (in shares) | 0 | (84) | |
Outstanding (in shares) | 90,808 | 90,808 | 94,183 |
Non Plan [Member] | |||
Outstanding (in shares) | 121,653 | 133,091 | |
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | 0 | |
Forfeited (in shares) | 0 | 0 | |
Expired (in shares) | (9,465) | (11,438) | |
Outstanding (in shares) | 112,188 | 121,653 | 133,091 |
Note Q - Stock Options - Opti_2
Note Q - Stock Options - Options Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Exercisable, weighted average exercise price (in dollars per share) | $ 17.12 |
Exercise Price Range 1 [Member] | |
Range of exercise prices, lower range (in dollars per share) | 4.08 |
Range of exercise prices, upper range (in dollars per share) | $ 5.84 |
Options outstanding (in shares) | shares | 25,565 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 5.20 |
Options outstanding, weighted average remaining remaining life (Year) | 4 years 7 months 17 days |
Options exercisable (in shares) | shares | 17,130 |
Exercisable, weighted average exercise price (in dollars per share) | $ 5.20 |
Exercise Price Range 2 [Member] | |
Range of exercise prices, lower range (in dollars per share) | 5.85 |
Range of exercise prices, upper range (in dollars per share) | $ 28 |
Options outstanding (in shares) | shares | 177,431 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 18.27 |
Options outstanding, weighted average remaining remaining life (Year) | 1 year 9 months 21 days |
Options exercisable (in shares) | shares | 177,431 |
Exercisable, weighted average exercise price (in dollars per share) | $ 18.27 |
Exercise Price Range 3 [Member] | |
Range of exercise prices, lower range (in dollars per share) | 4.08 |
Range of exercise prices, upper range (in dollars per share) | $ 28 |
Options outstanding (in shares) | shares | 202,996 |
Options exercisable (in shares) | shares | 194,561 |
Note R - Income Taxes (Details
Note R - Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets, Valuation Allowance | $ 17,188,000 | $ 15,891,000 | $ 15,716,000 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total | 0 | $ 0 | |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | |||
Operating Loss Carryforwards | 61,300,000 | ||
Operating Loss Carryforwards, Subject to Expiration | 43,100,000 | ||
Operating Loss Carryforwards, Not Subject to Expiration | $ 18,200,000 | ||
Open Tax Year | 2019 2020 2021 2022 | ||
State and Local Jurisdiction [Member] | Internal Revenue Service (IRS) [Member] | |||
Operating Loss Carryforwards, Subject to Expiration | $ 6,870,000 |
Note R - Income Taxes - Net Inc
Note R - Income Taxes - Net Income Loss (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net loss | $ (11,909,903) | $ (5,065,781) |
UNITED STATES | ||
Net loss | (10,416,593) | (4,507,071) |
HONG KONG | ||
Net loss | (458,839) | (439,814) |
Africa [Member] | ||
Net loss | (143,499) | (118,896) |
SPAIN | ||
Net loss | $ (890,972) | $ 0 |
Note R - Income Taxes - Compone
Note R - Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current – federal, states, and foreign | $ 0 | $ 0 |
Deferred- Federal | 1,175,000 | 128,000 |
Deferred - States | 122,000 | 47,000 |
Deferred - Foreign | (20,000) | 0 |
Total | 1,277 | 175,000 |
Change in valuation allowance | (1,297,000) | (175,000) |
Provision for income tax benefits | $ (20,434) | $ 0 |
Note R - Income Taxes - Compo_2
Note R - Income Taxes - Components of Deferred Taxes (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued compensation | $ 113,000 | $ 110,000 | $ 66,000 |
Allowance for doubtful accounts | 169,000 | 70,000 | 3,000 |
Research and development expenses | 633,000 | 0 | |
Capital loss carry forward | 114,000 | 0 | |
Stock-based compensation | 456,000 | 486,000 | 562,000 |
Equipment and leasehold improvements | (19,000) | ||
Equipment and leasehold improvements | 1,000 | 5,000 | |
Intangible assets | 341,000 | 61,000 | 53,000 |
Intangible assets - Foreign | (170,000) | 0 | |
Inventory reserve | 89,000 | 0 | |
Interest expense | 44,000 | 0 | |
Operating lease liabilities | 44,000 | 59,000 | 111,000 |
Reserve on debt security | 0 | 13,000 | |
Operating lease right-of-use assets | (44,000) | (57,000) | (109,000) |
Net operating loss and credit carryforwards | 15,248,000 | 15,148,000 | 15,025,000 |
Valuation allowances | (17,188,000) | (15,891,000) | (15,716,000) |
Net deferred tax liability | $ (170,000) | ||
Net deferred tax liability | $ 0 | $ 0 |
Note R - Income Taxes - Reconci
Note R - Income Taxes - Reconciliation of the Effective Income Tax Rate to US Federal Statutory Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Federal statutory income tax rate | 21% | 21% |
State taxes, net of federal benefit | 0.90% | 1.10% |
Permanent differences | (4.70%) | (1.00%) |
Expiration of net operating loss and research credit carryforwards | (5.70%) | (13.80%) |
Expiration and forfeiture of stock options | (0.30%) | (1.50%) |
Other | (0.50%) | (2.40%) |
Valuation allowance | (10.90%) | (3.40%) |
Effective tax rate | (0.20%) | 0% |
Note S - Revision of Previous_3
Note S - Revision of Previously Issued Consolidated Financial Statements - Summary of Revisions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
U.S. statutory income tax rate | 21% | 21% | |
Accrued Compensation | $ 113,000 | $ 110,000 | $ 66,000 |
State taxes, net of federal benefit | 0.90% | 1.10% | |
Allowance for doubtful accounts | $ 169,000 | $ 70,000 | 3,000 |
Permanent differences | (4.70%) | (1.00%) | |
Stock based compensation | $ 456,000 | $ 486,000 | 562,000 |
Expiration of net operating loss and research credit carryforwards | (5.70%) | (13.80%) | |
Equipment and leashold improvements | $ 19,000 | ||
Equipment and leashold improvements | $ 1,000 | 5,000 | |
Expiration and forfeiture of stock options | (0.30%) | (1.50%) | |
Intangible assets | $ 341,000 | $ 61,000 | 53,000 |
Other | (0.50%) | (2.40%) | |
Operating lease liability | $ 44,000 | $ 59,000 | 111,000 |
Valuation allowance | (10.90%) | (3.40%) | |
Reserve on debt security | $ 0 | $ 13,000 | |
Operationg Lease right-of -use assets | 44,000 | $ 57,000 | 109,000 |
Valuation allowance | 0% | ||
Net operating loss and research credit carryforwards | $ 15,248,000 | $ 15,148,000 | 15,025,000 |
Effective tax rate | (0.20%) | 0% | |
Valuation allowance | $ 17,188,000 | $ 15,891,000 | 15,716,000 |
Net deferred tax asset | $ 0 | 0 | |
Previously Reported [Member] | |||
U.S. statutory income tax rate | 21% | ||
Accrued Compensation | $ 135,000 | 81,000 | |
State taxes, net of federal benefit | 0% | ||
Allowance for doubtful accounts | $ 75,000 | 474,000 | |
Permanent differences | 0% | ||
Stock based compensation | $ 1,149,000 | 1,073,000 | |
Expiration of net operating loss and research credit carryforwards | 0% | ||
Equipment and leashold improvements | $ 10,000 | 14,000 | |
Expiration and forfeiture of stock options | 0% | ||
Intangible assets | $ 75,000 | 65,000 | |
Other | 0% | ||
Operating lease liability | $ 0 | 0 | |
Valuation allowance | 0% | ||
Reserve on debt security | $ 0 | ||
Operationg Lease right-of -use assets | $ 0 | 0 | |
Valuation allowance | (21.00%) | ||
Net operating loss and research credit carryforwards | $ 14,467,000 | 13,337,000 | |
Effective tax rate | 0% | ||
Valuation allowance | $ 15,891,000 | 15,016,000 | |
Net deferred tax asset | $ 0 | 0 | |
Revision of Prior Period, Adjustment [Member] | |||
U.S. statutory income tax rate | 0% | ||
Accrued Compensation | $ (25,000) | (15,000) | |
State taxes, net of federal benefit | 1.10% | ||
Allowance for doubtful accounts | $ (5,000) | (471,000) | |
Permanent differences | (1.00%) | ||
Stock based compensation | $ (663,000) | (511,000) | |
Expiration of net operating loss and research credit carryforwards | (13.80%) | ||
Equipment and leashold improvements | $ (11,000) | (19,000) | |
Expiration and forfeiture of stock options | (1.50%) | ||
Intangible assets | $ (14,000) | (12,000) | |
Other | (2.40%) | ||
Operating lease liability | $ 59,000 | 111,000 | |
Valuation allowance | (3.40%) | ||
Reserve on debt security | $ 13,000 | ||
Operationg Lease right-of -use assets | $ 57,000 | 109,000 | |
Valuation allowance | 21% | ||
Net operating loss and research credit carryforwards | $ 681,000 | 1,688,000 | |
Effective tax rate | 0% | ||
Valuation allowance | $ 0 | 700,000 | |
Net deferred tax asset | $ 0 | $ 0 |
Note T - Profit Sharing Plan (D
Note T - Profit Sharing Plan (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0 | $ 0 |
Note U - Earnings Per Share (_3
Note U - Earnings Per Share (EPS) - Securities Excluded From the Diluted Per Share Calculation 2 (Details) - Exercise Price Greater Than Average Market Price Of Common Shares [Member] - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive securities (in shares) | 5,075,021 | 4,901,848 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive securities (in shares) | 202,996 | 212,461 |
Warrant [Member] | ||
Antidilutive securities (in shares) | 4,872,025 | 4,689,387 |
Note V - Subsequent Events (Det
Note V - Subsequent Events (Details Textual) - shares | 12 Months Ended | |||
May 11, 2023 | May 05, 2023 | Mar. 16, 2023 | Dec. 31, 2022 | |
Restricted Stock [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||
Restricted Stock [Member] | Share-Based Payment Arrangement, Employee [Member] | Forecast [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 14,375 | |||
Director [Member] | Common Stock [Member] | Stock Issued in Lieu of Board Fees [Member] | Forecast [Member] | ||||
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture | 17,392 | |||
Director [Member] | Common Stock [Member] | Stock Issued in Lieu of Board Committee Fees [Member] | Forecast [Member] | ||||
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture | 2,900 | 2,858 | ||
Subsequent Event [Member] | Restricted Stock [Member] | Share-Based Payment Arrangement, Employee [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 40,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||
Subsequent Event [Member] | Director [Member] | Common Stock [Member] | Stock Issued in Lieu of Board Fees [Member] | ||||
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture | 15,388 |