Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 31, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | hopTo Inc. | ||
Entity Central Index Key | 0001021435 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,501,017 | ||
Entity Common Stock, Shares Outstanding | 9,804,400 | ||
Trading Symbol | HPTO | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 892,500 | $ 1,015,400 |
Accounts receivable, net of allowance for doubtful accounts of $3,600 and $7,800, respectively | 210,800 | 426,800 |
Prepaid expenses and other current assets | 79,000 | 112,900 |
Total Current Assets | 1,182,300 | 1,555,100 |
Property and equipment, net | 400 | 30,800 |
Other assets | 17,800 | 17,800 |
Total Assets | 1,200,500 | 1,603,700 |
Current Liabilities: | ||
Accounts payable | 318,700 | 251,700 |
Accrued expenses | 121,600 | 107,700 |
Accrued wages | 145,800 | 275,700 |
Deferred rent | 74,100 | |
Deposit liability | 12,100 | 93,500 |
Deferred revenue | 1,300,300 | 1,845,100 |
Other current liabilities | 855,100 | |
Total Current Liabilities | 1,898,500 | 3,502,900 |
Long Term Liabilities: | ||
Deferred revenue | 491,500 | 1,409,700 |
Total Liabilities | 2,390,000 | 4,912,600 |
Commitments and contingencies (Note 10) | ||
Shareholders' Equity (Deficit): | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.0001 par value, 195,000,000 shares authorized, 9,804,400 shares issued and outstanding, respectively | 1,000 | 1,000 |
Additional paid-in capital | 79,298,200 | 78,539,300 |
Accumulated deficit | (80,488,700) | (81,849,200) |
Total Shareholders' Deficit | (1,189,500) | (3,308,900) |
Total Liabilities and Shareholders' Deficit | $ 1,200,500 | $ 1,603,700 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 3,600 | $ 7,800 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 195,000,000 | 195,000,000 |
Common stock, shares issued | 9,804,400 | 9,804,400 |
Common stock, shares outstanding | 9,804,400 | 9,804,400 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total Revenue | $ 3,153,400 | $ 3,889,500 |
Total Cost of revenue | 145,800 | 68,300 |
Gross profit | 3,007,600 | 3,821,200 |
Operating Expenses | ||
Selling and marketing | 412,300 | 355,300 |
General and administrative | 1,236,900 | 1,558,400 |
Research and development | 1,518,700 | 1,500,100 |
Total operating expenses | 3,167,900 | 3,413,800 |
Income (Loss) from Operations | (160,300) | 407,400 |
Other Income (Expense) | ||
Interest and other income | 131,500 | 197,000 |
Interest and other expense | (1,700) | (500) |
Total Other Income (Expense) | 129,800 | 196,500 |
Income (Loss) before provision for income tax | (30,500) | 603,900 |
Provision for income tax | 900 | 3,300 |
Net Income (Loss) | $ (31,400) | $ 600,600 |
Earnings per share - basic and diluted | $ 0 | $ 0.06 |
Weighted Average Common Shares Outstanding - Basic | 10,150,867 | 9,804,400 |
Weighted Average Common Shares Outstanding - Diluted | 10,150,867 | 9,804,400 |
Software License [Member] | ||
Total Revenue | $ 812,900 | $ 1,530,800 |
Software Service Fees [Member] | ||
Total Revenue | 2,240,300 | 2,297,700 |
Other [Member] | ||
Total Revenue | 100,200 | 61,000 |
Software Service Costs [Member] | ||
Total Cost of revenue | 52,100 | 57,000 |
Software Product Costs [Member] | ||
Total Cost of revenue | $ 93,700 | $ 11,300 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2016 | $ 1,000 | $ 78,525,900 | $ (82,449,800) | $ (3,922,900) | |
Beginning balance, shares at Dec. 31, 2016 | 9,804,400 | ||||
Stock-based compensation expense | 13,400 | 13,400 | |||
Issuance of new warrants | |||||
Contributed services | |||||
Payments for repurchase of warrants | |||||
Cumulative effect from change of accounting policies | |||||
Net Income (loss) | 600,600 | 600,600 | |||
Ending balance at Dec. 31, 2017 | $ 1,000 | 78,539,300 | (81,849,200) | (3,308,900) | |
Ending balance, shares at Dec. 31, 2017 | 9,804,400 | ||||
Stock-based compensation expense | |||||
Issuance of new warrants | 699,400 | 699,400 | |||
Contributed services | 75,000 | 75,000 | |||
Payments for repurchase of warrants | (15,500) | (15,500) | |||
Cumulative effect from change of accounting policies | 1,391,900 | 1,391,900 | |||
Net Income (loss) | (31,400) | (31,400) | |||
Ending balance at Dec. 31, 2018 | $ 1,000 | $ 79,298,200 | $ (80,488,700) | $ (1,189,500) | |
Ending balance, shares at Dec. 31, 2018 | 9,804,400 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows Provided By (Used In) Operating Activities: | ||
Net income / (loss) | $ (31,400) | $ 600,600 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation | 29,700 | 51,200 |
Contributed services | 75,000 | |
Stock based compensation expense | 13,400 | |
Change in allowance for doubtful accounts | (4,200) | 100 |
Loss on disposal of fixed assets | 700 | 60,400 |
Loss on sublease | 63,100 | |
Net gain on sale of patents | (320,000) | |
Interest accrued for capital lease | 200 | |
Changes in deferred rent | (74,100) | (15,700) |
Changes to liquidated damage on warrant liability | (155,700) | 284,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 220,200 | (71,600) |
Prepaid expenses and other current assets | 33,900 | (74,200) |
Other assets (LT) | 91,200 | |
Accounts payable | 67,000 | (323,800) |
Accrued expenses | 13,900 | 20,300 |
Accrued wages | (129,900) | (37,200) |
Deposit liability | (81,400) | 12,100 |
Deferred revenue | (71,100) | (198,800) |
Net Cash Provided By (Used In) Operating Activities | (107,400) | 155,300 |
Cash Flows Provided By (Used In) Investing Activities: | ||
Proceeds from sale of fixed assets | 900 | |
Proceeds from sale of patents | 320,000 | |
Net Cash Provided By Investing Activities | 320,900 | |
Cash Flows Provided By (Used In) Financing Activities: | ||
Payments for repurchase of warrants | (15,500) | |
Payments for capital lease | (7,000) | |
Net Cash Used In Financing Activities | (15,500) | (7,000) |
Net Increase/ (Decrease) in Cash and Cash equivalents | (122,900) | 469,200 |
Cash and Cash equivalents, beginning of year | 1,015,400 | 546,200 |
Cash and cash equivalents, end of year | $ 892,500 | $ 1,015,400 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The Company hopTo Inc., and its subsidiaries are developers of application publishing software which includes application virtualization software and cloud computing software for multiple computer operating systems including Windows, UNIX and several Linux-based variants. The Company sells a family of products under the brand name GO-Global, which is a software application publishing business and is the Company’s sole revenue source at this time. GO-Global is an application access solution for use and/or resale by independent software vendors (“ISVs”), corporate enterprises, governmental and educational institutions, and others, who wish to take advantage of cross-platform remote access and Web-enabled access to their existing software applications, as well as those who are deploying secure, private cloud environments. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation and Use of Estimates Certain prior year information has been reclassified to conform to current year presentation. Liquidity Revenue Recognition The Company markets and licenses products indirectly through channel distributors, independent software vendors (“ISVs”), value-added resellers (“VARs”) (collectively “resellers”) and directly to corporate enterprises, governmental and educational institutions and others. Its product licenses are perpetual. The Company also separately sells intellectual property licenses, maintenance contracts (which are comprised of license updates and customer service access), and other products and services. There are no rights of return granted to purchasers of the Company’s software products. For the year ended December 31, 2017, software license revenues were recognized when: ● Persuasive evidence of an arrangement exists (i.e., when the Company signs a non-cancelable license agreement wherein the customer acknowledges an unconditional obligation to pay, or upon receipt of the customer’s purchase order), and ● Delivery has occurred or services have been rendered and there are no uncertainties surrounding product acceptance (i.e., when title and risk of loss have been transferred to the customer, which generally occurs when the media containing the licensed program(s) is provided to a common carrier or, in the case of electronic delivery, when the customer is given access to the licensed programs), and ● The price to the customer is fixed or determinable, as typically evidenced in a signed non-cancelable contract, or a customer’s purchase order, and ● Collectability is probable. If collectability is not considered probable, revenue is recognized when the fee is collected. In 2017, revenue recognized on software arrangements involving multiple deliverables is allocated to each deliverable based on vendor-specific objective evidence (“VSOE”) or third party evidence of the fair values of each deliverable; such deliverables include licenses for software products, maintenance, private labeling fees, or customer training. The Company limits its assessment of VSOE for each deliverable to either the price charged when the same deliverable is sold separately or the price established by management having the relevant authority to do so, for a deliverable not yet sold separately. If sufficient VSOE of fair value does not existed, so as permitted the allocation of revenue to the various elements of the arrangement, all revenue from the arrangement was deferred until such evidence existed or until all elements were delivered. If VSOE of the fair value did not exist and the only undelivered element was maintenance, then revenue was recognized on a ratably. If VSOE of the fair value of all undelivered elements exists but evidence did not exist for one or more delivered elements, then revenue was recognized using the residual method. Under the residual method, the fair value of the undelivered elements was deferred and the remaining portion of the arrangement fee was recognized as revenue. Certain resellers (“stocking resellers”) purchased product licenses that they held in inventory until they were resold to the ultimate end-user (an “inventory stocking order”). At the time that a stocking reseller placed an inventory stocking order, no product licenses were shipped by the Company to the stocking reseller rather, the stocking reseller’s inventory was credited with the number of licenses purchased and the stocking reseller can resell (issue) any number of licenses from their inventory at any time. Upon receipt of an order to issue one or more licenses from a stocking reseller’s inventory (a “draw down order”), the Company would ship the licenses(s) in accordance with the draw down order’s instructions. In 2017, maintenance revenue was recognized from service contracts ratably over the related contract period, which generally ranges from one to five years. Effective January 1, 2018, ASC 606, Revenue from Contracts with Customers, changed the recognition of revenue standards for reporting periods beginning after December 31, 2017. For the year ended December 31, 2018, revenue recognition was determined by ● identifying the contract, or contracts, with a customer; ● identifying the performance obligations in each contract; ● determine the transaction price; ● allocating the transaction price to the performance obligations in each contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services When control of the promised products and services are transferred to our customers, we recognize revenue in the amount that reflects the consideration we expect to receive in exchange for these products and services. Product Sales All of our licenses are delivered to the customer electronically. The Company sends the license key to the customer to download the related software from Company portal. We recognize revenue upon delivery of these licenses. For stocking resellers who purchase licenses through inventory stocking orders with the intent to resell to an end-user, revenue is recognized when the resellers’ accounts have been credited, at their discretion, for the number of licenses purchased. Service Revenue Similar to 2017, 2018 maintenance revenue was also recognized from service contracts ratably over the related contract period. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (ASC 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (ASC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (ASC 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of ASC 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (ASC 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company elected to adopt ASC 606 under the Modified Retrospective approach. Under the Modified Retrospective approach, only contracts with customers for which there were remaining unsatisfied performance obligations (open contracts) at the beginning of initial year of adoption must be restated to apply retrospectively the guidance under ASC 606. Any resulting impact for such contracts prior to the beginning of the initial year of adoption are made as an adjustment to opening accumulated deficit for such year. On January 1, 2018, the Company adopted ASC 606 using the Modified Retrospective method. This method required retrospective application of the new accounting standard to those contracts which were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The change to the current revenue policy is the timing of revenue recognition for software licenses purchased by stocking resellers. Under the guidance ASC 605, the Company recognized revenue upon the delivery of licenses to end users when they were purchased from the stocking reseller. Under the guidance ASC 606, license revenue is recognized upon crediting of the licenses to the stocking resellers account for draw down at their discretion after placement of the stocking order by the stocking reseller. During the year ended December 31, 2018, this change in revenue policy resulted in lower license revenue of $231,300 when compared to 2017. This lower license revenue had the same impact on gross profit, income (loss) from operations and net income (loss). The Company recorded $1,391,900 to opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to reversal of deferred license revenue associated with stocking orders placed in prior periods which had not been sold through to end users as of December 31, 2017. The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets, deferred revenue and accumulated deficit for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows: Balance Sheet Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Current Assets Deferred COGS $ — $ 20,000 $ 20,000 Liabilities and Stockholders’ Equity Accumulated Deficit, net of tax $ (81,849,200 ) $ 1,391,900 $ (80,457,300 ) Current Liabilities Deferred Revenue $ 1,845,100 $ (609,700 ) $ 1,235,400 Long Term Liabilities Deferred Revenue $ 1,409,700 $ (802,200 ) $ 607,500 All of the Company’s software licenses are denominated in U.S. dollars. As a result of the adoption of ASU NO. 2014-09, our 2018 revenues were subject to greater variability. Cash and Cash equivalents. Property and Equipment Shipping and Handling Software Development Costs “Costs of Software to be Sold, Leased or Marketed,” Deferred Rent Allowance for Doubtful Accounts Allowance for doubtful accounts years ended December 31, 2018 and 2017, amounted to $3,600 and $7,800, respectively. Income Taxes “Income Taxes,” The Company and one or more of its subsidiaries are subject to United States federal income taxes, as well as income taxes of multiple state and foreign jurisdictions. The Company and its subsidiaries are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2012. There are no tax examinations currently underway for any of the Company’s or its subsidiaries’ tax returns for years subsequent to 2011. The Company’s policy for deducting interest and penalties is to treat interest as interest expense and penalties as taxes. The Company had not accrued any amount for the payment of interest or penalties related to any uncertain tax positions at either December 31, 2018 or 2017, as its review of such positions indicated that such potential positions were minimal. Under FASB ASC 740-10-05, “Income Taxes,” The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. Among these new taxes on certain foreign sourced earnings, the Act created a new category of income inclusion: the global intangible low-taxed income (“GILTI”). The objective of GILTI is to deter U.S. corporations from transferring intangible property to non-U.S. low-tax jurisdictions by subjecting the non-U.S. income to current U.S. taxation. The Act also adds a provision for a deduction to offset the GILTI inclusion for C corporations only, which is 50 percent (37.5 percent after 2025) of the GILTI inclusion. The GILTI deduction is subject to limitation based mainly on the taxpayer’s taxable income. In addition to GILTI, the Act also introduced the foreign-derived intangible income (“FDII”) category. FDII is eligible income derived in connection with property sold or services provided by the U.S. taxpayer to a non-U.S. person. The taxpayer must establish that the property is foreign use property, and, in the case of services, the taxpayer must provide that the services are rendered to a non-U.S. person who is located outside of the United States. C corporations receive a deduction equal to 37.5 percent (21.875 percent after 2025) of foreign-derived intangible income (FDII). Similar to the GILTI deduction, the FDII deduction is subject to limitation. The Act significantly changes how the U.S. taxes corporations. The Act requires complex computations to be performed that were not previously required by U.S. tax law, significant judgments to be made in interpretation of the provisions of the Act, estimates in calculations, and preparation and analysis of information not previously relevant or regularly produced. As of December 31, 2018, the Company’s impact from the Act was immaterial. As the Company completes its analysis of the Act, collects and prepares necessary data, and interprets any additional guidance set forth by the U.S. Treasury Department, the IRS, and other standard-setting bodies, the Company may alter its assessment if it determines that the Act has a material impact on the provision for income taxes. Fair Value of Financial Instruments The fair value of the Company’s warrants are determined in accordance with FASB ASC 820, “Fair Value Measurement,” ● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. As of December 31, 2018 and 2017, the Company did not have any Warrants Liability reported. Long-Lived Assets Loss Contingencies Stock-Based Compensation Compensation – Stock Compensation. Valuation and Expense Information Under FASB ASC 718-10 The Company recorded stock-based compensation expense of $0 and $13,400 in the years ended December 31, 2018 and 2017, respectively. As required by FASB ASC 718-10, the Company estimates forfeitures of employee stock-based awards and recognizes compensation cost only for those awards expected to vest. Forfeiture rates are estimated based on an analysis of historical experience and are adjusted to actual forfeiture experience as needed. For stock options granted, the Company set the exercise price equal to the closing fair market value of the Company’s common stock as of the grant date. No options were issued during the years ended December 31, 2018 and 2017. The following table illustrates the non-cash stock-based compensation expense recorded during the years ended December 31, 2018 and 2017 by income statement classification: 2018 2017 Cost of revenue $ - $ 100 Selling and marketing expense - 200 General and administrative expense - 13,000 Research and development expense - 100 $ - $ 13,400 Estimated compensation expense is based on the estimated fair value of each option granted on the date of grant using a binomial model, using the estimated annualized forfeiture rate based on an analysis of historical data and considered the impact of events such as work force reductions we carried out in previous years. The expected term of our stock-based awards was based on historical award holder exercise patterns and considered the market performance of our common stock and other items. The estimated exercise factor was based on an analysis of historical data; historical exercise patterns; and a comparison of historical and current share prices. The approximate risk free interest rate was based on the implied yield available on U.S. Treasury issues with remaining terms equivalent to our expected term on our stock-based awards. The Company used the average historical volatility of its daily closing price for a period of time equal in length to the expected option term for the option being issued. The period of time over which historical volatility was measured ended on the last day of the quarterly reporting period during which the stock-based award was made. The Company does not anticipate paying dividends on its common stock for the foreseeable future. Earnings Per Share of Common Stock “Earnings Per Share,” Comprehensive Income (Loss) “Reporting Comprehensive Income,” Recent Accounting Pronouncements Effective January 1, 2018, ASC 606, Revenue from Contracts with Customers, changed the recognition of revenue standards for reporting periods beginning after December 31, 2017. (Refer to Note 2) Future Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Disclosure Update and Simplification In July 2016, the SEC released Disclosure Update and Simplification, No. 33-10532 amendments to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, U.S. GAAP, International Financial Reporting Standards (“IFRS”), or changes in the information environment. The Commission also solicited comments on a number of disclosure requirements that overlap with, but require information incremental to, U.S. GAAP to determine whether to retain, modify, eliminate, or refer them to the FASB for potential incorporation into U.S. GAAP. This rule is effective November 5, 2018. As of December 31, 2018, we did not have any material change affecting our financial statements. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment as of December 31, 2018 and 2017 consisted of the following: 2018 2017 Equipment $ 154,300 $ 184,600 Furniture & fixture 1,600 3,600 Leasehold improvements - 167,600 155,900 355,800 Less: accumulated depreciation and amortization 155,500 325,000 $ 400 $ 30,800 Aggregate property and equipment depreciation expense for the years ended December 31, 2018 and 2017 was $29,700 and $51,200 respectively. During 2018 and 2017, we did not capitalize any property and equipment. During 2018, we retired leasehold improvement with costs of $167,600, equipment with costs of $30,200 furniture and fixtures with costs of $2,000. During 2017, we retired equipment with costs of $74,100 and furniture and fixtures with costs of $187,000. The $199,800 and $261,100 total in assets retired in 2018 and 2017, respectively, had total remaining book value of $700 and $61,300. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 4. Accrued Expenses Accrued expenses as of December 31, 2018 and 2017 consisted of the following: 2018 2017 Consulting services $ 10,600 $ 20,500 Board of director fees 85,600 64,000 Rent 8,000 - Royalty fees 5,400 5,400 Other 12,100 16,900 $ 121,700 $ 107,700 |
Deferred Rent
Deferred Rent | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Rent | 5. Deferred Rent Our former corporate headquarters office leases at both 51 E. Campbell Ave in Campbell, California and at 1919 S. Bascom Ave in Campbell, California were terminated on September 30, 2018 and October 31, 2018, respectively. As of December 31, 2018 and 2017 deferred rent was: Component 2018 2017 Lease liability $ — $ 13,800 Deferred rent expense — 27,200 Deferred rent benefit — 33,100 $ — $ 74,100 |
Liability Attributable to Warra
Liability Attributable to Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Liability Attributable to Warrants | 6. Liability Attributable to Warrants During the year ended December 31, 2018, pursuant to a settlement agreement to issue warrants to purchase 564,556 shares of the Company’s Common stock, we derecognized the accrued liability for potential liquidated damages of $855,100 by crediting Additional Paid-In Capital for $699,400 and other income for $155,700. The warrants we issued were at $0.01 per share and will expire in 5 years from the date of issuance. Following the issuance, the Company purchased back 52,755 shares from certain warrant holders. The following tables reconcile the number of warrants outstanding for the periods indicated: For the Year Ended December 31, 2018 Beginning Outstanding Issued Exercised/Sold Cancelled / Forfeited Ending Outstanding 2014 Transaction 376,667 — — (265,556 ) 111,111 Exercise Agreement 300,000 564,556 (52,755 ) (300,000 ) 511,801 Consultant Warrant 11,285 — — (11,285 ) — Offer to Exercise 10,167 (10,167 ) — 698,119 564,556 (52,755 ) (587,008 ) 622,912 For the Year Ended December 31, 2017 Beginning Outstanding Issued Exercised Cancelled / Forfeited Ending Outstanding 2014 Transaction 376,667 — — — 376,667 Exercise Agreement 300,000 — — — 300,000 Consultant Warrant 11,285 — — — 11,285 Offer to Exercise 10,167 — — — 10,167 698,119 — — — 698,119 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Common Stock The Company did not issue any stock or pay any dividends during the years ended December 31, 2018 and 2017. Stock-Based Compensation Plans Active Plans 2012 Equity Incentive Plan In the case of a restricted stock award, the entire number of shares subject to such award would be issued at the time of the grant and subject to vesting provisions based on time or other conditions specified by the Board or an authorized committee of the Board. For awards based on time, should the grantee’s service to the Company end before full vesting occurred, all unvested shares would be forfeited and returned to the Company. In the case of awards granted with vesting provisions based on specific performance conditions, if those conditions were not met, then all shares would be forfeited and returned to the Company. Until forfeited, all shares issued under a restricted stock award would be considered outstanding for dividend, voting and other purposes. Under the 12 Plan, the exercise price of non-qualified stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted. The exercise price of incentive stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted provided, however, that if the recipient of the incentive stock option owns greater than 10% of the voting power of all shares of the Company’s capital stock then the exercise price will be no less than 110% of the fair market value of the Company’s common stock on the date the option is granted. The purchase price of the restricted stock issued under the 12 Plan shall also not be less than 100% of the fair market value of the Company’s common stock on the date the restricted stock is granted. All options granted under the 12 Plan are immediately exercisable by the optionee; however, there is a vesting period for the options. The options (and the shares of common stock issuable upon exercise of such options) vest, ratably, over a 33-month period; however, no options (and the underlying shares of common stock) vest until after three months from the date of the option grant. The exercise price is immediately due upon exercise of the option. The maximum term of options issued under the 12 Plan is ten years. Shares issued upon exercise of options are subject to the Company’s repurchase, which right lapses as the shares vest. The 12 Plan will terminate no later than November 7, 2022. During the years ended December 31, 2018 and 2017, no options or restricted common stock were granted under the 12 Plan. 411,593 shares of common stock remained available for issuance under the 12 Plan. No options previously issued under the 12 Plan were exercised during the years ended December 31, 2018 and December 31, 2017. Inactive Plans The following table summarizes options outstanding as of December 31, 2018 and 2017 that were granted from stock based compensation plans that are inactive. As of December 31, 2018, no options can be granted under these plans as the plans have expired. Options Outstanding Year Beginning of Year Granted Exercised Cancelled End of Year 2008 Stock Option Plan 2018 193,945 — — (79,468 ) 114,477 2005 Equity Incentive Plan 2018 667 — — (667 ) — 194,612 — — (80,135 ) 114,477 Weighted Average Exercise Price 2.59 2.69 2.52 2008 Stock Option Plan 2017 380,611 — — (186,666 ) 193,945 2005 Equity Incentive Plan 2017 7,666 — — (6,999 ) 667 Supplemental Stock Option Agreement 2017 333 — — (333 ) — 388,610 — - (193,998 ) 194,612 Weighted Average Exercise Price 2.59 3.36 2.59 Summary – All Plans A summary of the status of all of the options outstanding under all of the Company’s stock option plans, and non-plan grants to consultants, as of December 31, 2018 and 2017, and changes during the years then ended, is presented in the following table: 2018 2017 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Beginning 315,167 $ 2.46 684,722 $ 2.64 Granted — $ — — $ — Exercised — $ — — $ — Forfeited or expired (197,492 ) $ 2.39 (369,555 ) $ 2.79 Ending 117,675 $ 2.57 315,167 $ 2.46 Exercisable at year-end 117,675 $ 2.57 315,167 $ 2.46 Vested or expected to vest at year-end 117,675 $ 2.57 315,167 $ 2.46 As of December 31, 2018 and 2017, of the options exercisable, 117,675 and 315,167 were vested, respectively. The following table summarizes information about stock options outstanding as of December 31, 2018: Options Outstanding Range of Exercise Price Number Outstanding/Exercisable Weighted Average Remaining Contractual Life (Years) Weighted Average Outstanding/Exercise Price $ 0.75-$1.80 39,132 3.20 $ 0.80 $ 1.83-$2.40 1,667 7.29 $ 2.06 $ 2.55-$3.00 667 5.07 $ 2.55 $ 3.01-$3.30 29,268 4.82 $ 3.03 $ 3.31-$3.45 32,082 4.79 $ 3.45 $ 3.46-$4.20 13,333 4.69 $ 4.20 $ 4.21-$6.88 1,526 2.57 $ 6.71 $ 0.75-$6.88 117,675 4.26 $ 2.57 As of December 31, 2018, there were outstanding options to purchase 117,675 shares of common stock with a weighted average exercise price of $2.57 per share, a weighted average remaining contractual term of 4 years and an aggregate intrinsic value of $0. All of the options outstanding as of December 31, 2018 are fully vested and 0 were estimated to be forfeited or to expire in future periods. As of December 31, 2018, there was no unrecognized compensation cost, net of estimated forfeitures, related to unvested options. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The components of the provision (benefit) for income taxes for the years ended December 31, 2018 and 2017 consisted of the following: 2018 2017 Current Federal $ — $ — State — — Foreign 900 3,300 $ 900 $ 3,300 Deferred Federal $ — $ — State — — Foreign — — — — Total $ 900 $ 3,300 The following table summarizes the differences between income tax expense and the amount computed applying the federal income tax rate of 21% and 34% for the years ended December 31, 2018 and 2017, respectively: 2018 2017 Federal income tax (benefit) at statutory rate $ (6,600 ) $ 205,300 State income tax (benefit) at statutory rate (900 ) 800 Foreign tax rate differential 900 (600 ) IRC 965 Subpart F Income — 21,000 SBC – NQ cancellations (83,900 ) 235,900 Change in valuation allowance (92,800 ) (439,700 ) Meals and entertainment (50%) 700 700 Prior Year True-Up Adjustments 165,300 — Deferred Compensation 17,800 — Other items 400 (20,100 ) Provision (benefit) for income tax $ 900 $ 3,300 Deferred income taxes and benefits result from temporary timing differences in the recognition of certain expense and income items for tax and financial reporting purposes. The following table sets forth those differences as of December 31, 2018 and 2017: 2018 2017 Net operating loss carryforwards $ 13,870,200 $ 13,566,000 Tax credit carryforwards 977,500 1,047,000 Compensation expense – non-qualified stock options 166,800 238,000 Deferred revenue and maintenance service contracts 425,000 691,000 Depreciation, amortization, and capitalized software 11,300 — Reserves and other 52,400 108,000 Total deferred tax assets 15,503,100 15,650,000 Deferred tax liability – depreciation, amortization and capitalized software — (7,000 ) Net deferred tax asset 15,503,100 15,643,000 Valuation allowance (15,503,100 ) (15,643,000 ) Net deferred tax asset $ — $ — For financial reporting purposes, with the exception of the years ended December 31, 2018 and 2017, the Company has incurred a loss in each year since inception. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its net deferred tax assets at December 31, 2018 and 2017. The net change in the valuation allowance was decreased by $139,900 and $9,079,000 for the years ended December 31, 2018 and 2017, respectively. At December 31, 2018, the Company had approximately $63.8 million of federal net operating loss carryforwards and approximately $6.9 million of California state net operating loss carryforwards available to reduce future taxable income. The federal loss carryforwards will begin to expire in 2019 and the California state loss carry forwards began to expire in 2028. During the year ended December 31, 2018, the Company did not utilize any federal and California net operating losses. Under the Tax Reform Act of 1986, the amount of benefits from net operating loss carryforwards may be impaired or limited if the Company incurs a cumulative ownership change of more than 50%, as defined, over a three-year period. At December 31, 2018, the Company had approximately $0.9 million of federal research and development tax credits that will begin to expire in 2018. |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | 9. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and trade receivables. The Company places cash and, when applicable, cash equivalents, with high quality financial institutions and, by policy, limits the amount of credit exposure to any one financial institution. As of December 31, 2018, the Company had approximately $642,500 of cash with financial institutions in excess of FDIC insurance limits. As of December 31, 2017, the Company had approximately $765,400 of cash with financial institutions in excess of FDIC insurance limits. For the years ended December 31, 2018 and 2017, we currently consider the following to be our most significant customers and partners. For the purposes of this table, “Sales” refers to the dollar value of orders received from these customers and partners in the period indicated. These Sales values do not necessarily equal recognized revenue for these periods due to our revenue recognition policies which require deferral of revenue associated with prepaid software service fees. In 2017, deferrals of fees associated with stocking orders of software licenses were also required 2018 2017 Customer % Sales % Accounts Receivable % Sales % Accounts Receivable Centric System 9.5 % 3.2 % 6.9 % 12.6 % Elosoft 10.4 % 32.1 % 16.9 % 56.2 % GE 3.9 % 15.4 % 0.6 % 0.0 % Thermo LabSystems 4.1 % 10.8 % 2.9 % 4.9 % Total 27.9 % 61.5 % 27.3 % 73.7 % The Company performs credit evaluations of customers’ financial condition whenever necessary, and does not require cash collateral or other security to support customer receivables. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Operating Leases As of December 31, 2018, the leases for both of our former offices at 51 E. Campbell, CA and 1919 Bascom Ave. Campbell, CA expired on September 30, 2018, and October 31, 2018, respectively. Our current lease for the corporate headquarters in Concord, NH is a month-to-month rent basis, requiring a six-month notice from the lessor to terminate. Rent on the corporate headquarters continues at $4,000 per month. Rent expense aggregated approximately $28,600 and $67,600 for the years ended December 31, 2018 and 2017, respectively. Contingencies. The Company enters into indemnification provisions under (i) its agreements with other companies in its ordinary course of business, including contractors and customers and (ii) its agreements with investors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. These indemnification provisions often include indemnifications relating to representations made by the Company with regard to intellectual property rights, and often survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2018. The Company’s software license agreements also generally include a performance guarantee that the Company’s software products will operate substantially as described in the applicable program documentation for a period of 90 days after delivery. The Company also generally warrants that services that the Company performs will be provided in a manner consistent with reasonably applicable industry standards. To date, the Company has not incurred any material costs associated with these warranties and has no liabilities recorded for these agreements as of December 31, 2018. |
Employee 401(k) Plan
Employee 401(k) Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee 401(k) Plan | 11. Employee 401(k) Plan In December 1998, the Company adopted a 401(k) Plan (the “Plan”) to provide retirement benefits for employees. As allowed under Section 401(k) of the Internal Revenue Code, the Plan provides tax-deferred salary deductions for eligible employees. Employees may contribute up to 15% of their annual compensation to the Plan, limited to a maximum annual amount as set periodically by the Internal Revenue Service. In addition, the Company may make discretionary/matching contributions. During 2018 and 2017, the Company contributed a total of approximately $17,400 and $0, to the Plan, respectively. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | 12. Supplemental Disclosure of Cash Flow Information During the twelve-month period ended December 31, 2018, we reversed an accrual for potential liquidated damages of $855,100, crediting APIC for $699,400 and other income for $155,700 pursuant to an agreement to issue warrants to purchase 564,556 shares of the Company’s Common stock as disclosed in the Current Report on Form 8-K, which was filed with the SEC on May 30, 2018. We disbursed $0 and $200 for the payment of interest expense during the year ended December 31, 2018 and 2017, respectively. We disbursed $800 and $3,500 for the payment of income taxes during the year ended December 31, 2018 and 2017, respectively. Such disbursement was made for the payment of foreign income taxes related to the operation of our Israeli subsidiary, GraphOn Research Labs, Ltd. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information The Company’s operates under one segment. A single management team that reports to the CEO comprehensively manages the business as the chief operating decision maker. Accordingly, the Company does not have separately reportable segments. Revenue by country for the years ended December 31, 2018 and 2017 was as follows: Years Ended December 31, Revenue by Country 2018 2017 United States $ 1,188,500 $ 1,239,300 Brazil 652,700 758,000 Japan 236,600 286,300 Germany 177,100 234,700 The Netherlands 144,800 230,700 Other Countries 726,100 1,140,500 Total $ 3,153,400 $ 3,889,500 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions On December 28, 2018, the Company entered into an agreement with an unaffiliated stockholder of the Company to acquire 450,000 shares of the Company’s common stock and warrants to purchase an aggregate of 48,896 shares of the Company’s common stock for an aggregate cash consideration of $149,700. The Company agreed to assign its right to purchase 450,000 shares of common stock under the purchase agreement to a member of the Company’s board of directors and an entity controlled by a member of the Company’s board of directors and an executive officer at the company. A member of our board of directors controls an entity that is a significant shareholder in the Company and also serves as the Chief Executive Officer and Interim Chief Financial Officer of the Company. The related party has served in these executive roles providing management services to the Company since September 4, 2018, however does not receive salary or other forms of cash compensation. Management has estimated $75,000 as the market rate for the services rendered for the period from September 4, 2018 through December 31, 2018. The services have been recorded in the financial statements as a capital contribution. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates Certain prior year information has been reclassified to conform to current year presentation. |
Liquidity | Liquidity |
Revenue Recognition | Revenue Recognition The Company markets and licenses products indirectly through channel distributors, independent software vendors (“ISVs”), value-added resellers (“VARs”) (collectively “resellers”) and directly to corporate enterprises, governmental and educational institutions and others. Its product licenses are perpetual. The Company also separately sells intellectual property licenses, maintenance contracts (which are comprised of license updates and customer service access), and other products and services. There are no rights of return granted to purchasers of the Company’s software products. For the year ended December 31, 2017, software license revenues were recognized when: ● Persuasive evidence of an arrangement exists (i.e., when the Company signs a non-cancelable license agreement wherein the customer acknowledges an unconditional obligation to pay, or upon receipt of the customer’s purchase order), and ● Delivery has occurred or services have been rendered and there are no uncertainties surrounding product acceptance (i.e., when title and risk of loss have been transferred to the customer, which generally occurs when the media containing the licensed program(s) is provided to a common carrier or, in the case of electronic delivery, when the customer is given access to the licensed programs), and ● The price to the customer is fixed or determinable, as typically evidenced in a signed non-cancelable contract, or a customer’s purchase order, and ● Collectability is probable. If collectability is not considered probable, revenue is recognized when the fee is collected. In 2017, revenue recognized on software arrangements involving multiple deliverables is allocated to each deliverable based on vendor-specific objective evidence (“VSOE”) or third party evidence of the fair values of each deliverable; such deliverables include licenses for software products, maintenance, private labeling fees, or customer training. The Company limits its assessment of VSOE for each deliverable to either the price charged when the same deliverable is sold separately or the price established by management having the relevant authority to do so, for a deliverable not yet sold separately. If sufficient VSOE of fair value does not existed, so as permitted the allocation of revenue to the various elements of the arrangement, all revenue from the arrangement was deferred until such evidence existed or until all elements were delivered. If VSOE of the fair value did not exist and the only undelivered element was maintenance, then revenue was recognized on a ratably. If VSOE of the fair value of all undelivered elements exists but evidence did not exist for one or more delivered elements, then revenue was recognized using the residual method. Under the residual method, the fair value of the undelivered elements was deferred and the remaining portion of the arrangement fee was recognized as revenue. Certain resellers (“stocking resellers”) purchased product licenses that they held in inventory until they were resold to the ultimate end-user (an “inventory stocking order”). At the time that a stocking reseller placed an inventory stocking order, no product licenses were shipped by the Company to the stocking reseller rather, the stocking reseller’s inventory was credited with the number of licenses purchased and the stocking reseller can resell (issue) any number of licenses from their inventory at any time. Upon receipt of an order to issue one or more licenses from a stocking reseller’s inventory (a “draw down order”), the Company would ship the licenses(s) in accordance with the draw down order’s instructions. In 2017, maintenance revenue was recognized from service contracts ratably over the related contract period, which generally ranges from one to five years. Effective January 1, 2018, ASC 606, Revenue from Contracts with Customers, changed the recognition of revenue standards for reporting periods beginning after December 31, 2017. For the year ended December 31, 2018, revenue recognition was determined by ● identifying the contract, or contracts, with a customer; ● identifying the performance obligations in each contract; ● determine the transaction price; ● allocating the transaction price to the performance obligations in each contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services When control of the promised products and services are transferred to our customers, we recognize revenue in the amount that reflects the consideration we expect to receive in exchange for these products and services. Product Sales All of our licenses are delivered to the customer electronically. The Company sends the license key to the customer to download the related software from Company portal. We recognize revenue upon delivery of these licenses. For stocking resellers who purchase licenses through inventory stocking orders with the intent to resell to an end-user, revenue is recognized when the resellers’ accounts have been credited, at their discretion, for the number of licenses purchased. Service Revenue Similar to 2017, 2018 maintenance revenue was also recognized from service contracts ratably over the related contract period. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (ASC 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (ASC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (ASC 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of ASC 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (ASC 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company elected to adopt ASC 606 under the Modified Retrospective approach. Under the Modified Retrospective approach, only contracts with customers for which there were remaining unsatisfied performance obligations (open contracts) at the beginning of initial year of adoption must be restated to apply retrospectively the guidance under ASC 606. Any resulting impact for such contracts prior to the beginning of the initial year of adoption are made as an adjustment to opening accumulated deficit for such year. On January 1, 2018, the Company adopted ASC 606 using the Modified Retrospective method. This method required retrospective application of the new accounting standard to those contracts which were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The change to the current revenue policy is the timing of revenue recognition for software licenses purchased by stocking resellers. Under the guidance ASC 605, the Company recognized revenue upon the delivery of licenses to end users when they were purchased from the stocking reseller. Under the guidance ASC 606, license revenue is recognized upon crediting of the licenses to the stocking resellers account for draw down at their discretion after placement of the stocking order by the stocking reseller. During the year ended December 31, 2018, this change in revenue policy resulted in lower license revenue of $231,300 when compared to 2017. This lower license revenue had the same impact on gross profit, income (loss) from operations and net income (loss). The Company recorded $1,391,900 to opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to reversal of deferred license revenue associated with stocking orders placed in prior periods which had not been sold through to end users as of December 31, 2017. The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets, deferred revenue and accumulated deficit for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows: Balance Sheet Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Current Assets Deferred COGS $ — $ 20,000 $ 20,000 Liabilities and Stockholders’ Equity Accumulated Deficit, net of tax $ (81,849,200 ) $ 1,391,900 $ (80,457,300 ) Current Liabilities Deferred Revenue $ 1,845,100 $ (609,700 ) $ 1,235,400 Long Term Liabilities Deferred Revenue $ 1,409,700 $ (802,200 ) $ 607,500 All of the Company’s software licenses are denominated in U.S. dollars. As a result of the adoption of ASU NO. 2014-09, our 2018 revenues were subject to greater variability. |
Cash and Cash equivalents | Cash and Cash equivalents. |
Property and Equipment | Property and Equipment |
Shipping and Handling | Shipping and Handling |
Software Development Costs | Software Development Costs “Costs of Software to be Sold, Leased or Marketed,” |
Deferred Rent | Deferred Rent |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Allowance for doubtful accounts years ended December 31, 2018 and 2017, amounted to $3,600 and $7,800, respectively. |
Income Taxes | Income Taxes “Income Taxes,” The Company and one or more of its subsidiaries are subject to United States federal income taxes, as well as income taxes of multiple state and foreign jurisdictions. The Company and its subsidiaries are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2012. There are no tax examinations currently underway for any of the Company’s or its subsidiaries’ tax returns for years subsequent to 2011. The Company’s policy for deducting interest and penalties is to treat interest as interest expense and penalties as taxes. The Company had not accrued any amount for the payment of interest or penalties related to any uncertain tax positions at either December 31, 2018 or 2017, as its review of such positions indicated that such potential positions were minimal. Under FASB ASC 740-10-05, “Income Taxes,” The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. Among these new taxes on certain foreign sourced earnings, the Act created a new category of income inclusion: the global intangible low-taxed income (“GILTI”). The objective of GILTI is to deter U.S. corporations from transferring intangible property to non-U.S. low-tax jurisdictions by subjecting the non-U.S. income to current U.S. taxation. The Act also adds a provision for a deduction to offset the GILTI inclusion for C corporations only, which is 50 percent (37.5 percent after 2025) of the GILTI inclusion. The GILTI deduction is subject to limitation based mainly on the taxpayer’s taxable income. In addition to GILTI, the Act also introduced the foreign-derived intangible income (“FDII”) category. FDII is eligible income derived in connection with property sold or services provided by the U.S. taxpayer to a non-U.S. person. The taxpayer must establish that the property is foreign use property, and, in the case of services, the taxpayer must provide that the services are rendered to a non-U.S. person who is located outside of the United States. C corporations receive a deduction equal to 37.5 percent (21.875 percent after 2025) of foreign-derived intangible income (FDII). Similar to the GILTI deduction, the FDII deduction is subject to limitation. The Act significantly changes how the U.S. taxes corporations. The Act requires complex computations to be performed that were not previously required by U.S. tax law, significant judgments to be made in interpretation of the provisions of the Act, estimates in calculations, and preparation and analysis of information not previously relevant or regularly produced. As of December 31, 2018, the Company’s impact from the Act was immaterial. As the Company completes its analysis of the Act, collects and prepares necessary data, and interprets any additional guidance set forth by the U.S. Treasury Department, the IRS, and other standard-setting bodies, the Company may alter its assessment if it determines that the Act has a material impact on the provision for income taxes. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s warrants are determined in accordance with FASB ASC 820, “Fair Value Measurement,” ● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. As of December 31, 2018 and 2017, the Company did not have any Warrants Liability reported. |
Long-Lived Assets | Long-Lived Assets |
Loss Contingencies | Loss Contingencies |
Stock-Based Compensation | Stock-Based Compensation Compensation – Stock Compensation. Valuation and Expense Information Under FASB ASC 718-10 The Company recorded stock-based compensation expense of $0 and $13,400 in the years ended December 31, 2018 and 2017, respectively. As required by FASB ASC 718-10, the Company estimates forfeitures of employee stock-based awards and recognizes compensation cost only for those awards expected to vest. Forfeiture rates are estimated based on an analysis of historical experience and are adjusted to actual forfeiture experience as needed. For stock options granted, the Company set the exercise price equal to the closing fair market value of the Company’s common stock as of the grant date. No options were issued during the years ended December 31, 2018 and 2017. The following table illustrates the non-cash stock-based compensation expense recorded during the years ended December 31, 2018 and 2017 by income statement classification: 2018 2017 Cost of revenue $ - $ 100 Selling and marketing expense - 200 General and administrative expense - 13,000 Research and development expense - 100 $ - $ 13,400 Estimated compensation expense is based on the estimated fair value of each option granted on the date of grant using a binomial model, using the estimated annualized forfeiture rate based on an analysis of historical data and considered the impact of events such as work force reductions we carried out in previous years. The expected term of our stock-based awards was based on historical award holder exercise patterns and considered the market performance of our common stock and other items. The estimated exercise factor was based on an analysis of historical data; historical exercise patterns; and a comparison of historical and current share prices. The approximate risk free interest rate was based on the implied yield available on U.S. Treasury issues with remaining terms equivalent to our expected term on our stock-based awards. The Company used the average historical volatility of its daily closing price for a period of time equal in length to the expected option term for the option being issued. The period of time over which historical volatility was measured ended on the last day of the quarterly reporting period during which the stock-based award was made. The Company does not anticipate paying dividends on its common stock for the foreseeable future. |
Earnings Per Share of Common Stock | Earnings Per Share of Common Stock “Earnings Per Share,” |
Comprehensive Income (Loss) | Comprehensive Income (Loss) “Reporting Comprehensive Income,” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2018, ASC 606, Revenue from Contracts with Customers, changed the recognition of revenue standards for reporting periods beginning after December 31, 2017. (Refer to Note 2) Future Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Disclosure Update and Simplification In July 2016, the SEC released Disclosure Update and Simplification, No. 33-10532 amendments to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, U.S. GAAP, International Financial Reporting Standards (“IFRS”), or changes in the information environment. The Commission also solicited comments on a number of disclosure requirements that overlap with, but require information incremental to, U.S. GAAP to determine whether to retain, modify, eliminate, or refer them to the FASB for potential incorporation into U.S. GAAP. This rule is effective November 5, 2018. As of December 31, 2018, we did not have any material change affecting our financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Deferred Revenue and Accumulated Deficit | The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets, deferred revenue and accumulated deficit for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows: Balance Sheet Balance at December 31, 2017 Adjustments due to ASC 606 Balance at January 1, 2018 Current Assets Deferred COGS $ — $ 20,000 $ 20,000 Liabilities and Stockholders’ Equity Accumulated Deficit, net of tax $ (81,849,200 ) $ 1,391,900 $ (80,457,300 ) Current Liabilities Deferred Revenue $ 1,845,100 $ (609,700 ) $ 1,235,400 Long Term Liabilities Deferred Revenue $ 1,409,700 $ (802,200 ) $ 607,500 |
Schedule of Non-cash Stock-based Compensation Expense | The following table illustrates the non-cash stock-based compensation expense recorded during the years ended December 31, 2018 and 2017 by income statement classification: 2018 2017 Cost of revenue $ - $ 100 Selling and marketing expense - 200 General and administrative expense - 13,000 Research and development expense - 100 $ - $ 13,400 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment as of December 31, 2018 and 2017 consisted of the following: 2018 2017 Equipment $ 154,300 $ 184,600 Furniture & fixture 1,600 3,600 Leasehold improvements - 167,600 155,900 355,800 Less: accumulated depreciation and amortization 155,500 325,000 $ 400 $ 30,800 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses as of December 31, 2018 and 2017 consisted of the following: 2018 2017 Consulting services $ 10,600 $ 20,500 Board of director fees 85,600 64,000 Rent 8,000 - Royalty fees 5,400 5,400 Other 12,100 16,900 $ 121,700 $ 107,700 |
Deferred Rent (Tables)
Deferred Rent (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Summary of Deferred Rent | As of December 31, 2018 and 2017 deferred rent was: Component 2018 2017 Lease liability $ — $ 13,800 Deferred rent expense — 27,200 Deferred rent benefit — 33,100 $ — $ 74,100 |
Liability Attributable to War_2
Liability Attributable to Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following tables reconcile the number of warrants outstanding for the periods indicated: For the Year Ended December 31, 2018 Beginning Outstanding Issued Exercised/Sold Cancelled / Forfeited Ending Outstanding 2014 Transaction 376,667 — — (265,556 ) 111,111 Exercise Agreement 300,000 564,556 (52,755 ) (300,000 ) 511,801 Consultant Warrant 11,285 — — (11,285 ) — Offer to Exercise 10,167 (10,167 ) — 698,119 564,556 (52,755 ) (587,008 ) 622,912 For the Year Ended December 31, 2017 Beginning Outstanding Issued Exercised Cancelled / Forfeited Ending Outstanding 2014 Transaction 376,667 — — — 376,667 Exercise Agreement 300,000 — — — 300,000 Consultant Warrant 11,285 — — — 11,285 Offer to Exercise 10,167 — — — 10,167 698,119 — — — 698,119 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Share-based Compensation, Activity | As of December 31, 2018, no options can be granted under these plans as the plans have expired. Options Outstanding Year Beginning of Year Granted Exercised Cancelled End of Year 2008 Stock Option Plan 2018 193,945 — — (79,468 ) 114,477 2005 Equity Incentive Plan 2018 667 — — (667 ) — 194,612 — — (80,135 ) 114,477 Weighted Average Exercise Price 2.59 2.69 2.52 2008 Stock Option Plan 2017 380,611 — — (186,666 ) 193,945 2005 Equity Incentive Plan 2017 7,666 — — (6,999 ) 667 Supplemental Stock Option Agreement 2017 333 — — (333 ) — 388,610 — - (193,998 ) 194,612 Weighted Average Exercise Price 2.59 3.36 2.59 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the status of all of the options outstanding under all of the Company’s stock option plans, and non-plan grants to consultants, as of December 31, 2018 and 2017, and changes during the years then ended, is presented in the following table: 2018 2017 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Beginning 315,167 $ 2.46 684,722 $ 2.64 Granted — $ — — $ — Exercised — $ — — $ — Forfeited or expired (197,492 ) $ 2.39 (369,555 ) $ 2.79 Ending 117,675 $ 2.57 315,167 $ 2.46 Exercisable at year-end 117,675 $ 2.57 315,167 $ 2.46 Vested or expected to vest at year-end 117,675 $ 2.57 315,167 $ 2.46 |
Schedule of Share-based Compensation, Shares Authorized Under Stock Option Plans, by Exercise Price Range | The following table summarizes information about stock options outstanding as of December 31, 2018: Options Outstanding Range of Exercise Price Number Outstanding/Exercisable Weighted Average Remaining Contractual Life (Years) Weighted Average Outstanding/Exercise Price $ 0.75-$1.80 39,132 3.20 $ 0.80 $ 1.83-$2.40 1,667 7.29 $ 2.06 $ 2.55-$3.00 667 5.07 $ 2.55 $ 3.01-$3.30 29,268 4.82 $ 3.03 $ 3.31-$3.45 32,082 4.79 $ 3.45 $ 3.46-$4.20 13,333 4.69 $ 4.20 $ 4.21-$6.88 1,526 2.57 $ 6.71 $ 0.75-$6.88 117,675 4.26 $ 2.57 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision (benefit) for income taxes for the years ended December 31, 2018 and 2017 consisted of the following: 2018 2017 Current Federal $ — $ — State — — Foreign 900 3,300 $ 900 $ 3,300 Deferred Federal $ — $ — State — — Foreign — — — — Total $ 900 $ 3,300 |
Schedule of Effective Income Tax Rate Reconciliation | The following table summarizes the differences between income tax expense and the amount computed applying the federal income tax rate of 21% and 34% for the years ended December 31, 2018 and 2017, respectively: 2018 2017 Federal income tax (benefit) at statutory rate $ (6,600 ) $ 205,300 State income tax (benefit) at statutory rate (900 ) 800 Foreign tax rate differential 900 (600 ) IRC 965 Subpart F Income — 21,000 SBC – NQ cancellations (83,900 ) 235,900 Change in valuation allowance (92,800 ) (439,700 ) Meals and entertainment (50%) 700 700 Prior Year True-Up Adjustments 165,300 — Deferred Compensation 17,800 — Other items 400 (20,100 ) Provision (benefit) for income tax $ 900 $ 3,300 |
Schedule of Deferred Tax Assets and Liabilities | Deferred income taxes and benefits result from temporary timing differences in the recognition of certain expense and income items for tax and financial reporting purposes. The following table sets forth those differences as of December 31, 2018 and 2017: 2018 2017 Net operating loss carryforwards $ 13,870,200 $ 13,566,000 Tax credit carryforwards 977,500 1,047,000 Compensation expense – non-qualified stock options 166,800 238,000 Deferred revenue and maintenance service contracts 425,000 691,000 Depreciation, amortization, and capitalized software 11,300 — Reserves and other 52,400 108,000 Total deferred tax assets 15,503,100 15,650,000 Deferred tax liability – depreciation, amortization and capitalized software — (7,000 ) Net deferred tax asset 15,503,100 15,643,000 Valuation allowance (15,503,100 ) (15,643,000 ) Net deferred tax asset $ — $ — |
Concentration of Credit Risk (T
Concentration of Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | 2018 2017 Customer % Sales % Accounts Receivable % Sales % Accounts Receivable Centric System 9.5 % 3.2 % 6.9 % 12.6 % Elosoft 10.4 % 32.1 % 16.9 % 56.2 % GE 3.9 % 15.4 % 0.6 % 0.0 % Thermo LabSystems 4.1 % 10.8 % 2.9 % 4.9 % Total 27.9 % 61.5 % 27.3 % 73.7 % |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Country | Revenue by country for the years ended December 31, 2018 and 2017 was as follows: Years Ended December 31, Revenue by Country 2018 2017 United States $ 1,188,500 $ 1,239,300 Brazil 652,700 758,000 Japan 236,600 286,300 Germany 177,100 234,700 The Netherlands 144,800 230,700 Other Countries 726,100 1,140,500 Total $ 3,153,400 $ 3,889,500 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Accumulated deficit | $ (80,488,700) | $ (81,849,200) | |
Working capital deficit | 716,200 | ||
Deferred revenue | 1,300,300 | 1,845,100 | |
License revenue | 3,153,400 | 3,889,500 | |
Deferred rent | 74,100 | ||
Allowance for doubtful accounts | $ 3,600 | $ 7,800 | |
Income tax description | The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. Among these new taxes on certain foreign sourced earnings | ||
Income tax percentage | 21.00% | 21.00% | 34.00% |
Share-based compensation expense | $ 13,400 | ||
Shares of common stock equivalents were excluded from the computation of diluted earnings per share since its effect would be antidilutive | 353,231 | 1,013,286 | |
Common shares equivalents in the computation of dilutive earnings per share | |||
Minimum [Member] | |||
Property, plant and equipment, useful life | 3 years | ||
Minimum [Member] | Leasehold Improvements [Member] | |||
Property, plant and equipment, useful life | 3 years | ||
Maximum [Member] | |||
Property, plant and equipment, useful life | 7 years | ||
Maximum [Member] | Leasehold Improvements [Member] | |||
Property, plant and equipment, useful life | 7 years | ||
Global Intangible Low-taxed Income [Member] | |||
Income tax description | The Act also adds a provision for a deduction to offset the GILTI inclusion for C corporations only, which is 50 percent (37.5 percent after 2025) of the GILTI inclusion. | ||
Foreign-derived Intangible Income [Member] | |||
Income tax description | C corporations receive a deduction equal to 37.5 percent (21.875 percent after 2025) of foreign-derived intangible income (FDII). Similar to the GILTI deduction, the FDII deduction is subject to limitation. | ||
January 1, 2018 [Member] | |||
Accumulated deficit | $ (80,457,300) | $ 1,391,900 | |
Deferred revenue | 1,235,400 | ||
License Revenue [Member] | |||
License revenue | $ 231,300 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Deferred Revenue and Accumulated Deficit (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: Deferred COGS | ||
Liabilities and Stockholders' Equity: Accumulated Deficit, net of tax | $ (80,488,700) | (81,849,200) |
Current Liabilities: Deferred Revenue | 1,300,300 | 1,845,100 |
Long Term Liabilities: Deferred Revenue | 491,500 | 1,409,700 |
Adjustments due to ASC 606 [Member] | ||
Current Assets: Deferred COGS | 20,000 | |
Liabilities and Stockholders' Equity: Accumulated Deficit, net of tax | 1,391,900 | |
Current Liabilities: Deferred Revenue | (609,700) | |
Long Term Liabilities: Deferred Revenue | (802,200) | |
January 1, 2018 [Member] | ||
Current Assets: Deferred COGS | 20,000 | |
Liabilities and Stockholders' Equity: Accumulated Deficit, net of tax | (80,457,300) | $ 1,391,900 |
Current Liabilities: Deferred Revenue | 1,235,400 | |
Long Term Liabilities: Deferred Revenue | $ 607,500 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Non-cash Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 13,400 | |
Cost of Revenue [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 100 | |
Selling and Marketing Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 200 | |
General and Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 13,000 | |
Research and Development Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 100 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation | $ 29,700 | $ 51,200 |
Disposed of equipment | 199,800 | 261,100 |
Net book value | 700 | 61,300 |
Leasehold Improvement [Member] | ||
Disposed of equipment | 167,600 | |
Equipment [Member] | ||
Disposed of equipment | 30,200 | 74,100 |
Furniture and Fixtures [Member] | ||
Disposed of equipment | $ 2,000 | $ 187,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment gross | $ 155,900 | $ 355,800 |
Less: accumulated depreciation and amortization | 155,500 | 325,000 |
Property and equipment net | 400 | 30,800 |
Equipment [Member] | ||
Property and equipment gross | 154,300 | 184,600 |
Furniture and Fixtures [Member] | ||
Property and equipment gross | 1,600 | 3,600 |
Leasehold Improvements [Member] | ||
Property and equipment gross | $ 167,600 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Consulting services | $ 10,600 | $ 20,500 |
Board of director fees | 85,600 | 64,000 |
Rent | 8,000 | |
Royalty fees | 5,400 | 5,400 |
Other | 12,100 | 16,900 |
Accrued expenses | $ 121,600 | $ 107,700 |
Deferred Rent - Summary of Defe
Deferred Rent - Summary of Deferred Rent (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current liabilities | $ 74,100 | |
Lease liability [Member] | ||
Current liabilities | 13,800 | |
Deferred Rent Expense [Member] | ||
Current liabilities | 27,200 | |
Deferred Rent Benefit [Member] | ||
Current liabilities | $ 33,100 |
Liability Attributable to War_3
Liability Attributable to Warrants (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Other Liabilities Disclosure [Abstract] | |
Class of warrant or right, number of securities called by warrants or rights | shares | 564,556 |
Accural for potential liquidated damages | $ 855,100 |
Adjustment of additional paid in capital to settlement of liquidated damage | 699,400 |
Adjustment of other income in capital to settlement of liquidated damage | $ 155,700 |
Warrants expiration term | 5 years |
Class of warrant or right, exercise price of warrants or rights | $ / shares | $ 0.01 |
Repurchase of shares | shares | 52,755 |
Liability Attributable to War_4
Liability Attributable to Warrants - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning outstanding | 698,119 | 698,119 |
Issued | 564,556 | |
Exercised/Sold | (52,755) | |
Cancelled / forfeited | (587,008) | |
Ending outstanding | 622,912 | 698,119 |
2014 Transaction [Member] | ||
Beginning outstanding | 376,667 | 376,667 |
Issued | ||
Exercised/Sold | ||
Cancelled / forfeited | (265,556) | |
Ending outstanding | 111,111 | 376,667 |
Exercise Agreement [Member] | ||
Beginning outstanding | 300,000 | 300,000 |
Issued | 564,556 | |
Exercised/Sold | (52,755) | |
Cancelled / forfeited | (300,000) | |
Ending outstanding | 511,801 | 300,000 |
Consultant Warrant [Member] | ||
Beginning outstanding | 11,285 | 11,285 |
Issued | ||
Exercised/Sold | ||
Cancelled / forfeited | (11,285) | |
Ending outstanding | 11,285 | |
Offer to Exercise [Member] | ||
Beginning outstanding | 10,167 | 10,167 |
Issued | ||
Exercised/Sold | ||
Cancelled / forfeited | (10,167) | |
Ending outstanding | 10,167 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, options granted | ||
Share based compensation arrangement by share based payment award options vested outstanding number | 117,675 | 315,167 |
Share-based compensation, shares authorized under stock option plans, exercise price range, number of outstanding options | 117,675 | |
Share-based compensation, shares authorized under stock option plans, exercise price range, exercisable options, weighted average exercise price (in dollars per share) | $ 2.57 | |
Share-based compensation, shares authorized under stock option plans, exercise price range, outstanding options, weighted average remaining contractual term | 4 years | |
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value (in dollars) | $ 0 | |
Share based compensation arrangement by share based payment award options expected to be forfeited | 0 | |
2012 Equity Incentive Plan [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 643,797 | |
Share-based compensation arrangement by share-based payment award, options granted | ||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 411,593 | |
Restricted Stock [Member] | 2012 Equity Incentive Plan [Member] | Minimum [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 100.00% | |
Non Qualified Stock Options [Member] | 2012 Equity Incentive Plan [Member] | Minimum [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 10.00% | |
Incentive Stock Options [Member] | 2012 Equity Incentive Plan [Member] | Minimum [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 100.00% | |
Incentive Stock Options [Member] | 2012 Equity Incentive Plan [Member] | Minimum [Member] | If Recipient Owns Greater Than Ten Percent Voting Power [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 110.00% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share-based Compensation, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Note 9 - Stockholders' Equity (Details) - Summary of Inactive Plans [Line Items] | ||
Options Outstanding, Beginning Balance | 194,612 | 388,610 |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Cancelled | (80,135) | (193,998) |
Options Outstanding, Ending Balance | 114,477 | 194,612 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 2.59 | $ 2.59 |
Weighted Average Exercise Price, Cancelled | 2.69 | 3.36 |
Weighted Average Exercise Price, Outstanding Ending Balance | $ 2.52 | $ 2.59 |
2008 Stock Option Plan [Member] | ||
Note 9 - Stockholders' Equity (Details) - Summary of Inactive Plans [Line Items] | ||
Options Outstanding, Beginning Balance | 193,945 | 380,611 |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Cancelled | (79,468) | (186,666) |
Options Outstanding, Ending Balance | 114,477 | 193,945 |
2005 Stock Option Plan [Member] | ||
Note 9 - Stockholders' Equity (Details) - Summary of Inactive Plans [Line Items] | ||
Options Outstanding, Beginning Balance | 667 | 7,666 |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Cancelled | (667) | (6,999) |
Options Outstanding, Ending Balance | 667 | |
Supplemental Stock Option Agreement [Member] | ||
Note 9 - Stockholders' Equity (Details) - Summary of Inactive Plans [Line Items] | ||
Options Outstanding, Beginning Balance | 333 | |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Cancelled | (333) | |
Options Outstanding, Ending Balance |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options Outstanding, Beginning Balance | 194,612 | 388,610 |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Ending Balance | 114,477 | 194,612 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 2.59 | $ 2.59 |
Weighted Average Exercise Price, Outstanding Ending Balance | $ 2.52 | $ 2.59 |
Stock Option Plans [Member] | ||
Options Outstanding, Beginning Balance | 315,167 | 684,722 |
Options Outstanding, Granted | ||
Options Outstanding, Exercised | ||
Options Outstanding, Forfeited or expired | (197,492) | (369,555) |
Options Outstanding, Ending Balance | 117,675 | 315,167 |
Options Outstanding, Exercisable at year-end | 117,675 | 315,167 |
Options Outstanding, Vested or expected to vest at year-end | 117,675 | 315,167 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 2.46 | $ 2.64 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited or expired | 2.39 | 2.79 |
Weighted Average Exercise Price, Outstanding Ending Balance | 2.57 | 2.46 |
Weighted Average Exercise Price, Exercisable at year-end | 2.57 | 2.46 |
Weighted Average Exercise Price, Vested or expected to vest at year-end | $ 2.57 | $ 2.46 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Number Outstanding/Exercisable | shares | 117,675 |
Exercise Price Range 1 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | $ 0.75 |
Exercise Price Range, Upper Range Limit | $ 1.80 |
Options Outstanding, Number Outstanding/Exercisable | shares | 39,132 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 3 years 2 months 12 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 0.80 |
Exercise Price Range 2 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 1.83 |
Exercise Price Range, Upper Range Limit | $ 2.40 |
Options Outstanding, Number Outstanding/Exercisable | shares | 1,667 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 7 years 3 months 15 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 2.06 |
Exercise Price Range 3 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 2.55 |
Exercise Price Range, Upper Range Limit | $ 3 |
Options Outstanding, Number Outstanding/Exercisable | shares | 667 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 5 years 26 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 2.55 |
Exercise Price Range 4 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 3.01 |
Exercise Price Range, Upper Range Limit | $ 3.30 |
Options Outstanding, Number Outstanding/Exercisable | shares | 29,268 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 25 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 3.03 |
Exercise Price Range 5 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 3.31 |
Exercise Price Range, Upper Range Limit | $ 3.45 |
Options Outstanding, Number Outstanding/Exercisable | shares | 32,082 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 4 years 9 months 14 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 3.45 |
Exercise Price Range 6 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 3.46 |
Exercise Price Range, Upper Range Limit | $ 4.20 |
Options Outstanding, Number Outstanding/Exercisable | shares | 13,333 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 4 years 8 months 9 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 4.20 |
Exercise Price Range 7 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 4.21 |
Exercise Price Range, Upper Range Limit | $ 6.88 |
Options Outstanding, Number Outstanding/Exercisable | shares | 1,526 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 2 years 6 months 25 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 6.71 |
Exercise Price Range 8 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 0.75 |
Exercise Price Range, Upper Range Limit | $ 6.88 |
Options Outstanding, Number Outstanding/Exercisable | shares | 117,675 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 4 years 3 months 4 days |
Options Outstanding, Weighted Average Outstanding/Exercise Price | $ 2.57 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Note 10 - Income Taxes (Details) [Line Items] | |||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21.00% | 21.00% | 34.00% |
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 139,900 | $ 9,079,000 | |
Net operating losses | $ (160,300) | $ 407,400 | |
Percentage of cumulative ownership | 50.00% | ||
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | |||
Note 10 - Income Taxes (Details) [Line Items] | |||
Operating loss carryforwards | $ 63,700,000 | ||
Operating loss expiration date | expire in 2019 | ||
Internal Revenue Service (IRS) [Member] | Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | |||
Note 10 - Income Taxes (Details) [Line Items] | |||
Tax credit carryforward, amount | $ 900,000 | ||
California Franchise Tax Board [Member] | State and Local Jurisdiction [Member] | |||
Note 10 - Income Taxes (Details) [Line Items] | |||
Operating loss carryforwards | $ 6,900,000 | ||
Operating loss expiration date | expire in 2018 | ||
Federal [Member] | |||
Note 10 - Income Taxes (Details) [Line Items] | |||
Net operating losses |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
State | ||
Foreign | 900 | 3,300 |
Current income tax expense | 900 | 3,300 |
Federal | ||
State | ||
Foreign | ||
Deferred income tax expense | ||
Total | $ 900 | $ 3,300 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax (benefit) at statutory rate | $ (6,600) | $ 205,300 |
State income tax (benefit) at statutory rate | (900) | 800 |
Foreign tax rate differential | 900 | (600) |
IRC 965 Subpart F Income | 21,000 | |
SBC - NQ cancellations | (83,900) | 235,900 |
Change in valuation allowance | (92,800) | (439,700) |
Meals and entertainment (50%) | 700 | 700 |
Prior Year True-Up Adjustments | 165,300 | |
Deferred Compensation | 17,800 | |
Other items | 400 | (20,100) |
Provision (benefit) for income tax | $ 900 | $ 3,300 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 13,870,200 | $ 13,566,000 |
Tax credit carryforwards | 977,500 | 1,047,000 |
Compensation expense - non-qualified stock options | 166,800 | 238,000 |
Deferred revenue and maintenance service contracts | 425,000 | 691,000 |
Depreciation, amortization, and capitalized software | 11,300 | |
Reserves and other | 52,400 | 108,000 |
Total deferred tax assets | 15,503,100 | 15,650,000 |
Deferred tax liability - depreciation, amortization and capitalized software | (7,000) | |
Net deferred tax asset | 15,503,100 | 15,643,000 |
Valuation allowance | (15,503,100) | (15,643,000) |
Net deferred tax asset |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Risks and Uncertainties [Abstract] | ||
Cash, FDIC insured amount | $ 642,500 | $ 765,400 |
Concentration of Credit Risk -
Concentration of Credit Risk - Schedules of Concentration of Risk, by Risk Factor (Details) - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 27.90% | 27.30% |
Sales Revenue, Net [Member] | Centric Systems [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 9.50% | 6.90% |
Sales Revenue, Net [Member] | Elosoft [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 10.40% | 16.90% |
Sales Revenue, Net [Member] | GE [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 3.90% | 0.60% |
Sales Revenue, Net [Member] | Thermo Lab Systems [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 4.10% | 2.90% |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 61.50% | 73.70% |
Accounts Receivable [Member] | Centric Systems [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 3.20% | 12.60% |
Accounts Receivable [Member] | Elosoft [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 32.10% | 56.20% |
Accounts Receivable [Member] | GE [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 15.40% | 0.00% |
Accounts Receivable [Member] | Thermo Lab Systems [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 10.80% | 4.90% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease description | As of December 31, 2018, the leases for both of our former offices at 51 E. Campbell, CA and 1919 Bascom Ave. Campbell, CA expired on September 30, 2018, and October 31, 2018, respectively. Our current lease for the corporate headquarters in Concord, NH is a month-to-month rent basis, requiring a six-month notice from the lessor to terminate. Rent on the corporate headquarters continues at $4,000 per month. | |
Rent expense | $ 28,600 | $ 67,600 |
Aggregate warrants to purchase, shares | 564,556 |
Employee 401(k) Plan (Details N
Employee 401(k) Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, maximum annual contributions per employee, percent | 15.00% | |
Defined contribution plan, employer discretionary contribution amount | $ 17,400 | $ 0 |
Supplemental Disclosure of Ca_2
Supplemental Disclosure of Cash Flow Information (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Potential liquidated damages | $ 855,100 | |
Additional paid in capital | 699,400 | |
Other income | $ 155,700 | |
Purchase of warrants issued | 564,556 | |
Payment of interest expense | $ 0 | $ 200 |
Payment of income taxes | $ 800 | $ 3,500 |
Segment Information (Details Na
Segment Information (Details Narrative) | 12 Months Ended |
Dec. 31, 2018Integer | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Revenue by Country (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue by country | $ 3,153,400 | $ 3,889,500 |
United States [Member] | ||
Revenue by country | 1,188,500 | 1,239,300 |
Brazil [Member] | ||
Revenue by country | 652,700 | 758,000 |
Japan [Member] | ||
Revenue by country | 236,600 | 286,300 |
Other Countries [Member] | ||
Revenue by country | $ 1,167,600 | $ 1,605,900 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2018 |
Aggregate warrants to purchase, shares | 564,556 | 564,556 | |
Contributed services | $ 75,000 | $ 75,000 | |
Unaffiliated Stockholder [Member] | |||
Stock issued during period, shares | 450,000 | ||
Aggregate warrants to purchase, shares | 48,896 | ||
Stock issued during period, value | $ 149,700 | ||
Liabilities and Shareholders' Equity (Deficit) | |||
Stock issued during period, shares | 450,000 |