Network-1 (NTIP) 10-Q 16 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 13, 2016
Document And Entity Information
Entity Registrant Name	NETWORK 1 TECHNOLOGIES INC
Entity Central Index Key	1,065,078
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		23,295,446
Document Fiscal Year Focus	2,016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 20,739,000	$ 20,608,000
Marketable securities, available for sale	1,087,000	1,061,000
Royalty receivables	5,202,000	1,537,000
Other current assets	122,000	196,000
Total Current Assets	27,150,000	23,402,000
OTHER ASSETS:
Deferred tax assets	6,396,000	4,958,000
Patent, net of accumulated amortization	1,590,000	2,002,000
Security deposits	19,000	19,000
Total Other Assets	8,005,000	6,979,000
TOTAL ASSETS	35,155,000	30,381,000
CURRENT LIABILITIES:
Accounts payable	263,000	139,000
Accrued expenses	2,329,000	1,552,000
TOTAL LIABILITIES	$ 2,592,000	$ 1,691,000
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value, authorized 10,000,000 shares; none issued and outstanding at March 31, 2016 and December 31, 2015
Common stock, $0.01 par value; authorized 50,000,000 shares; 23,295,446 and 23,211,149 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	$ 233,000	$ 232,000
Additional paid-in capital	61,319,000	61,249,000
Accumulated deficit	(28,981,000)	(32,756,000)
Accumulated other comprehensive loss	(8,000)	(35,000)
TOTAL STOCKHOLDERS' EQUITY	32,563,000	28,690,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 35,155,000	$ 30,381,000

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	23,295,446	23,211,149
Common stock, shares outstanding	23,295,446	23,211,149

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Condensed Statements Of Income And Comprehensive Income
REVENUE	$ 5,190,000	$ 5,627,000
OPERATING EXPENSES:
Costs of revenue	1,486,000	1,689,000
Professional fees and related costs	452,000	446,000
General and administrative	403,000	659,000
Amortization of patents	414,000	413,000
Stock-based compensation	12,000	100,000
TOTAL OPERATING EXPENSES	2,767,000	3,307,000
OPERATING INCOME	2,423,000	2,320,000
OTHER INCOME:
Interest income, net	10,000	21,000
INCOME BEFORE INCOME TAXES	2,433,000	2,341,000
INCOME TAXES:
Current	51,000	55,000
Deferred taxes (benefit), net	(1,438,000)	756,000
Total Income Taxes (Benefit)	(1,387,000)	811,000
NET INCOME	$ 3,820,000	$ 1,530,000
Net Income per share
Basic	$ 0.16	$ 0.06
Diluted	$ 0.16	$ 0.06
Weighted average common shares outstanding:
Basic	23,252,751	24,089,009
Diluted	24,266,573	25,500,903
NET INCOME	$ 3,820,000	$ 1,530,000
OTHER COMPREHENSIVE INCOME:
Unrealized holding gain on securities available - for - sale arising during period	27,000	20,000
COMPREHENSIVE INCOME	$ 3,847,000	$ 1,550,000

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 3,820,000	$ 1,530,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of Patents	414,000	413,000
Stock based compensation	12,000	100,000
Deferred tax provision (benefit)	(1,438,000)	756,000
Changes in operating assets and liabilities:
Royalty receivables	(3,665,000)	(4,353,000)
Other current assets	74,000	62,000
Accounts payable	124,000	(108,000)
Accrued expense	777,000	(38,000)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	118,000	(1,638,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of patents and other assets	(2,000)	(30,000)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(2,000)	$ (30,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Value of shares delivered to fund withholding taxes on exercise of options	(44,000)
Repurchases of common stock, net of commissions	(1,000)	$ (1,882,000)
Proceeds from exercise of options and warrants	60,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	15,000	$ (1,882,000)
NET INCREASE IN CASH AND CASH EQUIVALENTS	131,000	3,550,000
CASH AND CASH EQUIVALENTS, beginning of period	20,608,000	17,662,000
CASH AND CASH EQUIVALENTS, end of period	$ 20,739,000	$ 14,112,000

BASIS OF PRESENTATION AND NATUR

BASIS OF PRESENTATION AND NATURE OF BUSINESS	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE A - BASIS OF PRESENTATION AND NATURE OF BUSINESS	[1] BASIS OF PRESENTATION The accompanying condensed consolidated financial statements are unaudited, but, in the opinion of the management of Network-1 Technologies, Inc. (the "Company"), contain all adjustments consisting only of normal recurring items which the Company considers necessary for the fair presentation of the Company's financial position as of March 31, 2016, and the results of its operations and comprehensive income for the three month period ended March 31, 2016 and March 31, 2015 and its cash flows for the three month periods ended March 31, 2016 and March 31, 2015. The unaudited condensed consolidated financial statements included herein have been prepared in accordance with the accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP may have been omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2016. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results of operations to be expected for the full year. The accompanying condensed consolidated financial statements include accounts of the Company and its wholly-owned subsidiary, Mirror Worlds Technologies, LLC. [2] BUSINESS: The Company is engaged in the development, licensing and protection of its intellectual property assets. The Company presently owns twenty-seven (27) patents including (i) the remote power patent (the "Remote Power Patent") covering the delivery of power over Ethernet (PoE) cables for the purpose of remotely powering network devices, such as wireless access ports, IP phones and network based cameras; (ii) the Mirror Worlds patent portfolio (the "Mirror World Patent Portfolio") relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system; (iii) the Cox patent portfolio (the "Cox Patent Portfolio") relating to enabling technology for identifying media content on the Internet and taking further action to be performed based on such identification; and (iv) patents covering systems and methods for the transmission of audio, video and data over computer and telephony networks in order to achieve high quality of service (QoS) (the "QoS Patents"). The Company has been actively engaged in licensing its Remote Power Patent (U.S. Patent No. 6,218,930). The Company has entered into twenty (20) license agreements with respect to its Remote Power Patent. The Company's current strategy includes continuing to pursue licensing opportunities for its Remote Power Patent and its efforts to monetize its Cox Patent Portfolio and Mirror Worlds Patent Portfolio acquired by the Company in 2013 (see Note I[2] hereof)). The Company's acquisition strategy is to focus on acquiring high quality patents which management believes have the potential to generate significant licensing opportunities as the Company has achieved with respect to its Remote Power Patent. The Company's Remote Power Patent has generated licensing revenue in excess of $87,000,000 from May 2007 through March 31, 2016. The Company continually reviews opportunities to acquire or license additional intellectual property. In addition, the Company may enter into strategic relationships with third parties to develop, commercialize, license or otherwise monetize their intellectual property.

SUMMARY OF SIGNIFICANT ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. The significant estimates and assumptions made in the preparation of the Company's unaudited condensed consolidated financial statements include the valuation of warrants and stock-based payments, deferred income taxes, valuation of patents, accrued expenses and valuation of marketable securities. Actual results could be materially different from those estimates, upon which the carrying values were based. Patents The Company owns patents that relate to various technologies. The Company capitalizes the costs associated with acquisition, registration and maintenance of its acquired patents and amortizes these assets over their remaining useful lives on a straight-line basis. Any further payments made to maintain or develop the patents would be capitalized and amortized over the balance of the useful life for the patents. Revenue Recognition The Company recognizes revenue received from the licensing of its intellectual property in accordance with Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB No. 104") and related authoritative pronouncements. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been performed pursuant to the terms of the license agreement, (iii) amounts are fixed or determinable, and (iv) collectability of amounts is reasonably assured. The Company relies on royalty reports received from third party licensees to record its revenue. From time to time the Company may audit royalties reported from licensees. Any adjusted royalty revenue as a result of such audits is recorded by the Company in the period in which such adjustment is agreed to by the Company and the licensee or otherwise determined. Income Taxes The Company accounts for income taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740, "Income Taxes" (ASC 740), which requires the Company to use the assets and liability method of accounting for income taxes. Under the assets and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forward. Under this accounting standard, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. ASC 740-10, "Accounting for Uncertainty in Income Taxes," defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. United States federal, state and local income tax returns prior to 2012 are not subject to examination by any applicable tax authorities. Effective January 1, 2016, the Company has elected to early adopt Accounting Standards Update No. 2015-17, Income Taxes (Topic 740); Balance Sheet Classification of Deferred Taxes Impairment of long-lived assets Intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Accordingly, we record impairment losses on long-lived assets used in operations or expected to be disposed of when indicators of impairment exist and the undiscounted cash flows expected to be derived from those assets are less than carrying amounts of these assets. At March 31, 2016 and December 31, 2015, there was no impairment to the Company's patents. Stock-Based Compensation The Company accounts for its stock-based compensation at fair value estimated on the grant date using the Black-Scholes option pricing model. See Note D hereof for further discussion of the Company's stock-based compensation. Earnings Per Share The Company reports earnings per share in accordance with U.S. GAAP, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts, such as warrants and options to purchase common stock were exercised. Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. Financial Instruments U.S. GAAP regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable. The carrying value of cash, marketable securities, royalty receivables, other assets, accounts payable, and accrued expenses approximates fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Marketable securities available for sale are measured at fair value on recurring basis based on Level 1 inputs (see Note H). Reclassification The Company has reclassified certain amounts in prior period condensed consolidated financial statements to conform to the current period's presentation. Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) In February 2015, FASB issued Accounting Standards Update ("ASU") No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In May 2014, FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Accounting Standards Adopted in the Period In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740); Balance Sheet Classification of Deferred Taxes

PATENTS

PATENTS	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE C - PATENTS	The Company's intangible assets at March 31, 2016 include patents with estimated remaining economic useful lives ranging from 0.25 to 5.5 years. For all periods presented, all of the Company's patents were subject to amortization. The gross carrying amounts and accumulated amortization related to acquired intangible assets as of March 31, 2016 and December 31, 2015 are as follows: March 31, 2016 December 31, 2015 Gross carrying amount – patents $ 6,387,000 $ 6,385,000 Accumulated amortization – patents (4,797,000 ) (4,383,000 ) Patents, net $ 1,590,000 $ 2,002,000 Amortization expense for the three months ended March 31, 2016 and March 31, 2015 was $414,000 and $413,000, respectively. Future amortization of current intangible assets, net is as follows: Twelve Months Ended March 31, 2017 $ 444,000 2018 $ 196,000 2019 $ 194,000 2020 $ 189,000 2021 and thereafter $ 567,000 Total $ 1,590,000 The Company's Remote Power Patent expires in March 2020. The expiration dates of the patents within the Company's Mirror Worlds Patent Portfolio range from June 2016 to February 2020. The expiration dates of the patents within the Cox Patent Portfolio range from September 2021 to November 2023 and the expiration date of the QoS Patents is June 2019.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE D - STOCK-BASED COMPENSATION	The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model. On the date of grant, the following weighted average assumptions were utilized for options granted during the three months ended March 31, 2015. There were no option grants during the three months ended March 31, 2016. Three Months Ended March 31, 2015 Risk-free interest rates Expected option life in years Expected stock price volatility Expected dividend yield 1.39% 5 years 30.24% -0- The following table presents information relating to all stock options outstanding and exercisable at March 31, 2016: Weighted Weighted Average Weighted Range of Average Remaining Average Exercise Options Exercise Life in Options Exercise Price Outstanding Price Years Exercisable Price $0.83 - $2.34 2,410,000 $1.29 3.40 2,410,000 $1.29 The Company recorded stock-based compensation of $12,000 and $100,000 for the three months ended March 31, 1016 and March 31, 2015, respectively. The Company had no unrecognized stock-based compensation cost as of March 31, 2016. The aggregate intrinsic value of options exercisable at March 31, 2016 was $1,551,000. During the three month period ended March 31, 2016, the Company's Chief Financial Officer and Executive Vice President exercised stock options to purchase 100,000 shares of the Company's common stock, at an exercise price of $1.59 per share, and 240,000 shares of common stock, at an exercise price of $1.60 per share, respectively. The options were exercised on a partial cashless (net exercise) basis by delivery to the Company of an aggregate of 249,820 shares of the Company's common stock (Chief Financial Officer – 50,857 shares and Executive Vice President - 198,963 shares) and $60,000. In addition an aggregate of 22,655 shares (Chief Financial Officer – 5,563 shares and Executive Vice President – 17,092 shares) were delivered to fund payroll withholding taxes on exercise, resulting in net shares of 43,580 and 23,945 issued to the Chief Financial Officer and Executive Vice President, respectively, with respect to such option exercises. In addition, during the three month period ended March 31, 2016, a consultant to the Company exercised a stock option to purchase 90,000 shares of the Company's common stock, at an exercise price of $1.60 per share. Such option was exercised on a cashless (net exercise) basis by delivery to the Company of 72,727 shares of common stock resulting in 17,273 net shares issued to the consultant with respect to such option exercise. During the three month period ended March 31, 2015, the Company granted 5-year stock options to each of its three non-management directors to purchase 35,000 shares of its common stock at an exercise price of $2.34 per share. Such options vested over a one-year period in four equal quarterly amounts beginning on April 22, 2015, subject to continued service on the Board. As of March 31, 2016, the following are the outstanding warrants to purchase shares of the Company's common stock: Number of Exercise Warrants Price Expiration Date 250,000 $2.10 May 21, 2018 250,000 $1.40 May 21, 2018 125,000 $2.10 July 26, 2018 125,000 $1.40 July 26, 2018 Total 750,000 All of the aforementioned warrants were issued to Recognition Interface, LLC in connection with the Company's acquisition of the Mirror Worlds Patent Portfolio (see Note I[2]).

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE E - INCOME TAXES	At March 31, 2016, the Company had net operating loss carryforwards (NOLs) and other carryforwards totaling approximately $18,387,000 expiring through 2029, with a future tax benefit of approximately $6,396,000. At March 31, 2016 and December 31, 2015, $6,396,000 and $4,958,000, respectively, were recorded as deferred tax assets on the Company's condensed consolidated balance sheets. At each report date, management considers new evidence, both positive and negative, of its view of the future realization of deferred tax assets. Based upon taxable income of $2,433,000 for the three months ended March 31, 2016, the Company recorded a reduction to its deferred tax assets of $842,000. In addition, at March 31, 2016 based upon additional taxable income anticipated to be realized in 2016 and in future years from legal proceedings and related license agreements, management determined that there was sufficient positive evidence to conclude that it was more likely than not that additional deferred taxes of approximately $2,280,000 were realizable. Accordingly, after reducing the deferred tax assets by $842,000 based on the effective tax applied against the taxable net income for the three months ended March 31, 2016, this amount was offset by a reduction in the Company's valuation allowance of $2,280,000 on its deferred tax assets resulting in a net deferred tax benefit of $1,438,000 recorded on the Company's consolidated statements of operations and comprehensive income for the three months ended March 31, 2016. To the extent that the Company has taxable income in the future, it will report income tax expense and such expense attributable to federal income taxes will reduce the deferred tax assets reflected on the accompanying condensed consolidated balance sheets. Management will continue to evaluate the recoverability of the Company's NOLs and adjust the deferred tax assets accordingly. Utilization of NOLs can be subject to a substantial annual limitation due to ownership change limitations that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. The personal holding company ("PHC") rules under the Internal Revenue Code impose a 20% tax on a PHC's undistributed personal holding company income ("PHC Income"), in general, taxable income subject to certain adjustments. For a corporation to be classified as a PHC, it must satisfy two tests: (i) that more than 50% in value of its outstanding shares must be owned directly or indirectly by 5 or fewer individuals at anytime during the second half of the year (after applying constructive ownership rules to attribute stock owned by entities to their beneficial owners and among certain family members and other related parties) (the "Ownership Test") and (ii) at least 60% of its adjusted ordinary gross income for a taxable year consists of dividends, interest, royalties, annuities and rents (the "Income Test"). During the second half of 2015 (as well as prior years), the Company did not meet the Ownership Test. Due to the significant number of shares held by the Company's largest shareholders, the Company will continually assess its share ownership to determine whether it meets the Ownership Test. If the Ownership Test were met and the income generated by the Company were determined to constitute "royalties" within the meaning of the Income Test, the Company would constitute a PHC and the Company would be subject to a 20% tax on the amount of any PHC Income (which cannot be offset by NOLs) that it does not distribute to its shareholders.

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE F - EARNINGS (LOSS) PER SHARE	Basic Earnings per share is calculated by dividing the net income by the weighted average number of outstanding common shares during the period. Diluted per share data includes the dilutive effects of options, warrants and convertible securities. Potential shares of 3,160,000 and 3,805,000 at March 31, 2016 and March 31, 2015, respectively, consisted of options and warrants. Computations of basic and diluted weighted average common shares outstanding are as follows: Three Months Ended March 31, 2016 2015 Weighted-average common shares outstanding – basic 23,252,751 24,089,009 Dilutive effect of options and warrants 1,013,822 1,411,894 Weighted-average common shares outstanding – diluted 24,266,573 25,500,903 Options and warrants excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive 480,000 105,000

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE G - CASH AND CASH EQUIVALENTS	The Company places cash investments in high quality financial institutions insured by the Federal Deposit Insurance Corporation ("FDIC"). At March 31, 2016, the Company maintained a cash balance of $20,088,000 in excess of FDIC limits. The Company considers all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents as of March 31, 2016 and December 31, 2015 are composed of: March 31, 2016 December 31, 2015 Cash $ 6,564,000 $ 6,283,000 Money market fund 14,175,000 14,325,000 Total $ 20,739,000 $ 20,608,000

MARKETABLE SECURITIES

MARKETABLE SECURITIES	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE H - MARKETABLE SECURITIES	Marketable securities are classified as available-for-sale and are recorded at fair market value. Unrealized gains and losses are reported as other comprehensive income or loss. Realized gains and losses are reclassified from other comprehensive income or loss to net income or loss in the period they are realized. At March 31, 2016 and December 31, 2015, the Company's marketable securities consisted of two corporate bonds (aggregate face value $1,000,000) with a 3.9% and 4.5% coupon and term of greater than three months when purchased. The Company's marketable securities mature in 2021 and it is not the intention of the Company to hold such securities until maturity.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE I - COMMITMENTS AND CONTINGENCIES	[1] Legal Fees : Russ, August & Kabat provides legal services to the Company with respect to its pending patent litigations filed in April 2014 and December 2014 against Google Inc. and YouTube, LLC in the United States District Court for the Southern District of New York relating to certain patents within the Company's Cox Patent Portfolio (see Note K[1] hereof). The terms of the Company's agreement with Russ, August & Kabat provides for legal fees on a full contingency basis ranging from 15% to 30% of the net recovery (after deduction of expenses) depending on the stage of the proceeding in which the result (settlement or judgment) is achieved. The Company is responsible for all of the expenses incurred with respect to this litigation. Dovel & Luner, LLP provides legal services to the Company with respect to its patent litigation commenced in May 2013 against Apple Inc., Microsoft, Inc. and other major vendors of document system software and computer systems in the United States District Court of Texas, Tyler Division, for infringement of U.S. Patent No. 6,006,227 (part of the Mirror Worlds Patent Portfolio - see Note K[2] hereof). The terms of the Company's agreement with Dovel & Luner LLP provide for legal fees on a contingency basis ranging from 25% to 40% of the net recovery (after deduction of expenses) depending upon the stage of proceeding in which a result (settlement or judgment) is achieved, subject to certain agreed upon contingency fee caps depending upon the amount of the net recovery. The Company is responsible for a certain portion of the expenses incurred with respect to the litigation. Dovel & Luner, LLP provides legal services to the Company with respect to its patent litigation filed in September 2011 against sixteen (16) data networking equipment manufacturers in the United States District Court for the Eastern District of Texas, Tyler (see Note K[3]). The terms of the Company's agreement with Dovel & Luner LLP essentially provide for legal fees on a full contingency basis ranging from 12.5% to 35% (with certain exceptions) of the net recovery (after deduction for expenses) depending on the stage of the preceding in which a result (settlement or judgment) is achieved. For the three month period ended March 31, 2016 and March 31, 2015, the Company incurred aggregate contingent legal fees with respect to the litigation of $52,000 and $208,000, respectively, to Dovel & Luner, LLP. The Company is responsible for a certain portion of the expenses incurred with respect to the litigation. Dovel & Luner, LLP provided legal services to the Company with respect to the litigation settled in July 2010 against Cisco and several other major data networking equipment manufacturers (see Note K[4]). The terms of the Company's agreement with Dovel & Luner, LLP with respect to this litigation provided for legal fees of a maximum aggregate cash payment of $1.5 million plus a contingency fee of 24% (based on the settlement being achieved at the trial stage). As a result of the royalty payments payable quarterly by Cisco in accordance with the Company's settlement and license agreement with Cisco, the Company has an obligation to pay Dovel & Luner, LLP (including local counsel) 24% of such royalties received. During the three months ended March 31, 2016 and March 31, 2015, the Company incurred aggregate legal fees to Dovel & Luner, LLP of $1,164,000 and $1,187,000, respectively, with respect to the aforementioned litigation. With respect to the Company's litigation against D-Link, which was settled in May 2007, the Company utilized the services of Blank Rome, LLP on a full contingency basis. In accordance with the Company's contingency fee agreement with Blank Rome LLP, once the Company recovered its expenses related to the litigation (which were recovered in the first quarter of 2013), the Company is obligated to pay legal fees to Blank Rome LLP equal to 25% of the royalty revenue received by the Company from its license agreement with D-Link for the life of the Remote Power Patent. During the three month period ended March 31, 2016 and March 31, 2015, the Company incurred legal fees to Blank Rome LLP of $11,000 and $13,000, respectively. [2] Patent Acquisitions: On February 28, 2013, the Company completed the acquisition of four patents (as well as a pending patent application) from Dr. Ingemar Cox (these patents together with subsequent related patent issuances comprise the Cox Patent Portfolio), a technology leader in digital watermarking content identification, digital rights management and related technologies, for a purchase price of $1,000,000 in cash and 403,226 shares of the Company's common stock. In addition, the Company is obligated to pay Dr. Cox 12.5% of the net proceeds (after deduction of expenses) generated by the Company from licensing, sale or enforcement of the patents. Since the acquisition of the patent portfolio from Dr. Cox, the Company has been issued five additional related patents by the U.S. Patent and Trademark Office ("USPTO"). Professional fees and filing fees of $169,000 were capitalized as patent cost. On May 21, 2013, the Company's wholly-owned subsidiary, Mirror Worlds Technologies, LLC, acquired all of the patents previously owned by Mirror Worlds, LLC (which subsequently changed its name to Looking Glass LLC ("Looking Glass")), consisting of nine issued United States patents and five pending applications covering foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system (these patents together with subsequent related patent issuances comprise the Mirror Worlds Patent Portfolio). As consideration for the patent acquisition, the Company paid Looking Glass $3,000,000 in cash, and issued 5-year warrants to purchase an aggregate of 1,750,000 shares of the Company's common stock (875,000 shares of common stock at an exercise price of $1.40 per share and 875,000 shares of common stock at an exercise price of $2.10 per share) (the "Looking Glass Warrants"). On June 3, 2014, the Company repurchased the Looking Glass Warrants from Looking Glass at a cost of $505,000. As part of the acquisition of the Mirror Worlds Patent Portfolio, the Company also entered into an agreement with Recognition Interface, LLC ("Recognition"), an entity that financed the commercialization of the patent portfolio prior to its sale to Mirror Worlds, LLC and also retained an interest in the licensing proceeds of the patent portfolio held by Mirror Worlds, LLC. Pursuant to the terms of the Company's agreement with Recognition, Recognition received (i) 5-year warrants to purchase 250,000 shares of the Company's common stock at an exercise price of $1.40 per share, and (ii) 5-year warrants to purchase 250,000 shares of common stock at an exercise price of $2.10 per share. Recognition also received from the Company an interest in the net proceeds realized from the monetization of the Mirror Worlds Patent Portfolio, as follows: (i) 10% of the first $125 million of net proceeds; (ii) 15% of the next $125 million of net proceeds; (iii) and 20% of any portion of the net proceeds in excess of $250 million. In addition, Abacus and Associates, Inc. ("Abacus"), an entity affiliated with Recognition, received a 60-day warrant to purchase 500,000 shares of the Company's common stock at an exercise price of $2.05 per share. In accordance with the Company's agreement with Recognition, as a result of the exercise of the 60-day warrant by Abacus in July 2013, additional 5-year warrants to purchase an aggregate of 250,000 shares of the Company's common stock were issued to Recognition (125,000 shares at an exercise price of $2.10 per share and 125,000 shares at an exercise price of $1.40 per share). As part of the acquisition of the Mirror Worlds Patent Portfolio, professional fees and filing fees of $409,000 were capitalized as patent cost. [3] Amended Patent Purchase Agreement: In January 2005, the Company and Merlot Communications, Inc., the successor of which is BAXL Technologies, Inc. (the "Seller"), amended the Patent Purchase Agreement originally entered into in November 2003 (the "Amendment") pursuant to which the Company paid an additional purchase price of $500,000 to Seller for the restructuring of future contingent payments to Seller from the licensing or sale of the patents (including the Remote Power Patent and the QoS Patents). The Amendment provided for future contingent payments by the Company to Seller of $1.0 million upon achievement of $25 million of Net Royalties (as defined) which payment was made in 2012, an additional $1.0 million contingent payment upon achievement of $50 million of Net Royalties (the "Second Contingent Payment") and an additional $500,000 contingent payment upon achievement of $62.5 million of Net Royalties from the licensing or sale of the patents acquired from Seller. On March 11, 2015, the Company entered into an agreement with a secured creditor of the Seller, who had all rights with respect to the Second Contingent Payment, pursuant to which the Company paid the secured creditor $900,000 in full satisfaction of the Second Contingent Payment of $1.0 million. [4] Services Agreement: Pursuant to a master services agreement, dated November 30, 2004 (the "Services Agreement"), between the Company and ThinkFire Services USA, Ltd. ("ThinkFire"), the Company was obligated to pay ThinkFire fees from royalty payments received from certain licensees of the Remote Power Patent over the term of the licenses in consideration for services performed on behalf of the Company. On February 10, 2015, the Company entered into an agreement with ThinkFire pursuant to which the Services Agreement was terminated with no further obligations in consideration of the Company's payment of $285,000 to ThinkFire ($261,000 of such payment has been included as general and administrative expenses for the three months ended March 31, 2015). [5] Lease Agreements: The Company leases its principal office space in New York City at a monthly base rent of approximately $3,700 which lease expires on May 31, 2017. The Company entered into a lease agreement in July 2011 to rent office space, in New Canaan, Connecticut. In August 2015, the Company entered into an agreement to extend the lease for a four year period (expiring September 30, 2019) at a base rent of $7,000 per month for the first year (increasing $100 per month each year), which is subject to annual adjustments to reflect increases in real estate taxes and operating expenses. Mirror Worlds Technologies, LLC, the Company's wholly-owned subsidiary, entered into a one year lease, at a base rent of $620 per month, to rent office space in Tyler, Texas (expiring April 30, 2017).

EMPLOYMENT ARRANGEMENTS AND OTH

EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE J - EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS	[1] The Incentive Compensation shall continue to be paid to the Chairman and Chief Executive Officer for the life of each of the Company's patents with respect to licenses entered into with third parties during the term of his employment or at anytime thereafter, whether he is employed by the Company or not; provided that In connection with the Agreement, the Chairman and Chief Executive Officer has also agreed not to compete with the Company as follows: (i) during the term of the Agreement and for a period of 12 months thereafter if his employment is terminated "Other Than For Cause" (as defined) provided he is paid his 12 month base salary severance amount and (ii) for a period of two years from the termination date, if terminated "For Cause" by the Company or "Without Good Reason" by the Chairman and Chief Executive Officer. The Company is currently in discussions with its Chairman and Chief Executive Officer with respect to a new employment agreement. [2]

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE K - LEGAL PROCEEDINGS	[1] In December 2014, Google Inc. filed four petitions to institute Inter Partes Inter Partes Inter Partes Inter Partes Inter Partes Covered Business Method On April 13, 2015, Google filed a Petition for Covered Business Method Covered Business Method [2] Mirror Worlds v Apple, et. al. Mirror Worlds v. Microsoft, et. al. On November 6, 2015, the Company entered into a settlement agreement with Microsoft pursuant to which Microsoft (including its customers) received a non-exclusive fully paid license for the Mirror Worlds Patents for their remaining life in consideration of a lump sum payment to the Company of $4.65 million. In addition, as customers of Microsoft, the pending litigation was also dismissed against Hewlett-Packard Corporation, Lenovo Group Ltd., Lenovo (United States), Inc., Dell, Inc., Best Buy Co., Inc., Samsung Electronics of America, Inc. and Samsung Telecommunications America L.L.C. Accordingly, the sole remaining defendant is Apple, Inc. The trial is scheduled for July 2016. [3] [4] In July 2010, the Company settled its patent litigation pending in the United States District Court for the Eastern District of Texas, Tyler Division, against Adtran, Inc, Cisco Systems, Inc. and Cisco-Linksys, LLC, (collectively, "Cisco"), Enterasys Networks, Inc., Extreme Networks, Inc., Foundry Networks, Inc., and 3Com Corporation, Inc. As part of the settlement, Adtran, Cisco, Enterasys, Extreme Networks and Foundry Networks each entered into a settlement agreement with the Company and entered into non-exclusive licenses for the Company's Remote Power Patent (the "Licensed Defendants"). Under the terms of the licenses, the Licensed Defendants paid the Company upon settlement approximately $32 million and also agreed to license the Remote Power Patent for its full term, which expires in March 2020. In accordance with the Settlement and License Agreement, dated May 25, 2011, Cisco is obliged to pay the Company royalties (which began in the first quarter of 2011) based on its sales of PoE products up to maximum royalty payments per year of $8 million through 2015 and $9 million per year thereafter for the remaining term of the patent. The royalty payments are subject to certain conditions including the continued validity of the Company's Remote Power Patent, and the actual royalty amounts received may be less than the caps stated above. Under the terms of the Agreement, if the Company grants other licenses with lower royalty rates to third parties (as defined in the Agreement), Cisco shall be entitled to the benefit of the lower royalty rates provided it agrees to the material terms of such other license. Under the terms of the Agreement, the Company has certain obligations to Cisco and if it materially breaches such terms, Cisco will be entitled to stop paying royalties to the Company. This would have a material adverse effect on the Company's business, financial condition and results of operations.

STOCK REPURCHASE

STOCK REPURCHASE	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE L - STOCK REPURCHASE	On August 22, 2011, the Company announced that its Board of Directors approved a share repurchase program to repurchase up to $2,000,000 of shares of its common stock over the next 12 months ("Share Repurchase Program"). On June 17, 2015, the Board of Directors authorized its fifth increase to the Share Repurchase Program authorizing the repurchase of up to an additional $2.0 million of shares of common stock over the subsequent 12 month period (for a total of up to $14 million since inception of the program in August 2011). The common stock may be repurchased from time to time in open market transactions or privately negotiated transactions in the Company's discretion. The timing and amount of the shares repurchased is determined by management based on its evaluation of market conditions and other factors. The Share Repurchase Program may be increased, suspended or discontinued at any time. Since inception of the Share Repurchase Program through March 31, 2016 the Company has repurchased an aggregate of 6,883,104 shares of its common stock at an average price per share of $1.65 or an aggregate cost of $11,346,000 ( )

CISCO CONCENTRATION

CISCO CONCENTRATION	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE M - CISCO CONCENTRATION	Revenue from Cisco constituted approximately 91% and 85% of the Company's revenue, respectively, for the three month period ended March 31, 2016 and March 31, 2015. At March 31, 2016 and December 31, 2015, the royalty receivable from Cisco constituted approximately 91% and 67% of the Company's royalty receivables, respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE N - SUBSEQUENT EVENTS	Mirror Worlds Technologies, LLC ("MWT"), a wholly-owned subsidiary of the Company, entered into an agreement, dated April 22, 1016, pursuant to which it will receive $17.5 million in connection with a settlement of a professional liability claim relating to services rendered in 2008 - 2010. The Company, through its subsidiary MWT, acquired the claim in May 2013 as part of its acquisition of the Mirror Worlds Patent Portfolio.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2016
Summary Of Significant Accounting Policies Policies
Use of Estimates and Assumptions	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. The significant estimates and assumptions made in the preparation of the Company's unaudited condensed consolidated financial statements include the valuation of warrants and stock-based payments, deferred income taxes, valuation of patents, accrued expenses and valuation of marketable securities. Actual results could be materially different from those estimates, upon which the carrying values were based.
Patents	The Company owns patents that relate to various technologies. The Company capitalizes the costs associated with acquisition, registration and maintenance of its acquired patents and amortizes these assets over their remaining useful lives on a straight-line basis. Any further payments made to maintain or develop the patents would be capitalized and amortized over the balance of the useful life for the patents.
Revenue Recognition	The Company recognizes revenue received from the licensing of its intellectual property in accordance with Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB No. 104") and related authoritative pronouncements. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been performed pursuant to the terms of the license agreement, (iii) amounts are fixed or determinable, and (iv) collectability of amounts is reasonably assured. The Company relies on royalty reports received from third party licensees to record its revenue. From time to time the Company may audit royalties reported from licensees. Any adjusted royalty revenue as a result of such audits is recorded by the Company in the period in which such adjustment is agreed to by the Company and the licensee or otherwise determined.
Income Taxes	The Company accounts for income taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740, "Income Taxes" (ASC 740), which requires the Company to use the assets and liability method of accounting for income taxes. Under the assets and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forward. Under this accounting standard, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. ASC 740-10, "Accounting for Uncertainty in Income Taxes," defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. United States federal, state and local income tax returns prior to 2012 are not subject to examination by any applicable tax authorities. Effective January 1, 2016, the Company has elected to early adopt Accounting Standards Update No. 2015-17, Income Taxes (Topic 740); Balance Sheet Classification of Deferred Taxes
Impairment of long-lived assets	Intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Accordingly, we record impairment losses on long-lived assets used in operations or expected to be disposed of when indicators of impairment exist and the undiscounted cash flows expected to be derived from those assets are less than carrying amounts of these assets. At March 31, 2016 and December 31, 2015, there was no impairment to the Company's patents.
Stock-based compensation	The Company accounts for its stock-based compensation at fair value estimated on the grant date using the Black-Scholes option pricing model. See Note D hereof for further discussion of the Company's stock-based compensation.
Earnings (Loss) Per Share	The Company reports earnings per share in accordance with U.S. GAAP, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts, such as warrants and options to purchase common stock were exercised. Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share.
Financial Instruments	U.S. GAAP regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable. The carrying value of cash, marketable securities, royalty receivables, other assets, accounts payable, and accrued expenses approximates fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Marketable securities available for sale are measured at fair value on recurring basis based on Level 1 inputs (see Note H).
Reclassification	The Company has reclassified certain amounts in prior period condensed consolidated financial statements to conform to the current period's presentation.
Recent Accounting Pronouncements	In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) In February 2015, FASB issued Accounting Standards Update ("ASU") No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In May 2014, FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
Accounting Standards Adopted in the Period	In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740); Balance Sheet Classification of Deferred Taxes

PATENTS (Tables)

PATENTS (Tables)	3 Months Ended
	Mar. 31, 2016
Patents Tables
Accumulated amortization related to acquired intangible assets	March 31, 2016 December 31, 2015 Gross carrying amount – patents $ 6,387,000 $ 6,385,000 Accumulated amortization – patents (4,797,000 ) (4,383,000 ) Patents, net $ 1,590,000 $ 2,002,000
Future amortization of current intangible assets, net	Twelve Months Ended March 31, 2017 $ 444,000 2018 $ 196,000 2019 $ 194,000 2020 $ 189,000 2021 and thereafter $ 567,000 Total $ 1,590,000

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2016
Stock-based Compensation Tables
Schedule of stock option	Three Months Ended March 31, 2015 Risk-free interest rates Expected option life in years Expected stock price volatility Expected dividend yield 1.39% 5 years 30.24% -0-
Schedule of information of stock options outstanding and exercisable	Weighted Weighted Average Weighted Range of Average Remaining Average Exercise Options Exercise Life in Options Exercise Price Outstanding Price Years Exercisable Price $0.83 - $2.34 2,410,000 $1.29 3.40 2,410,000 $1.29
Outstanding warrants to puchase shares	Number of Exercise Warrants Price Expiration Date 250,000 $2.10 May 21, 2018 250,000 $1.40 May 21, 2018 125,000 $2.10 July 26, 2018 125,000 $1.40 July 26, 2018 Total 750,000

EARNINGS (LOSS) PER SHARE (Tabl

EARNINGS (LOSS) PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Loss Per Share Tables
Schedule of Earnings Per Share	Three Months Ended March 31, 2016 2015 Weighted-average common shares outstanding – basic 23,252,751 24,089,009 Dilutive effect of options and warrants 1,013,822 1,411,894 Weighted-average common shares outstanding – diluted 24,266,573 25,500,903 Options and warrants excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive 480,000 105,000

CASH AND CASH EQUIVALENTS (Tabl

CASH AND CASH EQUIVALENTS (Tables)	3 Months Ended
	Mar. 31, 2016
Cash And Cash Equivalents Tables
Schedule of cash and cash equivalent	March 31, 2016 December 31, 2015 Cash $ 6,564,000 $ 6,283,000 Money market fund 14,175,000 14,325,000 Total $ 20,739,000 $ 20,608,000

BASIS OF PRESENTATION AND NAT25

BASIS OF PRESENTATION AND NATURE OF BUSINESS (Details Narrative)	3 Months Ended
	Mar. 31, 2016USD ($)Agreement
Notes to Financial Statements
Remote power patent revenue since May 2007 | $	$ 87,000,000
Patents owned	27
Number of License Agreements	20

SUMMARY OF SIGNIFICANT ACCOU26

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Summary Of Significant Accounting Policies Details Narrative
Impairment of investments	$ 0	$ 0

PATENTS (Details)

PATENTS (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Patents Details
Gross carrying amount - patents	$ 6,387,000	$ 6,385,000
Accumulated amortization - patents	(4,797,000)	(4,383,000)
Patents, net	$ 1,590,000	$ 2,002,000

PATENTS (Details 1)

PATENTS (Details 1) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Patents Details 1
2,017	$ 444,000
2,018	196,000
2,019	194,000
2,020	189,000
2021 and thereafter	567,000
Total	$ 1,590,000	$ 2,002,000

PATENTS (Details Narrative)

PATENTS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Amortization expense	$ 414,000	$ 413,000
Expiration of Remote Power Patent	March 2,020
Expiration of QoS family patents	June 2,019
Minimum [Member]
Estimated remaining economic useful of patents	3 months
Expiration dates of the patents within the Company's Mirror Worlds patent portfolio	JUNE 2,016
Expiration dates of the patents within the Cox patent portfolio	SEPTEMBER 2,021
Maximum [Member]
Estimated remaining economic useful of patents	5 years 6 months
Expiration dates of the patents within the Company's Mirror Worlds patent portfolio	FEBRUARY 2,020
Expiration dates of the patents within the Cox patent portfolio	NOVEMBER 2,023

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details)	3 Months Ended
	Mar. 31, 2015
Stock Based Compensation Details
Risk-free interest rates	1.39%
Expected option life in years	5 years
Expected stock price volatility	30.24%
Expected dividend yield	0.00%

STOCK BASED COMPENSATION (Det31

STOCK BASED COMPENSATION (Details 1)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Options outstanding | shares	2,410,000
Weighted average exercise price	$ 1.29
Weighted Average Remaining Life in Years	3 years 4 months 24 days
Options exercisable | shares	2,410,000
Weighted average exercise price	$ 1.29
Minimum [Member]
Range of Exercise price	0.83
Maximum [Member]
Range of Exercise price	$ 2.34

STOCK BASED COMPENSATION (Det32

STOCK BASED COMPENSATION (Details 2)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Number of warrants outstanding	750,000
Exercise Price $ 2.10
Number of warrants outstanding	250,000
Exercise Price | $ / shares	$ 2.10
Expiration Date	May 21, 2018
Exercise Price $ 1.40
Number of warrants outstanding	250,000
Exercise Price | $ / shares	$ 1.40
Expiration Date	May 21, 2018
Exercise Price $ 2.10
Number of warrants outstanding	125,000
Exercise Price | $ / shares	$ 2.10
Expiration Date	Jul. 26, 2018
Exercise Price $ 1.40
Number of warrants outstanding	125,000
Exercise Price | $ / shares	$ 1.40
Expiration Date	Jul. 26, 2018

STOCK BASED COMPENSATION (Det33

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock-based compensation	$ 12,000	$ 100,000
Unrecognized stock-based compensation cost	0
Aggregate intrinsic value of options exercisable	$ 1,551,000
Aggregate stock options excercised	420,000	0
Aggregate stock options issued	0	35,000
Stock option excercised, exercise price per share	$ 1.60	$ 2.34
Executive Vice President [Member]
Stock option excercised at 1.60 exercise price	240,000
Delivery of shares of common stock by cashless basis	198,963
Delivery of shares to fund withholding taxes	17,092
Net shares issued	23,945
Chief Financial Officer [Member]
Stock option excercised at 1.59 exercise price	100,000
Delivery of shares of common stock by cashless basis	50,857
Delivery of shares to fund withholding taxes	5,563
Delivery of cash for option excercise	$ 60,000
Net shares issued	43,580
Consultant [Member]
Stock option excercised at $1.60	90,000
Delivery of shares of common stock by cashless basis	72,727
Net shares issued	17,273

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income Taxes Details Narrative
Net operating loss carryforwards and other carryforwards	$ 18,387,000
Net operating loss carryforwards expired	through 2,029
Future tax benefit	$ 6,396,000
Deferred tax assets	6,396,000		$ 4,958,000
Income loss before taxes	2,433,000	$ 2,341,000
Reduction to deferred tax assets	842,000
Valuation allowance reduction on deferred tax asset	2,280,000
Net deferred tax benefit	$ (1,438,000)	$ 756,000

EARNINGS (LOSS) PER SHARE (Deta

EARNINGS (LOSS) PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Loss Per Share Details
Weighted-average common shares outstanding - basic	23,252,751	24,089,009
Dilutive effect of options and warrants	1,013,822	1,411,894
Weighted-average common shares outstanding - diluted	24,266,573	25,500,903
Options and warrants excluded from the computation of diluted income (loss) per share because the effect of inclusion would have been anti-dilutive	480,000	105,000

EARNINGS (LOSS) PER SHARE (De36

EARNINGS (LOSS) PER SHARE (Details Narratrive) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Loss Per Share Details Narratrive
Potentialy Dilutive Shares	3,160,000	3,805,000

CASH AND CASH EQUIVALENTS (Deta

CASH AND CASH EQUIVALENTS (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Cash And Cash Equivalents Details
Cash	$ 6,564,000	$ 6,283,000
Money market fund	14,175,000	14,325,000
Total	$ 20,739,000	$ 20,608,000	$ 14,112,000	$ 17,662,000

CASH AND CASH EQUIVALENTS (De38

CASH AND CASH EQUIVALENTS (Details Narrative)	Mar. 31, 2016USD ($)
Cash And Cash Equivalents Details Narrative
Maintained cash balance in excess of FDIC	$ 20,088,000

MARKETABLE SECURITIES (Details

MARKETABLE SECURITIES (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Corporate bonds face value, 3.9% - 4.5% coupon	$ 1,000,000	$ 1,000,000
Maturity date of marketable securities	2,021
Corporate Bond 1 [Member]
Corporate bond coupon	3.90%	3.90%
Corporate Bond 2 [Member]
Corporate bond coupon	4.50%	4.50%

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Legal Fees (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Legal Service Agreement With Russ, August Kabot For Litigation Filed In April 2014 and December 2014 [Member]
Legal Fees payment ,Terms	Legal fees on a full contingency basis ranging from 15% to 30% of the net recovery (after deduction of expenses)
Legal Service Agreement With Dovel And Luner For Litigation Settlement In May 2013 [Member]
Legal Fees payment ,Terms	Legal fees on a contingency basis ranging from 25% to 40% of the net recovery (after deduction of expenses)
Legal Service Agreement With Dovel And Luner For Litigation Filed In September 2011 [Member]
Legal Fees payment ,Terms	Legal fees on a full contingency basis ranging from 12.5% to 35% (with certain exceptions) of the net recovery (after deduction for expenses)
Legal fees and expenses	$ 52,000	$ 208,000
Legal Service Agreement With Dovel And Luner For Litigation Settlement In July 2010 [Member]
Legal Fees payment ,Terms	Legal fees of a maximum aggregate cash payment of $1.5 million plus a contingency fee of 24% (based on the settlement being achieved at the trial stage)
Legal fees and expenses	$ 1,164,000	1,187,000
Legal Service Agreement-Blank Rome [Member]
Legal Fees payment ,Terms	Legal fees to Blank Rome LLP equal to 25% of the royalty revenue received by the Company from its license agreement with D-Link
Legal fees and expenses	$ 11,000	$ 13,000

COMMITMENTS AND CONTINGENCIES41

COMMITMENTS AND CONTINGENCIES - Patent Acquisitions (Details Narrative) - USD ($)	Jun. 03, 2014	Jul. 31, 2013	May. 21, 2013	Feb. 28, 2013
Exercise price of five year option
Acquisition of Cox patents cash, purchase price				$ 1,000,000
Acquisition of Cox patents, common stock issued				403,226
Obligated to pay Cox, net proceeds percentage				12.50%
Capitalized professional fees and filing fees related to Cox Patent Portfolio				$ 169,000
Cash consideration for Mirror Worlds patent acquisition			$ 3,000,000
Cost of repurchase of Mirror Worlds warrants	$ 505,000
Issued 5-year warrants (Looking Glass) to purchase shares of common stock			1,750,000
5-year warrants (Looking Glass) to purchase 875,000 shares, exercise price per share			1.40
5-year warrants (Looking Glass) to purchase 875,000 shares, exercise price per share			2.10
Issued 5-year warrants (Recognition) to purchase 250,000 shares, exercise price per share			1.40
Issued 5-year warrants (Recognition) to purchase 250,000 shares, exercise price per share			2.10
60 day warrants (Abacus) to purchase shares of common stock			500,000
60-day warrants (Abacus), exercise price per shares			$ 2.05
Issued additional 5-year warrants (Recognition) to purchase shares of common stock as a result of exercise of 60-day warrant		250,000
Additional 5-year warrants to purchase 125,000 shares of common stock as a result of exercise of 60-day warrant, exercise price per share		2.10
Additional 5-year warrants to purchase 125,000 shares of common stock as a result of exercise of 60-day warrant, exercise price per share		1.40
Capitalized professional fees and filing fees related to Mirror Worlds patents			$ 409,000
Net proceeds percentage payable to Recognition from the monetization of the Mirror Worlds patent portfolio
First $125 Million			10.00%
Next $125 Million			15.00%
Over $250 Million			20.00%

COMMITMENTS AND CONTINGENCIES42

COMMITMENTS AND CONTINGENCIES - Amended Patent Purchase Agreement (Details Narrative) - USD ($)	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 11, 2015	Dec. 31, 2012	Jan. 01, 2005
Additional patent cost for restructuring of future contingent payments						$ 500,000
Achievement of net royalties	$ 62,500,000	$ 50,000,000
Contingent payment made					$ 1,000,000
Payment to secured creditor in satisfaction of second contingent payment				$ 900,000
Additional contingent payment	$ 500,000
2012 [Member]
Achievement of net royalties			$ 25,000,000
Contingent payment made			$ 1,000,000

COMMITMENTS AND CONTINGENCIES43

COMMITMENTS AND CONTINGENCIES - Services Agreement (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2015	Feb. 10, 2015
Commitments And Contingencies - Services Agreement Details Narrative
Company paid for service agreement termination		$ 285,000
Portion of payment included in general and administrative expenses	$ 261,000

COMMITMENTS AND CONTINGENCIES44

COMMITMENTS AND CONTINGENCIES - Leases Agreements (Details Narrative)	3 Months Ended
	Mar. 31, 2016USD ($)
New York City [Member]
Rental cost per month	$ 3,700
Expiring date	May 31, 2017
Tyler, Texas [Member]
Rental cost per month	$ 620
Expiring date	April 30, 2017
New Canaan CT [Member]
Expiring date	August 2,015
Description lease agreement	Extend the lease for a four year period (expiring September 30, 2019) at a base rent of $7,000 per month for the first year (increasing $100 per month each year).

EMPLOYMENT ARRANGEMENTS AND O45

EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Apr. 09, 2014	Nov. 01, 2012
Employment Arrangements And Other Agreements Details Narrative
Annual base salary Chairman and CEO			$ 415,000
Target annual bonus or minimum bonus Chairman and CEO			$ 150,000
Issuance of stock option to CEO to purchase common stock			500,000
CEO Stock option, exercise price			$ 1.19
Number of shares vested in equal quarterly amounts			41,667
Earned incentive compensation	$ 259,000	$ 281,000
Earned incentive compensation included in accrual expenses	$ 335,000		$ 446,000
CEO Incentive Compensation - percentage of gross royalties - Remote Power Patent					5.00%
CEO Incentive Compensation - percentage of net royalties - Additional Patents					10.00%
CEO Incentive Compensation - percentage of gross royalties - Additional Patents					6.25%
Annual cash bonuses for CEO			200,000
Number of years option granted to Chief Financial Officer	5 years
Annual base salary of Chief Financial Officer	$ 157,500
Annual bonus for Chief Financial Officer			$ 30,000
Issuance of 5 year stock option to CFO				50,000
CFO stock option, exercise price				$ 1.65

LEGAL PROCEEDINGS (Details narr

LEGAL PROCEEDINGS (Details narrative) - USD ($)	1 Months Ended	51 Months Ended	55 Months Ended
	Jul. 31, 2010	Mar. 31, 2020	Dec. 31, 2015	Nov. 06, 2015
Legal Proceedings Details Narrative
Royalties received from license defendants upon setlement	$ 32,000,000
Maximum Cisco royalty payment per year			$ 8,000,000
Maximum Cisco royalty payment per year for remaning term of the patent		$ 9,000,000
Microsoft settlement				$ 4,650,000

STOCK REPURCHASE PROGRAM (Detai

STOCK REPURCHASE PROGRAM (Details Narrative) - USD ($)	3 Months Ended	56 Months Ended
	Mar. 31, 2016	Mar. 31, 2016	Jun. 17, 2015	Aug. 22, 2011
Number of shares, common stock repurchased	500	6,883,104
Average price per share, common stock subject to repurchase	$ 1.95	$ 1.65
Aggregate cost of common stock repurchase		$ 11,346,000
Board of Directors [Member]
Stock Repurchase Program, dollar amount of shares authorized to be repurchased				2,000,000
Stock Repurchase Program, doller amount of additional shares authorized to be repurchased			2,000,000
Stock Repurchase Program, dollar amount of shares to be repurchase since inception			14,000,000

CISCO CONCENTRATION (Details Na

CISCO CONCENTRATION (Details Narrative)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Cisco Concentration Details Narrative
Percentage Revenue	91.00%	85.00%
Percentage of royalty receivable	91.00%		67.00%