Network-1 (NTIP) 10-Q 15 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 10, 2019
Document And Entity Information
Entity Registrant Name	NETWORK 1 TECHNOLOGIES INC
Entity Central Index Key	0001065078
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		23,889,598
Document Fiscal Year Focus	2019
Entity Emerging Growth Company	false
Entity Small Business	true

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 21,650,000	$ 23,763,000
Marketable securities, at fair value	30,837,000	31,228,000
Royalty receivables, net	774,000	444,000
Other current assets	83,000	112,000
Total Current Assets	53,344,000	55,547,000
OTHER ASSETS:
Deferred tax assets	233,000	168,000
Patents, net of accumulated amortization	1,959,000	1,989,000
Equity investment	2,445,000	2,541,000
Operating leases right-of-use asset	95,000
Security deposits	21,000	21,000
Total Other Assets	4,753,000	4,719,000
TOTAL ASSETS	58,097,000	60,266,000
CURRENT LIABILITIES:
Accounts payable	395,000	67,000
Income taxes payable	197,000	197,000
Accrued contingency fees and related costs	198,000	1,136,000
Accrued payroll	68,000	486,000
Operating lease obligations – current	88,000
Other accrued expenses	140,000	175,000
TOTAL CURRENT LIABILITIES	1,086,000	2,061,000
Operating lease obligations	8,000
TOTAL LIABILITIES	1,094,000	2,061,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value, authorized 10,000,000 shares; none issued and outstanding at March 31, 2019 and December 31, 2018
Common stock, $0.01 par value; authorized 50,000,000 shares; 23,782,761 and 23,735,927 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	238,000	237,000
Additional paid-in capital	65,294,000	65,151,000
Accumulated deficit	(8,558,000)	(7,102,000)
Accumulated other comprehensive income (loss)	29,000	(81,000)
TOTAL STOCKHOLDERS' EQUITY	57,003,000	58,205,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 58,097,000	$ 60,266,000

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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	23,782,761	23,735,927
Common stock, shares outstanding	23,782,761	23,735,927

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Condensed Consolidated Statements Of Operations And Comprehensive Income Loss
REVENUE	$ 606,000	$ 19,463,000
OPERATING EXPENSES:
Costs of revenue	146,000	7,259,000
Professional fees and related costs	307,000	518,000
General and administrative	488,000	507,000
Amortization of patents	54,000	70,000
Stock-based compensation	144,000	226,000
TOTAL OPERATING EXPENSES	1,139,000	8,580,000
OPERATING INCOME(LOSS)	(533,000)	10,883,000
OTHER INCOME:
Interest income, net	301,000	143,000
Net realized and unrealized gain from investments	23,000
Total other income	324,000	143,000
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET LOSSES OF EQUITY METHOD INVESTEE	(209,000)	11,026,000
INCOME TAXES (BENEFIT):
Current		2,425,000
Deferred taxes, net	(65,000)
Total income taxes (benefit)	(65,000)	2,425,000
INCOME (LOSS) BEFORE EQUITY IN NET LOSS OF EQUITY METHOD INVESTEE:	(144,000)	8,601,000
SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE	(96,000)
NET INCOME (LOSS)	$ (240,000)	$ 8,601,000
Net Income (LOSS) Per Share
Basic	$ (0.01)	$ 0.36
Diluted	$ (0.01)	$ 0.34
Weighted average common shares outstanding:
Basic	23,745,848	23,807,014
Diluted	23,745,848	25,611,497
Cash dividends declared per share	$ 0.05	$ 0.05
NET INCOME (LOSS)	$ (240,000)	$ 8,601,000
OTHER COMPREHENSIVE INOME (LOSS)
Net unrealized holding gain (loss) on corporate bonds and notes arising during the period, net of tax	110,000	(25,000)
COMPREHENSIVE INCOME (LOSS)	$ (130,000)	$ 8,576,000

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Beginning Balance, Shares at Dec. 31, 2017	23,843,915
Beginning Balance, Amount at Dec. 31, 2017	$ 238,000	$ 64,435,000	$ (10,219,000)	$ (42,000)	$ 54,412,000
Dividends and dividend equivalents declared			(1,228,000)		(1,228,000)
Stock-based compensation		226,000			226,000
Vesting of restricted stock units, Shares	11,250
Vesting of restricted stock units, Amount
Cashless exercise of options, Shares	26,890
Cashless exercise of options, Amount	$ 1,000				1,000
Treasury stock purchased and retired, Shares	(153,993)
Treasury stock purchased and retired, Amount	$ (2,000)		(397,000)		(399,000)
Net unrealized loss on corporate bonds and notes				(25,000)	(25,000)
Proceeds from exercise of options, Shares	25,000
Proceeds from exercise of options, Amount	$ 1,000	29,000			30,000
Net income			8,601,000		8,601,000
Ending Balance, Shares at Mar. 31, 2018	23,753,062
Ending Balance, Amount at Mar. 31, 2018	$ 238,000	64,690,000	(3,243,000)	(67,000)	61,618,000
Beginning Balance, Shares at Dec. 31, 2018	23,735,927
Beginning Balance, Amount at Dec. 31, 2018	$ 237,000	65,151,000	(7,102,000)	(81,000)	58,205,000
Dividends and dividend equivalents declared			(1,215,000)		(1,215,000)
Stock-based compensation		144,000			144,000
Vesting of restricted stock units, Shares	11,250
Vesting of restricted stock units, Amount
Cashless exercise of options, Shares	35,884
Cashless exercise of options, Amount	$ 1,000	(1,000)
Treasury stock purchased and retired, Shares	(300)
Treasury stock purchased and retired, Amount			(1,000)		(1,000)
Net unrealized loss on corporate bonds and notes				110,000	110,000
Net income			(240,000)		(240,000)
Ending Balance, Shares at Mar. 31, 2019	23,782,761
Ending Balance, Amount at Mar. 31, 2019	$ 238,000	$ 65,294,000	$ (8,558,000)	$ 29,000	$ 57,003,000

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ (240,000)	$ 8,601,000
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of patents	54,000	70,000
Stock-based compensation	144,000	226,000
Loss from equity investment	96,000
Unrealized gains on marketable securities	(14,000)
Deferred tax benefit	(65,000)
Changes in operating assets and liabilities:
Royalty receivables	(330,000)	151,000
Prepaid taxes		125,000
Other current assets	29,000	22,000
Operating lease right-of-use assets	33,000
Accounts payable	328,000	185,000
Income taxes payable		2,319,000
Operating lease obligations	(31,000)
Accrued expenses	(1,419,000)	5,223,000
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(1,415,000)	16,922,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of marketable securities	10,586,000
Purchases of marketable securities	(10,068,000)	(9,761,000)
Development of patents	(24,000)	(27,000)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	494,000	(9,788,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid	(1,191,000)	(1,188,000)
Repurchases of common stock, net of commissions	(1,000)	(399,000)
Proceeds from exercise of options and warrants		30,000
NET CASH USED IN FINANCING ACTIVITIES	(1,192,000)	(1,557,000)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(2,113,000)	5,557,000
CASH AND CASH EQUIVALENTS, beginning of period	23,763,000	51,101,000
CASH AND CASH EQUIVALENTS, end of period	21,650,000	56,678,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for: Interest
Cash paid during the period for: Income taxes
NON-CASH FINANCING ACTIVITY
Accrued dividend rights on restricted stock units	$ 27,000	$ 41,000

BASIS OF PRESENTATION AND NATUR

BASIS OF PRESENTATION AND NATURE OF BUSINESS:	3 Months Ended
	Mar. 31, 2019
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, 2019, and the results of its operations and comprehensive income (loss) for the three month periods ended March 31, 2019 and March 31, 2018, changes in stockholders' equity for the three month periods ended March 31, 2019 and March 31, 2018, and its cash flows for the three month periods ended March 31, 2019 and March 31, 2018. 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, 2018 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2019. The results of operations for the three months ended March 31, 2019 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 sixty-six (66) The Company's current strategy includes continuing to pursue licensing opportunities for its intellectual property assets. In addition, the Company continually reviews opportunities to acquire or license additional intellectual property as well as other strategic alternatives. The Company's patent 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 and Mirror Worlds Patent Portfolio. In addition, the Company may enter into strategic relationships with third parties to develop, commercialize, license or otherwise monetize their intellectual property. On November 13, 2017, a jury empaneled in the U.S. District Court for the Eastern District of Texas, Tyler Division, found that certain claims of the Company's Remote Power Patent were invalid and not infringed by Hewlett-Packard (the "HP Jury Verdict"). On August 29, 2018, the District Court (i) granted the Company's motion for judgment as a matter of law that its Remote Power Patent is valid, thereby overturning the HP Jury Verdict of invalidity and (ii) denied the Company's motion for a new trial on infringement. The Company has appealed the District Court's denial of its motion for a new trial on infringement to the U.S. Court of Appeals for the Federal Circuit (see Note I[1] hereof). The HP Jury Verdict had a material adverse effect on the Company's results of operations and cash-flow for the year ended December 31, 2018 and the three months ended March 31, 2019 and will continue to do so for the life of the Company's Remote Power Patent (March 2020) unless the District Court judgment of non-infringement is reversed on appeal. The Company has been dependent upon its Remote Power Patent for a significant portion of its revenue. As a result of the HP Jury Verdict, several of the Company's largest licensees, including Cisco Systems, Inc., its largest licensee, notified the Company in late November 2017 and January 2018 that they will no longer make ongoing royalty payments to the Company pursuant to their license agreements. If the Company successfully overturns the District Court order of non-infringement in its appeal to the Federal Circuit, certain licensees of the Remote Power Patent, including Cisco, will be obligated to pay the Company ongoing royalties and all royalties that accrued but were not paid following (and prior to) the HP Jury Verdict in November 2017. If the Company is unable to reverse the District Court order of non-infringement on appeal, or there is an arbitration ruling that certain of the Company's licensees, including Cisco, are relieved of their obligations to pay the Company royalties and the District Court order of non-infringement is not subsequently reversed on appeal, the Company's business, results of operations and cash-flow will continue to be materially adversely effected (see Note I[1] and Note I[2] hereof). Consistent with the Company's prior view, the District Court decision overturning the HP Jury Verdict on invalidity as referenced above confirmed the obligations of certain licensees to pay the Company all prior unpaid royalties, including those that accrued after the date of the HP Jury Verdict (November 13, 2017), as well as future royalties through the expiration of the Remote Power Patent in March 2020 (see Note I[1] to our unaudited condensed consolidated financial statements included in this quarterly report). Notwithstanding the District Court decision overturning the HP Jury Verdict on validity, Dell Inc. refused to pay us all unpaid royalties that accrued prior to and after the HP Verdict and in November 2018 we instituted litigation against Dell to collect such unpaid royalties (see Note I[5] to the Company's unaudited condensed consolidated financial statements included in this quarterly report). Consistent with the Company's revenue recognition policy (see Note B[5] hereof), the Company did not record revenue for 2018 and for the three months ended March 31, 2019 from certain licensees, including Cisco, who notified the Company they would not pay the Company ongoing royalties as a result of the HP Jury Verdict. The Company disagrees with the position taken by such licensees and may pursue arbitration if it does not achieve a satisfactory resolution (see Note I[1] and I[2] hereof).

SUMMARY OF SIGNIFICANT ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	[1] Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated 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 unaudited condensed 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 revenue recognition, stock-based compensation, income taxes, valuation of patents and equity method investments, including evaluation of the Company's basis difference. Actual results could be materially different from those estimates, upon which the carrying values were based. [2] Cash and Cash Equivalents The Company maintains cash deposits in high quality financial institutions insured by the Federal Deposit Insurance Corporation ("FDIC"). Accounts at each institution are insured by the FDIC up to $250,000. At March 31, 2019, the Company maintained a cash balance of $15,032,000 The Company considers all highly liquid short-term investments, including certificates of deposit and money market funds, that are purchased with an original maturity of three months or less to be cash equivalents. [3] Marketable Securities The Company's marketable securities are comprised of certificates of deposit with original maturity greater than three months from date of purchase, bond mutual funds, and corporate bonds and notes (see Note F). At March 31, 2019, included in marketable securities, the Company had aggregate certificates of deposit of $11,126,000 at financial institutions which constituted $1,500,000 in excess of the FDIC limit. The Company's marketable securities are measured at fair value and are accounted for in accordance with ASU 2016-01. Unrealized holding gains and losses on certificates of deposit and bond mutual funds are recorded in net realized and unrealized gain (loss) from investments on the unaudited condensed consolidated statements of income and comprehensive income. Unrealized holding gains and losses, net of the related tax effect, on corporate bonds and notes are excluded from earnings and are reported as a separate component of stockholders' equity until realized. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of the marketable securities. [4] Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09 Revenue from Contracts with Customers Under ASC 606, revenue is recognized when the Company completes the licensing of its intellectual property to its licensees, in an amount that reflects the consideration the Company expects to be entitled to in exchange for licensing its intellectual property. The Company determines revenue recognition through the following steps: • identification of the license agreement; • identification of the performance obligations in the license agreement; • determination of the consideration for the license; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when the Company satisfies its performance obligations. Revenue disaggregated by source is as follows: Three Months Ended March 31 2019 2018 Fully-Paid Licenses $ 130,000 (1) $ 12,700,000 Royalty Bearing Licenses 476,000 443,000 Other Revenue — 6,320,000 (2) Total Revenue $ 606,000 $ 19,463,000 (1) Represents conversion of an existing royalty bearing license to a fully-paid license. (2) Revenue from the sale of the Company's unsecured claim against Avaya, Inc. to an unaffiliated third party (see Note I[1] hereof). The Company relies on royalty reports received from third party licensees to record its revenue. From time to time, the Company may audit or otherwise dispute royalties reported from licensees. Any adjusted royalty revenue as a result of such audits or dispute is recorded by the Company in the period in which such adjustment is agreed to by the Company and the licensee or otherwise determined. Revenue from the Company's patent licensing business is generated from negotiated license agreements. The timing and amount of revenue recognized from each licensee depends upon a variety of factors, including the terms of each agreement and the nature of the obligations of the parties. These agreements may include, but not be limited to, elements related to past infringement liabilities, non-refundable upfront license fees, and ongoing royalties on licensed products sold by the licensee. Generally, in the event of settlement of litigation related to the Company's assertion of patent infringement involving its intellectual property, defendants will either pay (i) a non-refundable lump sum payment for a non-exclusive fully-paid license (a "Fully-Paid License"), or (ii) a non-refundable lump sum payment (license initiation fee) together with an ongoing obligation to pay quarterly or monthly royalties to the Company for the life of the licensed patent (a "Royalty Bearing License"). The Company's license agreements, both Fully-Paid Licenses and Royalty Bearing Licenses, typically include some combination of the following: (i) the grant of a non-exclusive license to manufacture and/or sell products covered by its patented technologies; (ii) the release of the licensee from certain claims, and (iii) the dismissal of any pending litigation. The intellectual property rights granted pursuant to these licenses typically extend until the expiration of the related patents. Pursuant to the terms of these agreements, the Company typically has no further performance obligations with respect to the grant of the non-exclusive licenses. Generally, the license agreements provide for the grant of the licenses, releases, and other obligations following execution of the agreement and the receipt of the up-front lump sum payment for a Fully-Paid License or a license initiation fee for a Royalty Bearing License. Ongoing Royalty Payments: Certain of the Company's revenue from Royalty Bearing Licenses results from the calculation of royalties based on a licensee's actual quarterly sales (one licensee pays monthly royalties) of licensed products, applied to a contractual royalty rate. Licensees that pay royalties on a quarterly basis generally report to the Company actual quarterly sales and related quarterly royalties due within 45 days after the end of the quarter in which such sales activity takes place. Licensees with Royalty Bearing Licenses are obligated to provide the Company with quarterly (or monthly) royalty reports that summarize their sales of licensed products and their related royalty obligations to the Company. The Company receives these royalty reports subsequent to the period in which its licensees underlying sales occurred. The amount of royalties due under Royalty Bearing Licenses, each quarter, cannot be reasonably estimated by management. Consequently, the Company recognizes revenue for the period in which the royalty report is received in arrears and other revenue recognition criteria are met. Non-Refundable Up-Front Fees: Fully-Paid Licenses provide for a non-refundable up-front payment, for which the Company has no future obligations or performance requirements, revenue is generally recognized when the Company has obtained the signed license agreement, all performance obligations have been substantially performed, amounts are fixed and determinable, and collectability is reasonably assured. Revenue from Fully-Paid Licenses may consist of one or more installments. The timing and amount of revenue recognized from each licensee depends upon a number of factors including the specific terms of each agreement and the nature of the deliverables and obligations. [5] Equity Investments Equity method investments are equity securities in entities the Company does not control but over which it has the ability to exercise significant influence. These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments — Equity Method and Joint Ventures When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. Upon sale of equity method investments, the difference between sales proceeds and the carrying amount of the equity investment is recognized in profit or loss. [6] 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. [7] Costs of Revenue The Company includes in costs of revenue for the three months ended March 31, 2019 and 2018 contingent legal fees payable to patent litigation counsel (see Note G[1] hereof), other contractual payments related to net proceeds from settlements (see Note G[2] hereof) and incentive bonus compensation payable to its Chairman and Chief Executive Officer (see Note H[1] hereof). [8] 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 (timing) 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 forwards. 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 U.S. federal, state and local income tax returns prior to 2015 are not subject to examination by any applicable tax authorities, except that tax authorities could challenge returns (only under certain circumstances) for earlier years to the extent they generated loss carry-forwards that are available for those future years. In July 2018, the Internal Revenue Service notified the Company that it was examining its 2016 federal tax return. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act ("Tax Act"), which made significant changes to the U.S. federal income tax law. The Tax Act affects 2018 and forward, including, but not limited to, a reduction in the federal corporate rate from 35.0% to 21.0%, elimination of the corporate alternative minimum tax, a new limitation on the deductibility of certain executive compensation, limitations on net operating losses generated after December 31, 2017 and various other items. 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"), which means, 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"). In the second half of 2018 (as well as during the second half of 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 continually assesses 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 that it does not distribute to its shareholders. [9] Stock-Based Compensation The Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation - Stock Compensation Compensation expense related to awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Share based payments issued to non-employees are recorded at their fair values and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period and are expensed using an accelerated attribution model. The Company uses the Black-Scholes option pricing model to determine the grant date fair value of options granted. The fair value of restricted stock units is determined based on the number of shares underlying the grant and either the quoted market price of the Company's common stock on the date of grant for time-based and performance-based awards, or the fair value on the date of grant using the Monte Carlo Simulation model for market-based awards (see Note D for further discussion of the Company's stock-based compensation). On January 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting [10] 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 and shares were issued pursuant to outstanding restricted stock units. Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share (see Note E). [11] Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures There are three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that are supported by little or no market activity; therefore, the inputs are developed by the Company using estimates and assumptions that the Company expects a market participant would use, including pricing models, discounted cash flow methodologies, or similar techniques. The carrying value of the Company's financial instruments, including cash and cash equivalents, royalty receivable, other assets, accounts payable, and accrued expenses approximates fair value because of the short-term nature of these financial instruments. The Company's marketable securities are classified within Level 1 because they are valued using quoted market prices in an active market (see Marketable Securities– Note F). [12] Carrying Value, Recoverability and Impairment of Long-Lived Assets An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. If an impairment loss is recognized, the adjusted carrying amount of a long-lived asset shall be its new cost basis. For a depreciable long-lived asset, the new cost basis shall be depreciated (amortized) over the remaining useful life of that asset. Restoration of a previously recognized impairment loss is prohibited. At March 31, 2019 and 2018, there was no impairment to the Company's patents and equity investment. The Company's equity investment in ILiAD Biotechnologies, LLC ("ILiAD"), a privately held development stage biotechnology company (see Equity Investment – Note J) is evaluated on a non-recurring basis for impairment and is classified within Level 3 as it is valued using significant unobservable inputs or data in an inactive market, and the valuation requires management judgment due to the absence of market price and inherent lack of liquidity. [13] Dividend Policy Dividends are recorded when declared by the Company's Board of Directors. Common stock dividends are charged against retained earnings when declared or paid (see Note M hereof). [14] Reclassification The Company has reclassified certain amounts in the prior period consolidated financial statements to conform to the current period's presentation. The Company reclassified a certain investment within cash and cash equivalents which was previously classified as marketable securities. These reclassifications had no impact on the previously reported net income. [15] New Accounting Standards Leases In February 2016, the FASB issued ASU 2016-2, Leases ("ASC 842"), The Company elected to adopt ASC 842 using the modified retrospective method and, therefore, has not recast comparative periods presented in its unaudited condensed consolidated financial statements. The Company elected the package of transition practical expedients for existing leases and therefore the Company has not reassessed the following: lease classification for existing leases, whether any existing contracts contained leases, and if any initial direct costs were incurred. The Company did not apply the hindsight practical expedient, and accordingly, the Company did not use hindsight in its assessment of lease terms. As permitted under ASC 842, the Company elected to not recognize ROU assets and related lease obligations for leases with terms of twelve months or less. In connection with the adoption of ASC 842, the Company recorded $127,000 of operating lease right-of-use assets and $128,000 of operating lease obligations as of January 1, 2019. See Note G[3] for additional information and required disclosures. Under ASC 842, the Company determined if an arrangement is a lease at inception. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's determined incremental borrowing rate is a hypothetical rate based on its understanding of what the Company's credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received and net of the deferred rent balance on the date of implementation. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. Disclosures On January 1, 2019, the Company adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

PATENTS

PATENTS	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE C - PATENTS	The Company's intangible assets at March 31, 2019 include patents with estimated remaining economic useful lives ranging from 1.25 to 14.75 March 31, 2019 December 31, 2018 Gross carrying amount – patents $ 7,705,000 $ 7,682,000 Accumulated amortization – patents (5,746,000 ) (5,693,000 ) Patents, net $ 1,959,000 $ 1,989,000 Amortization expense for the three months ended March 31, 2019 and March 31, 2018 was $54,000 Twelve Months Ended March 31, 2020 $ 280,000 2021 280,000 2022 280,000 2023 280,000 2024 and thereafter 839,000 Total $ 1,959,000 The Company's Remote Power Patent expires in March 2020. The expiration date of the patent within the Company's Mirror Worlds Patent Portfolio is February 2020 (eight of the nine patents in the Mirror Worlds Patent Portfolio have expired). The expiration dates of the patents within the Cox Patent Portfolio range from September 2021 to November 2023. The expiration dates of patents within the Company's M2M/IoT Patent Portfolio range from September 2033 to May 2034 and the expiration date of the QoS Patents is June 2019.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE D - STOCK-BASED COMPENSATION	Restricted Stock Units During the three months ended March 31, 2019, the Company issued 15,000 restricted stock units ("RSUs") to each of its three non-management directors as an annual grant for 2019 for service on the Company's Board of Directors. The RSUs vest in four equal quarterly installments of 3,750 shares of common stock on March 15, 2019, June 15, 2019, September 15, 2019 and December 15, 2019, subject to continued service on the Board of Directors. During the three months ended March 31, 2018, the Company issued 15,000 RSUs to each of its three non-management directors as an annual grant for 2018 for service on the Company's Board of Directors. The RSUs vested in four equal quarterly installments of 3,750 shares of common stock on March 15, 2018, June 15, 2018, September 15, 2018 and December 15, 2018, subject to continued service on the Board of Directors. A summary of restricted stock unit activity for the three months ended March 31, 2019 is as follows (each restricted stock unit issued by the Company represents the right to receive one share of the Company's common stock): Number of Shares Weighted-Average Grant Date Fair Value Balance of restricted stock units outstanding at December 31, 2018 505,000 $ 2.17 Grants of restricted stock units 45,000 2.60 Vested restricted stock units (11,250 ) 2.60 Balance of unvested restricted stock units at March 31, 2019 538,750 $ 2.20 Restricted stock unit compensation expense was $144,000 The Company has an aggregate of $599,000 of unrecognized restricted stock unit compensation as of March 31, 2019 to be expensed over a weighted average period of 1.41 years. All of the Company's outstanding (unvested) restricted stock units have dividend equivalent rights. As of March 31, 2019, there was $102,000 accrued for dividend equivalent rights. As of December 31, 2018, there was $76,000 accrued for dividend equivalent rights. Stock Options There were no stock option grants during the three months ended March 31, 2019 and March 31, 2018. The following table presents information relating to all stock options outstanding and exercisable at March 31, 2019: Weighted Weighted Average Range of Average Remaining Exercise Options Exercise Life in Options Price Outstanding Price Years Exercisable $0.83 - $2.34 1,530,000 $1.15 1.33 1,530,000 The Company had no recorded stock-based compensation related to stock option grants for the three months ended March 31, 2019 and March 31, 2018. The Company had no unrecognized stock-based compensation cost as of March 31, 2019. The aggregate intrinsic value of options exercisable at March 31, 2018 was $2,226,000. During the three months ended March 31, 2019, stock options to purchase an aggregate of 105,000 shares of the Company's common stock, at an exercise price of $1.65 per share, were exercised on a net exercise (cashless) basis by three non-management directors of the Company. With respect to the aforementioned stock options, net shares of an aggregate of 35,884 were delivered to the three non-management directors. During the three months ended March 31, 2018, stock options to purchase an aggregate of 75,000 shares of the Company's common stock, at an exercise price of $1.19 per share, were exercised (50,000 shares of which were exercised on a net exercise (cashless) basis) by three non-management directors of the Company. With respect to the aforementioned stock options to purchase 50,000 shares on a net exercise basis by two directors of the Company, net shares of an aggregate of 26,890 were delivered to the directors.

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE E - EARNINGS 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 restricted stock units. Potential shares of 2,068,750 and 2,788,750 at March 31, 2019 and March 31, 2018, respectively, consisted of options and restricted stock units. Computations of basic and diluted weighted average common shares outstanding were as follows: Three Months Ended March 31, 2019 2018 Weighted-average common shares outstanding – basic 23,745,848 23,807,014 Dilutive effect of options, warrants and restricted stock units — 1,804,483 Weighted-average common shares outstanding – diluted 23,745,848 25,611,497 Options and restricted stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive 2,068,750 —

MARKETABLE SECURITIES

MARKETABLE SECURITIES	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE F - MARKETABLE SECURITIES	Marketable securities as of March 31, 2019 and December 31, 2018 were composed of: March 31, 2019 Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 11,126,000 $ — $ — $ 11,126,000 Short term bond funds 11,379,000 14,000 — 11,393,000 Corporate bonds and notes 8,289,000 86,000 (57,000 ) 8,318,000 Total marketable securities $ 30,794,000 $ 100,000 $ (57,000 ) $ 30,837,000 December 31, 2018 Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 13,151,000 $ — $ — $ 13,151,000 Short term bond funds 9,648,000 — (8,000 ) 9,640,000 Corporate bonds and notes 8,518,000 — (81,000 ) 8,437,000 Total marketable securities $ 31,317,000 — $ (89,000 ) $ 31,228,000 The Company's marketable securities are measured at fair value and are accounted for in accordance with ASU 2016-01. Unrealized holding gains and losses on certificates of deposit and bond mutual funds are recorded in net realized and unrealized loss from investments on the consolidated statements of income and comprehensive income. Unrealized holding gains and losses, net of the related tax effect, on corporate bonds and notes are excluded from earnings and are reported as a separate component of stockholders' equity until realized. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of the marketable securities.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE G - COMMITMENTS AND CONTINGENCIES	[1] Legal Fees Russ, August & Kabat provides legal services to the Company with respect to its patent litigation filed in May 2017 against Facebook, Inc. in the U.S. District Court for the Southern District of New York relating to several patents within the Company's Mirror Worlds Patent Portfolio (see Note I[4] hereof). The terms of the Company's agreement with Russ, August & Kabat provide for cash payments on a monthly basis subject to a cap plus a contingency fee ranging between 15% and 24% 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. Russ, August & Kabat also 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 I[3] hereof). The terms of the Company's agreement with Russ, August & Kabat provide 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 filed in September 2011 against sixteen (16) data networking equipment manufacturers in the U.S. District Court for the Eastern District of Texas, Tyler (see Note I[1] hereof). 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 months ended March 31, 2019 and March 31, 2018, the Company incurred aggregate contingent legal fees to Dovel & Luner, LLP with respect to the litigation of $108,000 and $6,277,000, respectively. The Company is responsible for a certain portion of the expenses incurred with respect to the litigation. Dovel & Luner, LLP also 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 I[2] hereof). 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, 2019 and March 31, 2018, the Company did not incur any contingent legal fees to Dovel & Luner, LLP with respect to the litigation. [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 twenty-five (25) additional related patents by the USPTO resulting in an aggregate of twenty-nine (29) patents within the Cox Patent Portfolio. 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 U.S. 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. In addition, 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, and an affiliated entity also received warrants to purchase an aggregate of 1,250,000 shares of the Company's common stock (500,000 shares at an exercise price of $2.05 per share, 375,000 shares at an exercise price of $2.10 per share and 375,000 shares at an exercise price of $1.40 per share). All such warrants were exercised by Recognition (and its affiliate) as of January 2017, resulting in aggregate proceeds to the Company of $2,337,000. As part of the acquisition of the Mirror Worlds Patent Portfolio, the Company also entered into an agreement with Recognition pursuant to which Recognition 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; and (iii) 20% of any portion of the net proceeds in excess of $250 million. Since entering into the agreement with Recognition in May 2013, the Company has paid Recognition an aggregate of $3,127,000 with respect to such net proceeds interest related to the Mirror Worlds Patent Portfolio. No such payments were made by the Company to Recognition during the three months ended March 31, 2019 and March 31, 2018. On December 29, 2017, the Company acquired from M2M and IoT Technologies, LLC ("M2M") the M2M/IoT Patent Portfolio consisting of twelve (12) issued U.S. patents relating to, among other things, the enabling technology for authenticating and using embedded SIM cards in next generation IoT, Machine-to-Machine, and other mobile devices, including smartphones, tablets and computers as well as automobiles and drones. The Company paid $1,000,000 to acquire the M2M/IoT Patent Portfolio from M2M and has an obligation to pay M2M 14% of the first $100 million of net proceeds (after deduction of expenses) and 5% of net proceeds greater than $100 million from Monetization Activities (as defined) related to the patent portfolio. In addition, M2M will be entitled to receive from the Company $250,000 of additional consideration upon the occurrence of certain future events related to the patent portfolio. Since the acquisition of the patent portfolio from M2M, the Company has been issued nine additional related patents by the USPTO resulting in an aggregate of twenty-one (21) issued U.S. patents. [3] Lease Agreements The Company currently has two facility operating leases with remaining lease terms of six months to fourteen months. The Company leases its principal office space in New York City at a monthly base rent of approximately $3,900 which lease expires on May 31, 2020. The Company also leases office space in New Canaan, Connecticut expiring on September 30, 2019 at a base rent (inclusive of utilities) of $7,750 per month (increasing $100 per month each year), which is subject to annual adjustments to reflect increases in real estate taxes and operating expenses. Under ASC 842 (see Note B[15] hereof), operating lease expense is generally recognized evenly over the term of the lease. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease arrangements entered into or reassessed after the adoption of ASC 842, the Company combines the lease and non-lease components in determining the right-of-use ("ROU") assets and related lease obligation. Activity related to the Company's operating leases was as follows: Three Months Ended March 31, 2019 Operating lease expense $ 34,000 Cash paid for amounts included in the measurement of operating lease obligations 34,000 ROU assets obtained in exchange for operating lease obligations 128,000 The Company's operating lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate was determined based on information available for purposes of determining the present value of lease payments. The Company used an incremental borrowing rate of 5.5% at January 1, 2019 for all leases that commenced prior to that date. ROU lease assets and related lease obligations for the Company's operating leases were recorded in the condensed consolidated balance sheet as follows: As of March 31, 2019 Operating lease right-of-use assets $ 95,000 Operating lease obligations – current $ 88,000 Operating lease obligations – non-current 8,000 Total lease obligations $ 96,000 Weighted average remaining lease term (in months) 10 Weighted average discount rate 5.5 % Future lease payments included in the measurement of lease liabilities on the unaudited condensed consolidated balance sheet as of March 31, 2019, were as follows: Operating Leases 2019 – remaining period $ 79,000 2020 20,000 Total future minimum lease payments 99,000 Less imputed interest (3,000 ) Total operating lease liability $ 96,000

EMPLOYMENT ARRANGEMENTS AND OTH

EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE H - EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS	[1] On July 14, 2018, 375,000 RSUs owned by the Company's Chairman and Chief Executive Officer vested in accordance with the above referenced terms of the Agreement. With respect to such vesting of RSUs, the Company's Chairman and Chief Executive Officer delivered 172,313 shares of common stock to satisfy withholding taxes, and received 202,687 net shares of common stock. Under the terms of the Agreement, so long as the Chairman and Chief Executive Officer continues to serve as an executive officer of the Company, whether pursuant to the Agreement or otherwise, the Chairman and Chief Executive Officer shall also receive incentive compensation in an amount equal to 5% of the Company's gross royalties or other payments from Licensing Activities (as defined) (without deduction of legal fees or any other expenses) with respect to its Remote Power Patent and a 10% net interest (gross royalties and other payments after deduction of all legal fees and litigation expenses related to licensing, enforcement and sale activities, but in no event shall he receive less than 6.25% of the gross recovery) of the Company's royalties and other payments relating to Licensing Activities with respect to patents other than the Remote Power Patent (including the Mirror Worlds Patent Portfolio, Cox Patent Portfolio and M2M/IoT Patent Portfolio) (collectively, the "Incentive Compensation"). During the three months ended March 31, 2019 and March 31, 2018, the Chairman and Chief Executive Officer earned Incentive Compensation of 30,000 and $973,000, respectively. As of March 31, 2019 and December 31, 2018, $49,000 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 any time 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. [2] [3]

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE I - LEGAL PROCEEDINGS	[1] On November 13, 2017, a jury empaneled in the U.S. District Court for the Eastern District of Texas, Tyler Division, found that certain claims of the Company's Remote Power Patent were invalid and not infringed by HP. On February 2, 2018, the Company moved to throw out the jury verdict and have the Court determine that certain claims of the Remote Power Patent are not obvious (invalid) as a matter of law by filing motions for judgment as a matter of law on validity and a new trial on validity and infringement. On August 29, 2018, the District Court issued an order granting the Company's motion for judgment as a matter of law that the Remote Power Patent is valid, thereby overturning the jury verdict of invalidity and denied the Company's motion for a new trial on infringement. On August 30, 2018, the Company appealed the District Court's denial of its motion for a new trial on infringement to the U.S. Court of Appeals for the Federal Circuit. On September 13, 2018, HP filed a cross-appeal of the District Court's order that the Remote Power Patent is valid as a matter of law. No hearing on the appeal has been set. If the Company is unable to reverse the District Court order on appeal, or there is an arbitration ruling that the District Court order relieves the obligation of certain of the Company's licensees including Cisco, the Company's largest licensee, to continue to pay royalties to the Company and the District Court order is not subsequently reversed on appeal, the Company's business, results of operations and cash-flow will continue to be materially adversely effected. On November 1, 2017, defendant Juniper Networks, Inc. ("Juniper") agreed to settle its litigation with the Company for $13,250,000 for a fully-paid license to the Company's Remote Power Patent. On December 8, 2017, the Company was advised by Juniper that it would not make the settlement payment to the Company as a result of the HP Jury Verdict and that there was no binding settlement agreement. On January 16, 2018, the Company revised and closed its settlement with defendant Juniper. The Company agreed to revise the settlement to avoid the possibility of protracted litigation regarding enforcing the settlement. Under the terms of the revised settlement, Juniper paid the Company $12,700,000 and received a fully-paid license to the Remote Power Patent (and certain other patents owned by the Company) for its full term, which applies to its sales of PoE products. On October 16, 2017, the U.S. Bankruptcy Court of the Southern District of New York approved the Company's settlement with defendant Avaya, Inc. ("Avaya"). As part of the settlement, Avaya, which on January 19, 2017 had filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, entered into a non-exclusive license agreement for the full term of the Remote Power Patent. Under the terms of the license, Avaya paid a lump sum amount for sales of certain designated PoE products and agreed to pay ongoing royalties for other designated PoE products. In addition, Avaya agreed that the Company shall have an allowed general unsecured claim in the amount of $37,500,000, as amended, relating to all acts occurring on or before January 19, 2017 ("Allowed Claim"). Under the Debtors' Second Amended Joint Chapter 11 Plan of Reorganization of Avaya Inc. and its Debtor Affiliates, which was approved by the Bankruptcy Court on November 28, 2017 and became effective on December 15, 2017, the Debtors estimated that the total amount of general unsecured claims that will ultimately be allowed will total approximately $305,000,000 which, based on the treatment of general unsecured creditors therein, would result in estimated recoveries for the holders of general unsecured claims of approximately 18.9% of their Allowed Claim. On January 9, 2018, the Company sold its Allowed Claim to a third party for $6,320,000. In October 2016, the Company entered a settlement agreement with Polycom, Inc. ("Polycom"). Under the terms of the settlement, Polycom entered into a non-exclusive license for the Remote Power Patent for its full term and is obligated to pay the Company a license initiation fee of $5,000,000 for past sales of its PoE products and ongoing royalties based on its sales of PoE products. $2,000,000 of the license initiation fee was paid within 30 days and the balance is payable in three annual installments of $1,000,000 beginning in October 2017. Payments due in October 2018 and October 2019 need not be paid by Polycom if all asserted claims of the Company's Remote Power Patent have been found invalid. Since the District Court in August 2018 granted the Company's motion for judgment as a matter of law that the Remote Power Patent is valid thereby overturning the HP Jury Verdict of invalidity, Polycom became obligated to make the aforementioned remaining aggregate payments of $2,000,000 (subject to the continued validity of the Remote Power Patent) to the Company (of which $1,000,000 was paid in November 2018). [2] The Company's seventeen (17) licensees with royalty bearing licenses are obligated to pay the Company ongoing royalties on a quarterly or monthly basis for the life of its Remote Power Patent (through March 2020), subject to certain conditions. These conditions include the continued validity of certain claims of the Remote Power Patent or a finding that a third party's PoE products are found not to infringe the Remote Power Patent and such finding applies to the applicable licensee's licensed products. As a result of the HP Jury Verdict several of the Company's largest licensees, including Cisco, its largest licensee, notified the Company in late November 2017 and January 2018 that they will no longer make ongoing royalty payments to the Company pursuant to their license agreements. If the Company successfully overturns the District Court judgment of non-infringement in the appeal to the Federal Circuit, certain licensees of the Remote Power Patent, including Cisco, will be obligated to pay the Company ongoing royalties and all royalties that accrued but were not paid following (and prior to) the HP Jury Verdict in November 2017. If the Company is unable to reverse the District Court order of non-infringement on appeal, or there is an arbitration ruling that certain of our licensees, including Cisco, are relieved of their obligations to pay royalties and the District Court order of non-infringement is not subsequently reversed on appeal, the Company's business, results of operations and cash-flow will continue to be materially adversely effected (see Note I[1] hereof). [3] The above referenced litigations that the Company commenced in the U.S. District Court for the Southern District of New York in April 2014 and December 2014 against Google and YouTube were subject to court ordered stays which were in effect from July 2, 2015 until January 2, 2019 as a result of proceedings at the Patent Trial and Appeal Board (PTAB) and related appeals. Pursuant to a Joint Stipulation and Order Regarding Lifting of Stays, entered on January 2, 2019, the parties agreed, among other things, that the stays with respect to the litigations were lifted. [4] [5]

EQUITY INVESTMENT

EQUITY INVESTMENT	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE J – EQUITY INVESTMENT	On December 18, 2018, the Company agreed to make an investment of up to $5,000,000 in ILiAD Biotechnologies, LLC ("ILiAD"), a privately held development stage biotechnology company dedicated to the prevention of human disease caused by Bordetella pertussis with a current focus on its proprietary intranasal vaccine, BPZE1, for the prevention of pertussis (whooping cough). The investment by the Company is part of a financing of up to approximately $16,200,000 of Class C units of ILiAD, consisting of two tranches. The Company made an initial investment (tranche 1) at the December 18, 2018 closing of $2,500,000 to purchase 1,111,111 Class C units at $2.25 per unit and received five-year warrants to purchase 366,666 Class C units at an exercise price of $2.75 per unit. The Company owned approximately 6.8% of the outstanding units of ILiAD (on a non-fully diluted basis) at March 31, 2019. In connection with its investment, the Company's Chairman and Chief Executive Officer obtained a seat on ILiAD's Board of Managers. In accordance with the Securities Purchase Agreement, dated December 18, 2018, the Company is obligated to invest an additional $2,500,000 (tranche 2) to purchase 943,396 Class C units at $2.65 per unit (and will also receive additional five-year warrants to purchase 311,320 Class C units at an exercise price of $3.50 per unit) contingent upon ILiAD receiving, on or before December 31, 2019, an "allowed-to-proceed" notification from the FDA for a Phase 2b clinical study. On May 2, 2019, ILiAD notified the Company that it had received an "allowed to proceed" notice from the FDA permitting ILiAD to advance to the Phase 2b clinical study of its BP2E1 vaccine. ILiAD elected to permit its Class C investors (including the Company) to bifurcate their tranche 2 commitments such that 40% would be currently due (additional $1,000,000 investment by the Company which was made on May 6, 2019) and 60% (additional $1,500,000 investment by the Company) would be due when ILiAD receives satisfactory safety data from the clinical study. Following completion of the Class C unit financing (assuming completion of the second tranche), the Company will own approximately 10.5% of the outstanding units of ILiAD (on a non-fully diluted basis). The Company incurred approximately $41,000 of advisory and legal expenses in conjunction with its equity investment in ILiAD which have been capitalized as a component of the equity investment carrying value at March 31, 2019. The Company's investment in ILiAD is accounted for as an equity method investment in accordance with ASC 323, Investments — Equity Method and Joint Ventures The difference between the Company's share of equity in ILiAD's net assets and the equity investment carrying value reported on the Company's condensed consolidated balance sheet at March 31, 2019 is due to an excess amount paid over the book value of the investment totaling approximately $2,445,000 which is accounted for as equity method goodwill.

STOCK REPURCHASE

STOCK REPURCHASE	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE K - STOCK REPURCHASE	On June 14, 2017, the Board of Directors authorized an extension and increase of the Company's share repurchase program (the "Share Repurchase Program") to repurchase up to $5,000,000 of common stock over the subsequent 24 month period (for a total authorization of approximately $17,000,000 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, 2019, the Company has repurchased an aggregate of 8,154,698 shares of its common stock at an aggregate cost of $15,142,916 (exclusive of commissions) or an average per share price of $1.86. All such repurchased shares have been cancelled. During the three months ended March 31, 2019, the Company repurchased 300 shares of its common stock at a cost of $676 (exclusive of commissions) or an average per share price of $2.25. At March 31, 2019, the dollar value of remaining shares that may be repurchased under the Share Repurchase Program was $1,321,091.

CONCENTRATIONS

CONCENTRATIONS	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE L - CONCENTRATIONS	Revenue from four licensees constituted approximately 80% of the Company's revenue for the three months ended March 31, 2019. Revenue from one licensee constituted approximately 65% of the Company's revenue for the three months ended March 31, 2018. Revenue from the sale of the Company's unsecured claim against Avaya, Inc. constituted approximately 32% of the Company's revenue for the three months ended March 31, 2018. At March 31, 2019, royalty receivables from five licensees constituted in the aggregate approximately 93% of the Company's royalty receivables. At December 31, 2018, royalty receivables from four licensees constituted in the aggregate approximately 80% of the Company's royalty receivables.

DIVIDEND POLICY

DIVIDEND POLICY	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
NOTE M - DIVIDEND POLICY	On December 7, 2016, the Board of Directors of the Company approved the initiation of a dividend policy providing for the payment of a semi-annual cash dividend of $0.05 per common share ($0.10 per common share annually) commencing in 2017. The Company anticipates paying the semi-annual cash dividends in March and September of each year. It is anticipated that the semi-annual cash dividend will continue to be paid through March 2020 (the expiration of the Company's Remote Power Patent) provided that the Company continues to receive royalties from licensees of its Remote Power Patent. On February 9, 2018, the Board of Directors of the Company declared a semi-annual cash dividend of $0.05 per common share which was paid on March 23, 2018 to all common stockholders of record as of March 9, 2018. On February 11, 2019, the Board of Directors declared a cash dividend of $0.05 per common share with a payment date of March 25, 2019 to all common stockholders as of March 11, 2019. However, if the Company is unable to overturn the District Court order of non-infringement in its litigation with Hewlett-Packard on appeal to the Federal Circuit (see Note I[1] hereof), or there is not an arbitration ruling that the HP Jury Verdict finding of non-infringement does not apply to certain licensees of the Remote Power Patent including Cisco, the Board of Directors may decide to modify or discontinue semi-annual cash dividends of $0.05 per common share.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2019
Summary Of Significant Accounting Policies
Use of Estimates and Assumptions	The preparation of the unaudited condensed consolidated 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 unaudited condensed 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 revenue recognition, stock-based compensation, income taxes, valuation of patents and equity method investments, including evaluation of the Company's basis difference. Actual results could be materially different from those estimates, upon which the carrying values were based.
Cash and Cash Equivalents	The Company maintains cash deposits in high quality financial institutions insured by the Federal Deposit Insurance Corporation ("FDIC"). Accounts at each institution are insured by the FDIC up to $250,000. At March 31, 2019, the Company maintained a cash balance of $15,032,000 The Company considers all highly liquid short-term investments, including certificates of deposit and money market funds, that are purchased with an original maturity of three months or less to be cash equivalents.
Marketable Securities	The Company's marketable securities are comprised of certificates of deposit with original maturity greater than three months from date of purchase, bond mutual funds, and corporate bonds and notes (see Note F). At March 31, 2019, included in marketable securities, the Company had aggregate certificates of deposit of $11,126,000 at financial institutions which constituted $1,500,000 in excess of the FDIC limit. The Company's marketable securities are measured at fair value and are accounted for in accordance with ASU 2016-01. Unrealized holding gains and losses on certificates of deposit and bond mutual funds are recorded in net realized and unrealized gain (loss) from investments on the unaudited condensed consolidated statements of income and comprehensive income. Unrealized holding gains and losses, net of the related tax effect, on corporate bonds and notes are excluded from earnings and are reported as a separate component of stockholders' equity until realized. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of the marketable securities.
Revenue Recognition	On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09 Revenue from Contracts with Customers Under ASC 606, revenue is recognized when the Company completes the licensing of its intellectual property to its licensees, in an amount that reflects the consideration the Company expects to be entitled to in exchange for licensing its intellectual property. The Company determines revenue recognition through the follow steps: • identification of the license agreement; • identification of the performance obligations in the license agreement; • determination of the consideration for the license; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when the Company satisfies its performance obligations. Revenue disaggregated by source is as follows: Three Months Ended March 31 2019 2018 Fully-Paid Licenses $ 130,000 (1) $ 12,700,000 Royalty Bearing Licenses 476,000 443,000 Other Revenue — 6,320,000 (2) Total Revenue $ 606,000 $ 19,463,000 (1) Represents conversion of an existing royalty bearing license to a fully-paid license. (2) Revenue from the sale of the Company's unsecured claim against Avaya, Inc. to an unaffiliated third party (see Note I[1] hereof). The Company relies on royalty reports received from third party licensees to record its revenue. From time to time, the Company may audit or otherwise dispute royalties reported from licensees. Any adjusted royalty revenue as a result of such audits or dispute is recorded by the Company in the period in which such adjustment is agreed to by the Company and the licensee or otherwise determined. Revenue from the Company's patent licensing business is generated from negotiated license agreements. The timing and amount of revenue recognized from each licensee depends upon a variety of factors, including the terms of each agreement and the nature of the obligations of the parties. These agreements may include, but not be limited to, elements related to past infringement liabilities, non-refundable upfront license fees, and ongoing royalties on licensed products sold by the licensee. Generally, in the event of settlement of litigation related to the Company's assertion of patent infringement involving its intellectual property, defendants will either pay (i) a non-refundable lump sum payment for a non-exclusive fully-paid license (a "Fully-Paid License"), or (ii) a non-refundable lump sum payment (license initiation fee) together with an ongoing obligation to pay quarterly or monthly royalties to the Company for the life of the licensed patent (a "Royalty Bearing License"). The Company's license agreements, both Fully-Paid Licenses and Royalty Bearing Licenses, typically include some combination of the following: (i) the grant of a non-exclusive license to manufacture and/or sell products covered by its patented technologies; (ii) the release of the licensee from certain claims, and (iii) the dismissal of any pending litigation. The intellectual property rights granted pursuant to these licenses typically extend until the expiration of the related patents. Pursuant to the terms of these agreements, the Company typically has no further performance obligations with respect to the grant of the non-exclusive licenses. Generally, the license agreements provide for the grant of the licenses, releases, and other obligations following execution of the agreement and the receipt of the up-front lump sum payment for a Fully-Paid License or a license initiation fee for a Royalty Bearing License. Ongoing Royalty Payments: Certain of the Company's revenue from Royalty Bearing Licenses results from the calculation of royalties based on a licensee's actual quarterly sales (one licensee pays monthly royalties) of licensed products, applied to a contractual royalty rate. Licensees that pay royalties on a quarterly basis generally report to the Company actual quarterly sales and related quarterly royalties due within 45 days after the end of the quarter in which such sales activity takes place. Licensees with Royalty Bearing Licenses are obligated to provide the Company with quarterly (or monthly) royalty reports that summarize their sales of licensed products and their related royalty obligations to the Company. The Company receives these royalty reports subsequent to the period in which its licensees underlying sales occurred. The amount of royalties due under Royalty Bearing Licenses, each quarter, cannot be reasonably estimated by management. Consequently, the Company recognizes revenue for the period in which the royalty report is received in arrears and other revenue recognition criteria are met. Non-Refundable Up-Front Fees: Fully-Paid Licenses provide for a non-refundable up-front payment, for which the Company has no future obligations or performance requirements, revenue is generally recognized when the Company has obtained the signed license agreement, all performance obligations have been substantially performed, amounts are fixed and determinable, and collectability is reasonably assured. Revenue from Fully-Paid Licenses may consist of one or more installments. The timing and amount of revenue recognized from each licensee depends upon a number of factors including the specific terms of each agreement and the nature of the deliverables and obligations.
Equity Investments	Equity method investments are equity securities in entities the Company does not control but over which it has the ability to exercise significant influence. These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments — Equity Method and Joint Ventures When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. Upon sale of equity method investments, the difference between sales proceeds and the carrying amount of the equity investment is recognized in profit or loss.
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.
Costs of Revenue	The Company includes in costs of revenue for the three months ended March 31, 2019 and 2018 contingent legal fees payable to patent litigation counsel (see Note G[1] hereof), other contractual payments related to net proceeds from settlements (see Note G[2] hereof) and incentive bonus compensation payable to its Chairman and Chief Executive Officer (see Note H[1] hereof).
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 (timing) 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 forwards. 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 U.S. federal, state and local income tax returns prior to 2015 are not subject to examination by any applicable tax authorities, except that tax authorities could challenge returns (only under certain circumstances) for earlier years to the extent they generated loss carry-forwards that are available for those future years. In July 2018, the Internal Revenue Service notified the Company that it was examining its 2016 federal tax return. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act ("Tax Act"), which made significant changes to the U.S. federal income tax law. The Tax Act affects 2018 and forward, including, but not limited to, a reduction in the federal corporate rate from 35.0% to 21.0%, elimination of the corporate alternative minimum tax, a new limitation on the deductibility of certain executive compensation, limitations on net operating losses generated after December 31, 2017 and various other items. 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"), which means, 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"). In the second half of 2018 (as well as during the second half of 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 continually assesses 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 that it does not distribute to its shareholders.
Stock-Based Compensation	The Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation - Stock Compensation Compensation expense related to awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Share based payments issued to non-employees are recorded at their fair values and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period and are expensed using an accelerated attribution model. The Company uses the Black-Scholes option pricing model to determine the grant date fair value of options granted. The fair value of restricted stock units is determined based on the number of shares underlying the grant and either the quoted market price of the Company's common stock on the date of grant for time-based and performance-based awards, or the fair value on the date of grant using the Monte Carlo Simulation model for market-based awards (see Note D for further discussion of the Company's stock-based compensation). On January 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting
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 and shares were issued pursuant to outstanding restricted stock units. Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share (see Note E).
Fair Value Measurements	ASC Topic 820, Fair Value Measurement and Disclosures There are three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that are supported by little or no market activity; therefore, the inputs are developed by the Company using estimates and assumptions that the Company expects a market participant would use, including pricing models, discounted cash flow methodologies, or similar techniques. The carrying value of the Company's financial instruments, including cash and cash equivalents, royalty receivable, other assets, accounts payable, and accrued expenses approximates fair value because of the short-term nature of these financial instruments. The Company's marketable securities are classified within Level 1 because they are valued using quoted market prices in an active market (see Marketable Securities– Note F).
Carrying Value, Recoverability and Impairment of Long-Lived Assets	An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. If an impairment loss is recognized, the adjusted carrying amount of a long-lived asset shall be its new cost basis. For a depreciable long-lived asset, the new cost basis shall be depreciated (amortized) over the remaining useful life of that asset. Restoration of a previously recognized impairment loss is prohibited. At March 31, 2019 and 2018, there was no impairment to the Company's patents and equity investment. The Company's equity investment in ILiAD Biotechnologies, LLC ("ILiAD"), a privately held development stage biotechnology company (see Equity Investment – Note J) is evaluated on a non-recurring basis for impairment and is classified within Level 3 as it is valued using significant unobservable inputs or data in an inactive market, and the valuation requires management judgment due to the absence of market price and inherent lack of liquidity.
Dividend Policy	Dividends are recorded when declared by the Company's Board of Directors. Common stock dividends are charged against retained earnings when declared or paid (see Note M hereof).
Reclassification	The Company has reclassified certain amounts in the prior period consolidated financial statements to conform to the current period's presentation. The Company reclassified a certain investment within cash and cash equivalents which was previously classified as marketable securities. These reclassifications had no impact on the previously reported net income.
New Accounting Standards	Leases In February 2016, the FASB issued ASU 2016-2, Leases ("ASC 842"), condensed consolidated financial statements in that existing leases were recorded as right-of-use ("ROU") assets and related lease obligations on the condensed consolidated balance sheet. The Company elected to adopt ASC 842 using the modified retrospective method and, therefore, has not recast comparative periods presented in its unaudited condensed consolidated financial statements. The Company elected the package of transition practical expedients for existing leases and therefore the Company has not reassessed the following: lease classification for existing leases, whether any existing contracts contained leases, and if any initial direct costs were incurred. The Company did not apply the hindsight practical expedient, and accordingly, the Company did not use hindsight in its assessment of lease terms. As permitted under ASC 842, the Company elected to not recognize ROU assets and related lease obligations for leases with terms of twelve months or less. In connection with the adoption of ASC 842, the Company recorded $127,000 of operating lease right-of-use assets and $128,000 of operating lease obligations as of January 1, 2019. See Note G[3] for additional information and required disclosures. Under ASC 842, the Company determined if an arrangement is a lease at inception. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's determined incremental borrowing rate is a hypothetical rate based on its understanding of what the Company's credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received and net of the deferred rent balance on the date of implementation. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. Disclosures On January 1, 2019, the Company adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

SUMMARY OF SIGNIFICANT ACCOU_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure Summary Of Significant Accounting Policies Tables Abstract
Schedule of Revenue disaggregated by revenue source	Revenue disaggregated by source is as follows: Three Months Ended March 31 2019 2018 Fully-Paid Licenses $ 130,000 (1) $ 12,700,000 Royalty Bearing Licenses 476,000 443,000 Other Revenue — 6,320,000 (2) Total Revenue $ 606,000 $ 19,463,000 __________________________ (1) Represents conversion of an existing royalty bearing license to a fully-paid license. (2) Revenue from the sale of the Company's unsecured claim against Avaya, Inc. to an unaffiliated third party (see Note I[1] hereof).

PATENTS (Tables)

PATENTS (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure Patents Tables Abstract
Accumulated amortization related to acquired intangible assets	March 31, 2019 December 31, 2018 Gross carrying amount – patents $ 7,705,000 $ 7,682,000 Accumulated amortization – patents (5,746,000 ) (5,693,000 ) Patents, net $ 1,959,000 $ 1,989,000
Future amortization of current intangible assets, net	Twelve Months Ended March 31, 2020 $ 280,000 2021 280,000 2022 280,000 2023 280,000 2024 and thereafter 839,000 Total $ 1,959,000

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2019
Stock-based Compensation
Summary of restricted stock unit activity	Number of Shares Weighted-Average Grant Date Fair Value Balance of restricted stock units outstanding at December 31, 2018 505,000 $ 2.17 Grants of restricted stock units 45,000 2.60 Vested restricted stock units (11,250 ) 2.60 Balance of unvested restricted stock units at March 31, 2019 538,750 $ 2.20
Summary of information of stock options outstanding and exercisable	Weighted Weighted Average Range of Average Remaining Exercise Options Exercise Life in Options Price Outstanding Price Years Exercisable $0.83 - $2.34 1,530,000 $1.15 1.33 1,530,000

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure Earnings Loss Per Share Tables Abstract
Schedule of Earnings Per Share	Three Months Ended March 31, 2019 2018 Weighted-average common shares outstanding – basic 23,745,848 23,807,014 Dilutive effect of options, warrants and restricted stock units — 1,804,483 Weighted-average common shares outstanding – diluted 23,745,848 25,611,497 Options and restricted stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive 2,068,750 —

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure Marketable Securities Tables Abstract
Marketable securities	March 31, 2019 Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 11,126,000 $ — $ — $ 11,126,000 Short term bond funds 11,379,000 14,000 — 11,393,000 Corporate bonds and notes 8,289,000 86,000 (57,000 ) 8,318,000 Total marketable securities $ 30,794,000 $ 100,000 $ (57,000 ) $ 30,837,000 December 31, 2018 Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 13,151,000 $ — $ — $ 13,151,000 Short term bond funds 9,648,000 — (8,000 ) 9,640,000 Corporate bonds and notes 8,518,000 — (81,000 ) 8,437,000 Total marketable securities $ 31,317,000 — $ (89,000 ) $ 31,228,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	3 Months Ended
	Mar. 31, 2019
Commitments And Contingencies
Schedule of operating lease	Three Months Ended March 31, 2019 Operating lease expense $ 34,000 Cash paid for amounts included in the measurement of operating lease obligations 34,000 ROU assets obtained in exchange for operating lease obligations 128,000
Schedule of operating leases were recorded in the condensed consolidated balance sheet	As of March 31, 2019 Operating lease right-of-use assets $ 95,000 Operating lease obligations – current $ 88,000 Operating lease obligations – non-current 8,000 Total lease obligations $ 96,000 Weighted average remaining lease term (in months) 10 Weighted average discount rate 5.5 %
Schedule of measurement of lease liabilities	Operating Leases 2019 – remaining period $ 79,000 2020 20,000 Total future minimum lease payments 99,000 Less imputed interest (3,000 ) Total operating lease liability $ 96,000

BASIS OF PRESENTATION AND NAT_2

BASIS OF PRESENTATION AND NATURE OF BUSINESS (Details Narrative)	3 Months Ended
	Mar. 31, 2019Agreement
Basis Of Presentation And Nature Of Business
Patents owned	66
Number of Remote Power Patent License Agreements	27
Number of Mirror Worlds Patent Portfolio Licensing Agreements	2

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019		Mar. 31, 2018
Disclosure Summary Of Significant Accounting Policies Details Abstract
Fully-Paid Licenses	$ 130,000	[1]	$ 12,700,000
Royalty Bearing Licenses	476,000		443,000
Other Revenue			6,320,000	[2]
Total Revenue	$ 606,000		$ 19,463,000
[1]	Represents conversion of an existing royalty bearing license to a fully-paid license.
[2]	Revenue from the sale of the Company's unsecured claim against Avaya, Inc. to an unaffiliated third party (see Note I[1] hereof).

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	3 Months Ended
	Mar. 31, 2019USD ($)
Impairment of long-lived assets	$ 0
FDIC insured limit	250,000
Cash in excess of FDIC insured limit	15,032,000
January 1, 2019 [Member]
ASC 842, operating lease right-of-use assets	127,000
ASC 842, operating lease obligations	128,000
Certificates of Deposit [Member]
Cash in excess of FDIC insured limit	1,500,000
Certificate of deposits	$ 11,126,000

PATENTS (Details)

PATENTS (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Patents, net	$ 1,959,000	$ 1,989,000
Patents [Member]
Gross carrying amount - patents	7,705,000	7,682,000
Accumulated amortization - patents	(5,746,000)	(5,693,000)
Patents, net	$ 1,959,000	$ 1,989,000

PATENTS (Details 1)

PATENTS (Details 1) - Patents [Member]	Mar. 31, 2019USD ($)
2020	$ 280,000
2021	280,000
2022	280,000
2023	280,000
2024 and thereafter	839,000
Total	$ 1,959,000

PATENTS (Details Narrative)

PATENTS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Amortization expense	$ 54,000	$ 70,000
Expiration date of Remote Power Patent	March 2020
Expiration date of QoS family patents	June 2019
Expiration dates of the patents within the Company's Mirror Worlds patent portfolio	February 2020
Minimum [Member]
Estimated remaining economic useful of patents	1 year 2 months 30 days
Expiration dates of the patents within the Cox patent portfolio	September 2021
Expiration dates of the patents within the Company's M2M/IoT Patent Portfolio	September 2033
Maximum [Member]
Estimated remaining economic useful of patents	14 years 9 months
Expiration dates of the patents within the Cox patent portfolio	November 2023
Expiration dates of the patents within the Company's M2M/IoT Patent Portfolio	May 2034

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details)	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Stock Based Compensation
Number of restricted stock units outstanding, Beginning balance | shares	505,000
Restricted stock units outstanding, weighted average grant date fair value, Beginning balance | $ / shares	$ 2.17
Number of restricted stock units outstanding, Grants | shares	45,000
Restricted stock units outstanding, weighted average grant date fair value, Grants | $ / shares	$ 2.60
Vested restricted stock units, shares | shares	(11,250)
Vested restricted stock units, weighted average grant date fair value | $ / shares	$ 2.60
Unvested restricted stock units, shares, Ending balance | shares	538,750
Unvested restricted stock units, weighted average grant date fair value, Ending balance | $ / shares	$ 2.20

STOCK BASED COMPENSATION (Det_2

STOCK BASED COMPENSATION (Details 1)	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Options outstanding | shares	1,530,000
Weighted average exercise price	$ 1.15
Weighted Average Remaining Life in Years	1 year 3 months 29 days
Options exercisable | shares	1,530,000
Minimum [Member]
Range of Exercise price	$ 0.83
Maximum [Member]
Range of Exercise price	$ 2.34

STOCK BASED COMPENSATION (Det_3

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 15, 2019	Sep. 15, 2019	Jun. 15, 2019	Mar. 15, 2019	Dec. 15, 2018	Sep. 15, 2018	Jun. 15, 2018	Mar. 15, 2018
Restricted stock unit compensation expense	$ 144,000	$ 226,000
Accrued dividend equivalent rights	$ 102,000		$ 76,000
Aggregate intrinsic value of options exercisable		$ 2,226,000
Restricted Stock Units (RSUs) [Member]
Restricted stock units to each director for services	15,000	15,000
Quarterly installments of shares				3,750	3,750	3,750	3,750	3,750	3,750	3,750	3,750
Stock unit description	Each restricted stock unit issued by the Company represents the right to receive one share of the Company's common stock
Unrecognized restricted stock unit compensation expense	$ 599,000
Weighted average amortized period	1 year 4 months 29 days
Three non-management directors [Member]
Aggregate shares exercised during period	105,000	75,000
Shares exercised on cashless (net exercise) basis		50,000
Net shares issued upon exercise of stock options	35,884	26,890
Exercise price	$ 1.65	$ 1.19

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disclosure Earnings Per Share Details Abstract
Weighted-average common shares outstanding - basic	23,745,848	23,807,014
Dilutive effect of options, warrants and restricted stock units		1,804,483
Weighted-average common shares outstanding - diluted	23,745,848	25,611,497
Options and restricted stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive	2,068,750

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narratrive) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disclosure Earnings Loss Per Share Details Narratrive Abstract
Potentially Dilutive Shares	2,068,750	2,788,750

MARKETABLE SECURITIES (Details)

MARKETABLE SECURITIES (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Fair Value [Member]
Certificates of deposit	$ 11,126,000	$ 13,151,000
Short term bond funds	11,393,000	9,640,000
Corporate bonds and notes	8,318,000	8,437,000
Total marketable securities	30,837,000	31,228,000
Cost Basis [Member]
Certificates of deposit	11,126,000	13,151,000
Short term bond funds	11,379,000	9,648,000
Corporate bonds and notes	8,289,000	8,518,000
Total marketable securities	30,794,000	31,317,000
Gross Unrealized Gains [Member]
Certificates of deposit
Short term bond funds	14,000
Corporate bonds and notes	86,000
Total marketable securities	100,000
Gross Unrealized Losses [Member]
Certificates of deposit
Short term bond funds		(8,000)
Corporate bonds and notes	(57,000)	(81,000)
Total marketable securities	$ (57,000)	$ (89,000)

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Commitments And Contingencies Details Abstract
Operating lease expense	$ 34,000
Cash paid for amounts included in the measurement of operating lease obligations	34,000
ROU assets obtained in exchange for operating lease obligations	$ 128,000

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Disclosure Commitments And Contingencies Details 1Abstract
Operating lease right-of-use assets	$ 95,000
Operating lease obligations – current	88,000
Operating lease obligations – non-current	8,000
Total lease obligations	$ 96,000
Weighted average remaining lease term (in months)	10 months
Weighted average discount rate	5.50%

COMMITMENTS AND CONTINGENCIES_4

COMMITMENTS AND CONTINGENCIES (Details 2)	Mar. 31, 2019USD ($)
Commitments And Contingencies Details 2Abstract
2019 – remaining period	$ 79,000
2020	20,000
Total future minimum lease payments	99,000
Less imputed interest	(3,000)
Total operating lease liability	$ 96,000

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Legal Fees (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
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)
Contingent legal fees	$ 108,000	$ 6,277,000
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)
Royalty payments, Terms	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
Legal Service Agreement With Russ, August Kabot For Litigation Filed In May 2017 [Member]
Legal Fees payment ,Terms	Cash payments on a monthly basis subject to a cap plus a contingency fee ranging between 15% and 24% of the net recovery (after deduction of expenses)
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)

COMMITMENTS AND CONTINGENCIES_5

COMMITMENTS AND CONTINGENCIES - Patent Acquisitions (Details Narrative)	1 Months Ended	71 Months Ended
	Dec. 29, 2017USD ($)Agreement	Mar. 31, 2019USD ($)	Jan. 01, 2017USD ($)	Jun. 03, 2014USD ($)	May 21, 2013USD ($)$ / sharesshares	Feb. 28, 2013USD ($)shares
Acquisition of Cox patents cash, purchase price | $						$ 1,000,000
Acquisition of Cox patents, common stock issued | shares						403,226
Obligated to pay Cox, net proceeds percentage						12.50%
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 | shares					1,750,000
5-year warrants (Looking Glass) to purchase 875,000 shares, exercise price per share | shares					1.40
5-year warrants (Looking Glass) to purchase 875,000 shares, exercise price per share | shares					2.10
Net proceeds percentage payable to Recognition from the monetization of the Recognition patent portfolio
First $125 Million					10.00%
Next $125 Million					15.00%
Over $250 Million					20.00%
Recognition net proceeds payment related to Mirror Worlds patents | $		$ 3,127,000
First warrants to purchase an aggregate of 1,250,000 shares of common stock | shares					500,000
First warrants to purchase an aggregate of 1,250,000 shares of common stock, exercise price per share | $ / shares					$ 2.05
Second warrants to purchase an aggregate of 1,250,000 shares of common stock | shares					375,000
Second warrants to purchase an aggregate of 1,250,000 shares of common stock, exercise price per shares | $ / shares					$ 2.10
Third warrants to purchase an aggregate of 1,250,000 shares of common stock | shares					375,000
Third warrants to purchase an aggregate of 1,250,000 shares of common stock, exercise price per shares | $ / shares					$ 1.40
Net proceeds percentage payable to M2M from monetization of patents | $			$ 0
First $100 Million	14.00%
Next $100 Million	5.00%
Additional consideration payable upon occurrence of certain future events | $	$ 250,000
Payment to acquire the M2M/IoT Patent Portfolio | $	$ 1,000,000
Description of additional consideration to payable	Obligation to pay M2M $250,000 of additional consideration upon the occurrence of certain future events related to the patent portfolio.
M2M [ Member]
Net proceeds percentage payable to Recognition from the monetization of the Recognition patent portfolio
Number of U.S. patents - M2M patent portfolio | Agreement	21

COMMITMENTS AND CONTINGENCIES_6

COMMITMENTS AND CONTINGENCIES - Lease Agreements (Details Narrative)	3 Months Ended
	Mar. 31, 2019USD ($)
Incremental borrowing rate description	The Company used an incremental borrowing rate of 5.5% at January 1, 2019 for all leases that commenced prior to that date.
New York City [Member]
Rental cost per month	$ 3,900
Expiring date	May 31, 2020
New Canaan CT [Member]
Rental cost per month	$ 7,750
Expiring date	September 30, 2019
Description lease agreement	Connecticut expiring on September 30, 2019 at a base rent (inclusive of utilities) of $7,750 per month (increasing $100 per month each year), which is subject to annual adjustments to reflect increases in real estate taxes and operating expenses.

EMPLOYMENT ARRANGEMENTS AND O_2

EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS (Details Narrative) - USD ($)

Jul. 14, 2018

Jun. 09, 2018

Jun. 09, 2017

Jul. 14, 2016

Jun. 09, 2016

Nov. 27, 2018

Jun. 30, 2016

Mar. 31, 2019

Mar. 31, 2018

Dec. 31, 2015

Dec. 31, 2014

Apr. 09, 2014

Annual base salary of Chief Financial Officer

$ 157,500

$ 175,000

Issuance of 5 year stock option to CFO

50,000

CFO stock option, exercise price

$ 1.65

Option vested

25,000

25,000

Earned incentive compensation - Chairman and CEO

49,000

$ 109,000

Executive Vice President [Member]

Annual base salary of Executive Vice President

200,000

Executive Vice President [Member] | Restricted Stock [Member]

Restricted stock units vested

25,000

25,000

Restricted stock units granted

50,000

50,000

Description for vesting of RSUs

On November 27, 2018, the Executive Vice President was granted 50,000 RSUs which vested 50% on the one year anniversary of the grant date (November 27, 2019) and 50% on the two year anniversary of the grant date (November 27, 2020)

Chief Financial Officer [Member] | Restricted Stock [Member]

Restricted stock units vested

25,000

25,000

Restricted stock units granted

50,000

40,000

Description for vesting of RSUs

On November 27, 2018, the Company's Chief Financial Officer was granted 40,000 RSUs, with 50% of such RSUs vesting on the one year anniversary of the grant date (November 27, 2019) and 50% vesting on the two year anniversary of the grant date (November 27, 2020)

Chairman and CEO [Member] | EmploymentAgreement [Member]

Target annual bonus or minimum bonus Chairman and CEO

175,000

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%

Earned incentive compensation - Chairman and CEO

$ 30,000

$ 973,000

Restricted stock units vested

375,000

Common stock shares delivered to satisfy withholding taxes

172,313

Common stock shares issued, net

202,687

Chairman and CEO [Member] | NewEmploymentAgreement [Member]

Annual base salary

$ 475,000

Target annual bonus or minimum bonus Chairman and CEO

$ 175,000

2013 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]

RSUs granted to chairman and chief executive officer vested on July 14, 2018

750,000

2013 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Transaction 1 [Member]

RSUs granted to chairman and chief executive officer vested on July 14, 2018

250,000

Closing price minimum for vesting beginning July 14, 2018

$ 4.25

2013 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Transaction 2 [Member]

RSUs granted to chairman and chief executive officer vested on July 14, 2018

250,000

Closing price minimum for vesting beginning July 14, 2018

$ 3.25

2013 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Transaction 3 [Member]

RSUs granted to chairman and chief executive officer vested on July 14, 2018

250,000

LEGAL PROCEEDINGS (Details Narr

LEGAL PROCEEDINGS (Details Narrative) - USD ($)	Nov. 13, 2018	Jan. 09, 2018	Nov. 01, 2017	Nov. 30, 2018	Jan. 16, 2018	Oct. 31, 2016	Jul. 31, 2010	Mar. 31, 2020	Dec. 15, 2017	Jan. 19, 2017
Payments received from license defendants upon settlement							$ 32,000,000
Maximum Cisco royalty payment per year for remaining term of the remote power patent								$ 9,000,000
General unsecured claim allowed sold to third party		$ 6,320,000
Avaya [Member]
General unsecured claim allowed, amount									$ 305,000,000	$ 37,500,000
General unsecured claims, percentage									18.90%
Juniper [Member]
Litigation settlement, original settlement amount			$ 13,250,000
Payments received from license defendants upon settlement					$ 12,700,000
Polycom [Member]
Litigation settlement, licence initiation fee receivable						$ 5,000,000
Payments received from license defendants upon settlement				$ 1,000,000		$ 2,000,000
Licence initiation fee payable, description						The balance is payable in three annual installments of $1,000,000 beginning in October 2017
litigation settlement, description						The District Court in August 2018 granted the Company's motion for judgment as a matter of law that the Remote Power Patent is valid thereby overturning the HP Jury Verdict of invalidity, Polycom became obligated to make the aforementioned remaining aggregate payments of $2,000,000 to the Company (of which $1,000,000 was paid in November 2018.)
Dell [Member]
litigation settlement, description	On November 13, 2018, the Company filed a lawsuit against Dell, Inc. in the District Court, 241st Judicial District, Smith County, Texas, for breach of a settlement and license agreement, dated August 15, 2016, with the Company as a result of Dell's failure to make royalty payments, and provide corresponding royalty reports, to the Company based on sales of Dell's PoE products. The Company believes Dell is obligated to pay the Company all prior unpaid royalties that accrued prior to and after the date of the HP Jury Verdict (November 2017) as well as future royalties through the expiration of the Remote Power Patent in March 2020. On December 7, 2018, Dell filed its Answer and Counterclaim. Dell denied the claim asserted by the Company and asserted a counterclaim in excess of $1,000,000. On January 28, 2019, Dell brought a motion to stay the case as a result of the Company's pending appeal of the District Court order overturning the HP Jury Verdict on non-infringement to the U.S. Court of Appeals for the Federal Circuit and HP's appeal of the District Court's order that the Remote Power Patent is valid as a matter of law. Dell's motion to stay the litigation was denied by the Court on May 7, 2019

EQUTY INVESTMENT (Details Narra

EQUTY INVESTMENT (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Dec. 18, 2018	Mar. 31, 2019
Goodwill		$ 2,445,000
ILiAD [Member]
Advisory and legal expenses		41,000
ILiAD [Member] | Maximum [Member]
Investment	$ 5,000,000
ILiAD [Member] | Tranche One [Member]
Initial investment	$ 2,500,000
Description for the terms of allowed-to-proceed notice under aggrement	On May 2, 2019, ILiAD notified the Company that it had received an "allowed to proceed" notice from the FDA permitting ILiAD to advance to the Phase 2b clinical study of its BP2E1 vaccine. ILiAD elected to permit its Class C investors (including the Company) to bifurcate their tranche 2 commitments such that 40% would be currently due (additional $1,000,000 investment by the Company which was made on May 6, 2019) and 60% (additional $1,500,000 investment by the Company) would be due when ILiAD receives satisfactory safety data from the clinical study.
ILiAD [Member] | Tranche Two [Member]
Initial investment		$ 2,500,000
ILiAD [Member] | Class C units [Member] | Maximum [Member]
Investment	$ 16,200,000
ILiAD [Member] | Class C units [Member] | Tranche One [Member]
Units purchase		1,111,111
Price per unit		$ 2.25
Warrants to purchase units		366,666
Exercise price		$ 2.75
Ownership percentage		6.80%
ILiAD [Member] | Class C units [Member] | Tranche Two [Member]
Units purchase	943,396
Price per unit	$ 2.65
Warrants to purchase units	311,320
Exercise price	$ 3.50
Ownership percentage	10.50%

STOCK REPURCHASE (Details Narra

STOCK REPURCHASE (Details Narrative) - USD ($)	3 Months Ended	92 Months Ended
	Mar. 31, 2019	Mar. 31, 2019	Jun. 14, 2017	Aug. 31, 2011
Number of shares, common stock repurchased	300	8,154,698
Average price per share, common stock subject to repurchase	$ 2.25	$ 1.86
Aggregate cost of common stock repurchased	$ 676	$ 15,142,916
Remaining shares subject to repurchase, value	$ 1,321,091
Board of Directors [Member]
Stock Repurchase Program, dollar amount of additional shares authorized to be repurchased			5,000,000
Stock Repurchase Program, dollar amount of shares authorized for repurchase since inception				17,000,000

CONCENTRATIONS (Details Narrati

CONCENTRATIONS (Details Narrative)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Licensees Four [Member]
Percentage revenue	80.00%
Royalty receivables percentage from five licensee	93.00%
Royalty receivables percentage from four licensees			80.00%
Licensees One [Member]
Percentage revenue		65.00%
Percentage revenue from sale of unsecured Avaya claim		32.00%

DIVIDEND POLICY (Details Narrat

DIVIDEND POLICY (Details Narrative) - $ / shares	Dec. 07, 2016	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Dividend Policy Details Narrative Abstract
Semi-annual cash dividend per common share	$ 0.05	$ 0.05	$ 0.05	$ 0.10
Annual dividend per common share	$ 0.10
Dividend policy payment description				On February 9, 2018, the Board of Directors of the Company declared a semi-annual cash dividend of $0.05 per common share which was paid on March 23, 2018 to all common stockholders of record as of March 9, 2018. On February 11, 2019, the Board of Directors declared a cash dividend of $0.05 per common share with a payment date of March 25, 2019 to all common stockholders as of March 11, 2019.