Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-15288 | ||
Entity Registrant Name | NETWORK-1 TECHNOLOGIES, INC. | ||
Entity Central Index Key | 0001065078 | ||
Entity Tax Identification Number | 11-3027591 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 65 Locust Avenue | ||
Entity Address, Address Line Two | Third Floor | ||
Entity Address, City or Town | New Canaan | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06840 | ||
City Area Code | (203) | ||
Local Phone Number | 920-1055 | ||
Title of 12(b) Security | Common Stock $.01 par value | ||
Trading Symbol | NTIP | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 38,052,926 | ||
Entity Common Stock, Shares Outstanding | 23,510,019 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum llp | ||
Auditor Location | New York, New York |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 16,896,000 | $ 13,448,000 |
Marketable securities, at fair value | 28,571,000 | 34,991,000 |
Prepaid taxes | 177,000 | |
Other current assets | 206,000 | 348,000 |
Total Current Assets | 45,673,000 | 48,964,000 |
OTHER ASSETS: | ||
Patents, net of accumulated amortization | 1,326,000 | 1,592,000 |
Equity investment | 5,249,000 | 7,252,000 |
Operating leases right of use asset | 16,000 | 161,000 |
Security deposits | 13,000 | |
Total Other Assets | 6,604,000 | 9,005,000 |
TOTAL ASSETS | 52,277,000 | 57,969,000 |
CURRENT LIABILITIES: | ||
Accounts payable | 125,000 | 507,000 |
Income taxes payable | 115,000 | |
Accrued payroll | 378,000 | 317,000 |
Other accrued expenses | 297,000 | 587,000 |
Operating lease obligations, current | 23,000 | 79,000 |
Total Current Liabilities | 823,000 | 1,605,000 |
LONG TERM LIABILITIES: | ||
Deferred tax liability | 762,000 | 1,161,000 |
Operating lease obligation, non-current | 94,000 | |
TOTAL LIABILITIES | 1,585,000 | 2,860,000 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value; authorized 10,000,000 shares; none issued and outstanding at December 31, 2023 and December 31, 2022 | ||
Common stock, $0.01 par value; authorized 50,000,000 shares; 23,553,908 and 23,863,639 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 235,000 | 239,000 |
Additional paid-in capital | 67,446,000 | 66,939,000 |
Accumulated deficit | (16,989,000) | (12,055,000) |
Accumulated other comprehensive loss | (14,000) | |
TOTAL STOCKHOLDERS’ EQUITY | 50,692,000 | 55,109,000 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 52,277,000 | $ 57,969,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 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 or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 23,553,908 | 23,863,639 |
Common Stock, Shares, Outstanding | 23,553,908 | 23,863,639 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
REVENUE | $ 2,601,000 | |
OPERATING EXPENSES: | ||
Costs of revenue | 874,000 | |
Professional fees and related costs | 807,000 | 809,000 |
General and administrative | 2,889,000 | 2,778,000 |
Amortization of patents | 266,000 | 316,000 |
TOTAL OPERATING EXPENSES | 4,836,000 | 3,903,000 |
OPERATING LOSS | (2,235,000) | (3,903,000) |
OTHER INCOME | ||
Interest and dividend income, net | 1,868,000 | 1,020,000 |
Gain on conversion of note | 271,000 | |
Gain on equity method investment | 3,883,000 | |
Net realized and unrealized gain (loss) on marketable securities | 525,000 | (1,351,000) |
Total other income, net | 2,393,000 | 3,823,000 |
INCOME (LOSS) BEFORE INCOME TAXES AND SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE | 158,000 | (80,000) |
INCOME TAXES PROVISION: | ||
Current | 11,000 | |
Deferred taxes, net | (399,000) | 607,000 |
Total income taxes (benefit) expense | (388,000) | 607,000 |
INCOME (LOSS) BEFORE SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE: | 546,000 | (687,000) |
SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE | (2,003,000) | (1,639,000) |
NET LOSS | $ (1,457,000) | $ (2,326,000) |
Basic | $ (0.06) | $ (0.10) |
Diluted | $ (0.06) | $ (0.10) |
Weighted average common shares outstanding: | ||
Basic | 23,791,287 | 23,825,917 |
Diluted | 23,791,287 | 23,825,917 |
Cash dividends declared per share | $ 0.10 | $ 0.10 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Net unrealized holding gain (loss) on corporate bonds and notes arising during the year, net of tax | $ 14,000 | $ (2,000) |
COMPREHENSIVE LOSS | $ (1,443,000) | $ (2,328,000) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity |
Balance – December 31, 2022 at Dec. 31, 2021 | $ 238,000 | $ 66,361,000 | $ (6,428,000) | $ (12,000) | $ 60,159,000 |
Beginning balance, shares at Dec. 31, 2021 | 23,792,212 | ||||
Dividends and dividend equivalents declared | (2,418,000) | (2,418,000) | |||
Stock-based compensation | 585,000 | 585,000 | |||
Vesting of restricted stock units | $ 2,000 | (2,000) | |||
Vesting of restricted stock units, shares | 182,500 | ||||
Cashless exercise of stock options | $ 5,000 | (5,000) | |||
Cashless exercise of options, Shares | 500,000 | ||||
Value of shares delivered to pay withholding taxes | $ (3,000) | (352,000) | (355,000) | ||
Value of shares delivered to pay withholding taxes, Shares | (382,543) | ||||
Treasury stock purchased and retired | $ (3,000) | (531,000) | (534,000) | ||
Treasury stock purchased and retired, shares | (228,530) | ||||
Net unrealized loss on corporate bonds and notes | (2,000) | (2,000) | |||
Net loss | (2,326,000) | (2,326,000) | |||
Balance – December 31, 2023 at Dec. 31, 2022 | $ 239,000 | 66,939,000 | (12,055,000) | (14,000) | 55,109,000 |
Ending balance, shares at Dec. 31, 2022 | 23,863,639 | ||||
Dividends and dividend equivalents declared | (2,433,000) | (2,433,000) | |||
Stock-based compensation | 508,000 | 508,000 | |||
Vesting of restricted stock units | $ 1,000 | (1,000) | |||
Vesting of restricted stock units, shares | 157,500 | ||||
Value of shares delivered to pay withholding taxes | (83,000) | (83,000) | |||
Value of shares delivered to pay withholding taxes, Shares | (39,099) | ||||
Treasury stock purchased and retired | $ (5,000) | (961,000) | (966,000) | ||
Treasury stock purchased and retired, shares | (428,132) | ||||
Realized gain on corporate bonds | 14,000 | 14,000 | |||
Net loss | (1,457,000) | (1,457,000) | |||
Balance – December 31, 2023 at Dec. 31, 2023 | $ 235,000 | $ 67,446,000 | $ (16,989,000) | $ 50,692,000 | |
Ending balance, shares at Dec. 31, 2023 | 23,553,908 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,457,000) | $ (2,326,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Amortization of patents | 266,000 | 316,000 |
Stock-based compensation | 508,000 | 585,000 |
Loss allocated from equity investment | 2,003,000 | 1,639,000 |
Deferred tax (benefit) expense | (399,000) | 607,000 |
Amortization of right of use asset, net | 65,000 | 43,000 |
Gain on equity method investment | (3,883,000) | |
Accrued interest on convertible note | (86,000) | |
Gain on conversion of note | (271,000) | |
Unrealized (gain) loss on marketable securities | (103,000) | 880,000 |
Changes in operating assets and liabilities: | ||
Other current assets | 142,000 | (208,000) |
Prepaid taxes | 177,000 | (167,000) |
Accounts payable | (382,000) | 48,000 |
Income taxes payable | (115,000) | (2,837,000) |
Security deposit | (13,000) | 13,000 |
Operating lease obligations | (70,000) | (31,000) |
Accrued expenses | (291,000) | 242,000 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 331,000 | (5,436,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sales of marketable securities | 53,521,000 | 13,156,000 |
Purchases of marketable securities | (46,984,000) | (33,903,000) |
Development of patents | (524,000) | |
Equity Investment | (1,000,000) | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 6,537,000 | (22,271,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash dividends paid | (2,371,000) | (2,453,000) |
Value of shares delivered to fund withholding taxes | (83,000) | (355,000) |
Repurchases of common stock, inclusive of commissions | (966,000) | (534,000) |
NET CASH USED IN FINANCING ACTIVITIES | (3,420,000) | (3,342,000) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 3,448,000 | (31,049,000) |
CASH AND CASH EQUIVALENTS, beginning of year | 13,448,000 | 44,497,000 |
CASH AND CASH EQUIVALENTS, end of year | 16,896,000 | 13,448,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | ||
Income taxes | 65,000 | 3,004,000 |
NON-CASH FINANCING ACTIVITY | ||
Accrued dividend rights on restricted stock units | 65,000 | 37,000 |
Modification of right-of-use asset | 80,000 | 204,000 |
Conversion of note receivable | $ 1,086,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) Attributable to Parent | $ (1,457,000) | $ (2,326,000) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business
Business | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Business | Note A – Business Network-1 Technologies, Inc. (the “Company”) is engaged in the development, licensing and protection of its intellectual property assets. The Company presently owns one hundred ( 100 54 15 The Company’s current strategy includes continuing to pursue licensing opportunities for its intellectual property assets. In addition, the Company reviews opportunities to acquire or license additional intellectual property as well as other strategic alternatives. The Company’s patent acquisition and development 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 also enter into strategic relationships with third parties to develop, commercialize, license or otherwise monetize their intellectual property. The Company has made equity investments totaling $ 7,000,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note B – Summary of Significant Accounting Policies [1] Principles of Consolidation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries, Mirror Worlds Technologies, LLC and HFT Solutions, LLC. All intercompany transactions and balances are eliminated in consolidation. [2] Use of Estimates and Assumptions The preparation of the 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. The estimates and assumptions made in the preparation of the Company’s consolidated financial statements primarily include costs related to the Company’s assertion of litigation, the valuation of the Company’s patent portfolios, stock-based compensation, the recoverability of deferred tax assets and the carrying value of the Company’s equity method investments. Actual results could be materially different from those estimates, upon which the carrying values were based. Certain amounts recorded to reflect the Company’s share of the income or losses of its equity method investee, accounted for under the equity method, are based on estimates and the unaudited results of operations of the equity method investee, and may require adjustment in the future when the audit is complete. The Company reports its share of the results of its equity method investee on a one quarter lag basis. [3] 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 2,403,000 1,715,000 15,327,000 5,316,000 The Company considers all highly liquid short-term investments, including certificates of deposit and money market funds, which are purchased with an original maturity of three months or less to be cash equivalents. [4] Marketable Securities The Company’s marketable securities are comprised of certificates of deposit with an original maturity greater than three months from date of purchase, government securities and fixed income mutual funds . 6,077,000 2,976,000 [5] Revenue Recognition Under ASC 606, revenue is recognized when the Company completes the licensing of its intellectual property to its licensees or enters into a litigation settlement agreement involving any of its expired patents. With respect to licensing its intellectual property or such litigation settlement agreement, revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for licensing its intellectual property or in settlement of the litigation. The Company determines revenue recognition through the following steps: • identification of the license agreement or litigation settlement agreement; • identification of the performance obligations in the license agreement or litigation settlement agreement; • determination of the consideration for the license or settlement; • 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: Schedule of disaggregation of revenue Years Ended December 31, 2023 2022 Litigation Settlements $ 2,601,000 $ — Total Revenue $ 2,601,000 $ — See Note K[4] hereof for further discussion of revenue recognized. Revenue from the Company’s patent licensing and enforcement business is typically generated from negotiated license agreements or settlement agreements with respect to any of the Company’s expired patents. The timing and amount of revenue recognized from each licensee or such settlement agreement 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, (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, or (iii) a lump sum settlement payment with respect to litigation involving the Company’s expired patents. 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. [6] Equity Method 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 Upon a sale of an equity method investment by the Company, the difference between sales proceeds and the carrying amount of the equity investment is recognized in profit or loss. Upon the issuance of securities in an observable price transaction, the Company will account for the share issuance by the equity method investee as if the Company had sold a proportionate share of its investment in the observable price transaction. The Company will record a gain or loss associated with the dilution of its investment to reflect third party investments in the investee and will increase or decrease its basis in the equity method investee accordingly. The gain or loss is recorded within other income or expense in the Company’s consolidated statements of operations and comprehensive loss. The Company performed an assessment to determine significance of the equity method investee under the investment, asset and income tests utilizing the 20% threshold. The Company determined that the equity method investee satisfied the income test and has included summarized financial data of the equity method investee in Note H hereof. [7] 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. [8] Costs of Revenue and Related Costs The Company includes in costs of revenue for the year ended December 31, 2023 and 2022 contingent legal fees payable to patent litigation counsel, any other contractual payments to third parties related to net proceeds from monetization of patents (see Note I[1] hereof) and incentive bonus compensation payable to its Chairman and Chief Executive Officer (see Note J[1] hereof). [9] Income Taxes The Company accounts for income taxes in accordance with Financial Accounting Standards Board (FASB) 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 no U.S. federal, state and local income tax returns prior to 2020 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. [10] 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. 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. [11] 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. [12] Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. 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 and accounts payable, 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. The Company’s equity method investment is measured on a non-recurring basis and is classified within Level 2 as it is valued using an observable price transaction for similar assets in a market that is not active (see Note B[6] and Note H hereof). [13] 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 December 31, 2023 and 2022, there was no The Company’s equity investment in ILiAD is evaluated on a non-recurring basis for impairment, when and if a triggering event occurs. [14] Leases Under ASC 842, the Company determines if an arrangement is a lease at inception. Right-of-Use (“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 the Company's lease does 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 and the initial term will be adjusted when it is reasonably certain that the Company will exercise such options. As permitted under ASC 842, the Company has elected to not recognize ROU assets and related lease obligations for leases with initial terms of twelve months or less . [15] Dividend Policy Cash 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 O hereof). [16] New Accounting Standards Current Expected Credit Loss In June 2016, the FASB issued ASU 2016-13 “Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments”. This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance applies to loans, accounts receivable, trade receivables and other financial assets measured at amortized cost, loan commitments, held-to-maturity debt securities and beneficial interests in securitized financial assets, but the effect on the Company is projected to be limited to held-to-maturity debt securities. The guidance was effective for the year beginning on January 1, 2023, including interim periods within the year. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Segments In November 2023, the FAS B issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures |
Patents
Patents | 12 Months Ended |
Dec. 31, 2023 | |
Patents | |
Patents | Note C – Patents The Company’s intangible assets at December 31, 2023 include patents with estimated remaining economic useful lives ranging from 10 16 Schedule of patent 2023 2022 Gross carrying amount $ 8,473,000 $ 8,473,000 Accumulated amortization (7,147,000 ) (6,881,000 ) Patents, net $ 1,326,000 $ 1,592,000 Amortization expense for the years ended December 31, 2023 and 2022 was $ 266,000 316,000 Schedule of future amortization of current intangible For the years ended December 31, 2024 $ 120,000 2025 120,000 2026 120,000 2027 119,000 2028 116,000 Thereafter 731,000 Total $ 1,326,000 The expiration dates for the M2M/IoT Portfolio range from September 2033 May 2034 October 31, 2039 November 1, 2039 |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note D – Income (Loss) Per Share Basic Income (Loss) per share is calculated by dividing the net income (loss) by the weighted average number of outstanding common shares during the period. Diluted per share data included the dilutive effects of restricted stock units. Potentially dilutive shares of 587,500 625,000 Schedule of earnings per share 2023 2022 Weighted-average common shares outstanding – basic 23,791,287 23,825,917 Dilutive effect of restricted stock units — — Weighted-average common shares outstanding – diluted 23,791,287 23,825,917 Restricted stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive 587,500 625,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note E – Income Taxes Significant components of the income taxes were as follows for the years ended December 31, 2023 and 2022. Schedule of components of the income taxes 2023 2022 Current State and local $ — $ — Federal 11,000 — Total Current Tax Expense (Benefit) $ 11,000 $ — Deferred State and local (39,000 ) 56,000 Federal (360,000 ) 551,000 Total Deferred Tax Expense (399,000 ) 607,000 Total Income Taxes $ (388,000 ) $ 607,000 Significant components of deferred tax assets (liability) as of December 31, 2023 and 2022 consisted of the following: Schedule of components of deferred tax assets and liability 2023 2022 Deferred tax assets (liability): Net operating loss carryforward $ 804,000 $ 477,000 Capital loss carryforward 47,000 331,000 Stock options and RSU 27,000 30,000 Tax credit carryforward 148,000 — Other 182,000 — Total deferred tax assets 1,208,000 838,000 Valuation allowance (1,208,000 ) (838,000 ) Deferred tax assets, net of valuation allowance $ — $ — 2023 2022 Deferred Tax Liability (1) (762,000 ) (1,161,000 ) Total deferred tax liability $ (762,000 ) $ (1,161,000 ) _________________________ (1) As of December 31, 2023, the Company’s estimated aggregate total net operating loss carryforwards (NOLs) were $ 3,364,000 1,201,000 , 1,201,000 762,000 The reconciliation between the taxes as shown and the amount that would be computed by applying the statutory federal income tax rate to the net income before income taxes is as follows: Schedule of reconciliation of income tax Years Ended December 31, 2023 2022 Income tax - statutory rate 21.00 % 21.00 % Permanent differences (0.19) % (8.4) % Change in valuation allowance (1.98) % (48.79) % State 2.46 % 1.28 % Other — (0.43) % Total 21.29 % (35.34) % On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The excise tax applies in cases where the total value of the stock repurchased during the taxable year exceeds $1,000,000. As the Company did not meet this threshold in 2023, the excise tax is not applicable for the 2023 tax year (see Note M hereof) . The personal holding company (“PHC”) rules under the Internal Revenue Code impose a 20% tax on a PHC’s undistributed personal holding company income (“UPHCI”), 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 five or fewer individuals at any time during the second half of the year (after applying constructive ownership rules to attribute stock owned by entities to their beneficial owners and among certain family members and other related parties) (the “Ownership Test”) and (ii) at least 60% of its adjusted ordinary gross income for a taxable year consists of dividends, interest, royalties, annuities and rents (the “Income Test”). During the second half of 2023, based on available information concerning the Company’s shareholder ownership, the Company did not satisfy the Ownership Test. In addition, the Company did not satisfy the Income Test in 2023. Thus, the Company was not a PHC for 2023. However, the Company may subsequently be determined to be a PHC in 2024 or in future years if it satisfies both the Ownership Test and the Income Test. If the Company were to become a PHC in 2024 or any future year, it would be subject to an additional 20% tax on its UPHCI. In such an event, the Company may issue a special cash dividend to its shareholders in an amount equal to the UPHCI rather than incur the additional 20% tax. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity | N ote Stockholders’ Equity The Company adopted a new 2022 Stock Incentive Plan, (the “2022 Plan”), approved by its Board of Directors on July 25, 2022 and its stockholders on September 20, 2022. The 2022 Plan provides for the grant of any or all of the following types of awards: (a) stock options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted stock units. Awards under the 2022 Plan may be granted singly, in combination, or in tandem. Subject to standard anti-dilution adjustments as provided, the 2022 Plan provides for an aggregate of 2,300,000 shares of the Company’s common stock to be available for distribution. The Company’s Compensation Committee generally has the authority to administer the 2022 Plan, determine participants who will be granted awards, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards. Awards under the 2022 Plan may be granted to employees, directors and consultants of the Company and its subsidiaries. As of December 31, 2023, there were 2,180,000 As of December 31, 2023, there were 75,000 512,500 Restricted Stock Units A summary of restricted stock units granted during the year ended December 31, 2023 and December 31, 2022 is as follows (each restricted stock unit represents the contingent right to receive one share of the Company’s common stock): Schedule of stock option activity 2023 2022 Number of Shares Weighted-Average Grant Number of Shares Weighted-Average Grant Balance of restricted stock units outstanding at beginning of year 625,000 $ 1.87 12,500 $ 3.36 Grants of restricted stock units 120,000 2.27 670,000 1.92 Vested restricted stock units (157,500 ) (2.43 ) (57,500 ) (2.73 ) Balance of restricted stock units outstanding at end of year 587,500 $ 1.81 625,000 $ 1.87 Restricted stock unit compensation expense was $508,000 $585,000 The Company has an aggregate of $508,000 2 The fair value of restricted stock units is determined based on the number of shares granted and the quoted market price of the Company’s common stock on the date of grant for time-based and performance-based awards and fair value at grant date using the Monte Carlo simulation model for market-based awards(see Note B[10] hereof). The key inputs into the Monte Carlo simulation used to value the restricted stock units was a risk free rate of 2.39% 4 40% $2.47 All of the Company’s issued restricted stock units have dividend equivalent rights. As of December 31, 2023 and 2022, there was $99,000 $37,000 |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2023 | |
Marketable Securities | |
Marketable Securities | Note G – Marketable Securities Marketable securities as of December 31, 2023 and 2022 were composed of: Schedule of marketable securities December 31, 2023 Cost Gross Gross Fair Value Certificates of Deposit $ 6,112,000 $ — $ (35,000 ) $ 6,077,000 Government securities 14,701,000 127,000 (10,000 ) 14,818,000 Fixed income mutual funds 7,585,000 91,000 — 7,676,000 Total marketable securities $ 28,398,000 $ 218,000 $ (45,000 ) $ 28,571,000 December 31, 2022 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Government securities $ 20,781,000 $ 67,000 $ — $ 20,848,000 Fixed income mutual funds 11,904,000 — 915,000 10,989,000 Certificates of Deposit 3,019,500 — (43,000 ) 2,976,000 Corporate bonds and notes 192,000 — (14,000 ) 178,000 Total marketable securities $ 35,896,000 $ 67,000 $ (972,000 ) $ 34,991,000 |
Equity Investment
Equity Investment | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investment | Note H – Equity Investment During the period December 2018 through August 2022, the Company made aggregate investments of $7,000,000 6.7% 5.4% On August 24, 2022, ILiAD completed a private financing of $ 42,836,000 30,000,000 1,000,000 3,883,000 In addition, as part of the Financing, the Company converted its convertible note in the principal amount of $1,000,000 $86,000 $271,000 For the years ended December 31, 2023 and 2022, the Company recorded an allocated net loss from its equity method investment in ILiAD of $2,003,000 $1,639,000 The difference between the Company’s share of equity in ILiAD’s net assets and the purchase price of the investment is due to an excess amount paid over the book value of the investment of $5,515,000 The Company performed an assessment to determine significance of its equity investee using the investment, asset and income tests. The Company concluded the income test threshold was met for the year ended December 31, 2023. The following table provides certain summarized financial information for the Company’s equity method investee for the periods presented and has been compiled from the equity investee’s financial statement, reported on one quarter lag. As a result of the Company receiving audited financial statements from ILiAD for its year ended December 31, 2022 (See Note B[2] hereof), the table below includes an additional comprehensive loss of $621,000 $42,000 Schedule of equity method investments Twelve Months Ended 2023 2022 Loss from continuing operations $ 24,272,000 $ 15,246,000 Comprehensive loss $ 29,532,000 $ 17,913,000 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note I – Commitments and Contingencies [1] Legal fees: Russ, August & Kabat provides legal services to the Company with respect to its pending patent litigation filed in May 2017 against Meta Platforms, Inc. ( formerly, 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 K[2] 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% 24% 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 U.S. District Court for the Southern District of New York relating to certain patents within the Cox Patent Portfolio acquired by the Company from Dr. Cox (see Note K[1] hereof). The terms of the Company’s agreement with Russ, August & Kabat provide for legal fees on a full contingency basis ranging from 15% 30% . Dovel & Luner, LLP (“Dovel”) provided and continues to provide legal services to the Company with respect to its patent litigation related to the Remote Power Patent (See Note K[4] hereof). The terms of the Company’s agreement with Dovel provides ,among other things, for legal fees on a contingency basis ranging from 15% 40% $744,000 $88,000 [2] Patent Acquisitions: On March 25, 2022, the Company completed the acquisition of a new patent portfolio (HFT Patent Portfolio) currently consisting of nine U.S. patents and two pending U.S. patents covering certain advanced technologies relating to high frequency trading, which inventions specifically address technological problems associated with speed and latency and provide critical latency gains in trading systems where the difference between success and failure may be measured in nanoseconds. The Company paid the seller $500,000 $500,000 $375,000 15% 17.5% In connection with the Company’s acquisition of its Cox Patent Portfolio, the Company is obligated to pay Dr. Cox 12.5% As part of the acquisition of the Mirror Worlds Patent Portfolio, the Company also entered into an agreement with Recognition Interface, LLC (“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: Obligated to pay recognition, net proceeds 10% 15% 20% $3,127,000 In connection with the Company’s acquisition of its M2M/IoT Patent Portfolio, the Company is obligated to pay M2M 14% 5% $250,000 [3] Savings and investment plan: The Company has a Savings and Investment Plan which allows participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code of 1986. The Company also may make discretionary annual matching and profit sharing contributions in amounts determined by the Board of Directors, subject to statutory limits. The 401(k) Plan expense for the years ended December 31, 2023 and 2022 was $73,000 $78,000 [4] Leases: The Company has one operating lease for its principal office space in New Canaan, Connecticut that was to expire on April 30, 2025. On September 29, 2023 ,the Company exercised its early termination right under the lease to terminate the lease as of December 31, 2023 which was extended on December 27, 2023 until March 31, 2024. There are no material residual guarantees associated with the Company’s lease and there are no significant restrictions or covenants included in the Company’s lease. The calculated incremental borrowing rate was approximately 4.2% 3 3 There was no sublease rental income for the year ended December 31, 2023, and the Company is not the lessor in any lease arrangement, and there were no related-party lease agreements. Right-of-use lease assets and related lease obligations for the Company’s operating leases were recorded in the consolidated balance sheet as follows: Schedule of operating leases obligations As of As of December 31, 2023 December 31, 2022 Operating lease right-of-use assets $ 16,000 $ 161,000 Operating lease obligations – current 23,000 79,000 Operating lease obligations – non-current — 94,000 Total lease obligations $ 23,000 $ 173,000 The table below presents certain information related to the Company’s lease costs for the year ended December 31, 2023 and 2022: Schedule of leases cost For the Year Ended 2023 2022 Operating lease cost $ 68,000 $ 48,000 Short-term lease cost — 82,000 Total lease cost $ 68,000 $ 130,000 Future lease payments included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2023, were as follows: Schedule of future minimum leases payments Operating Leases 2024 $ 23,000 2025 — 2026 — 2027 — 2028 — Total future minimum lease payments 23,000 Less imputed interest — Total operating lease liability $ 23,000 |
Employment Arrangements and Oth
Employment Arrangements and Other Agreements | 12 Months Ended |
Dec. 31, 2023 | |
Employment Arrangements And Other Agreements | |
Employment Arrangements and Other Agreements | Note J – Employment Arrangements and Other Agreements [1] $535,000 3% $175,000 $175,000 In addition, pursuant to the Agreement, the Company granted the Chairman and Chief Executive Officer, under its 2013 Plan, 600,000 175,000 100,000 75,000 150,000 $3.50 150,000 $4.00 125,000 $4.50 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 the 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 all of the Company’s patent portfolios and its investment in ILiAD) (collectively, the “Incentive Compensation”). During the year ended December 31, 2023 and 2022, the Chairman and Chief Executive Officer earned Incentive Compensation of $130,000 0 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, the employment of the Chairman and Chief Executive Officer has not been terminated by the Company “For Cause” (as defined) or terminated by him without “Good Reason” (as defined). In the event of a merger or sale of substantially all of the Company’s assets, the Company has the option to extinguish the right of the Chairman and Chief Executive Officer to receive future Incentive Compensation by payment to him of a lump sum payment, in an amount equal to the fair market value of such future interest as determined by an independent third party expert if the parties do not reach agreement as to such value. In the event that the Chairman and Chief Executive Officer’s employment is terminated by the Company “Other Than For Cause” (as defined) or by him for “Good Reason” (as defined), the Chairman and Chief Executive Officer shall also be entitled to (i) a lump sum severance payment of 12 months base salary, (ii) a pro-rated portion of the $ 175,000 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 months 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] $25,000 [3] $175,000 |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Note K – Legal Proceedings [1] Company initiated litigation against Google Inc. (“Google”) and YouTube, LLC (“YouTube”) in the U.S. District Court for the Southern District of New York for infringement of several of its patents within its Cox Patent Portfolio acquired from Dr. Cox which relate to the identification of media content on the Internet. The lawsuit alleges that Google and YouTube have infringed and continue to infringe certain of the Company’s patents by making, using, selling and offering to sell unlicensed systems and related products and services, which include YouTube’s Content ID system. The litigations 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 the appeals of PTAB Final Written Decisions to the U.S. Court of Appeals for the Federal Circuit. 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. In January 2019, the two litigations against Google and YouTube were consolidated. Discovery is complete and the parties have each submitted summary judgment motions which remain pending. A trial date has not been set. [2] the Company’s wholly-owned subsidiary, initiated litigation against Facebook, Inc. (“now Meta Platforms, Inc. (“Meta”)) in the U.S. District Court for the Southern District of New York, for infringement of U.S. Patent No. 6,006,227, U.S. Patent No. 7,865,538 and U.S. Patent No. 8,255,439 (among the patents within the Company’s Mirror Worlds Patent Portfolio). The lawsuit alleged that the asserted patents are infringed by Meta’s core technologies that enable Meta’s Newsfeed and Timeline features. On March 7, 2022, the District Court entered a ruling granting in part and denying in part a motion for summary judgment by Meta. In its ruling the Court (i) denied Meta’s motion that the asserted patents were invalid by concluding that all asserted claims were patent eligible under §101 of the Patent Act and (ii) granted summary judgment of non-infringement in favor of Meta and dismissed the case. The Company strongly disagrees with the decision on non-infringement and on April 4, 2022, the Company filed an appeal to the U.S. Court of Appeals for the Federal Circuit, which is pending. [3] Company filed a lawsuit against Netgear, Inc. (“Netgear”) in the Supreme Court of the State of New York, County of New York, for breach of a Settlement and License Agreement, dated May 22, 2009 (the “License Agreement”), with the Company for failure to make royalty payments, and provide corresponding royalty reports, to the Company based on sales of Netgear’s PoE products. On October 22, 2021, Netgear filed a Demand for Arbitration at the American Arbitration Association (AAA) seeking to arbitrate certain issues raised in the litigation. The Company objected to jurisdiction at the AAA. On April 22, 2022, Netgear filed a counterclaim in the N.Y. court action alleging that the Company breached the License Agreement by not offering Netgear lower royalties. On September 22, 2022, the arbitration brought by Netgear was dismissed by the AAA on jurisdiction grounds. The case remained pending in the Supreme Court of the State of New York, County of New York. [4] Company initiated nine separate litigation against ten defendants for infringement of its Remote Power Patent seeking monetary damages based upon reasonable royalties, as follows: (i) On October 6, 2022, the Company initiated such litigation against Arista Networks, Inc., Fortinet, Inc., Honeywell International Inc. and Ubiquiti Inc. in the United States District Court, District of Delaware; (ii) On October 27, 2022, and November 3, 2022, the Company initiated such litigation against TP-Link USA Corporation and Hikvision USA, Inc. in the United States District Court for the Central District of California; (iii) On November 4, 2022, the Company initiated such litigation against Panasonic Holdings Corporation and Panasonic Corporation of North America in the United States District Court for the Eastern District of Texas (Marshall Division); and (iv) On November 8, 2022 and November 16, 2022, the Company initiated such litigation against Antaira Technologies, LLC and Dahua Technology USA in the United States District Court for the Central District of California. During the year ended December 31, 2023, the Company entered into settlement agreements with Arista Networks, Inc, Antaira Technologies, LLC, Panasonic Holdings Corporation, TP-Link USA Corporation, Hikvision USA Inc., Fortinet Inc., and Dahua Technology USA resulting in aggregate settlements paid and recognized as revenue of $2,601,000 $150,000 |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note L – Concentrations Revenue from the Company’s Remote Power Patent constituted 100% 90% |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Stock Repurchase Program | Note M – Stock Repurchase Program On June 14, 2023, the Company’s Board of Directors authorized an extension and increase of the Share Repurchase Program to repurchase up to $5,000,000 During the year ended December 31, 2023, the Company repurchased an aggregate of 428,132 $955,000 $2.23 Since inception of the Share Repurchase Program (August 2011) through December 31, 2023, the Company has repurchased an aggregate of 9,532,982 $18,713,000 $1.94 On December 27, 2023, the Company entered into a written trading plan (the “10b5-1 Plan”) under Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Exchange Act”). Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a company to repurchase its shares at times when it might otherwise be prevented from doing so due to self-imposed trading black-outs or pursuant to insider trading laws. Purchases under the 10b5-1 Plan may be made during the following periods: (1) beginning on January 9,2024 until two trading days after the Company issues a press release announcing its financial results for the year ended December 31, 2023, and (2) beginning on April 1, 2024 until two trading days after the Company issues a press release announcing its financial results for the quarter ended March 31, 2024. Under the 10b5-1 Plan, the Company’s third party broker may purchase up to 1,0000,000 shares of the Company’s common stock, subject to certain price, market, volume and timing constraints, in accordance with the terms of the plan and subject to Rule 10b5-1 and Rule 10b-18 of the Exchange Act. |
Dividend Policy
Dividend Policy | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Dividend Policy | Note N – Dividend Policy The Company’s dividend policy consists of a semi-annual cash dividend of $0.05 $0.10 $0.05 March 31, 2023 March 15, 2023 $0.05 September 29, 2023 September 19, 2023 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note O – Subsequent Events [1] , $0.05 March 29, 2024 March 15, 2024 [2] , 15,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | [1] Principles of Consolidation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries, Mirror Worlds Technologies, LLC and HFT Solutions, LLC. All intercompany transactions and balances are eliminated in consolidation. |
Use of Estimates and Assumptions | [2] Use of Estimates and Assumptions The preparation of the 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. The estimates and assumptions made in the preparation of the Company’s consolidated financial statements primarily include costs related to the Company’s assertion of litigation, the valuation of the Company’s patent portfolios, stock-based compensation, the recoverability of deferred tax assets and the carrying value of the Company’s equity method investments. Actual results could be materially different from those estimates, upon which the carrying values were based. Certain amounts recorded to reflect the Company’s share of the income or losses of its equity method investee, accounted for under the equity method, are based on estimates and the unaudited results of operations of the equity method investee, and may require adjustment in the future when the audit is complete. The Company reports its share of the results of its equity method investee on a one quarter lag basis. |
Cash and Cash Equivalents | [3] 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 2,403,000 1,715,000 15,327,000 5,316,000 The Company considers all highly liquid short-term investments, including certificates of deposit and money market funds, which are purchased with an original maturity of three months or less to be cash equivalents. |
Marketable Securities | [4] Marketable Securities The Company’s marketable securities are comprised of certificates of deposit with an original maturity greater than three months from date of purchase, government securities and fixed income mutual funds . 6,077,000 2,976,000 |
Revenue Recognition | [5] Revenue Recognition Under ASC 606, revenue is recognized when the Company completes the licensing of its intellectual property to its licensees or enters into a litigation settlement agreement involving any of its expired patents. With respect to licensing its intellectual property or such litigation settlement agreement, revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for licensing its intellectual property or in settlement of the litigation. The Company determines revenue recognition through the following steps: • identification of the license agreement or litigation settlement agreement; • identification of the performance obligations in the license agreement or litigation settlement agreement; • determination of the consideration for the license or settlement; • 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: Schedule of disaggregation of revenue Years Ended December 31, 2023 2022 Litigation Settlements $ 2,601,000 $ — Total Revenue $ 2,601,000 $ — See Note K[4] hereof for further discussion of revenue recognized. Revenue from the Company’s patent licensing and enforcement business is typically generated from negotiated license agreements or settlement agreements with respect to any of the Company’s expired patents. The timing and amount of revenue recognized from each licensee or such settlement agreement 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, (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, or (iii) a lump sum settlement payment with respect to litigation involving the Company’s expired patents. 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 Method Investments | [6] Equity Method 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 Upon a sale of an equity method investment by the Company, the difference between sales proceeds and the carrying amount of the equity investment is recognized in profit or loss. Upon the issuance of securities in an observable price transaction, the Company will account for the share issuance by the equity method investee as if the Company had sold a proportionate share of its investment in the observable price transaction. The Company will record a gain or loss associated with the dilution of its investment to reflect third party investments in the investee and will increase or decrease its basis in the equity method investee accordingly. The gain or loss is recorded within other income or expense in the Company’s consolidated statements of operations and comprehensive loss. The Company performed an assessment to determine significance of the equity method investee under the investment, asset and income tests utilizing the 20% threshold. The Company determined that the equity method investee satisfied the income test and has included summarized financial data of the equity method investee in Note H hereof. |
Patents | [7] 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 and Related Costs | [8] Costs of Revenue and Related Costs The Company includes in costs of revenue for the year ended December 31, 2023 and 2022 contingent legal fees payable to patent litigation counsel, any other contractual payments to third parties related to net proceeds from monetization of patents (see Note I[1] hereof) and incentive bonus compensation payable to its Chairman and Chief Executive Officer (see Note J[1] hereof). |
Income Taxes | [9] Income Taxes The Company accounts for income taxes in accordance with Financial Accounting Standards Board (FASB) 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 no U.S. federal, state and local income tax returns prior to 2020 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. |
Stock-Based Compensation | [10] 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. 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. |
Earnings Per Share | [11] 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. |
Fair Value Measurements | [12] Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. 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 and accounts payable, 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. The Company’s equity method investment is measured on a non-recurring basis and is classified within Level 2 as it is valued using an observable price transaction for similar assets in a market that is not active (see Note B[6] and Note H hereof). |
Carrying Value, Recoverability and Impairment of Long-Lived Assets | [13] 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 December 31, 2023 and 2022, there was no The Company’s equity investment in ILiAD is evaluated on a non-recurring basis for impairment, when and if a triggering event occurs. |
Leases | [14] Leases Under ASC 842, the Company determines if an arrangement is a lease at inception. Right-of-Use (“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 the Company's lease does 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 and the initial term will be adjusted when it is reasonably certain that the Company will exercise such options. As permitted under ASC 842, the Company has elected to not recognize ROU assets and related lease obligations for leases with initial terms of twelve months or less . |
Dividend Policy | [15] Dividend Policy Cash 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 O hereof). |
New Accounting Standards | [16] New Accounting Standards Current Expected Credit Loss In June 2016, the FASB issued ASU 2016-13 “Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments”. This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance applies to loans, accounts receivable, trade receivables and other financial assets measured at amortized cost, loan commitments, held-to-maturity debt securities and beneficial interests in securitized financial assets, but the effect on the Company is projected to be limited to held-to-maturity debt securities. The guidance was effective for the year beginning on January 1, 2023, including interim periods within the year. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Segments In November 2023, the FAS B issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of disaggregation of revenue | Schedule of disaggregation of revenue Years Ended December 31, 2023 2022 Litigation Settlements $ 2,601,000 $ — Total Revenue $ 2,601,000 $ — |
Patents (Tables)
Patents (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Patents | |
Schedule of patent | Schedule of patent 2023 2022 Gross carrying amount $ 8,473,000 $ 8,473,000 Accumulated amortization (7,147,000 ) (6,881,000 ) Patents, net $ 1,326,000 $ 1,592,000 |
Schedule of future amortization of current intangible | Schedule of future amortization of current intangible For the years ended December 31, 2024 $ 120,000 2025 120,000 2026 120,000 2027 119,000 2028 116,000 Thereafter 731,000 Total $ 1,326,000 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Schedule of earnings per share 2023 2022 Weighted-average common shares outstanding – basic 23,791,287 23,825,917 Dilutive effect of restricted stock units — — Weighted-average common shares outstanding – diluted 23,791,287 23,825,917 Restricted stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive 587,500 625,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the income taxes | Schedule of components of the income taxes 2023 2022 Current State and local $ — $ — Federal 11,000 — Total Current Tax Expense (Benefit) $ 11,000 $ — Deferred State and local (39,000 ) 56,000 Federal (360,000 ) 551,000 Total Deferred Tax Expense (399,000 ) 607,000 Total Income Taxes $ (388,000 ) $ 607,000 |
Schedule of components of deferred tax assets and liability | Schedule of components of deferred tax assets and liability 2023 2022 Deferred tax assets (liability): Net operating loss carryforward $ 804,000 $ 477,000 Capital loss carryforward 47,000 331,000 Stock options and RSU 27,000 30,000 Tax credit carryforward 148,000 — Other 182,000 — Total deferred tax assets 1,208,000 838,000 Valuation allowance (1,208,000 ) (838,000 ) Deferred tax assets, net of valuation allowance $ — $ — 2023 2022 Deferred Tax Liability (1) (762,000 ) (1,161,000 ) Total deferred tax liability $ (762,000 ) $ (1,161,000 ) |
Schedule of reconciliation of income tax | Schedule of reconciliation of income tax Years Ended December 31, 2023 2022 Income tax - statutory rate 21.00 % 21.00 % Permanent differences (0.19) % (8.4) % Change in valuation allowance (1.98) % (48.79) % State 2.46 % 1.28 % Other — (0.43) % Total 21.29 % (35.34) % |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of stock option activity | Schedule of stock option activity 2023 2022 Number of Shares Weighted-Average Grant Number of Shares Weighted-Average Grant Balance of restricted stock units outstanding at beginning of year 625,000 $ 1.87 12,500 $ 3.36 Grants of restricted stock units 120,000 2.27 670,000 1.92 Vested restricted stock units (157,500 ) (2.43 ) (57,500 ) (2.73 ) Balance of restricted stock units outstanding at end of year 587,500 $ 1.81 625,000 $ 1.87 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Marketable Securities | |
Schedule of marketable securities | Schedule of marketable securities December 31, 2023 Cost Gross Gross Fair Value Certificates of Deposit $ 6,112,000 $ — $ (35,000 ) $ 6,077,000 Government securities 14,701,000 127,000 (10,000 ) 14,818,000 Fixed income mutual funds 7,585,000 91,000 — 7,676,000 Total marketable securities $ 28,398,000 $ 218,000 $ (45,000 ) $ 28,571,000 December 31, 2022 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Government securities $ 20,781,000 $ 67,000 $ — $ 20,848,000 Fixed income mutual funds 11,904,000 — 915,000 10,989,000 Certificates of Deposit 3,019,500 — (43,000 ) 2,976,000 Corporate bonds and notes 192,000 — (14,000 ) 178,000 Total marketable securities $ 35,896,000 $ 67,000 $ (972,000 ) $ 34,991,000 |
Equity Investment (Tables)
Equity Investment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of equity method investments | Schedule of equity method investments Twelve Months Ended 2023 2022 Loss from continuing operations $ 24,272,000 $ 15,246,000 Comprehensive loss $ 29,532,000 $ 17,913,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating leases obligations | Schedule of operating leases obligations As of As of December 31, 2023 December 31, 2022 Operating lease right-of-use assets $ 16,000 $ 161,000 Operating lease obligations – current 23,000 79,000 Operating lease obligations – non-current — 94,000 Total lease obligations $ 23,000 $ 173,000 |
Schedule of leases cost | Schedule of leases cost For the Year Ended 2023 2022 Operating lease cost $ 68,000 $ 48,000 Short-term lease cost — 82,000 Total lease cost $ 68,000 $ 130,000 |
Schedule of future minimum leases payments | Schedule of future minimum leases payments Operating Leases 2024 $ 23,000 2025 — 2026 — 2027 — 2028 — Total future minimum lease payments 23,000 Less imputed interest — Total operating lease liability $ 23,000 |
Business (Details Narrative)
Business (Details Narrative) | 12 Months Ended | |
Dec. 31, 2023 USD ($) Integer | Dec. 31, 2022 USD ($) | |
Patents owned by the company | 100 | |
Expired patents | 54 | |
Foreign patents owned by the company | 15 | |
ILiAD Biotechnologies LLC [Member] | ||
Aggregate investment amount | $ | $ 7,000,000 | $ 7,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Total Revenue | $ 2,601,000 | |
Litigation Settlements [Member] | ||
Product Information [Line Items] | ||
Total Revenue | $ 2,601,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
FDIC insured limit | $ 250,000 | $ 250,000 |
Cash in excess of FDIC insured limit | 2,403,000 | 1,715,000 |
Cash equivalents not insured | 15,327,000 | 5,316,000 |
Certificates of deposit | 6,077,000 | 2,976,000 |
Uncertain tax positions | 0 | 0 |
Company impairment patents and equity investment | $ 0 | $ 0 |
Patents (Details)
Patents (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Patents | ||
Gross carrying amount | $ 8,473,000 | $ 8,473,000 |
Accumulated amortization | (7,147,000) | (6,881,000) |
Patents, net | $ 1,326,000 | $ 1,592,000 |
Patents (Details 1)
Patents (Details 1) | Dec. 31, 2023 USD ($) |
Patents | |
2024 | $ 120,000 |
2025 | 120,000 |
2026 | 120,000 |
2027 | 119,000 |
2028 | 116,000 |
Thereafter | 731,000 |
Total | $ 1,326,000 |
Patents (Details Narrative)
Patents (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Amortization expense | $ 266,000 | $ 316,000 |
Minimum [Member] | ||
Estimated remaining economic useful of patents | 10 years | |
Expiration dates of the patents within the Company's M2M/IoT Patent Portfolio | September 2033 | |
Expiration dates within companys HFT patent portfolio | October 31, 2039 | |
Maximum [Member] | ||
Estimated remaining economic useful of patents | 16 years | |
Expiration dates of the patents within the Company's M2M/IoT Patent Portfolio | May 2034 | |
Expiration dates within companys HFT patent portfolio | November 1, 2039 |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Weighted-average common shares outstanding – basic | 23,791,287 | 23,825,917 |
Dilutive effect of restricted stock units | ||
Weighted-average common shares outstanding – diluted | 23,791,287 | 23,825,917 |
Restricted stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive | 587,500 | 625,000 |
Income (Loss) Per Share (Deta_2
Income (Loss) Per Share (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Potentially dilutive shares | 587,500 | 625,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current | ||
State and local | ||
Federal | 11,000 | |
Total Current Tax Expense (Benefit) | 11,000 | |
Deferred | ||
State and local | (39,000) | 56,000 |
Federal | (360,000) | 551,000 |
Total Deferred Tax Expense | (399,000) | 607,000 |
Total Income Taxes | $ (388,000) | $ 607,000 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 804,000 | $ 477,000 |
Capital loss carryforward | 47,000 | 331,000 |
Stock options and RSU | 27,000 | 30,000 |
Tax Credit Carryforward | 148,000 | |
Other | 182,000 | |
Total deferred tax assets | 1,208,000 | 838,000 |
Valuation allowance | (1,208,000) | (838,000) |
Deferred tax assets, net of valuation allowance | ||
Deferred Tax Liability | (762,000) | (1,161,000) |
Total deferred tax assets (liability) | $ (762,000) | $ (1,161,000) |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax - statutory rate | 21% | 21% |
Permanent differences | (0.19%) | (8.40%) |
Change in valuation allowance | (1.98%) | (48.79%) |
State | 2.46% | 1.28% |
Other | 0% | (0.43%) |
Total | 21.29% | (35.34%) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards | $ 3,364,000 | |
Deferred Tax Assets, Gross | 1,201,000 | |
Deferred Tax Assets, Valuation Allowance | 1,201,000 | |
Deferred Tax Liabilities, Net | $ 762,000 | $ 1,161,000 |
Stockholders' equity (Details)
Stockholders' equity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Restricted stock units, outstanding number of units, beginning balance | 625,000 | 12,500 |
Restricted stock units, weighted average grant date fair value, beginning balance | $ 1.87 | $ 3.36 |
Grants of restricted stock units | 120,000 | 670,000 |
Grants of restricted stock units, weighted average grant date fair value | $ 2.27 | $ 1.92 |
Vested restricted stock units | (157,500) | (57,500) |
Vested restricted stock units, weighted average grant date fair value | $ (2.43) | $ (2.73) |
Resricted stock units, Outstanding Number of units, Ending Balance | 587,500 | 625,000 |
Restricted stock units, weighted average grant date fair value, ending balance | $ 1.81 | $ 1.87 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Restricted stock unit compensation expense | $ 508,000 | $ 585,000 |
Unrecognized restricted stock unit compensation expense | $ 508,000 | |
Weighted average amortized period | 2 years | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.39% | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 4 years | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 40% | |
Share Price | $ 2.47 | |
Accrued dividend rights on restricted stock unit | $ 99,000 | $ 37,000 |
Stock Incentive Plan 2022 [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Common stock available for issuance under 2022 Plan | 2,180,000 | |
Common stock subject to outstanding awards | 75,000 | |
Stock Incentive Plan 2013 [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Common stock subject to outstanding awards | 512,500 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value [Member] | ||
OtherInvestmentsReadilyMarketableLineItems [Line Items] | ||
Certificates of deposit | $ 6,077,000 | $ 2,976,000 |
Government securities | 14,818,000 | 20,848,000 |
Fixed income mutual funds | 7,676,000 | 10,989,000 |
Corporate bonds and notes | 178,000 | |
Total marketable securities | 28,571,000 | 34,991,000 |
Cost Basis [Member] | ||
OtherInvestmentsReadilyMarketableLineItems [Line Items] | ||
Certificates of deposit | 6,112,000 | 3,019,500 |
Government securities | 14,701,000 | 20,781,000 |
Fixed income mutual funds | 7,585,000 | 11,904,000 |
Corporate bonds and notes | 192,000 | |
Total marketable securities | 28,398,000 | 35,896,000 |
Gross Unrealized Gains [Member] | ||
OtherInvestmentsReadilyMarketableLineItems [Line Items] | ||
Certificates of deposit | ||
Government securities | 127,000 | 67,000 |
Fixed income mutual funds | 91,000 | |
Corporate bonds and notes | ||
Total marketable securities | 218,000 | 67,000 |
Gross Unrealized Losses [Member] | ||
OtherInvestmentsReadilyMarketableLineItems [Line Items] | ||
Certificates of deposit | (35,000) | (43,000) |
Government securities | (10,000) | |
Fixed income mutual funds | 915,000 | |
Corporate bonds and notes | (14,000) | |
Total marketable securities | $ (45,000) | $ (972,000) |
Equity Investment (Details)
Equity Investment (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Loss from continuing operations | $ 24,272,000 | $ 15,246,000 |
Comprehensive loss | $ 29,532,000 | $ 17,913,000 |
Equity Investment (Details Narr
Equity Investment (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Aug. 24, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||
Unrealized gain securities | $ 3,883,000 | ||
Principal amount - convertible note | 1,000,000 | ||
Accrued interest - convertible note | 86,000 | ||
Unrealized gain on conversion - convertible note | $ 271,000 | ||
Additional Comprehensive loss | (1,443,000) | (2,328,000) | |
Additional net loss | $ (1,457,000) | (2,326,000) | |
Iliad [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage fully diluted | 5.40% | ||
Equity investment net loss | $ 2,003,000 | 1,639,000 | |
Book value of investment | 5,515,000 | ||
Additional Comprehensive loss | 621,000 | ||
Additional net loss | $ 42,000 | ||
Iliad [Member] | Class C Units [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage not fully diluted | 6.70% | ||
ILiAD Biotechnologies LLC [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Aggregrate investment | $ 7,000,000 | $ 7,000,000 | |
Private financing - D units | $ 42,836,000 | ||
Invested amount - multi-national pharma | 30,000,000 | ||
Additional invested amount - D units | $ 1,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease right-of-use assets | $ 16,000 | $ 161,000 |
Operating lease obligations – current | 23,000 | 79,000 |
Operating lease obligations – non-current | 94,000 | |
Total lease obligations | $ 23,000 | $ 173,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 68,000 | $ 48,000 |
Short-term lease cost | 82,000 | |
Total lease cost | $ 68,000 | $ 130,000 |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2024 | $ 23,000 | |
2025 | ||
2026 | ||
2027 | ||
2028 | ||
Total future minimum lease payments | 23,000 | |
Less imputed interest | ||
Total operating lease liability | $ 23,000 | $ 173,000 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | 128 Months Ended | ||
Mar. 25, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | May 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Contingency fee minimum - Meta litigation | 15% | ||||
Contingency fee maximum - Meta litigation | 24% | ||||
Legal fees on a full contingency minimum - Google litigation | 15% | ||||
Legal fees on a full contingency maximum - Google litigation | 30% | ||||
Legal fees on a contingency basis minimum - Remote power patent | 15% | ||||
Legal fees on a contingency basis maximum - Remote power patent | 40% | ||||
Contingent fees and accrued expenses | $ 744,000 | ||||
Accrued expenses | $ 88,000 | $ 88,000 | |||
HFT patent acqusition - cash at closing | $ 500,000 | ||||
Obligation to pay HFT seller additional cash based on achieving certain milestones | 500,000 | ||||
Contingent common stock issued upon achieving certain milestones | $ 375,000 | ||||
First $50 million of HFT net proceeds | 15% | ||||
Greater than $50 million of HFT net proceeds | 17.50% | ||||
Obligated to pay Cox, net proceeds percentage | 12.50% | 12.50% | |||
Obligated to pay Recognition, net proceeds | |||||
First $125 Million | 10% | 10% | |||
Next $125 Million | 15% | 15% | |||
Over $250 Million | 20% | 20% | |||
Recognition net proceeds payment related to Mirror Worlds patents | $ 3,127,000 | ||||
Obligated to pay M2M | |||||
First $100 Million | 14% | 14% | |||
Next $100 Million | 5% | 5% | |||
Additional consideration payable upon occurrence of certain future events | $ 250,000 | $ 250,000 | |||
401(k) Plan expense | $ 73,000 | $ 78,000 | |||
Lease borrowing rate - incremental | 4.20% | ||||
Remaining lease term | 3 months | 3 months | 3 years |
Employment Arrangements and O_2
Employment Arrangements and Other Agreements (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 22, 2024 | Mar. 22, 2023 | Mar. 22, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Chief Executive Officer [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Annual discretionary bonus | $ 175,000 | $ 175,000 | |||
CEO Incentive Compensation | 130,000 | 0 | |||
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Restricted stock units granted | 600,000 | ||||
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Tranche One [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Restricted stock units Tranche 1 | 175,000 | ||||
Restricted Stock Units to vest (Tranche 1) | 75,000 | 100,000 | |||
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Restricted stock units to vest (Tranche 2) | 150,000 | ||||
Minimum stock price for vesting | $ 3.50 | ||||
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Tranche Three [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Minimum stock price for vesting | $ 4 | ||||
Restricted stock units to vest (Tranche 3) | 150,000 | ||||
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share Based Compensation Award Tranche Four [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Minimum stock price for vesting | $ 4.50 | ||||
Restricted stock units to vest (Tranche 4) | 125,000 | ||||
Chief Executive Officer [Member] | New Employment Agreement [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Annual base salary | $ 535,000 | ||||
Annual base salary increase | 3% | ||||
Annual Target Bonus | $ 175,000 | ||||
Prorated target bonus | $ 175,000 | ||||
Vice President [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Annual discretionary bonus | $ 25,000 | 25,000 | |||
Chief Financial Officer [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Annual base salary | $ 175,000 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) - USD ($) | 12 Months Ended | ||
May 09, 2017 | Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Recognized revenue | $ 2,601,000 | ||
Non recognized revenue | $ 150,000 | ||
Google [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Litigation pending, description | Company initiated litigation against Google Inc. (“Google”) and YouTube, LLC (“YouTube”) in the U.S. District Court for the Southern District of New York for infringement of several of its patents within its Cox Patent Portfolio acquired from Dr. Cox which relate to the identification of media content on the Internet. The lawsuit alleges that Google and YouTube have infringed and continue to infringe certain of the Company’s patents by making, using, selling and offering to sell unlicensed systems and related products and services, which include YouTube’s Content ID system. The litigations 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 the appeals of PTAB Final Written Decisions to the U.S. Court of Appeals for the Federal Circuit. 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. In January 2019, the two litigations against Google and YouTube were consolidated. Discovery is complete and the parties have each submitted summary judgment motions which remain pending. A trial date has not been set. | ||
Facebook [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Litigation pending, description | the Company’s wholly-owned subsidiary, initiated litigation against Facebook, Inc. (“now Meta Platforms, Inc. (“Meta”)) in the U.S. District Court for the Southern District of New York, for infringement of U.S. Patent No. 6,006,227, U.S. Patent No. 7,865,538 and U.S. Patent No. 8,255,439 (among the patents within the Company’s Mirror Worlds Patent Portfolio). The lawsuit alleged that the asserted patents are infringed by Meta’s core technologies that enable Meta’s Newsfeed and Timeline features. | ||
Netgear [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Litigation pending, description | Company filed a lawsuit against Netgear, Inc. (“Netgear”) in the Supreme Court of the State of New York, County of New York, for breach of a Settlement and License Agreement, dated May 22, 2009 (the “License Agreement”), with the Company for failure to make royalty payments, and provide corresponding royalty reports, to the Company based on sales of Netgear’s PoE products. On October 22, 2021, Netgear filed a Demand for Arbitration at the American Arbitration Association (AAA) seeking to arbitrate certain issues raised in the litigation. The Company objected to jurisdiction at the AAA. On April 22, 2022, Netgear filed a counterclaim in the N.Y. court action alleging that the Company breached the License Agreement by not offering Netgear lower royalties. On September 22, 2022, the arbitration brought by Netgear was dismissed by the AAA on jurisdiction grounds. The case remained pending in the Supreme Court of the State of New York, County of New York. | ||
Arista Networks [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Litigation pending, description | Company initiated nine separate litigation against ten defendants for infringement of its Remote Power Patent seeking monetary damages based upon reasonable royalties, as follows: (i) On October 6, 2022, the Company initiated such litigation against Arista Networks, Inc., Fortinet, Inc., Honeywell International Inc. and Ubiquiti Inc. in the United States District Court, District of Delaware; (ii) On October 27, 2022, and November 3, 2022, the Company initiated such litigation against TP-Link USA Corporation and Hikvision USA, Inc. in the United States District Court for the Central District of California; (iii) On November 4, 2022, the Company initiated such litigation against Panasonic Holdings Corporation and Panasonic Corporation of North America in the United States District Court for the Eastern District of Texas (Marshall Division); and (iv) On November 8, 2022 and November 16, 2022, the Company initiated such litigation against Antaira Technologies, LLC and Dahua Technology USA in the United States District Court for the Central District of California. |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 | |
Concentration Risk [Line Items] | |
Percentage revenue | 100% |
Four Parties [Member] | |
Concentration Risk [Line Items] | |
Percentage revenue | 90% |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details Narrative) - USD ($) | 12 Months Ended | 149 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2023 | Jun. 14, 2023 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Number of shares, common stock repurchased | 428,132 | 9,532,982 | |
Aggregate cost of common stock repurchased | $ 955,000 | $ 18,713,000 | |
Average price per share, common stock repurchased | $ 2.23 | $ 1.94 | |
Board Of Directors [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Stock repurchase program, dollar amount | 5,000,000 |
Dividend Policy (Details Narrat
Dividend Policy (Details Narrative) - $ / shares | 12 Months Ended | ||
Mar. 03, 2023 | Sep. 08, 2021 | Dec. 31, 2023 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Dividends, per share - semi-annual | $ 0.05 | ||
Dividends, per share - annual | $ 0.10 | ||
Board Of Directors [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Dividends, per share - semi-annual | $ 0.05 | $ 0.05 | |
Semi-annual cash dividend payment date | Mar. 31, 2023 | Sep. 29, 2023 | |
Semi-annual cash dividend record date | Mar. 15, 2023 | Sep. 19, 2023 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - $ / shares | 1 Months Ended | 12 Months Ended | |||
Mar. 03, 2023 | Sep. 08, 2021 | Feb. 23, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | |||||
Semi-annual cash dividend per common share | $ 0.10 | $ 0.10 | |||
Board Of Directors [Member] | |||||
Subsequent Event [Line Items] | |||||
Dividend payment date | Mar. 31, 2023 | Sep. 29, 2023 | |||
Semi-annual cash dividend record date | Mar. 15, 2023 | Sep. 19, 2023 | |||
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Subsequent Event [Line Items] | |||||
Restricted stock units granted to directors | 15,000 | ||||
Subsequent Event [Member] | Board Of Directors [Member] | |||||
Subsequent Event [Line Items] | |||||
Semi-annual cash dividend per common share | $ 0.05 | ||||
Dividend payment date | Mar. 29, 2024 | ||||
Semi-annual cash dividend record date | Mar. 15, 2024 |