Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 6-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VirnetX Holding Corp | |
Entity Central Index Key | 1082324 | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,116,862 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $13,290 | $18,658 |
Investments available for sale | 21,410 | 22,571 |
Prepaid expenses - current | 957 | 653 |
Total current assets | 35,657 | 41,882 |
Prepaid expenses - non-current | 3,048 | 3,144 |
Property and equipment, net | 62 | 64 |
Total assets | 38,767 | 45,090 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,306 | 3,554 |
Royalty payable | 6,100 | 6,100 |
Related-party payable | 0 | 81 |
Income tax liability | 395 | 408 |
Deferred revenue, current portion | 1,500 | 1,500 |
Derivative liability | 0 | 320 |
Total current liabilities | 9,301 | 11,963 |
Deferred revenue, non-current portion | 125 | 500 |
Total liabilities | 9,426 | 12,463 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, par value $0.0001 per share Authorized: 10,000,000 shares at March 31, 2015 and December 31, 2014, Issued and outstanding: 0 shares at March 31, 2015 and December 31, 2014 | 0 | 0 |
Common stock, par value $0.0001 per share Authorized: 100,000,000 shares at March 31, 2015 and December 31, 2014, Issued and outstanding: 52,116,862 shares and 51,996,701 shares, at March 31, 2015 and December 31, 2014, respectively | 5 | 5 |
Additional paid-in capital | 135,632 | 133,072 |
Accumulated deficit | -106,289 | -100,435 |
Accumulated other comprehensive loss | -7 | -15 |
Total stockholders' equity | 29,341 | 32,627 |
Total liabilities and stockholders' equity | $38,767 | $45,090 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 52,116,862 | 51,996,701 |
Common stock, outstanding (in shares) | 52,116,862 | 51,996,701 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract] | ||
Revenue | $375 | $250 |
Operating expense: | ||
Research and development | 392 | 347 |
Selling, general and administrative | 5,742 | 6,856 |
Total operating expense | 6,134 | 7,203 |
Loss from operations | -5,759 | -6,953 |
Gain (loss) on change in value of derivative liability | -117 | 838 |
Interest income, net | 23 | 30 |
Loss before taxes | -5,853 | -6,085 |
Provision for income taxes | -2 | -2 |
Net loss | ($5,855) | ($6,087) |
Basic and diluted loss per share (in dollars per share) | ($0.11) | ($0.12) |
Weighted average shares outstanding basic and diluted (in shares) | 52,027 | 51,253 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) [Abstract] | ||
Net loss | ($5,855) | ($6,087) |
Other comprehensive gain (loss), net of tax: | ||
Change in unrealized gain (loss) on investments, net of tax | 8 | -11 |
Total other comprehensive gain (loss), net of tax | 8 | -11 |
Comprehensive loss | ($5,847) | ($6,098) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss | ($5,855) | ($6,087) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 7 | 5 |
Stock-based compensation | 1,692 | 1,828 |
Change in value of derivative liability | 117 | -838 |
Changes in assets and liabilities: | ||
Prepaid expenses - current | -208 | -4,024 |
Accounts payable and accrued liabilities | -2,248 | 1,263 |
Income tax liability | -13 | 0 |
Related-party payable | -81 | 0 |
Deferred revenues | -375 | -250 |
Net cash used in operating activities | -6,964 | -8,103 |
Cash flows from investing activities: | ||
Purchase of property and equipment | -4 | 0 |
Purchase of investments | -2,932 | -3,383 |
Proceeds from sale or maturity of investments | 4,101 | 5,701 |
Net cash provided by investing activities | 1,165 | 2,318 |
Cash flows from financing activities: | ||
Proceeds from exercise of options | 0 | 68 |
Proceeds from exercise of warrants | 431 | 0 |
Net cash provided by financing activities | 431 | 68 |
Net decrease in cash and cash equivalents | -5,368 | -5,717 |
Cash and cash equivalents, beginning of period | 18,658 | 19,173 |
Cash and cash equivalents, end of period | $13,290 | $13,456 |
Business_Description_and_Basis
Business Description and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Business Description and Basis of Presentation [Abstract] | |
Business Description and Basis of Presentation | Note 1 — Business Description and Basis of Presentation |
We develop software and technology solutions for securing real-time communications over the Internet. Our patented GABRIEL Connection Technology™ combines industry standard encryption protocols with our patented techniques for automated domain name system, or DNS, lookup mechanisms, and enables users to create a secure communication link using secure domain names over wired or wireless (4G/LTE) networks. We are currently beta testing our GABRIEL Connection Technology™ as part of our Secure Domain Name Initiative, or (SDNI), on various platforms including PCs, smart phones and tablets. We also intend to establish the exclusive secure domain name registry in the United States and other key markets around the world. | |
Our portfolio of intellectual property is the foundation of our business model. We currently own over 100 U.S. and international patents with over 75 pending applications. Our patent portfolio is primarily focused on securing real-time communications over the Internet, as well as related services such as the establishment and maintenance of a secure domain name registry. Our patented methods also have additional applications in the key areas of device operating systems and network security for Cloud services, M2M communications in areas of Smart City, Connected Car and Connected Home. | |
We have submitted a declaration with the 3rd Generation Partnership Project, or 3GPP, identifying a group of our patents and patent applications that we believe are or may become essential to certain developing specifications in the 3GPP LTE, SAE project. We have agreed to make available a non-exclusive patent license under fair, reasonable and non-discriminatory terms and conditions, with compensation, or FRAND, to 3GPP members desiring to implement the technical specifications identified by us. We believe that we are positioned to license our essential security patents to 3GPP members as they move into 4G. | |
We believe that the market opportunity for our software and technology solutions is large and expanding as secure domain names are now an integral part of securing the next generation 4G/LTE Advanced wireless networks and M2M communications in areas including Smart City, Connected Car and Connected Home. We also believe that all 4G/LTE Advanced mobile devices will require unique secure domain names and become part of a secure domain name registry. | |
We intend to license our patent portfolio, technology and software, including our secure domain name registry service, to domain infrastructure providers, communication service providers as well as to system integrators. We intend to seek further license of our technology, including our GABRIEL Connection Technology™ to enterprise customers, developers and original equipment manufacturers, or OEMs, of chips, servers, smart phones, tablets, e-Readers, laptops, net books and other devices, within the IP-telephony, mobility, fixed-mobile convergence and unified communications markets including 4G/LTE. We have published our royalty rates and guidelines on our website. All forward moving licenses have adhered to these guidelines and have met or exceeded these rates and we will use these rates and guidelines in all future license negotiations. | |
Our software and technology solutions, including our Secure Domain Name Registry and GABRIEL Connection Technology™, are designed to facilitate secure communications and provide the security platform required by next-generation Internet-based applications such as instant messaging, or IM, voice over Internet protocol, or VoIP, mobile services, streaming video, file transfer, remote desktop and, or M2M communications. Our technology generates secure connections on a “zero-click” or “single-click” basis, significantly simplifying the deployment of secure real-time communication solutions by eliminating the need for end-users to enter any encryption information. | |
Our product Gabriel Secure Communication Platform™, unlike other collaboration and communication products and services on the market today, does not require access to user’s confidential data and minimizes the threat of hacking and data mining. It enables individuals and organizations to maintain complete ownership and control over their personal and confidential data, secured within their own private network, while enabling authorized secure encrypted access from anywhere at any time. Our Gabriel Collaboration Suite™ is a set of applications that run on top of our Gabriel Secure Communication Platform™. It enables seamless and secure cross-platform communications between user’s devices that have our software installed. Our products have undergone internal testing with employees, contractors, shareholders and private beta testers and are now in public beta at over 80 small and medium businesses. General public release of products is expected in the first-half of 2015 upon successful conclusion of our ongoing public beta program. | |
We have signed Patent License Agreements with Avaya Inc., Aastra USA, Inc., Microsoft, Mitel Networks Corporation, NEC Corporation and NEC Corporation of America, Siemens Enterprise Communications GmbH & Co. KG, and Siemens Enterprise Communications Inc. to license certain of our patents, for a one-time payment and/or an ongoing royalty for all future sales through the expiration of the licensed patents with respect to certain current and future IP-encrypted products. | |
Our employees include the core development team behind our patent portfolio, technology and software. This team has worked together for over ten years and is the same team that invented and developed this technology while working at Leidos, is a FORTUNE 500® scientific, engineering and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure and health. The team has continued its research and development work started at Leidos, and expanded the set of patents we acquired in 2006 from Leidos, into a larger portfolio with over 100 U.S. and international patents with over 75 pending applications. This portfolio now serves as the foundation of our licensing business and planned service offerings and is expected to generate the majority of our future revenue in license fees and royalties. We intend to continue our research and development efforts to further strengthen and expand our patent portfolio. See – Operations – Research and Development Expenses for a description of our research and development expenses for the past three fiscal years discussed below. | |
We intend to continue using an outsourced and leveraged model to maintain efficiency and manage costs as we grow our licensing business by, for example, offering incentives to early licensing targets or asserting our rights for use of our patents. We also intend to expand our design pilot in participation with leading 4G/LTE companies (domain infrastructure providers, chipset manufacturers, service providers, and others) and build our secure domain name registry. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies | ||||||||||||||||||||||||
Unaudited Interim Financial Information | |||||||||||||||||||||||||
The accompanying Condensed Consolidated Balance Sheet as of March 31, 2015, the Condensed Consolidated Statements of Income for the three months ended March 31, 2015 and 2014, the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2015 and 2014, and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of March 31, 2015, our results of operations for the three months ended March 31, 2015 and 2014, and our cash flows for the three months ended March 31, 2015 and 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. | |||||||||||||||||||||||||
These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on March 2, 2015. | |||||||||||||||||||||||||
Basis of Consolidation | |||||||||||||||||||||||||
The consolidated financial statements include the accounts of VirnetX Holding Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. | |||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||
We prepare our consolidated financial statements in accordance with U.S. GAAP. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. | |||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
We derive our revenue from patent licensing. The timing and amount of revenue recognized from each licensee depends upon a variety of factors, including the specific terms of each agreement and the nature of the deliverables and obligations. Such agreements may be complex and include multiple elements. These agreements may include, without limitation, elements related to the settlement of past patent infringement liabilities, up-front and non-refundable license fees for the use of patents, patent licensing royalties on covered products sold by licensees, and the compensation structure and ownership of intellectual property rights associated with contractual technology development arrangements. Licensing agreements are accounted for under the Financial Accounting Standards Board (“FASB”) revenue recognition guidance, "Revenue Arrangements with Multiple Deliverables." This guidance requires consideration to be allocated to each element of an agreement that has stand-alone value using the relative fair value method. In other circumstances, such as those agreements involving consideration for past and expected future patent royalty obligations, after consideration of the particular facts and circumstances, the appropriate recording of revenue between periods may require the use of judgment. In all cases, revenue is only recognized after all of the following criteria are met: (1) written agreements have been executed; (2) delivery of technology or intellectual property rights has occurred or services have been rendered; (3) fees are fixed or determinable; and (4) collectability of fees is reasonably assured. | |||||||||||||||||||||||||
Patent License Agreements: Upon signing a patent license agreement, including licenses entered into upon settlement of litigation, we provide the licensee permission to use our patented technology in specific applications. We account for patent license agreements in accordance with the guidance for revenue recognition for arrangements with multiple deliverables, with amounts allocated to each element based on their fair values. We have elected to utilize the leased-based model for revenue recognition with revenue being recognized over the expected period of benefit to the licensee. Under our patent license agreements, we do or expect to typically receive one or a combination of the following forms of payment as consideration for permitting our licensees to use our patented inventions in specific applications and products: | |||||||||||||||||||||||||
· | Consideration for Past Sales: Consideration related to a licensee’s product sales from prior periods may result from a negotiated agreement with a licensee that utilized our patented technology prior to signing a patent license agreement with us or from the resolution of a litigation, disagreement or arbitration with a licensee over the specific terms of an existing license agreement. We may also receive royalty for past sales in connection with the settlement of patent litigation where there was no prior patent license agreement. These amounts are negotiated, typically based upon application of a royalty rate to historical sales prior to the execution of the license agreement. In each of these cases, since delivery has occurred, we record the consideration as revenue when we have obtained a signed agreement, identified a fixed or determinable price, and determined that collectability is reasonably assured. | ||||||||||||||||||||||||
· | Current Royalty Payments: Ongoing royalty payments cover a licensee’s obligations to us related to its sales of covered products in the current contractual reporting period. Licensees that owe these current royalty payments are obligated to provide us with quarterly or semi-annual royalty reports that summarize their sales of covered products and their related royalty obligations to us. We expect to receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, it is impractical for us to recognize revenue in the period in which the underlying sales occur, and, in most cases, we will recognize revenue in the period in which the royalty report is received and other revenue recognition criteria are met due to the fact that without royalty reports from our licensees, our visibility into our licensees’ sales is limited. | ||||||||||||||||||||||||
· | Non-Refundable Up-Front Fees and Minimum Fee Contracts: For licenses that provide for non-refundable up-front or fixed minimum fees over their term, for which we have no future obligations or performance requirements, revenue is generally recognized over the license term. For licenses that provide for fees that are not fixed or determinable, including licenses that provide for extended payment terms and/or payment of a significant portion of the fee after expiration of the license or more than 12 months after delivery, the fees are generally presumed not to be fixed or determinable, and revenue is deferred and recognized as earned, but generally not in advance of collection. | ||||||||||||||||||||||||
· | Non-Royalty Elements: Elements that are not related to royalty revenue in nature, such as settlement fees, expense reimbursement, and damages, if any, are recorded as gain from settlement which is reflected as a separate line item within the operating expenses section in the consolidated statements of operations. | ||||||||||||||||||||||||
Deferred revenue | |||||||||||||||||||||||||
In August 2013 we began receiving annual payments on a contract that requires payment to us over 4 years totaling $10,000 ("August 2013 Contract Settlement"). From the inception of that license to March 31, 2015, we received cash totaling $5,000, all of which is non-refundable, and in accordance with our revenue recognition policy, we will not recognize any of the $5,000 balance due until collected.. We recognized $375 and $250 of revenue related to the August 2013 Contract Settlement during the three months ended March 31, 2015 and 2014 respectively. | |||||||||||||||||||||||||
Activity under the August 2013 Contract Settlement was as follows: | |||||||||||||||||||||||||
Deferred Revenue, December 31, 2014 | $ | 2,000 | |||||||||||||||||||||||
Less: Amount amortized as revenue | 375 | ||||||||||||||||||||||||
Deferred Revenue, March 31, 2015 | $ | 1,625 | |||||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||
Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. | |||||||||||||||||||||||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||||||||||||||||||||
Our cash and cash equivalents are primarily maintained at two major financial institutions in the United States. A portion of those balances are insured by the Federal Deposit Insurance Corporation. During the three months ended March 31, 2015 we had funds which were uninsured. We do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships with major financial institutions. We have not experienced any losses on our deposits of cash and cash equivalents. | |||||||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||||||
Our Series I Warrants were required to be accounted for as derivative liabilities and carried at fair value on our Condensed Consolidated Balance Sheets as a result of an anti-dilution provision which precluded them from being considered indexed to our stock. The warrant liabilities were marked-to-market each period and the change in the fair value was recorded as gain or loss on derivative liability in the accompanying Condensed Consolidated Statements of Operations. All remaining unexercised Series 1 Warrants expired during the three months ended March 31, 2015. | |||||||||||||||||||||||||
Prepaid Expenses | |||||||||||||||||||||||||
Prepaid expenses at March 31, 2015 include the current portion of prepaid rent for a facility lease for corporate promotional and marketing purposes. Beginning March 2014, the prepayment totaling $4,000 is being amortized over the 10 year term of the lease. The unamortized non-current portion of the prepayment is included in Prepaid expenses-non-current on the consolidated balance sheet. | |||||||||||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||||||||||
On an annual basis we identify and record impairment losses on long-lived assets when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability is measured by comparison of the anticipated future net undiscounted cash flows to the related assets’ carrying value. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. | |||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||
Fair value is the price that would result from an orderly transaction between market participants at the measurement date. A fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 2 measurements utilize either directly or indirectly observable inputs in markets other than quoted prices in active markets. | |||||||||||||||||||||||||
Our financial instruments are stated at amounts that equal, or approximate, fair value. When we estimate fair value, we utilize market data or assumptions that we believe market participants would use in pricing the financial instrument, including assumptions about risk and inputs to the valuation technique. We use valuation techniques, primarily the income and market approach, which maximizes the use of observable inputs and minimize the use of unobservable inputs for recurring fair value measurements. | |||||||||||||||||||||||||
Mutual Funds: Valued at the quoted net asset value of shares held. | |||||||||||||||||||||||||
Corporate, Municipal and U.S. Agency Securities: Fair value measured at the closing price reported on the active market on which the individual securities are traded. | |||||||||||||||||||||||||
Series I Warrants: Fair value measured by using a binomial valuation model. The assumptions used to measure fair value of our outstanding Series I Warrants carried as derivative liabilities on our Condensed Consolidated Balance Sheet for December 31, 2014 included a warrant exercise price of $3.59 per share, a common share price of $5.49 discount rate of 1.65%, and a volatility of 89.6%. | |||||||||||||||||||||||||
The following tables show the adjusted cost, gross unrealized gains, gross unrealized losses and fair value of our securities by significant investment category as of March 31, 2015 and December 31, 2014. | |||||||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair | Cash | Investments | ||||||||||||||||||||
Cost | Gains | Losses | Value | and Cash | Available | ||||||||||||||||||||
Equivalents | for Sale | ||||||||||||||||||||||||
Cash | $ | 4,524 | $ | - | $ | - | $ | 4,524 | $ | 4,524 | $ | - | |||||||||||||
Level 1: | |||||||||||||||||||||||||
Mutual funds | 974 | - | - | 974 | 974 | - | |||||||||||||||||||
Corporate securities | 11,142 | 1 | - | 11,143 | 4,929 | 6,214 | |||||||||||||||||||
Municipal securities | 256 | - | - | 256 | - | 256 | |||||||||||||||||||
U.S agency securities | 17,798 | 6 | (1 | ) | 17,803 | 2,863 | 14,940 | ||||||||||||||||||
30,170 | 7 | (1 | ) | 30,176 | 8,766 | 21,410 | |||||||||||||||||||
Total | $ | 34,694 | $ | 7 | $ | (1 | ) | $ | 34,700 | $ | 13,290 | $ | 21,410 | ||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair | Cash | Investments | ||||||||||||||||||||
Cost | Gains | Losses | Value | and Cash | Available | ||||||||||||||||||||
Equivalents | for Sale | ||||||||||||||||||||||||
Cash | $ | 1,183 | $ | - | $ | - | $ | 1,183 | $ | 1,183 | $ | - | |||||||||||||
Level 1: | |||||||||||||||||||||||||
Mutual funds | 10,139 | - | - | 10,139 | 10,139 | - | |||||||||||||||||||
Corporate securities | 9,405 | 1 | (3 | ) | 9,403 | 1,645 | 7,758 | ||||||||||||||||||
U.S agency securities | 20,504 | 2 | (2 | ) | 20,504 | 5,691 | 14,813 | ||||||||||||||||||
40,048 | 3 | (5 | ) | 40,046 | 17,475 | 22,571 | |||||||||||||||||||
Total | $ | 41,231 | $ | 3 | $ | (5 | ) | $ | 41,229 | $ | 18,658 | $ | 22,571 | ||||||||||||
The following table sets forth by level within the fair value hierarchy, our liabilities stated at fair value as of December 31, 2014. | |||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Quoted | Significant | Significant | |||||||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||||||
Markets | Inputs | ||||||||||||||||||||||||
for | |||||||||||||||||||||||||
Identical | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||||||||||
Series l Warrants | $ | — | $ | — | $ | 320 | 320 | ||||||||||||||||||
Total | $ | — | $ | — | $ | 320 | 320 | ||||||||||||||||||
The following table sets forth a summary of changes in the fair value of our Level 3 liability stated at fair value for the three months ended March 31, 2015 and 2014. | |||||||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Measurements | Measurements | ||||||||||||||||||||||||
Using | Using | ||||||||||||||||||||||||
Significant | Significant | ||||||||||||||||||||||||
Unobservable | Unobservable | ||||||||||||||||||||||||
Inputs (Level 3) | Inputs (Level 3) | ||||||||||||||||||||||||
Balance December 31, 2014 | $ | 320 | Balance December 31, 2013 | $ | 2,564 | ||||||||||||||||||||
Loss on derivative liability included in net loss | 117 | Gain on derivative liability included in net loss | (838 | ) | |||||||||||||||||||||
Settlements | (333 | ) | Settlements | — | |||||||||||||||||||||
Expiration of warrants | (104 | ) | Expiration of warrants | — | |||||||||||||||||||||
Balance March 31, 2015 | $ | — | Balance March 31, 2014 | $ | 1,726 | ||||||||||||||||||||
New Accounting Pronouncements | |||||||||||||||||||||||||
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, “Presentation of Financial Statements – Going Concern”, Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The amendments in this ASU apply to all entities and require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. We are currently evaluating the impact this guidance will have on our financial position and results of operations. | |||||||||||||||||||||||||
In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718)," which makes amendments to the codification topic 718, "Accounting for Share-Based Payments.” when the terms of an award provide that a performance target could be achieved after the requisite service period. The new guidance becomes effective for annual reporting periods beginning after December 15, 2015, early adoption is permitted. We are currently evaluating the impact this guidance will have on our financial position and results of operations. | |||||||||||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09 "Revenue from Contracts with Customers" (Topic 606). Topic 606 supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments create a new Subtopic 340-40, “Other Assets and Deferred Costs—Contracts with Customers”. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are currently evaluating the impact this guidance will have on our financial position and statement of operations. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | Note 3 — Income Taxes |
Our income tax expense was $2 for the three months ended March 31, 2015 and 2014. As a result of net operating losses during the periods the provisions reflect only minimum tax payments. We have valuation allowances covering our deferred tax assets including net operating loss carry-forwards. | |
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets at March 31, 2015 will not be fully realizable. Accordingly, management has maintained a valuation allowance against its net deferred tax assets at March 31, 2015. The valuation allowance carried against our net deferred tax assets was approximately $23,000 and $21,000 at March 31, 2015 and December 31, 2014, respectively. | |
At March 31, 2015, we have federal and state net operating loss carry-forwards of approximately $36,000 and $38,000, respectively, expiring beginning in 2027 and 2016, respectively. | |
Effective January 1, 2009, we adopted accounting guidance for income taxes, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return. We are now required to recognize in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. | |
Our tax years for 2005 and forward are subject to examination by the U.S. tax authority and various state tax authorities. These years are open due to net operating losses and tax credits remaining unutilized from such years. | |
Our policy is to recognize interest and penalties accrued on uncertain tax positions as a component of income tax expense. As of March 31, 2015, we had accrued immaterial amounts of interest and penalties related to the uncertain tax positions. |
Commitments_and_Related_Party_
Commitments and Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Related Party Transactions [Abstract] | |
Commitments and Related Party Transactions | Note 4 — Commitments and Related Party Transactions |
We lease our offices under an operating lease with a third party expiring in October 2015 for $5 per month. We recognize rent expense on a straight-line basis over the term of the lease. | |
On January 31, 2015 we entered into a 12 month non-exclusive lease for the use of an aircraft from K2 Investment Fund LLC (“LLC”) for business travel for employees of the Company. We incurred approximately $82 in rental fees (including fees and other reimbursements) to the LLC during the three months ended March 31, 2015. Our Chief Executive Officer and Chief Administrative Officer are the managing partners of the LLC and control the equity interests of the LLC. The lease for use of the plane calls for a rental- rate of $8 per flight hour, with no minimum usage requirement. The agreement contains other terms and conditions normal in such transactions and can be cancelled by either us or the LLC with a 30 day notice. |
Stock_Based_Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | Note 5 — Stock Based Compensation |
We have a stock incentive plan for employees and others called the “VirnetX Holding Corporation 2013 Equity Incentive Plan”, or the Plan, which has been approved by our stockholders. The Plan provides for the granting of up to 14,124,469 shares of our common stock, including stock options and stock purchase rights (“RSUs”), and will expire in 2024. As of March 31, 2015, 1,861,217 shares remained available for grant under the Plan. During the three months ending March 31, 2015 there were 25,000 options granted to employees and no RSUs granted. | |
Stock-based compensation expense included in general and administrative expense was $1,692 and $1,828 for the three months ended March 31, 2015 and 2014, respectively. | |
As of March 31, 2015, the unrecognized stock-based and RSUs compensation expense related to non-vested stock options and RSUs was $8,101 and $3,720, respectively, which will be amortized over an estimated weighted average period of approximately 2.37 and 2.34 years, respectively. |
Warrants
Warrants | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Warrants [Abstract] | ||||||||||||||||||||||||||||
Warrants | Note 6 — Warrants | |||||||||||||||||||||||||||
During the three months ended March 31, 2015 our remaining outstanding Series 1 Warrants were exercised or expired. Information about warrants outstanding during the three months ended March 31, 2015 follows: | ||||||||||||||||||||||||||||
Original Number | Exercise | Exercisable at | Became | Exercised | Terminated / | Exercisable | Expiration | |||||||||||||||||||||
of | Price per | December 31, | Exercisable | Cancelled / | at March 31, | Date | ||||||||||||||||||||||
Warrants Issued | Common | 2014 | Expired | 2015 | ||||||||||||||||||||||||
Share | ||||||||||||||||||||||||||||
2,619,036 | (1) | $ | 3.59 | 157,467 | — | 120,161 | 37,306 | — | Mar-15 | |||||||||||||||||||
Total | 157,467 | — | 120,161 | 37,306 | — | |||||||||||||||||||||||
-1 | Referred to as our Series I Warrants. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2015 | |
Litigation [Abstract] | |
Litigation | Note 7 — Litigation |
We have one intellectual property infringement lawsuit pending against Apple, Inc. in the United States District Court for the Eastern District of Texas, Tyler Division, pursuant to which we allege that this party infringes on certain of our patents. We seek damages and injunctive relief in all the complaints. | |
VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) – Consolidated Lead Case | |
On March 30, 2015, the United States Court for the Eastern District of Texas, Tyler Division, issued an order finding substantial overlap between the remanded portions of the Civil Action Case 6:10-CV-00417-LED (VirnetX vs. Cisco et. al.), and the ongoing Civil Action Case 6:12-CV-00855-LED (VirnetX Inc. v. Apple, Inc.). The court consolidated the two civil actions under Civil Action Case 6:12-CV-00855-LED (VirnetX Inc. v. Apple, Inc.) and designated it as the lead case. The court reset the jury trial date to January 25, 2016 with jury selection scheduled to start on January 18, 2016. All future updates will be provided under this case. | |
VirnetX Inc. v. Cisco Systems, Inc. et al. (13-1489-LP VirnetX, Case 6:10-CV-00417-LED) | |
On August 11, 2010, we initiated a lawsuit by filing a complaint against Aastra, Apple, Cisco, and NEC in the United States District Court for the Eastern District of Texas, Tyler Division, pursuant to which we alleged that these parties infringe on certain of our patents. We sought damages and injunctive relief. Aastra and NEC agreed to sign license agreements with us and we agreed to drop all the accusations of infringement against them. At the pre-trial hearing, the judge decided to conduct separate jury trial for each defendant, and try only the case against Apple on the scheduled trial date. The jury trial of our case against Cisco was held on March 4, 2013. The jury in our case against Cisco came back with a verdict of non-infringement also determined that all our patents-in-suit patents are not invalid. Our motions for a new trial and Cisco’s infringement of certain VirnetX patents were denied and the case against Cisco was closed. | |
The jury trial of our case against Apple was held on October 31, 2012. On November 6, 2012, a jury in the United States Court for the Eastern District of Texas, Tyler Division, awarded us over $368 million in a verdict against Apple Corporation for infringing four of our patents. On February 26, 2013, the court issued its Memorandum Opinion and Order regarding post-trial motions resulting from the prior jury verdict denying Apple’s motion to reduce the damages awarded by the jury for past infringement. The Court further denied Apple’s request for a new trial on the liability and damages portions of the verdict and granted our motions for pre-judgment interest, post-judgment interest, and post-verdict damages to date. The Court ordered that Apple pay $34 in daily interest up to final judgment and $330 in daily damages for infringement up to final judgment for certain Apple devices included in the verdict. The Court denied our request for a permanent injunction and severed the future infringement portion into its own separate proceedings under Case 6:13-CV-00211-LED. | |
On July 3, 2013, Apple filed an appeal of the judgment dated February 27, 2013 and order dated June 4, 2013 denying Apple’s motion to alter or amend the judgment to the United States Court of Appeals for the Federal Circuit (USCAFC). On September 16, 2014, USCAFC issued their opinion, affirming the jury’s finding that all 4 of our patents are valid, confirming the jury’s finding of infringement of VPN on Demand under many of the asserted claims of our ‘135 and ‘151 patents, and confirming the district’s court’s decision to allow evidence concerning our licenses and royalty rates in connection with the determination of damages. In its opinion, the USCAFC also vacated the jury’s damages award and the district court’s claim construction with respect to parts of our ‘504 and ‘211 patents and remanded the damages award and determination of infringement with respect to FaceTime –for further proceedings consistent with its opinion. On October 16, 2014, we filed a petition with the USCAFC, requesting a rehearing and rehearing en banc of the Federal Circuit’s September 14, 2014, decision concerning VirnetX’s litigation against Apple Inc. On December 16, 2014, USCAFC denied our petition requesting a rehearing and rehearing en banc of the Federal Circuit's September 14, 2014, decision and remanded the case back to the Eastern District of Texas, Tyler Division, for further proceedings consistent with its opinion. On February 25, 2015, USCAFC granted Apple's motions to lift stay of proceedings and vacate Case 6:13-CV-00211-LED. All the issues at hand in Case 6:13-CV-00211-LED will now be addressed as a part of VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) - Consolidated Lead Case. On March 30, 2015, the court issued an order finding substantial overlap between the remanded portions of this case and the ongoing Civil Action Case 6:12-CV-00855-LED (VirnetX Inc. v. Apple, Inc.). The court consolidated the two civil actions under Civil Action Case 6:12-CV-00855-LED (VirnetX Inc. v. Apple, Inc.) and designated it as the lead case. All future updates will now be provided under VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) – Consolidated Lead Case. | |
VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) | |
On November 6, 2012, we filed a new complaint against Apple Inc., in the United States District Court for the Eastern District of Texas, Tyler Division for willfully infringing four of our patents, U.S. Patent Nos. 6,502,135, 7,418,504, 7,921,211 and 7,490,151, and seeking both an unspecified amount of damages and injunctive relief. The accused products include the iPhone 5, iPod Touch 5th Generation, iPad 4th Generation, iPad mini, and the latest Macintosh computers. Due to their release dates, these products were not included in the previous lawsuit that concluded with a Jury verdict on November 6, 2012 that was subsequently upheld by the United States District Court for the Eastern District of Texas, Tyler Division, on February 26, 2013. On July 1, 2013, we filed a consolidated and amended complaint to include U.S. Patent No. 8,051,181 and consolidate Civil Action No. 6:11-cv-00563-LED. On August 27, 2013, we filed an amended complaint including allegations of willful infringement related to U.S. Patent No. 8,504,697 seeking both damages and injunctive relief. The Markman hearing in this case was held on May 20, 2014 and on August 8, 2014, issued its Markman Order, denying Apple’s motion for summary judgment of indefiniteness, in which Apple alleged that some of the disputed claims terms in the patents asserted by us were invalid for indefiniteness. In a separate order, the court granted in part and denied in part our motion for partial summary judgment on Apple’s invalidity counterclaims, precluding Apple from asserting invalidity as a defense against infringement of the claims that were tried before a jury in our prior litigation against Apple (VirnetX vs. Cisco et. al., Case 6:10-CV-00417-LED). The jury trial in this case is scheduled for October 13, 2015. On March 30, 2015, the court issued an order finding substantial overlap between this case and the remanded portions of Case 6:10-CV-00417-LED (VirnetX vs. Cisco et. al.). The court consolidated the two civil actions under Civil Action Case 6:12-CV-00855-LED (VirnetX Inc. v. Apple, Inc.) and designated it as the lead case. All future updates will now be provided under VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) – Consolidated Lead Case. | |
One or more potential intellectual property infringement claims may also be available to us against certain other companies who have the resources to defend against any such claims. Although we believe these potential claims are worth pursuing, commencing a lawsuit can be expensive and time-consuming, and there is no assurance that we will prevail on such potential claims. In addition, bringing a lawsuit may lead to potential counterclaims which may preclude our ability to commercialize our initial products, which are currently in development. Currently, we are not a party to any other pending legal proceedings, and are not aware of any proceeding threatened or contemplated against us by any governmental authority or other party. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 8 — Subsequent Events |
On May 8, 2015 we entered into a Patent Licensing Representative Agreement with IPValue Management, Inc. ("IPValue"). Under the terms of the Agreement, IPValue will assist us in commercializing our portfolio of certain patents on securing real-time communications over the Internet. IPValue will originate and assist us with negotiating potential patent licensing transactions in return for a commission to be paid out of any revenues received by us from such potential licensing transactions. The Agreement contains other terms and conditions normal in such transactions. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||
Unaudited Interim Financial Information | Unaudited Interim Financial Information | ||||||||||||||||||||||||
The accompanying Condensed Consolidated Balance Sheet as of March 31, 2015, the Condensed Consolidated Statements of Income for the three months ended March 31, 2015 and 2014, the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2015 and 2014, and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of March 31, 2015, our results of operations for the three months ended March 31, 2015 and 2014, and our cash flows for the three months ended March 31, 2015 and 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. | |||||||||||||||||||||||||
These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on March 2, 2015. | |||||||||||||||||||||||||
Basis of Consolidation | Basis of Consolidation | ||||||||||||||||||||||||
The consolidated financial statements include the accounts of VirnetX Holding Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. | |||||||||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||||||||
We prepare our consolidated financial statements in accordance with U.S. GAAP. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. | |||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||||||||
We derive our revenue from patent licensing. The timing and amount of revenue recognized from each licensee depends upon a variety of factors, including the specific terms of each agreement and the nature of the deliverables and obligations. Such agreements may be complex and include multiple elements. These agreements may include, without limitation, elements related to the settlement of past patent infringement liabilities, up-front and non-refundable license fees for the use of patents, patent licensing royalties on covered products sold by licensees, and the compensation structure and ownership of intellectual property rights associated with contractual technology development arrangements. Licensing agreements are accounted for under the Financial Accounting Standards Board (“FASB”) revenue recognition guidance, "Revenue Arrangements with Multiple Deliverables." This guidance requires consideration to be allocated to each element of an agreement that has stand-alone value using the relative fair value method. In other circumstances, such as those agreements involving consideration for past and expected future patent royalty obligations, after consideration of the particular facts and circumstances, the appropriate recording of revenue between periods may require the use of judgment. In all cases, revenue is only recognized after all of the following criteria are met: (1) written agreements have been executed; (2) delivery of technology or intellectual property rights has occurred or services have been rendered; (3) fees are fixed or determinable; and (4) collectability of fees is reasonably assured. | |||||||||||||||||||||||||
Patent License Agreements: Upon signing a patent license agreement, including licenses entered into upon settlement of litigation, we provide the licensee permission to use our patented technology in specific applications. We account for patent license agreements in accordance with the guidance for revenue recognition for arrangements with multiple deliverables, with amounts allocated to each element based on their fair values. We have elected to utilize the leased-based model for revenue recognition with revenue being recognized over the expected period of benefit to the licensee. Under our patent license agreements, we do or expect to typically receive one or a combination of the following forms of payment as consideration for permitting our licensees to use our patented inventions in specific applications and products: | |||||||||||||||||||||||||
· | Consideration for Past Sales: Consideration related to a licensee’s product sales from prior periods may result from a negotiated agreement with a licensee that utilized our patented technology prior to signing a patent license agreement with us or from the resolution of a litigation, disagreement or arbitration with a licensee over the specific terms of an existing license agreement. We may also receive royalty for past sales in connection with the settlement of patent litigation where there was no prior patent license agreement. These amounts are negotiated, typically based upon application of a royalty rate to historical sales prior to the execution of the license agreement. In each of these cases, since delivery has occurred, we record the consideration as revenue when we have obtained a signed agreement, identified a fixed or determinable price, and determined that collectability is reasonably assured. | ||||||||||||||||||||||||
· | Current Royalty Payments: Ongoing royalty payments cover a licensee’s obligations to us related to its sales of covered products in the current contractual reporting period. Licensees that owe these current royalty payments are obligated to provide us with quarterly or semi-annual royalty reports that summarize their sales of covered products and their related royalty obligations to us. We expect to receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, it is impractical for us to recognize revenue in the period in which the underlying sales occur, and, in most cases, we will recognize revenue in the period in which the royalty report is received and other revenue recognition criteria are met due to the fact that without royalty reports from our licensees, our visibility into our licensees’ sales is limited. | ||||||||||||||||||||||||
· | Non-Refundable Up-Front Fees and Minimum Fee Contracts: For licenses that provide for non-refundable up-front or fixed minimum fees over their term, for which we have no future obligations or performance requirements, revenue is generally recognized over the license term. For licenses that provide for fees that are not fixed or determinable, including licenses that provide for extended payment terms and/or payment of a significant portion of the fee after expiration of the license or more than 12 months after delivery, the fees are generally presumed not to be fixed or determinable, and revenue is deferred and recognized as earned, but generally not in advance of collection. | ||||||||||||||||||||||||
· | Non-Royalty Elements: Elements that are not related to royalty revenue in nature, such as settlement fees, expense reimbursement, and damages, if any, are recorded as gain from settlement which is reflected as a separate line item within the operating expenses section in the consolidated statements of operations. | ||||||||||||||||||||||||
Deferred revenue | Deferred revenue | ||||||||||||||||||||||||
In August 2013 we began receiving annual payments on a contract that requires payment to us over 4 years totaling $10,000 ("August 2013 Contract Settlement"). From the inception of that license to March 31, 2015, we received cash totaling $5,000, all of which is non-refundable, and in accordance with our revenue recognition policy, we will not recognize any of the $5,000 balance due until collected.. We recognized $375 and $250 of revenue related to the August 2013 Contract Settlement during the three months ended March 31, 2015 and 2014 respectively. | |||||||||||||||||||||||||
Activity under the August 2013 Contract Settlement was as follows: | |||||||||||||||||||||||||
Deferred Revenue, December 31, 2014 | $ | 2,000 | |||||||||||||||||||||||
Less: Amount amortized as revenue | 375 | ||||||||||||||||||||||||
Deferred Revenue, March 31, 2015 | $ | 1,625 | |||||||||||||||||||||||
Earnings Per Share | Earnings Per Share | ||||||||||||||||||||||||
Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. | |||||||||||||||||||||||||
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties | ||||||||||||||||||||||||
Our cash and cash equivalents are primarily maintained at two major financial institutions in the United States. A portion of those balances are insured by the Federal Deposit Insurance Corporation. During the three months ended March 31, 2015 we had funds which were uninsured. We do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships with major financial institutions. We have not experienced any losses on our deposits of cash and cash equivalents. | |||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments | ||||||||||||||||||||||||
Our Series I Warrants were required to be accounted for as derivative liabilities and carried at fair value on our Condensed Consolidated Balance Sheets as a result of an anti-dilution provision which precluded them from being considered indexed to our stock. The warrant liabilities were marked-to-market each period and the change in the fair value was recorded as gain or loss on derivative liability in the accompanying Condensed Consolidated Statements of Operations. All remaining unexercised Series 1 Warrants expired during the three months ended March 31, 2015. | |||||||||||||||||||||||||
Prepaid Expenses | Prepaid Expenses | ||||||||||||||||||||||||
Prepaid expenses at March 31, 2015 include the current portion of prepaid rent for a facility lease for corporate promotional and marketing purposes. Beginning March 2014, the prepayment totaling $4,000 is being amortized over the 10 year term of the lease. The unamortized non-current portion of the prepayment is included in Prepaid expenses-non-current on the consolidated balance sheet. | |||||||||||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||||||||||
On an annual basis we identify and record impairment losses on long-lived assets when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability is measured by comparison of the anticipated future net undiscounted cash flows to the related assets’ carrying value. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. | |||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||||||||||
Fair value is the price that would result from an orderly transaction between market participants at the measurement date. A fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 2 measurements utilize either directly or indirectly observable inputs in markets other than quoted prices in active markets. | |||||||||||||||||||||||||
Our financial instruments are stated at amounts that equal, or approximate, fair value. When we estimate fair value, we utilize market data or assumptions that we believe market participants would use in pricing the financial instrument, including assumptions about risk and inputs to the valuation technique. We use valuation techniques, primarily the income and market approach, which maximizes the use of observable inputs and minimize the use of unobservable inputs for recurring fair value measurements. | |||||||||||||||||||||||||
Mutual Funds: Valued at the quoted net asset value of shares held. | |||||||||||||||||||||||||
Corporate, Municipal and U.S. Agency Securities: Fair value measured at the closing price reported on the active market on which the individual securities are traded. | |||||||||||||||||||||||||
Series I Warrants: Fair value measured by using a binomial valuation model. The assumptions used to measure fair value of our outstanding Series I Warrants carried as derivative liabilities on our Condensed Consolidated Balance Sheet for December 31, 2014 included a warrant exercise price of $3.59 per share, a common share price of $5.49 discount rate of 1.65%, and a volatility of 89.6%. | |||||||||||||||||||||||||
The following tables show the adjusted cost, gross unrealized gains, gross unrealized losses and fair value of our securities by significant investment category as of March 31, 2015 and December 31, 2014. | |||||||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair | Cash | Investments | ||||||||||||||||||||
Cost | Gains | Losses | Value | and Cash | Available | ||||||||||||||||||||
Equivalents | for Sale | ||||||||||||||||||||||||
Cash | $ | 4,524 | $ | - | $ | - | $ | 4,524 | $ | 4,524 | $ | - | |||||||||||||
Level 1: | |||||||||||||||||||||||||
Mutual funds | 974 | - | - | 974 | 974 | - | |||||||||||||||||||
Corporate securities | 11,142 | 1 | - | 11,143 | 4,929 | 6,214 | |||||||||||||||||||
Municipal securities | 256 | - | - | 256 | - | 256 | |||||||||||||||||||
U.S agency securities | 17,798 | 6 | (1 | ) | 17,803 | 2,863 | 14,940 | ||||||||||||||||||
30,170 | 7 | (1 | ) | 30,176 | 8,766 | 21,410 | |||||||||||||||||||
Total | $ | 34,694 | $ | 7 | $ | (1 | ) | $ | 34,700 | $ | 13,290 | $ | 21,410 | ||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair | Cash | Investments | ||||||||||||||||||||
Cost | Gains | Losses | Value | and Cash | Available | ||||||||||||||||||||
Equivalents | for Sale | ||||||||||||||||||||||||
Cash | $ | 1,183 | $ | - | $ | - | $ | 1,183 | $ | 1,183 | $ | - | |||||||||||||
Level 1: | |||||||||||||||||||||||||
Mutual funds | 10,139 | - | - | 10,139 | 10,139 | - | |||||||||||||||||||
Corporate securities | 9,405 | 1 | (3 | ) | 9,403 | 1,645 | 7,758 | ||||||||||||||||||
U.S agency securities | 20,504 | 2 | (2 | ) | 20,504 | 5,691 | 14,813 | ||||||||||||||||||
40,048 | 3 | (5 | ) | 40,046 | 17,475 | 22,571 | |||||||||||||||||||
Total | $ | 41,231 | $ | 3 | $ | (5 | ) | $ | 41,229 | $ | 18,658 | $ | 22,571 | ||||||||||||
The following table sets forth by level within the fair value hierarchy, our liabilities stated at fair value as of December 31, 2014. | |||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Quoted | Significant | Significant | |||||||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||||||
Markets | Inputs | ||||||||||||||||||||||||
for | |||||||||||||||||||||||||
Identical | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||||||||||
Series l Warrants | $ | — | $ | — | $ | 320 | 320 | ||||||||||||||||||
Total | $ | — | $ | — | $ | 320 | 320 | ||||||||||||||||||
The following table sets forth a summary of changes in the fair value of our Level 3 liability stated at fair value for the three months ended March 31, 2015 and 2014. | |||||||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Measurements | Measurements | ||||||||||||||||||||||||
Using | Using | ||||||||||||||||||||||||
Significant | Significant | ||||||||||||||||||||||||
Unobservable | Unobservable | ||||||||||||||||||||||||
Inputs (Level 3) | Inputs (Level 3) | ||||||||||||||||||||||||
Balance December 31, 2014 | $ | 320 | Balance December 31, 2013 | $ | 2,564 | ||||||||||||||||||||
Loss on derivative liability included in net loss | 117 | Gain on derivative liability included in net loss | (838 | ) | |||||||||||||||||||||
Settlements | (333 | ) | Settlements | — | |||||||||||||||||||||
Expiration of warrants | (104 | ) | Expiration of warrants | — | |||||||||||||||||||||
Balance March 31, 2015 | $ | — | Balance March 31, 2014 | $ | 1,726 | ||||||||||||||||||||
New Accounting Pronouncements | New Accounting Pronouncements | ||||||||||||||||||||||||
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, “Presentation of Financial Statements – Going Concern”, Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The amendments in this ASU apply to all entities and require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. We are currently evaluating the impact this guidance will have on our financial position and results of operations. | |||||||||||||||||||||||||
In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718)," which makes amendments to the codification topic 718, "Accounting for Share-Based Payments.” when the terms of an award provide that a performance target could be achieved after the requisite service period. The new guidance becomes effective for annual reporting periods beginning after December 15, 2015, early adoption is permitted. We are currently evaluating the impact this guidance will have on our financial position and results of operations. | |||||||||||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09 "Revenue from Contracts with Customers" (Topic 606). Topic 606 supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments create a new Subtopic 340-40, “Other Assets and Deferred Costs—Contracts with Customers”. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are currently evaluating the impact this guidance will have on our financial position and statement of operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||
Schedule of Deferred Revenue | Activity under the August 2013 Contract Settlement was as follows: | ||||||||||||||||||||||||
Deferred Revenue, December 31, 2014 | $ | 2,000 | |||||||||||||||||||||||
Less: Amount amortized as revenue | 375 | ||||||||||||||||||||||||
Deferred Revenue, March 31, 2015 | $ | 1,625 | |||||||||||||||||||||||
Cash and Available-for-Sale Securities Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value by Significant Investment Category | The following tables show the adjusted cost, gross unrealized gains, gross unrealized losses and fair value of our securities by significant investment category as of March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||
31-Mar-15 | |||||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair | Cash | Investments | ||||||||||||||||||||
Cost | Gains | Losses | Value | and Cash | Available | ||||||||||||||||||||
Equivalents | for Sale | ||||||||||||||||||||||||
Cash | $ | 4,524 | $ | - | $ | - | $ | 4,524 | $ | 4,524 | $ | - | |||||||||||||
Level 1: | |||||||||||||||||||||||||
Mutual funds | 974 | - | - | 974 | 974 | - | |||||||||||||||||||
Corporate securities | 11,142 | 1 | - | 11,143 | 4,929 | 6,214 | |||||||||||||||||||
Municipal securities | 256 | - | - | 256 | - | 256 | |||||||||||||||||||
U.S agency securities | 17,798 | 6 | (1 | ) | 17,803 | 2,863 | 14,940 | ||||||||||||||||||
30,170 | 7 | (1 | ) | 30,176 | 8,766 | 21,410 | |||||||||||||||||||
Total | $ | 34,694 | $ | 7 | $ | (1 | ) | $ | 34,700 | $ | 13,290 | $ | 21,410 | ||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair | Cash | Investments | ||||||||||||||||||||
Cost | Gains | Losses | Value | and Cash | Available | ||||||||||||||||||||
Equivalents | for Sale | ||||||||||||||||||||||||
Cash | $ | 1,183 | $ | - | $ | - | $ | 1,183 | $ | 1,183 | $ | - | |||||||||||||
Level 1: | |||||||||||||||||||||||||
Mutual funds | 10,139 | - | - | 10,139 | 10,139 | - | |||||||||||||||||||
Corporate securities | 9,405 | 1 | (3 | ) | 9,403 | 1,645 | 7,758 | ||||||||||||||||||
U.S agency securities | 20,504 | 2 | (2 | ) | 20,504 | 5,691 | 14,813 | ||||||||||||||||||
40,048 | 3 | (5 | ) | 40,046 | 17,475 | 22,571 | |||||||||||||||||||
Total | $ | 41,231 | $ | 3 | $ | (5 | ) | $ | 41,229 | $ | 18,658 | $ | 22,571 | ||||||||||||
Financial Instrument Liabilities by Level within Fair Value Hierarchy | The following table sets forth by level within the fair value hierarchy, our liabilities stated at fair value as of December 31, 2014. | ||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||
Quoted | Significant | Significant | |||||||||||||||||||||||
Prices in | Other | Unobservable | |||||||||||||||||||||||
Active | Observable | Inputs | |||||||||||||||||||||||
Markets | Inputs | ||||||||||||||||||||||||
for | |||||||||||||||||||||||||
Identical | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||||||||||
Series l Warrants | $ | — | $ | — | $ | 320 | 320 | ||||||||||||||||||
Total | $ | — | $ | — | $ | 320 | 320 | ||||||||||||||||||
Summary of Changes in Fair Value of Level 3 Liabilities | The following table sets forth a summary of changes in the fair value of our Level 3 liability stated at fair value for the three months ended March 31, 2015 and 2014. | ||||||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Measurements | Measurements | ||||||||||||||||||||||||
Using | Using | ||||||||||||||||||||||||
Significant | Significant | ||||||||||||||||||||||||
Unobservable | Unobservable | ||||||||||||||||||||||||
Inputs (Level 3) | Inputs (Level 3) | ||||||||||||||||||||||||
Balance December 31, 2014 | $ | 320 | Balance December 31, 2013 | $ | 2,564 | ||||||||||||||||||||
Loss on derivative liability included in net loss | 117 | Gain on derivative liability included in net loss | (838 | ) | |||||||||||||||||||||
Settlements | (333 | ) | Settlements | — | |||||||||||||||||||||
Expiration of warrants | (104 | ) | Expiration of warrants | — | |||||||||||||||||||||
Balance March 31, 2015 | $ | — | Balance March 31, 2014 | $ | 1,726 |
Warrants_Tables
Warrants (Tables) | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Warrants [Abstract] | ||||||||||||||||||||||||||||
Information about Warrants Outstanding | During the three months ended March 31, 2015 our remaining outstanding Series 1 Warrants were exercised or expired. Information about warrants outstanding during the three months ended March 31, 2015 follows: | |||||||||||||||||||||||||||
Original Number | Exercise | Exercisable at | Became | Exercised | Terminated / | Exercisable | Expiration | |||||||||||||||||||||
of | Price per | December 31, | Exercisable | Cancelled / | at March 31, | Date | ||||||||||||||||||||||
Warrants Issued | Common | 2014 | Expired | 2015 | ||||||||||||||||||||||||
Share | ||||||||||||||||||||||||||||
2,619,036 | (1) | $ | 3.59 | 157,467 | — | 120,161 | 37,306 | — | Mar-15 | |||||||||||||||||||
Total | 157,467 | — | 120,161 | 37,306 | — | |||||||||||||||||||||||
-1 | Referred to as our Series I Warrants. |
Business_Description_and_Basis1
Business Description and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Business | |
Patent | |
Business Description and Basis of Presentation [Abstract] | |
Minimum number of small and medium businesses involved in internal testing | 80 |
Number of patents owned | 100 |
Number of pending patent applications | 75 |
Period for which core development team has worked together | 10 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Institution | ||||
Deferred Revenue [Abstract] | ||||
Term of contract | 4 years | |||
Contract amount | $10,000 | |||
Annual payment on contract, received | 5,000 | |||
Activity under August 2013 contract settlement [Roll Forward] | ||||
Deferred Revenue, Beginning Balance | 2,000 | |||
Less: Amount amortized as revenue | 375 | 250 | ||
Deferred Revenue, Ending Balance | 1,625 | |||
Concentration of Credit Risk and Others Risks and Uncertainties [Abstract] | ||||
Number of financial institutions holding company's cash | 2 | |||
Prepaid Expense [Abstract] | ||||
Prepayment of facility lease for corporate promotional and marketing purposes | 4,000 | |||
Lease term | 10 years | |||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Adjusted Cost | 13,290 | 13,456 | 18,658 | 19,173 |
Adjusted Cost | 30,170 | 40,048 | ||
Unrealized Gains | 7 | 3 | ||
Unrealized Losses | -1 | -5 | ||
Fair Value | 30,176 | 40,046 | ||
Adjusted Cost | 34,694 | 41,231 | ||
Fair Value | 34,700 | 41,229 | ||
Investments Available for Sale | 30,176 | 40,046 | ||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 320 | |||
Cash [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Adjusted Cost | 4,524 | 1,183 | ||
Fair Value | 4,524 | 1,183 | ||
Cash and Cash Equivalents | 4,524 | 1,183 | ||
Mutual Funds [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Adjusted Cost | 974 | 10,139 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 0 | 0 | ||
Fair Value | 974 | 10,139 | ||
Investments Available for Sale | 974 | 10,139 | ||
Corporate securities [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Adjusted Cost | 11,142 | 9,405 | ||
Unrealized Gains | 1 | 1 | ||
Unrealized Losses | 0 | -3 | ||
Fair Value | 11,143 | 9,403 | ||
Investments Available for Sale | 11,143 | 9,403 | ||
Municipal securities [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Adjusted Cost | 256 | |||
Unrealized Gains | 0 | |||
Unrealized Losses | 0 | |||
Fair Value | 256 | |||
Investments Available for Sale | 256 | |||
U.S agency securities [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Adjusted Cost | 17,798 | 20,504 | ||
Unrealized Gains | 6 | 2 | ||
Unrealized Losses | -1 | -2 | ||
Fair Value | 17,803 | 20,504 | ||
Investments Available for Sale | 17,803 | 20,504 | ||
Series I Warrants [Member] | ||||
Fair value assumptions [Abstract] | ||||
Warrant exercise price (in dollars per share) | $3.59 | |||
Common share price (in dollars per share) | $5.49 | |||
Discount rate (in hundredths) | 1.65% | |||
Expected volatility rate (in hundredths) | 89.60% | |||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 320 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 0 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Series I Warrants [Member] | ||||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 0 | |||
Significant Other Observable Inputs (Level 2) [Member] | ||||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 0 | |||
Significant Other Observable Inputs (Level 2) [Member] | Series I Warrants [Member] | ||||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 0 | |||
Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 320 | |||
Changes in fair value of Level 3 liabilities [Roll Forward] | ||||
Beginning Balance | 320 | 2,564 | 2,564 | |
Gain (Loss) on derivative liability included in net loss | 117 | -838 | ||
Settlements | -333 | 0 | ||
Expiration of warrants | -104 | 0 | ||
Ending Balance | 0 | 1,726 | ||
Significant Unobservable Inputs (Level 3) [Member] | Series I Warrants [Member] | ||||
Fair value of liabilities [Abstract] | ||||
Series 1 Warrants | 320 | |||
Recurring [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 13,290 | 18,658 | ||
Fair Value | 21,410 | 22,571 | ||
Cash and Cash Equivalents | 13,290 | 18,658 | ||
Investments Available for Sale | 21,410 | 22,571 | ||
Recurring [Member] | Cash [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 4,524 | 1,183 | ||
Cash and Cash Equivalents | 4,524 | 1,183 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 8,766 | 17,475 | ||
Fair Value | 21,410 | 22,571 | ||
Cash and Cash Equivalents | 8,766 | 17,475 | ||
Investments Available for Sale | 21,410 | 22,571 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Mutual Funds [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 974 | 10,139 | ||
Fair Value | 0 | 0 | ||
Cash and Cash Equivalents | 974 | 10,139 | ||
Investments Available for Sale | 0 | 0 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate securities [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 4,929 | 1,645 | ||
Fair Value | 6,214 | 7,758 | ||
Cash and Cash Equivalents | 4,929 | 1,645 | ||
Investments Available for Sale | 6,214 | 7,758 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Municipal securities [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 0 | |||
Fair Value | 256 | |||
Cash and Cash Equivalents | 0 | |||
Investments Available for Sale | 256 | |||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S agency securities [Member] | ||||
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract] | ||||
Fair Value | 2,863 | 5,691 | ||
Fair Value | 14,940 | 14,813 | ||
Cash and Cash Equivalents | 2,863 | 5,691 | ||
Investments Available for Sale | $14,940 | $14,813 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Income Taxes [Abstract] | |||
Income tax expense | $2 | $2 | |
Valuation allowance carried against net deferred tax assets | 23,000 | 21,000 | |
Federal [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 36,000 | ||
Operating loss carryforwards, expiration dates | 31-Dec-27 | ||
State [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $38,000 | ||
Operating loss carryforwards, expiration dates | 31-Dec-16 |
Commitments_and_Related_Party_1
Commitments and Related Party Transactions (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Operating Leased Assets [Line Items] | |
Corporate headquarters, periodic monthly rental expenses | $5 |
Corporate headquarters, lease expiration date | 31-Oct-15 |
K2 Investment Fund LLC [Member] | Aircraft [Member] | |
Operating Leased Assets [Line Items] | |
Rental fees incurred for use of plane | 82 |
Rate of aircraft lease (in dollars per flight hour) | $8 |
Term of notice for cancellation of lease | 30 days |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $1,692 | $1,828 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted (in shares) | 25,000 | |
Unrecognized stock-based compensation expense expected to be recognized | 8,101 | |
Weighted average vesting amortization period | 2 years 4 months 13 days | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted (in shares) | 0 | |
Unrecognized stock-based compensation expense expected to be recognized | $3,720 | |
Weighted average vesting amortization period | 2 years 4 months 2 days | |
2013 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized for issuance (in shares) | 14,124,469 | |
Shares available for grant (in shares) | 1,816,217 |
Warrants_Details
Warrants (Details) (Warrants [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | ||
Class of Warrant or Right [Line Items] | ||
Exercisable, beginning of period (in shares) | 157,467 | |
Became exercisable (in shares) | 0 | |
Exercised (in shares) | 120,161 | |
Terminated/cancelled/expired (in shares) | 37,306 | |
Exercisable, end of period (in shares) | 0 | |
Series I Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Original number of warrants issued (in shares) | 2,619,036 | [1] |
Exercise price per common share (in dollars per share) | 3.59 | |
Exercisable, beginning of period (in shares) | 157,467 | |
Became exercisable (in shares) | 0 | |
Exercised (in shares) | 120,161 | |
Terminated/cancelled/expired (in shares) | 37,306 | |
Exercisable, end of period (in shares) | 0 | |
Expiration date | 31-Mar-15 | |
[1] | Referred to as our Series I Warrants. |
Litigation_Details
Litigation (Details) (USD $) | 0 Months Ended | 3 Months Ended |
Nov. 06, 2012 | Mar. 31, 2015 | |
Patent | Lawsuit | |
Litigation [Abstract] | ||
Number of intellectual property infringement lawsuits pending | 1 | |
Amount of damages awarded in patent infringement case | $368,000,000 | |
Number of patents allegedly infringed upon by Apple, Inc. | 4 | |
Amount of interest payment awarded up to final judgment, per day | 34,000 | |
Amount of damage infringement payment awarded up to final judgment, per day | $330,000 |