Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 05, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'GLOBALSCAPE INC | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 20,967,617 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001112920 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $9,265 | $9,455 |
Accounts receivable (net of allowance for doubtful accounts of $551 and $154 in 2014 and 2013, respectively) | 6,722 | 3,765 |
Federal income tax receivable | 34 | 113 |
Current deferred tax asset | 174 | 184 |
Prepaid expenses | 264 | 349 |
Total current assets | 16,459 | 13,866 |
Long term investments | 3,169 | 3,122 |
Capitalized software development costs, net | 2,697 | 1,028 |
Deferred tax asset | 745 | 1,476 |
Goodwill | 12,712 | 12,712 |
Fixed assets, net | 738 | 744 |
Other assets | 133 | 144 |
Total assets | 36,653 | 33,092 |
Current liabilities: | ' | ' |
Accounts payable | 632 | 655 |
Accrued expenses | 1,296 | 898 |
Deferred revenue | 11,047 | 9,092 |
Long term debt, current portion | 0 | 1,397 |
Total current liabilities | 12,975 | 12,042 |
Deferred revenue, non-current portion | 3,159 | 1,708 |
Long term debt, non-current portion | 0 | 2,989 |
Other long term liabilities | 52 | 60 |
Commitments and contingencies | ' | ' |
Stockholders’ equity: | ' | ' |
Preferred stock, par value $0.001 per share, 10,000,000 authorized, no shares issued or outstanding | 0 | 0 |
Common stock, par value $0.001 per share, 40,000,000 authorized, 20,967,617 and 19,592,117 shares issued at September 30, 2014 and December 31, 2013, respectively | 25 | 20 |
Additional paid-in capital | 18,198 | 15,834 |
Treasury stock, 403,581 shares, at cost, at September 30, 2014 and December 31, 2013 | -1,452 | -1,452 |
Retained earnings | 3,696 | 1,891 |
Total stockholders’ equity | 20,467 | 16,293 |
Total liabilities and stockholders’ equity | $36,653 | $33,092 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowance for doubtful accounts (in Dollars) | $551 | $154 |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 20,967,617 | 19,592,117 |
Treasury stock, shares | 403,581 | 403,581 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Revenues: | ' | ' | ' | ' |
Software licenses | $2,291 | $2,432 | $6,789 | $6,752 |
Maintenance and support | 3,790 | 3,493 | 11,181 | 10,153 |
Professional services | 409 | 412 | 933 | 1,237 |
Total Revenues | 6,490 | 6,337 | 18,903 | 18,142 |
Operating Expenses: | ' | ' | ' | ' |
Cost of revenues | 277 | 250 | 679 | 782 |
Selling, general and administrative | 4,173 | 3,492 | 13,077 | 11,137 |
Research and development | 513 | 923 | 1,722 | 2,653 |
TappIn intangible asset impairment and earnout liability elimination | 0 | -128 | 0 | -128 |
Depreciation and amortization | 263 | 265 | 580 | 787 |
Total operating expenses | 5,226 | 4,802 | 16,058 | 15,231 |
Income from operations | 1,264 | 1,535 | 2,845 | 2,911 |
Other expense, net | -11 | -39 | -58 | -130 |
Income before income taxes | 1,253 | 1,496 | 2,787 | 2,781 |
Income tax expense (benefit) | 471 | -791 | 982 | -404 |
Net income | 782 | 2,287 | 1,805 | 3,185 |
Comprehensive income | $782 | $2,287 | $1,805 | $3,185 |
Net income per common share - | ' | ' | ' | ' |
Basic (in Dollars per share) | $0.04 | $0.12 | $0.09 | $0.17 |
Diluted (in Dollars per share) | $0.04 | $0.12 | $0.09 | $0.17 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic (in Shares) | 20,487 | 18,761 | 20,024 | 18,570 |
Diluted (in Shares) | 20,890 | 19,158 | 20,624 | 19,001 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balances at Dec. 31, 2013 | $20 | $15,834 | ($1,452) | $1,891 | $16,293 |
Balances (in Shares) at Dec. 31, 2013 | 19,592,117 | ' | ' | ' | ' |
Shares issued upon exercise of stock options | 5 | 2,196 | ' | ' | 2,201 |
Shares issued upon exercise of stock options (in Shares) | 1,295,500 | ' | ' | ' | ' |
Stock-based compensation expense: | ' | ' | ' | ' | ' |
Stock options | ' | 260 | ' | ' | 260 |
Restricted stock | ' | 120 | ' | ' | 120 |
Restricted stock (in Shares) | 80,000 | ' | ' | ' | ' |
Net decrease in excess tax benefit from stock-based compensation | ' | -212 | ' | ' | -212 |
Net income | ' | ' | ' | 1,805 | 1,805 |
Balances at Sep. 30, 2014 | $25 | $18,198 | ($1,452) | $3,696 | $20,467 |
Balances (in Shares) at Sep. 30, 2014 | 20,967,617 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Activities: | ' | ' |
Net income | $1,805 | $3,185 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Bad debt expense | 318 | 29 |
Depreciation and amortization | 580 | 787 |
Stock-based compensation | 380 | 522 |
Deferred taxes | 740 | -1,030 |
Excess tax benefit from share-based compensation | 212 | 83 |
TappIn intangible asset impariment and earnout liability elimination | 0 | -128 |
Subtotal before changes in operating assets and liabilities | 4,035 | 3,448 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -3,275 | -251 |
Prepaid expenses | 85 | 8 |
Other assets | 10 | -62 |
Deferred revenue | 3,405 | 948 |
Accounts payable | -24 | -6 |
Accrued expenses | 398 | -149 |
Other long-term liabilities | -6 | -2 |
Income tax receivable and payable | -132 | -107 |
Net cash provided by operating activities | 4,496 | 3,827 |
Investing Activities: | ' | ' |
Software development costs | -2,028 | -686 |
Purchase of property and equipment | -215 | -65 |
Purchase of TappIn, Inc. and earnout payments | 0 | -500 |
Interest reinvested in long term investments | -47 | -47 |
Net cash (used in) investing activities | -2,290 | -1,298 |
Financing Activities: | ' | ' |
Proceeds from exercise of stock options | 2,201 | 231 |
Tax benefit from stock-based compensation | -212 | -83 |
Notes payable principle payments | -4,385 | -999 |
Net cash used in financing activities | -2,396 | -851 |
Net increase (decrease) in cash | -190 | 1,678 |
Cash at beginning of period | 9,455 | 8,079 |
Cash at end of period | 9,265 | 9,757 |
Cash paid during the period for: | ' | ' |
Interest | 117 | 182 |
Income taxes | $642 | $731 |
1_Nature_of_Business
1. Nature of Business | 9 Months Ended | |
Sep. 30, 2014 | ||
Disclosure Text Block [Abstract] | ' | |
Nature of Operations [Text Block] | ' | |
1 | Nature of Business | |
GlobalSCAPE, Inc. and its wholly-owned subsidiary TappIn, Inc. (together referred to as the “Company” or “we”) provide secure information exchange capabilities for enterprises and consumers through the development and distribution of software, delivery of managed and hosted solutions, and provisioning of associated services. We operate in the "enterprise application integration" and "enterprise file synchronization and sharing" industries, including the sub-technologies of managed file transfer (MFT), secure content mobility, and collaboration. Our solution portfolio addresses data and information management, movement, security, and accessibility across a broad range of environments. | ||
Our solution portfolio facilitates transmission of critical information between diverse and geographically separated network infrastructures while supporting a range of information protection approaches to meet privacy and other security requirements. In addition to enabling secure, flexible transmission of critical information using servers, desktop and notebook computers, and a wide range of network-enabled mobile devices, our products also provide customers with the ability to monitor and audit file transfer activities. | ||
Throughout these notes unless otherwise noted, our references to the 2014 quarter and the 2013 quarter refer to the three months ended September 30, 2014 and 2013, respectively. Our references to the 2014 nine months and the 2013 nine months refer to the nine months ended September 30, 2014 and 2013, respectively. | ||
2Basis_of_Presentation
2.Basis of Presentation | 9 Months Ended | |
Sep. 30, 2014 | ||
Disclosure Text Block [Abstract] | ' | |
Basis of Accounting [Text Block] | ' | |
2 | Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X, “Interim Financial Statements”, as prescribed by the Securities and Exchange Commission, or SEC. Accordingly, they do not include all information and footnotes required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. In the opinion of management, all accounting entries necessary for a fair presentation of our financial position and results of operations have been made. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which we refer to as the 2013 Form 10-K, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations also included in our 2013 Form 10-K and in this report. | ||
We follow accounting standards set by the Financial Accounting Standards Board. This board sets GAAP in the United States that we follow in preparing financial statements that report our financial position, results of operations, and sources and uses of cash. We also follow the reporting regulations of the SEC. | ||
The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our financial statements. It is possible the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations. | ||
3_Significant_Accounting_Polic
3. Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Significant Accounting Policies [Text Block] | ' | |
3 | Significant Accounting Policies | |
There have been no changes in our significant accounting policies during the 2014 nine months compared to the 2013 nine months or from those described in our 2013 Form 10-K. Listed below is a condensed version of our significant accounting policies. | ||
Principles of Consolidation | ||
The accompanying consolidated financial statements of GlobalSCAPE, Inc. are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. | ||
Revenue Recognition | ||
We develop, market and sell software products and provide services enabling and supporting those products. We recognize revenue from a sale transaction when the following conditions are met: | ||
· | Persuasive evidence of an arrangement exists. | |
· | Delivery has occurred or services have been rendered. | |
· | The amount is fixed or determinable. | |
· | Collection is reasonably assured. | |
For a sale transaction not meeting any one of these four criteria, we defer recognition of revenue related to that transaction until all the criteria are met. | ||
We earn the majority of our software license revenue from software products sold under perpetual software license agreements. At the time our customers purchase these products, they typically also purchase a product maintenance and support, or M&S, agreement. These transactions are multiple element software sales for which we assess the presence of vendor specific objective evidence (“VSOE”) of the fair value of the undelivered elements to determine the portion of these sales to recognize as revenue upon delivery of the software product and the portion of these sales to record as deferred revenue at the time the product is delivered. We amortize the deferred revenue component to revenue in future periods as we deliver the related future services to the customer. For transactions, if any, for which we cannot establish VSOE of fair value of the undelivered elements, we initially record the entire transaction as deferred revenue and amortize that amount to revenue in future periods as we deliver the related future services to the customer. | ||
Our deferred revenue consists primarily of revenue to be earned in the future as we deliver services under M&S agreements. We generally bill our customers for M&S services in advance of our delivery of those services. We record deferred revenue for the portion of those billings for which we have not yet delivered the services. We recognize revenue when we deliver those services. | ||
For our products delivered under a software-as-a-service transaction on a monthly or other periodic subscription basis, we recognize subscription revenue, including initial setup fees, on a monthly basis over the contractual term of the customer contract as we deliver our products and services. We record deferred revenue for the portion of our billings for these services for which we have not yet delivered the services. We recognize revenue when the services are delivered. | ||
We provide professional services to our customers consisting primarily of software installation support, operations support and training. We recognize revenue from these services as they are completed and accepted by our customers. | ||
We collect sales tax on many of our sales. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. | ||
Revenue Classifications | ||
Beginning with our reporting of revenue for the three and nine months ended September 30, 2014, we began classifying revenue as software license, M&S or professional services revenue and eliminated the other revenue category. We have reclassified amounts previously reported as other revenue for the three and nine months ended September 30, 2013, into the comparable software license, M&S or professional services revenue category. | ||
Goodwill | ||
Goodwill is not amortized. On at least an annual basis, we test goodwill for impairment at the reporting unit level. We operate as a single reporting unit. | ||
When testing goodwill, we first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of our reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, we assess events and circumstances relevant to us including, but not limited to: | ||
· | Macroeconomic conditions. | |
· | Industry and market considerations. | |
· | Cost factors and trends for labor and other expenses of operating our business. | |
· | Our overall financial performance and outlook for the future. | |
· | Trends in the quoted market value and trading of our common stock. | |
In considering these and other factors, we consider the extent to which any adverse events and circumstances identified could affect the comparison of our reporting unit’s fair value with its carrying amount. We place more weight on events and circumstances that most affect our reporting unit’s fair value or the carrying amount of our net assets. We consider positive and mitigating events and circumstances that may affect our determination of whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We evaluate, on the basis of the weight of the evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. | ||
If, after assessing the totality of these qualitative events and circumstances, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, we conclude there is no impairment of goodwill and perform no further testing in accordance with GAAP. If we conclude otherwise, we proceed with performing the first step, and if necessary, the second step, of the two-step goodwill impairment test prescribed by GAAP. | ||
As of December 31, 2013, after assessing the totality of the relevant events and circumstances, we determined it not more likely than not that the fair value of our reporting unit was less than its carrying amount. Accordingly, we concluded there was no impairment of goodwill as of that date. There have been no material events or changes in circumstances since that time indicating that the carrying amount of goodwill may exceed it fair market value and that interim testing needed to be performed. | ||
Research and Development | ||
We expense research and development costs as incurred. | ||
Capitalized Software Development Costs | ||
When we complete research and development for a software product and have completed a detail program design or a working model of that software product, we capitalize production costs incurred for that software product from that point forward until it is ready for general release to the public. Thereafter, we amortize capitalized software production costs to expense using the straight-line method over the estimated useful life of that product, which is generally three years. | ||
Stock-Based Compensation | ||
We measure the cost of share-based payment transactions at the grant date based on the calculated fair value of the award. We recognize this cost as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. | ||
For stock option awards, we estimate their fair value at the grant date using the Black-Scholes option-pricing model considering the following factors: | ||
· | We estimate expected volatility based on historical volatility of our common stock. | |
· | We use primarily the simplified method to derive an expected term which represents an estimate of the time options are expected to remain outstanding. We use this method because our options are plain-vanilla options, and we believe our historical option exercise experience is not adequately indicative of our future expectations. | |
· | We base the risk-free rate for periods within the contractual life of the option on the U.S. treasury yield curve in effect at the time of grant. | |
For restricted stock awards, we use the quoted price of our common stock on the grant date as the fair value of the award. | ||
Income Taxes | ||
We account for income taxes using the asset and liability method. We record deferred tax assets and liabilities based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are carried on the balance sheet with the presumption that they will be realizable in future periods in which we generate taxable income. | ||
We assess the likelihood that deferred tax assets will be realized from future taxable income. Based on this assessment, we provide any necessary valuation allowance on our balance sheet with a corresponding increase in the tax provision on our statement of operations. Any valuation allowances we establish are determined based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic jurisdictions in which we operate. | ||
We account for uncertainty in income taxes using a two-step process to determine the amount of tax benefit to be recognized. First, we evaluate the tax position to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, we assess the tax position to determine the amount of benefit to recognize in the financial statements. The amount of the benefit we recognize is the largest amount that we believe has a greater than 50% likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. | ||
Use of Estimates | ||
The preparation of consolidated financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements. It is possible that the actual results could differ from these estimates and assumptions which could have a material effect on the reported amounts of the Company’s financial position and results of operation. | ||
Recent Accounting Pronouncements | ||
The Financial Accounting Standards Board has issued Accounting Standards Update No. 2014-09 entitled Revenue from Contracts with Customers (Topic 606). The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for those goods or services. We are subject to this guidance effective with financial statements we issue for the year ending December 31, 2017, and the quarterly periods during that year. We do not expect the amounts or timing of revenue we report in those future periods under this guidance to be materially affected relative to current guidance. | ||
4_Capitalized_Software_Develop
4. Capitalized Software Development Costs | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||||||||||
4 | Capitalized Software Development Costs | ||||||||||||||||
Our capitalized software development costs profile was as follows: (in thousands): | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Gross capitalized cost | $ | 3,257 | $ | 1,229 | |||||||||||||
Accumulated amortization | (560 | ) | (201 | ) | |||||||||||||
Net balance | $ | 2,697 | $ | 1,028 | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Amount capitalized | $ | 744 | $ | 327 | $ | 2,028 | $ | 686 | |||||||||
Amortization expense | (186 | ) | (47 | ) | (359 | ) | (124 | ) | |||||||||
Released | Unreleased | ||||||||||||||||
Products | Products | ||||||||||||||||
Gross capitalized amount at September 30, 2014 | $ | 2,304 | $ | 953 | |||||||||||||
Future amortization expense: | |||||||||||||||||
Three months ending December 31, 2014 | 192 | ||||||||||||||||
Year ending December 31, | |||||||||||||||||
2015 | 740 | ||||||||||||||||
2016 | 594 | ||||||||||||||||
2017 | 218 | ||||||||||||||||
Total | $ | 1,744 | |||||||||||||||
The future amortization expense of the gross capitalized software development costs related to unreleased products will be determinable at a future date when those products are ready for general release to the public. | |||||||||||||||||
5_Notes_Payable
5. Notes Payable | 9 Months Ended | |
Sep. 30, 2014 | ||
Debt Disclosure [Abstract] | ' | |
Debt Disclosure [Text Block] | ' | |
5 | Notes Payable | |
We repaid our notes payable in full during the 2014 quarter. This payment eliminated the financial covenants and other terms and conditions of the related loan agreements. It also eliminated the lien on our long term investments. | ||
6_Stock_Options_Restricted_Sto
6. Stock Options, Restricted Stock and Share-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||||||
6 | Stock Options, Restricted Stock and Share-Based Compensation | ||||||||||||||||
We have stock-based compensation plans under which we have granted, and may grant in the future, incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee members of the Board of Directors. Our share-based compensation expense was as follows ($ in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Share-based compensation expense | $ | 120 | $ | 225 | $ | 380 | $ | 522 | |||||||||
Stock Options | |||||||||||||||||
The GlobalSCAPE, Inc. 2010 Employee Long-Term Equity Incentive Plan is our current stock-based incentive plan for our employees. Provisions and characteristics of this plan include the following: | |||||||||||||||||
· | Up to three million shares of common stock may be issued for stock-based incentives including stock options and restricted stock awards. | ||||||||||||||||
· | The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of the Board of Directors. | ||||||||||||||||
· | The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock at market close on that date. | ||||||||||||||||
· | Stock options we issue generally become exercisable ratably over a three year period and expire ten years from the date of grant. | ||||||||||||||||
Our stock option activity has been as follows: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | Weighted Average | Aggregate | |||||||||||||||
Exercise | Remaining | Intrinsic | |||||||||||||||
Number of | Price | Contractual | Value | ||||||||||||||
Shares | Per Share | Term in Years | (000's) | ||||||||||||||
Outstanding at December 31, 2013 | 3,117,745 | $ | 1.92 | 4.46 | $ | 1,808 | |||||||||||
Granted | 356,500 | $ | 2.4 | ||||||||||||||
Forfeited | (186,590 | ) | $ | 1.94 | |||||||||||||
Exercised | (1,295,500 | ) | $ | 1.73 | |||||||||||||
Outstanding at September 30, 2014 | 1,992,155 | $ | 2.12 | 6.16 | $ | 970 | |||||||||||
Exercisable at September 30, 2014 | 1,333,685 | $ | 2.15 | 4.76 | $ | 710 | |||||||||||
Additional information about our stock options is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Weighted average fair value per share of options granted | $ | 1.34 | $ | 0.8 | $ | 1.3 | $ | 0.82 | |||||||||
Intrinsic value of options exercised | $ | 160,984 | $ | 27 | $ | 1,080,291 | $ | 62 | |||||||||
Cash received from stock options exercised | $ | 214,556 | $ | 74,000 | $ | 2,201,368 | $ | 231,000 | |||||||||
Number of options that vested | 83,590 | 190,880 | 232,910 | 370,270 | |||||||||||||
Fair value of options that vested | $ | 83,070 | $ | 231,793 | $ | 231,057 | $ | 444,424 | |||||||||
Unrecognized compensation expense related to non-vested options at end of year | $ | 611,569 | $ | 658,000 | $ | 611,569 | $ | 658,000 | |||||||||
Weighted average years over which non-vested option expense will be recognized | 2 | 1.83 | 2 | 1.83 | |||||||||||||
We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Expected volatility | 58 | % | 52 | % | 56 | % | 55 | % | |||||||||
Expected annual dividend yield | 0 | 0 | 0 | 0 | |||||||||||||
Risk free rate of return | 1.88 | % | 1.89 | % | 1.93 | % | 1.42 | % | |||||||||
Expected option term (years) | 6 | 6 | 6 | 6 | |||||||||||||
We did not issue any restricted stock awards under this plan during the 2014 nine months or the 2013 nine months. As of September 30, 2014, stock-based incentives for up to 1,040,510 shares remained available for issuance in the future under the plan. | |||||||||||||||||
Restricted Stock Awards | |||||||||||||||||
The 2006 Non-Employee Directors Long Term Incentive Plan provides for the issuance of either stock options or restricted stock awards. Provisions of this plan include the following: | |||||||||||||||||
· | It authorizes the issuance of up to 500,000 shares of our common stock for stock-based incentives including stock options and restricted stock awards. | ||||||||||||||||
· | The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of the Board of Directors. | ||||||||||||||||
· | Restricted stock awards are initially issued with a legend restricting transferability of the shares until the recipient satisfies the vesting provision of the award, which is generally continuing service for one year subsequent to the date of the award. | ||||||||||||||||
Our restricted stock awards profile as of September 30, 2014 and activity for the nine months then ended was as follows: | |||||||||||||||||
Total | |||||||||||||||||
Grant Date | Fair Value of | ||||||||||||||||
Number of | Fair Value | Shares That | |||||||||||||||
Shares | Per Share | Vested | |||||||||||||||
Restricted Shares Outstanding at December 31, 2013 | 80,000 | $ | 1.65 | ||||||||||||||
Shares granted with restrictions | 80,000 | $ | 2.32 | ||||||||||||||
Shares vested and restrictions removed | (80,000 | ) | $ | 189,600 | |||||||||||||
Restricted Shares Outstanding at September 30, 2014 | 80,000 | $ | 2.32 | ||||||||||||||
Shares remaining available under the plan for future issuance | 68,500 | ||||||||||||||||
Unrecognized compensation expense for non-vested shares as of September 30, 2014: | |||||||||||||||||
Expense to be recognized in future periods | $ | 123,733 | |||||||||||||||
Weighted average number of months over which expense is expected to be recognized | 8 | ||||||||||||||||
7_TappIn_Earnout_Liability
7. TappIn Earnout Liability | 9 Months Ended | |
Sep. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
7 | TappIn Earnout Liability | |
Our acquisition of TappIn provides for the possible payment of $4.5 million of contingent consideration remaining as of September 30, 2014, to the former shareholders of TappIn if our TappIn product line achieves certain revenue milestones by no later than December 31, 2014. We have concluded the likelihood that those revenue milestones will be achieved and that the contingent consideration will have to be paid both to be remote. Accordingly, there is no TappIn earn out liability on our balance sheet as of September 30, 2014. | ||
8_Income_Taxes
8. Income Taxes | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||||||||||
8 | Income Taxes | ||||||||||||||||
Our income tax expense (benefit) reconciles to an income tax expense resulting from applying an assumed statutory federal income rate of 34% to income before income taxes as follows ($ in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Income tax expense (benefit) at federal statutory rate | $ | 426 | $ | 519 | $ | 948 | $ | 946 | |||||||||
Increase (decrease) in taxes resulting from: | |||||||||||||||||
TappIn Earnout | - | (1,256 | ) | - | (1,256 | ) | |||||||||||
Research and development tax credit | - | (15 | ) | - | (88 | ) | |||||||||||
Domestic production activities deduction | (8 | ) | (37 | ) | (18 | ) | (71 | ) | |||||||||
State taxes, net of federal benefit | 15 | 11 | 24 | 42 | |||||||||||||
Other | 38 | (13 | ) | 28 | 23 | ||||||||||||
Income tax expense (benefit) per the statement of operations | $ | 471 | $ | (791 | ) | $ | 982 | $ | (404 | ) | |||||||
The research and experimentation tax credit, or R&D tax credit, has not been enacted by legislation for 2014. Accordingly our financial statements for 2014 do not include any effects of an R&D tax credit. | |||||||||||||||||
As of September 30, 2014, we had federal income tax net operating loss carry forwards of $794,000 available to offset future federal taxable income, if any. These carry forwards expire in 2030 and 2031. | |||||||||||||||||
We have a deferred tax asset of $1.1 million related to capital loss carry forwards arising prior to 2013. We can realize this capital loss carry forward deferred tax asset to the extent we have capital gains in future periods against which this capital loss can be deducted. We believe it uncertain that we will have sufficient capital gains in the future to support this deduction which indicates it is not more-likely-than-not that we will realize this deferred tax asset. Accordingly, we have recorded a valuation allowance of $1.1 million for this capital loss carry forward deferred tax asset. | |||||||||||||||||
We claimed R&D tax credits on certain of our tax returns and have included the effect of those credits in our provision for income taxes in previous years. Certain of those returns, and in particular the R&D tax credit claimed on those returns, are under routine examination by the Internal Revenue Service. We believe it more-likely-than-not this examination could result in $125,000 of such credits we claimed not being allowed by the Internal Revenue Service. During 2013, we recorded a valuation allowance for this amount due to the uncertainty of this item. | |||||||||||||||||
Our tax years of 2008 through 2013 remain subject to review by the Internal Revenue Service. | |||||||||||||||||
9Earnings_per_Common_Share
9.Earnings per Common Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share [Text Block] | ' | ||||||||||||||||
9 | Earnings per Common Share | ||||||||||||||||
Earnings per share for the periods indicated were as follows (in thousands except per share amounts): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income | $ | 782 | $ | 2,287 | $ | 1,805 | $ | 3,185 | |||||||||
Weighted average shares outstanding - basic | 20,487 | 18,761 | 20,024 | 18,570 | |||||||||||||
Stock options | 403 | 397 | 600 | 431 | |||||||||||||
Weighted average shares outstanding - diluted | 20,890 | 19,158 | 20,624 | 19,001 | |||||||||||||
Net income per common share - basic | $ | 0.04 | $ | 0.12 | $ | 0.09 | $ | 0.17 | |||||||||
Net income per common share - diluted | $ | 0.04 | $ | 0.12 | $ | 0.09 | $ | 0.17 | |||||||||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended | |
Sep. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Consolidation, Policy [Policy Text Block] | ' | |
Principles of Consolidation | ||
The accompanying consolidated financial statements of GlobalSCAPE, Inc. are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. | ||
Revenue Recognition, Policy [Policy Text Block] | ' | |
Revenue Recognition | ||
We develop, market and sell software products and provide services enabling and supporting those products. We recognize revenue from a sale transaction when the following conditions are met: | ||
· | Persuasive evidence of an arrangement exists. | |
· | Delivery has occurred or services have been rendered. | |
· | The amount is fixed or determinable. | |
· | Collection is reasonably assured. | |
For a sale transaction not meeting any one of these four criteria, we defer recognition of revenue related to that transaction until all the criteria are met. | ||
We earn the majority of our software license revenue from software products sold under perpetual software license agreements. At the time our customers purchase these products, they typically also purchase a product maintenance and support, or M&S, agreement. These transactions are multiple element software sales for which we assess the presence of vendor specific objective evidence (“VSOE”) of the fair value of the undelivered elements to determine the portion of these sales to recognize as revenue upon delivery of the software product and the portion of these sales to record as deferred revenue at the time the product is delivered. We amortize the deferred revenue component to revenue in future periods as we deliver the related future services to the customer. For transactions, if any, for which we cannot establish VSOE of fair value of the undelivered elements, we initially record the entire transaction as deferred revenue and amortize that amount to revenue in future periods as we deliver the related future services to the customer. | ||
Our deferred revenue consists primarily of revenue to be earned in the future as we deliver services under M&S agreements. We generally bill our customers for M&S services in advance of our delivery of those services. We record deferred revenue for the portion of those billings for which we have not yet delivered the services. We recognize revenue when we deliver those services. | ||
For our products delivered under a software-as-a-service transaction on a monthly or other periodic subscription basis, we recognize subscription revenue, including initial setup fees, on a monthly basis over the contractual term of the customer contract as we deliver our products and services. We record deferred revenue for the portion of our billings for these services for which we have not yet delivered the services. We recognize revenue when the services are delivered. | ||
We provide professional services to our customers consisting primarily of software installation support, operations support and training. We recognize revenue from these services as they are completed and accepted by our customers. | ||
We collect sales tax on many of our sales. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. | ||
Reclassification, Policy [Policy Text Block] | ' | |
Revenue Classifications | ||
Beginning with our reporting of revenue for the three and nine months ended September 30, 2014, we began classifying revenue as software license, M&S or professional services revenue and eliminated the other revenue category. We have reclassified amounts previously reported as other revenue for the three and nine months ended September 30, 2013, into the comparable software license, M&S or professional services revenue category. | ||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | |
Goodwill | ||
Goodwill is not amortized. On at least an annual basis, we test goodwill for impairment at the reporting unit level. We operate as a single reporting unit. | ||
When testing goodwill, we first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of our reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, we assess events and circumstances relevant to us including, but not limited to: | ||
· | Macroeconomic conditions. | |
· | Industry and market considerations. | |
· | Cost factors and trends for labor and other expenses of operating our business. | |
· | Our overall financial performance and outlook for the future. | |
· | Trends in the quoted market value and trading of our common stock. | |
In considering these and other factors, we consider the extent to which any adverse events and circumstances identified could affect the comparison of our reporting unit’s fair value with its carrying amount. We place more weight on events and circumstances that most affect our reporting unit’s fair value or the carrying amount of our net assets. We consider positive and mitigating events and circumstances that may affect our determination of whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We evaluate, on the basis of the weight of the evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount. | ||
If, after assessing the totality of these qualitative events and circumstances, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, we conclude there is no impairment of goodwill and perform no further testing in accordance with GAAP. If we conclude otherwise, we proceed with performing the first step, and if necessary, the second step, of the two-step goodwill impairment test prescribed by GAAP. | ||
As of December 31, 2013, after assessing the totality of the relevant events and circumstances, we determined it not more likely than not that the fair value of our reporting unit was less than its carrying amount. Accordingly, we concluded there was no impairment of goodwill as of that date. There have been no material events or changes in circumstances since that time indicating that the carrying amount of goodwill may exceed it fair market value and that interim testing needed to be performed. | ||
Research and Development Expense, Policy [Policy Text Block] | ' | |
Research and Development | ||
We expense research and development costs as incurred. | ||
Research, Development, and Computer Software, Policy [Policy Text Block] | ' | |
Capitalized Software Development Costs | ||
When we complete research and development for a software product and have completed a detail program design or a working model of that software product, we capitalize production costs incurred for that software product from that point forward until it is ready for general release to the public. Thereafter, we amortize capitalized software production costs to expense using the straight-line method over the estimated useful life of that product, which is generally three years. | ||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |
Stock-Based Compensation | ||
We measure the cost of share-based payment transactions at the grant date based on the calculated fair value of the award. We recognize this cost as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. | ||
For stock option awards, we estimate their fair value at the grant date using the Black-Scholes option-pricing model considering the following factors: | ||
· | We estimate expected volatility based on historical volatility of our common stock. | |
· | We use primarily the simplified method to derive an expected term which represents an estimate of the time options are expected to remain outstanding. We use this method because our options are plain-vanilla options, and we believe our historical option exercise experience is not adequately indicative of our future expectations. | |
· | We base the risk-free rate for periods within the contractual life of the option on the U.S. treasury yield curve in effect at the time of grant. | |
For restricted stock awards, we use the quoted price of our common stock on the grant date as the fair value of the award | ||
Income Tax, Policy [Policy Text Block] | ' | |
Income Taxes | ||
We account for income taxes using the asset and liability method. We record deferred tax assets and liabilities based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are carried on the balance sheet with the presumption that they will be realizable in future periods in which we generate taxable income. | ||
We assess the likelihood that deferred tax assets will be realized from future taxable income. Based on this assessment, we provide any necessary valuation allowance on our balance sheet with a corresponding increase in the tax provision on our statement of operations. Any valuation allowances we establish are determined based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic jurisdictions in which we operate. | ||
We account for uncertainty in income taxes using a two-step process to determine the amount of tax benefit to be recognized. First, we evaluate the tax position to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, we assess the tax position to determine the amount of benefit to recognize in the financial statements. The amount of the benefit we recognize is the largest amount that we believe has a greater than 50% likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. | ||
Use of Estimates, Policy [Policy Text Block] | ' | |
Use of Estimates | ||
The preparation of consolidated financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements. It is possible that the actual results could differ from these estimates and assumptions which could have a material effect on the reported amounts of the Company’s financial position and results of operation. | ||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |
Recent Accounting Pronouncements | ||
The Financial Accounting Standards Board has issued Accounting Standards Update No. 2014-09 entitled Revenue from Contracts with Customers (Topic 606). The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for those goods or services. We are subject to this guidance effective with financial statements we issue for the year ending December 31, 2017, and the quarterly periods during that year. We do not expect the amounts or timing of revenue we report in those future periods under this guidance to be materially affected relative to current guidance. |
4_Capitalized_Software_Develop1
4. Capitalized Software Development Costs (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 'Our capitalized software development costs profile was as follows: (in thousands): | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Gross capitalized cost | $ | 3,257 | $ | 1,229 | |||||||||||||
Accumulated amortization | (560 | ) | (201 | ) | |||||||||||||
Net balance | $ | 2,697 | $ | 1,028 | |||||||||||||
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | ' | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Amount capitalized | $ | 744 | $ | 327 | $ | 2,028 | $ | 686 | |||||||||
Amortization expense | (186 | ) | (47 | ) | (359 | ) | (124 | ) | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | ' | ||||||||||||||||
Released | Unreleased | ||||||||||||||||
Products | Products | ||||||||||||||||
Gross capitalized amount at September 30, 2014 | $ | 2,304 | $ | 953 | |||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||||||||||||||
Future amortization expense: | |||||||||||||||||
Three months ending December 31, 2014 | 192 | ||||||||||||||||
Year ending December 31, | |||||||||||||||||
2015 | 740 | ||||||||||||||||
2016 | 594 | ||||||||||||||||
2017 | 218 | ||||||||||||||||
Total | $ | 1,744 |
6_Stock_Options_Restricted_Sto1
6. Stock Options, Restricted Stock and Share-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | 'Our share-based compensation expense was as follows ($ in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Share-based compensation expense | $ | 120 | $ | 225 | $ | 380 | $ | 522 | |||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | 'Our stock option activity has been as follows: | ||||||||||||||||
Weighted | |||||||||||||||||
Average | Weighted Average | Aggregate | |||||||||||||||
Exercise | Remaining | Intrinsic | |||||||||||||||
Number of | Price | Contractual | Value | ||||||||||||||
Shares | Per Share | Term in Years | (000's) | ||||||||||||||
Outstanding at December 31, 2013 | 3,117,745 | $ | 1.92 | 4.46 | $ | 1,808 | |||||||||||
Granted | 356,500 | $ | 2.4 | ||||||||||||||
Forfeited | (186,590 | ) | $ | 1.94 | |||||||||||||
Exercised | (1,295,500 | ) | $ | 1.73 | |||||||||||||
Outstanding at September 30, 2014 | 1,992,155 | $ | 2.12 | 6.16 | $ | 970 | |||||||||||
Exercisable at September 30, 2014 | 1,333,685 | $ | 2.15 | 4.76 | $ | 710 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | 'Additional information about our stock options is as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Weighted average fair value per share of options granted | $ | 1.34 | $ | 0.8 | $ | 1.3 | $ | 0.82 | |||||||||
Intrinsic value of options exercised | $ | 160,984 | $ | 27 | $ | 1,080,291 | $ | 62 | |||||||||
Cash received from stock options exercised | $ | 214,556 | $ | 74,000 | $ | 2,201,368 | $ | 231,000 | |||||||||
Number of options that vested | 83,590 | 190,880 | 232,910 | 370,270 | |||||||||||||
Fair value of options that vested | $ | 83,070 | $ | 231,793 | $ | 231,057 | $ | 444,424 | |||||||||
Unrecognized compensation expense related to non-vested options at end of year | $ | 611,569 | $ | 658,000 | $ | 611,569 | $ | 658,000 | |||||||||
Weighted average years over which non-vested option expense will be recognized | 2 | 1.83 | 2 | 1.83 | |||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 'We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Expected volatility | 58 | % | 52 | % | 56 | % | 55 | % | |||||||||
Expected annual dividend yield | 0 | 0 | 0 | 0 | |||||||||||||
Risk free rate of return | 1.88 | % | 1.89 | % | 1.93 | % | 1.42 | % | |||||||||
Expected option term (years) | 6 | 6 | 6 | 6 | |||||||||||||
Nonvested Restricted Stock Shares Activity [Table Text Block] | 'Our restricted stock awards profile as of September 30, 2014 and activity for the nine months then ended was as follows: | ||||||||||||||||
Total | |||||||||||||||||
Grant Date | Fair Value of | ||||||||||||||||
Number of | Fair Value | Shares That | |||||||||||||||
Shares | Per Share | Vested | |||||||||||||||
Restricted Shares Outstanding at December 31, 2013 | 80,000 | $ | 1.65 | ||||||||||||||
Shares granted with restrictions | 80,000 | $ | 2.32 | ||||||||||||||
Shares vested and restrictions removed | (80,000 | ) | $ | 189,600 | |||||||||||||
Restricted Shares Outstanding at September 30, 2014 | 80,000 | $ | 2.32 | ||||||||||||||
Shares remaining available under the plan for future issuance | 68,500 | ||||||||||||||||
Unrecognized compensation expense for non-vested shares as of September 30, 2014: | |||||||||||||||||
Expense to be recognized in future periods | $ | 123,733 | |||||||||||||||
Weighted average number of months over which expense is expected to be recognized | 8 |
8_Income_Taxes_Tables
8. Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 'Our income tax expense (benefit) reconciles to an income tax expense resulting from applying an assumed statutory federal income rate of 34% to income before income taxes as follows ($ in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Income tax expense (benefit) at federal statutory rate | $ | 426 | $ | 519 | $ | 948 | $ | 946 | |||||||||
Increase (decrease) in taxes resulting from: | |||||||||||||||||
TappIn Earnout | - | (1,256 | ) | - | (1,256 | ) | |||||||||||
Research and development tax credit | - | (15 | ) | - | (88 | ) | |||||||||||
Domestic production activities deduction | (8 | ) | (37 | ) | (18 | ) | (71 | ) | |||||||||
State taxes, net of federal benefit | 15 | 11 | 24 | 42 | |||||||||||||
Other | 38 | (13 | ) | 28 | 23 | ||||||||||||
Income tax expense (benefit) per the statement of operations | $ | 471 | $ | (791 | ) | $ | 982 | $ | (404 | ) |
9Earnings_per_Common_Share_Tab
9.Earnings per Common Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 'Earnings per share for the periods indicated were as follows (in thousands except per share amounts): | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income | $ | 782 | $ | 2,287 | $ | 1,805 | $ | 3,185 | |||||||||
Weighted average shares outstanding - basic | 20,487 | 18,761 | 20,024 | 18,570 | |||||||||||||
Stock options | 403 | 397 | 600 | 431 | |||||||||||||
Weighted average shares outstanding - diluted | 20,890 | 19,158 | 20,624 | 19,001 | |||||||||||||
Net income per common share - basic | $ | 0.04 | $ | 0.12 | $ | 0.09 | $ | 0.17 | |||||||||
Net income per common share - diluted | $ | 0.04 | $ | 0.12 | $ | 0.09 | $ | 0.17 |
3_Significant_Accounting_Polic1
3. Significant Accounting Policies (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
3. Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill, Impairment Loss | ' | $0 |
Probability of occurrence of event | 50.00% | ' |
Software and Software Development Costs [Member] | ' | ' |
3. Significant Accounting Policies (Details) [Line Items] | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years | ' |
4_Capitalized_Software_Develop2
4. Capitalized Software Development Costs (Details) - Schedule of Finite-Lived Intangible Assets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Finite-Lived Intangible Assets [Abstract] | ' | ' |
Gross capitalized cost | $3,257 | $1,229 |
Accumulated amortization | -560 | -201 |
Net balance | $2,697 | $1,028 |
4_Capitalized_Software_Develop3
4. Capitalized Software Development Costs (Details) - Finite-lived Intangible Assets Amortization Expense (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Finite-lived Intangible Assets Amortization Expense [Abstract] | ' | ' | ' | ' |
Amount capitalized | $744 | $327 | $2,028 | $686 |
Amortization expense | ($186) | ($47) | ($359) | ($124) |
4_Capitalized_Software_Develop4
4. Capitalized Software Development Costs (Details) - Schedule of Capitalized Costs (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
4. Capitalized Software Development Costs (Details) - Schedule of Capitalized Costs [Line Items] | ' | ' |
Gross capitalized amount at September 30, 2014 | $3,257 | $1,229 |
Released Products [Member] | ' | ' |
4. Capitalized Software Development Costs (Details) - Schedule of Capitalized Costs [Line Items] | ' | ' |
Gross capitalized amount at September 30, 2014 | 2,304 | ' |
Unreleased Products [Member] | ' | ' |
4. Capitalized Software Development Costs (Details) - Schedule of Capitalized Costs [Line Items] | ' | ' |
Gross capitalized amount at September 30, 2014 | $953 | ' |
4_Capitalized_Software_Develop5
4. Capitalized Software Development Costs (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Computer Software, Intangible Asset [Member], USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Computer Software, Intangible Asset [Member] | ' |
Future amortization expense: | ' |
Three months ending December 31, 2014 | $192 |
Year ending December 31, | ' |
2015 | 740 |
2016 | 594 |
2017 | 218 |
Total | $1,744 |
6_Stock_Options_Restricted_Sto2
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Employee Stock Option [Member] | 2010 Employee Long-Term Equity Incentive Plan [Member] | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '3 years |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | '10 years |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,040,510 |
Restricted Stock [Member] | 2006 Non-Employee Directors Long-term Equity Incentive Plan [Member] | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | '1 year |
Restricted Stock [Member] | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 68,500 |
2006 Non-Employee Directors Long-term Equity Incentive Plan [Member] | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 500,000 |
6_Stock_Options_Restricted_Sto3
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule Of Share Based Compensation Expense (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Schedule Of Share Based Compensation Expense [Abstract] | ' | ' | ' | ' |
Share-based compensation expense | $120 | $225 | $380 | $522 |
6_Stock_Options_Restricted_Sto4
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity (Employee Stock Option [Member], USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Employee Stock Option [Member] | ' | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity [Line Items] | ' | ' |
Number of Shares, Outstanding | 1,992,155 | 3,117,745 |
Average Exercise Price, Outstanding | $2.12 | $1.92 |
Remaining Contractual Term, Outstanding | '6 years 58 days | '4 years 167 days |
Intrinsic Value, Outstanding | $970 | $1,808 |
Exercisable at September 30, 2014 | 1,333,685 | ' |
Exercisable at September 30, 2014 | $2.15 | ' |
Exercisable at September 30, 2014 | '4 years 277 days | ' |
Exercisable at September 30, 2014 | $710 | ' |
Granted | 356,500 | ' |
Granted | $2.40 | ' |
Forfeited | -186,590 | ' |
Forfeited | $1.94 | ' |
Exercised | -1,295,500 | ' |
Exercised | $1.73 | ' |
6_Stock_Options_Restricted_Sto5
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Stock Options (Employee Stock Option [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Employee Stock Option [Member] | ' | ' | ' | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Stock Options [Line Items] | ' | ' | ' | ' |
Weighted average fair value per share of options granted (in Dollars per share) | $1.34 | $0.80 | $1.30 | $0.82 |
Intrinsic value of options exercised | $160,984 | $27 | $1,080,291 | $62 |
Cash received from stock options exercised | 214,556 | 74,000 | 2,201,368 | 231,000 |
Number of options that vested (in Shares) | 83,590 | 190,880 | 232,910 | 370,270 |
Fair value of options that vested | 83,070 | 231,793 | 231,057 | 444,424 |
Unrecognized compensation expense related to non-vested options at end of year | $611,569 | $658,000 | $611,569 | $658,000 |
Weighted average years over which non-vested option expense will be recognized | '2 years | '1 year 302 days | '2 years | '1 year 302 days |
6_Stock_Options_Restricted_Sto6
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Employee Stock Option [Member]) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Employee Stock Option [Member] | ' | ' | ' | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ' | ' | ' | ' |
Expected volatility | 58.00% | 52.00% | 56.00% | 55.00% |
Expected annual dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk free rate of return | 1.88% | 1.89% | 1.93% | 1.42% |
Expected option term (years) | '6 years | '6 years | '6 years | '6 years |
6_Stock_Options_Restricted_Sto7
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity (Restricted Stock [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Restricted Stock [Member] | ' |
6. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity [Line Items] | ' |
Restricted Shares Outstanding at December 31, 2013 | 80,000 |
Restricted Shares Outstanding at December 31, 2013 (in Dollars per share) | $1.65 |
Shares granted with restrictions | 80,000 |
Shares granted with restrictions (in Dollars per share) | $2.32 |
Shares vested and restrictions removed | -80,000 |
Shares vested and restrictions removed (in Dollars) | $189,600 |
Restricted Shares Outstanding at September 30, 2014 | 80,000 |
Restricted Shares Outstanding at September 30, 2014 (in Dollars per share) | $2.32 |
Shares remaining available under the plan for future issuance | 68,500 |
Unrecognized compensation expense for non-vested shares as of September 30, 2014: | ' |
Expense to be recognized in future periods (in Dollars) | $123,733 |
Weighted average number of months over which expense is expected to be recognized | '8 years |
7_TappIn_Earnout_Liability_Det
7. TappIn Earnout Liability (Details) (TappIn [Member], USD $) | Sep. 30, 2014 |
TappIn [Member] | ' |
7. TappIn Earnout Liability (Details) [Line Items] | ' |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $4,500,000 |
Business Combination, Contingent Consideration, Liability, Current | $0 |
8_Income_Taxes_Details
8. Income Taxes (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | |
8. Income Taxes (Details) [Line Items] | ' | ' | ' |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% | ' |
Operating Loss Carryforwards | $794,000 | ' | ' |
Deferred Tax Assets, Capital Loss Carryforwards | 1,100,000 | ' | ' |
Income Tax Examination, Estimate of Possible Loss | ' | ' | $125,000 |
Domestic Tax Authority [Member] | Minimum [Member] | ' | ' | ' |
8. Income Taxes (Details) [Line Items] | ' | ' | ' |
Federal Net Operating Loss Carryforwards Expiration Year | '2030 | ' | ' |
Domestic Tax Authority [Member] | Maximum [Member] | ' | ' | ' |
8. Income Taxes (Details) [Line Items] | ' | ' | ' |
Federal Net Operating Loss Carryforwards Expiration Year | '2031 | ' | ' |
8_Income_Taxes_Details_Schedul
8. Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ' | ' | ' | ' |
Income tax expense (benefit) at federal statutory rate | $426 | $519 | $948 | $946 |
TappIn Earnout | 0 | -1,256 | 0 | -1,256 |
Research and development tax credit | 0 | -15 | 0 | -88 |
Domestic production activities deduction | -8 | -37 | -18 | -71 |
State taxes, net of federal benefit | 15 | 11 | 24 | 42 |
Other | 38 | -13 | 28 | 23 |
Income tax expense (benefit) per the statement of operations | $471 | ($791) | $982 | ($404) |
9Earnings_per_Common_Share_Det
9.Earnings per Common Share (Details) - Schedule of Earnings Per Share, Basic and Diluted (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Schedule of Earnings Per Share, Basic and Diluted [Abstract] | ' | ' | ' | ' |
Net income (in Dollars) | $782 | $2,287 | $1,805 | $3,185 |
Weighted average shares outstanding - basic | 20,487 | 18,761 | 20,024 | 18,570 |
Stock options | 403 | 397 | 600 | 431 |
Weighted average shares outstanding - diluted | 20,890 | 19,158 | 20,624 | 19,001 |
Net income per common share - basic (in Dollars per share) | $0.04 | $0.12 | $0.09 | $0.17 |
Net income per common share - diluted (in Dollars per share) | $0.04 | $0.12 | $0.09 | $0.17 |