Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
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 | 21,145,021 | |
Amendment Flag | false | |
Entity Central Index Key | 1,112,920 | |
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 | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets Unaudited - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 17,421 | $ 15,885 |
Short term investments | 3,303 | 3,254 |
Accounts receivable (net of allowance for doubtful accounts of $335 and $325 in 2016 and 2015, respectively) | 8,870 | 6,081 |
Federal income tax receivable | 104 | 290 |
Prepaid and other expenses | 425 | 511 |
Total current assets | 30,123 | 26,021 |
Property and equipment, net | 463 | 498 |
Capitalized software development costs, net | 3,961 | 3,982 |
Goodwill | 12,712 | 12,712 |
Deferred tax asset, net | 976 | 940 |
Other assets | 30 | 60 |
Total assets | 48,265 | 44,213 |
Current liabilities: | ||
Accounts payable | 622 | 839 |
Accrued expenses | 1,841 | 1,893 |
Deferred revenue | 13,005 | 12,000 |
Income taxes payable | 517 | 127 |
Total current liabilities | 15,985 | 14,859 |
Deferred revenue, non-current portion | 3,688 | 3,612 |
Other long term liabilities | 34 | 44 |
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, 21,548,602 and 21,383,467 shares issued at September 30, 2016, and December 31, 2015, respectively | 21 | 21 |
Additional paid-in capital | 20,632 | 19,583 |
Treasury stock, 403,581 shares, at cost, at September 30, 2016 and December 31, 2015 | (1,452) | (1,452) |
Retained earnings | 9,357 | 7,546 |
Total stockholders’ equity | 28,558 | 25,698 |
Total liabilities and stockholders’ equity | $ 48,265 | $ 44,213 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets Unaudited (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance for doubtful accounts (in Dollars) | $ 335 | $ 325 |
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
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) | $ 0.001 | $ 0.001 |
Common stock, authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 21,548,602 | 21,383,467 |
Treasury stock, shares | 403,581 | 403,581 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Revenues: | ||||
Software licenses | $ 3,373 | $ 2,852 | $ 8,565 | $ 8,590 |
Maintenance and support | 4,713 | 4,142 | 13,843 | 12,269 |
Professional services | 667 | 653 | 2,013 | 1,531 |
Total Revenues | 8,753 | 7,647 | 24,421 | 22,390 |
Cost of revenues | ||||
Software licenses | 873 | 562 | 2,303 | 1,651 |
Maintenance and support | 363 | 341 | 1,145 | 1,057 |
Professional services | 534 | 605 | 1,689 | 1,257 |
Total cost of revenues | 1,770 | 1,508 | 5,137 | 3,965 |
Gross profit | 6,983 | 6,139 | 19,284 | 18,425 |
Operating expenses | ||||
Sales and marketing | 2,759 | 2,289 | 8,453 | 7,060 |
General and administrative | 1,638 | 1,449 | 5,083 | 4,629 |
Research and development | 528 | 646 | 1,727 | 1,832 |
Total operating expenses | 4,925 | 4,384 | 15,263 | 13,521 |
Income from operations | 2,058 | 1,755 | 4,021 | 4,904 |
Other income | 28 | 17 | 88 | 51 |
Income before income taxes | 2,086 | 1,772 | 4,109 | 4,955 |
Income tax expense | 687 | 542 | 1,348 | 1,585 |
Net income | 1,399 | 1,230 | 2,761 | 3,370 |
Comprehensive income | $ 1,399 | $ 1,230 | $ 2,761 | $ 3,370 |
Net income per common share - | ||||
Basic (in Dollars per share) | $ 0.07 | $ 0.06 | $ 0.13 | $ 0.16 |
Diluted (in Dollars per share) | $ 0.06 | $ 0.06 | $ 0.13 | $ 0.16 |
Weighted average shares outstanding: | ||||
Basic (in Shares) | 21,122 | 20,892 | 21,061 | 20,782 |
Diluted (in Shares) | 21,674 | 21,440 | 21,640 | 21,294 |
Cash dividends declared per share (in Dollars per share) | $ 0.015 | $ 0.015 | $ 0.045 | $ 0.030 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Activities: | ||
Net income | $ 2,761 | $ 3,370 |
Items not involving cash at the time they are recorded in the statement of operations: | ||
Bad debt expense | 67 | 147 |
Depreciation and amortization | 1,522 | 1,116 |
Share-based compensation | 721 | 482 |
Deferred taxes | (36) | (320) |
Excess tax benefit from share-based compensation | 5 | (49) |
Subtotal before changes in operating assets and liabilities | 5,040 | 4,746 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,856) | (1,690) |
Prepaid expenses | 86 | 154 |
Deferred revenue | 1,081 | 531 |
Accounts payable | (217) | (757) |
Accrued expenses | (52) | 10 |
Other Assets | 30 | 37 |
Other long-term liabilities | (10) | (5) |
Income tax receivable and payable | 571 | 403 |
Net cash provided by operating activities | 3,673 | 3,429 |
Investing Activities: | ||
Software development costs capitalized | (1,298) | (1,613) |
Purchase of property and equipment | (168) | (108) |
Interest reinvested in short and long term investments | (49) | (48) |
Net cash (used in) investing activities | (1,515) | (1,769) |
Financing Activities: | ||
Proceeds from exercise of stock options | 333 | 417 |
Excess tax benefit from share-based compensation | (5) | 49 |
Dividends paid | (950) | (626) |
Net cash (used in) financing activities | (622) | (160) |
Net increase in cash | 1,536 | 1,500 |
Cash at beginning of period | 15,885 | 11,358 |
Cash at end of period | 17,421 | 12,858 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income taxes | $ 776 | $ 1,341 |
1. Nature of Business
1. Nature of Business | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Nature of Operations [Text Block] | 1. Nature of Business We develop and sell computer software that provides secure information exchange, file transfer and file sharing capabilities for enterprises and consumers. Our primary business is selling and supporting managed file transfer, or MFT, software for enterprises. The brand name of our MFT product platform is Enhanced File Transfer, or EFT. We also sell other products that are synergistic to EFT including Mail Express, scConnect, WAFS, and CuteFTP. We earn most of our revenue from the sale of EFT and products that are part of our EFT platform. We earn revenue from the sale of perpetual software licenses, providing products under software-as-a-service, or SaaS, subscriptions, providing maintenance and support services, or M&S, and offering professional services for product customization and integration. Throughout these notes unless otherwise noted, our references to the 2016 quarter and the 2015 quarter refer to the three months ended September 30, 2016 and 2015, respectively. Our references to the 2016 nine months and the 2015 nine months refer to the nine months ended September 30, 2016 and 2015, respectively. |
2. Basis of Presentation
2. Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
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, or 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, 2015, which we refer to as the 2015 Form 10-K, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations We follow accounting standards set by the Financial Accounting Standards Board. This board sets GAAP 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 United States Securities and Exchange Commission, or 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, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 3. Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements of GlobalSCAPE, Inc. and its wholly-owned subsidiary (collectively referred to as the “Company” or “we”) are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. Revenue Recognition We develop, market and sell software 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 of the sale is fixed or determinable. · Collection of the sale amount 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 the 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 bill our customers in advance for M&S services and record accounts receivable and deferred revenue in the same amount at the time we issue an invoice. We commence recognition of the deferred revenue as revenue only after the M&S period begins. For our products licensed and delivered under a SaaS 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. Amounts invoiced or paid prior to this revenue recognition are presented as deferred revenue until earned. 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 of Expenses In preparing our financial statements for the year ended December 31, 2015, we revised the manner in which we present cost of revenues and other elements of our statement of operations in response to the changing nature of our business and the resulting differences in the scope and nature of certain expenses we incur. Cost of Revenue Cost of revenue was expanded from one line to three lines to correspond with the associated revenue classifications. Amortization of capitalized software development costs was moved from depreciation and amortization and included in the cost of license revenue. Other costs included in cost of license revenue are royalties we pay to use technology in our products that is developed by others and fees paid to third party service providers who support our cloud based and SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related personnel costs of our employees who deliver the related service to our clients. These costs were previously included in the general and administrative classification. Also included in the cost of professional services revenue are the fees of third party service providers. Selling, General and Administrative We separated selling, general and administrative expenses into two line items – sales and marketing and general and administrative. Depreciation and Amortization After reclassifying amortization of capitalized software development costs to cost of license revenue, the remaining depreciation and amortization costs were included in general and administrative expense and the depreciation and amortization line on our statement of operations was removed. Effect of the reclassifications The reclassifications were between cost of revenues and operating expenses and had no effect on revenue, income from operations, net income or earnings per share. The following tables illustrate the effects of these reclassifications on previously reported amounts for the quarter and the nine months ended September 30, 2015 ($ in thousands): Quarter Ended September 30, 2015 Reclassification of Previously Reported Amounts As Cost Capitalized Personnel Depreciation Selling, As Operating Revenues: Software licenses $ 2,852 $ 2,852 Maintenance and support 4,142 4,142 Professional services 653 653 Total revenues 7,647 7,647 Cost of Revenues: Software licenses 195 367 562 Maintenance and support 341 341 Professional services 263 342 605 Total cost of revenues - 1,508 Gross profit - 6,139 Operating Expenses Sales and marketing - 2,289 2,289 General and administrative - 1,449 1,449 Cost of Revenues 458 (458 ) - Selling, general and administrative 4,355 (683 ) 66 (3,738 ) - Research and development 646 646 Depreciation and amortization 433 (367 ) (66 ) - Total operating expenses 5,892 4,384 Income from operations 1,755 1,755 Other income (expense), net 17 17 Income before income taxes 1,772 1,772 Income tax expense 542 542 Net income $ 1,230 $ 1,230 Comprehensive income $ 1,230 $ 1,230 Net income per common share - Basic $ 0.06 $ 0.06 Diluted $ 0.06 $ 0.06 Nine Months Ended September 30, 2015 Reclassification of Previously Reported Amounts As Previously Reported Cost of Revenues Capitalized Software Cost Amortization Personnel Costs Depreciation Selling, General & Administrative As Now Reported Operating Revenues: Software licenses $ 8,590 $ 8,590 Maintenance and support 12,269 12,269 Professional services 1,531 1,531 Total revenues 22,390 22,390 Cost of Revenues: Software licenses 739 912 1,651 Maintenance and support 1,057 1,057 Professional services 327 930 1,257 Total cost of revenues - 3,965 Gross profit - 18,425 Operating Expenses Sales and marketing - 7,060 7,060 General and administrative - 4,629 4,629 Cost of Revenues 1,066 (1,066 ) - Selling, general and administrative 13,472 (1,987 ) 204 (11,689 ) - Research and development 1,832 1,832 Depreciation and amortization 1,116 (912 ) (204 ) - Total operating expenses 17,486 13,521 Income from operations 4,904 4,904 Other income (expense), net 51 51 Income before income taxes 4,955 4,955 Income tax expense 1,585 1,585 Net income $ 3,370 $ 3,370 Comprehensive income $ 3,370 $ 3,370 Net income per common share - Basic $ 0.16 $ 0.16 Diluted $ 0.16 $ 0.16 Cash and cash equivalents Cash and cash equivalents includes all cash and highly liquid investments with original maturities of three months or less. Short Term Investments Short-term investments consist of certificates of deposit held with financial institutions with contractual maturity dates less than one year from the balance sheet date. The Company has the intent and ability to hold these investments until their maturity dates and therefore accounts for them as held-to-maturity. These certificates of deposit are stated at amortized cost, which approximates the fair value of these investments. Property and Equipment Property and equipment is comprised of furniture and fixtures, software, computer equipment and leasehold improvements which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Furniture, fixtures and equipment have a useful life of five to seven years, computer equipment and software have a useful life of three years and leasehold improvements have a useful life that is the shorter of the term of the lease under which the improvements were made or the estimated useful life of the asset. Expenditures for maintenance and repairs are expensed as incurred. 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, 2015, 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 its fair market value and that interim testing needed to be performed. Capitalized Software Development Costs When we complete research and development for a software product and have in place 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. We periodically assess the carrying value of capitalized software development costs relative to our estimates of realizability through sales of products in the marketplace. Research and Development We expense research and development costs as incurred. Advertising Expense We expense advertising costs as incurred as a component of our sales and marketing expenses. Advertising expense was $480,315 and $334,352 in the 2016 quarter and the 2015 quarter, respectively, and $1,447,078 and $1,116,894 in the 2016 nine months and 2015 nine months, respectively. Share-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. • We estimate a dividend yield based on our historical and expected future dividend payments. 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. Earnings Per Share We compute basic earnings per share using the weighted-average number of common shares outstanding during the periods. We compute diluted earnings per share using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. Awards of non-vested restricted stock and options are considered potentially dilutive common shares for the purpose of computing earnings per common share. We apply the treasury stock method to non-vested options under which the assumed proceeds include the amount the employee must pay to exercise the option plus the amount of unrecognized cost attributable to future periods less any expected tax benefits. Recent accounting pronouncements In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update (ASU) 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases In November 2015, the FASB, issued ASU No. 2015-17, Income Tax: Balance Sheet Classification of Deferred Taxes In May 2014, FASB issued ASU No. 2014-09 entitled Revenue from Contracts with Customers (Topic 606) Use of Estimates The preparation of consolidated 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 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. |
4. Capitalized Software Develop
4. Capitalized Software Development Costs | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 Gross capitalized cost $ 7,012 $ 5,714 Accumulated amortization (3,051 ) (1,732 ) Net balance $ 3,961 $ 3,982 Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Amount capitalized $ 452 $ 506 $ 1,298 $ 1,613 Amortization expense (450 ) (367 ) (1,319 ) (912 ) Released Unreleased Products Products Gross capitalized amount at September 30, 2016 $ 5,700 $ 1,312 Future amortization expense: Three months ending December 31, 2016 452 Year ending December 31, 2017 1,433 2018 699 2019 65 Total $ 2,649 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. Stock Options, Restricted St
5. Stock Options, Restricted Stock and Share-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 5. 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Share-based compensation expense $ 221 $ 167 $ 721 $ 482 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: · It authorizes the issuance of up to three million shares of 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. · 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. · We issued no restricted stock awards under this plan during the 2016 or 2015 periods. · As of September 30, 2016, stock-based incentives for up to 167,335 shares remained available for issuance in the future under this plan. Our stock option activity has been as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value (000's) Outstanding at December 31, 2015 2,091,325 $ 2.45 6.09 $ 3,277 Granted 1,055,300 $ 3.58 Forfeited (372,045 ) $ 3.14 Exercised (165,135 ) $ 2.02 Outstanding at September 30, 2016 2,609,445 $ 2.83 6.29 $ 2,015 Exercisable at September 30, 2016 1,351,760 $ 2.26 3.59 $ 1,814 Additional information about our stock options is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average fair value of options granted $ 1.61 $ 1.42 $ 1.63 $ 1.38 Intrinsic value of options exercised $ 78,607 $ 105,450 $ 261,061 $ 386,408 Cash received from stock options exercised $ 70,320 $ 98,706 $ 333,329 $ 416,680 Number of options that vested 42,390 93,290 308,736 274,824 Fair value of options that vested $ 42,565 $ 97,679 $ 418,877 $ 296,886 Unrecognized compensation expense related to non-vested options at end of period $ 1,609,593 $ 753,846 $ 1,609,593 $ 753,846 Weighted average years over which non-vested option expense will be recognized 2.3 2.0 2.3 2.0 As of September 30, 2016 Range of Exercise Prices Underlying Shares Outstanding Options Outstanding Options Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number of Underlying Shares Weighted Average Exercise Price $ 0.85 - $1.43 168,600 3.16 $ 1.16 168,600 $ 1.16 $ 1.47 - $2.32 612,995 4.05 $ 1.82 607,255 $ 1.82 $ 2.34 - $3.52 1,319,850 7.29 $ 3.13 445,905 $ 2.74 $ 3.53 - $4.21 508,000 7.44 $ 3.83 130,000 $ 4.10 Total options 2,609,445 1,351,760 We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Expected volatility 54 % 56 % 55 % 57 % Expected annual dividend yield 1.50 % 2.40 % 1.50 % 2.40 % Risk free rate of return 1.18 % 1.75 % 1.46 % 1.59 % Expected option term (years) 6.00 6.00 6.00 6.00 Based upon our dividend payment activity in recent years, beginning with the first quarter of 2015, we added an expected annual dividend yield to these assumptions. Restricted Stock Awards In May 2015, we adopted the 2015 Non-Employee Directors Long Term Incentive Plan (“2015 Directors Plan”). This plan provides for the issuance of either stock options or restricted stock awards for up to 500,000 shares of our common stock. Provisions and characteristics of this plan include the following: · 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. · As of September 30, 2016, stock based incentives for up to 340,000 shares remained available for issuance in the future under this plan. Our restricted stock awards activity has been as follows: Number of Shares Grant Date Fair Value Per Share Total Fair Value of Shares That Vested Restricted Shares Outstanding at December 31, 2015 80,000 $ 3.34 Shares granted with restrictions 80,000 $ 3.31 Shares vested and restrictions removed (80,000 ) $ 3.34 $ 276,000 Restricted Shares Outstanding at September 30, 2016 80,000 $ 3.31 Unrecognized compensation expense for non-vested shares as of September 30,2016 Expense to be recognized in future periods $ 156,999 Weighted average number of months over which expense is expected to be recognized 7 |
6. Income Taxes
6. Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 6. Income Taxes The components of our income tax expense (benefit) are as follows ($ in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Current Deferred Total Current Deferred Total Current Deferred Total Current Deferred Total Federal $ 688 $ (81 ) $ 607 $ 797 $ (254 ) $ 543 $ 1,214 $ (21 ) $ 1,193 $ 1,812 $ (313 ) $ 1,499 Foreign 12 - 12 6 - 6 37 $ 22 33 - $ 33 State 72 (4 ) 68 (4 ) (3 ) (7 ) 133 (15 ) $ 133 60 (7 ) $ 53 Total $ 772 $ (85 ) $ 687 $ 799 $ (257 ) $ 542 $ 1,384 $ (36 ) $ 1,348 $ 1,905 $ (320 ) $ 1,585 Current taxes per our federal income tax return are presented in these financial statements as follows ($ in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Current federal income tax expense in the statement of operations $ 687 $ 542 $ 1,348 $ 1,585 Tax (deficiency) from stock-based compensation recorded in additional paid-in capital (13 ) (15 ) (26 ) (59 ) Current taxes per our federal income tax return $ 674 $ 527 $ 1,322 $ 1,526 Deferred income taxes on our balance sheet reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows ($ in thousands): September 30, December 31, 2016 2015 Deferred tax assets: Share-based compensation $ 718 $ 677 Deferred revenue 1,185 1,154 Net operating loss carryforward 106 151 Compensation and benefits 164 168 Allowance for doubtful accounts 114 111 Other 52 33 Total deferred tax assets 2,339 2,294 Deferred tax liabilities: Intangible assets 1,356 1,339 Depreciation 7 15 Total gross deferred tax liabilities 1,363 1,354 Net deferred tax assets $ 976 $ 940 As of September 30, 2016, we had federal income tax net operating loss carryforwards of $312,000 available to offset future federal taxable income, if any. These carryforwards became available through our acquisition of TappIn, Inc. in 2011. These carryforwards expire in 2030 and 2031. As of September 30, 2016, we had federal income tax capital loss carryforwards of $1,100,000 (tax effected) which resulted from the reduction of our investments in and notes receivable from CoreTrace Corporation in 2012. We can realize capital loss carryforwards 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 and accordingly have not reflected this item as a deferred tax asset in the schedule above. This carryforward expires in 2017. In assessing the realizability of deferred tax assets, we consider whether it is more-likely-than-not that a deferred tax asset will not be realized. Our assessment of the likelihood of having sufficient taxable income in the future to support deduction or utilization of the items giving rise to our deferred tax assets indicates it is more-likely-than-not that we will realize the deferred tax assets listed in the table above. We claim research and experimentation tax credits, or R&D tax credits, on certain of our tax returns and have included the effect of those credits in our provision for income taxes. Because our 2008, 2009 and 2010 tax returns were under routine examination by the Internal Revenue Service and because we believed it more-likely-than-not the examination could result in $125,000 of such credits we claimed not being allowed by the Internal Revenue Service, we recorded a reserve for an uncertain tax position in the amount of $125,000 in 2012 related to this item. The Internal Revenue Service completed its routine examination of our 2008, 2009 and 2010 income tax returns in 2015 and those results have been included in our provision for income taxes in 2015. We continue to maintain a reserve for an uncertain tax position in the amount of $110,000 for our 2011 through 2016 tax returns related to the R&D tax credit. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows ($ in thousands): 2016 2015 Balance at beginning of year $ 90 $ 125 Increases for tax positions related to the current year 9 - Increases for tax positions related to prior years 11 48 Decreases for tax positions related to prior years - (51 ) Decreases due to settlements related to prior years - (32 ) Balance at September 30 and December 31, respectively $ 110 $ 90 To the extent they arise, we record interest and penalty expenses related to income taxes as components of other expense in our statement of operations. We incurred no such expenses in 2016, 2015 or 2014. We file state tax returns in various states. The taxes resulting from these filings are included in income tax expense. 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 September 30, Nine months ended September 30, 2016 2015 2016 2015 Income tax expense (benefit) at federal statutory rate $ 710 $ 603 $ 1,397 $ 1,685 Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 44 (5 ) 72 33 Incentive stock options 25 0 60 0 Other (1 ) (13 ) 20 8 R&D tax credit uncertain tax position (net) 10 110 21 59 Research and development credit (55 ) (123 ) (119 ) (123 ) Domestic production activities deduction (46 ) (30 ) (103 ) (77 ) Income tax expense (benefit) per the statement of operations $ 687 $ 542 $ 1,348 $ 1,585 In November 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-17, Income Tax: Balance Sheet Classification of Deferred Taxes |
7. Earnings per Common Share
7. Earnings per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 7. 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, 2016 2015 2016 2015 Net income $ 1,399 $ 1,230 $ 2,761 $ 3,370 Weighted average shares outstanding - basic 21,122 20,892 21,061 20,782 Stock options 552 548 579 512 Weighted average shares outstanding - diluted 21,674 21,440 21,640 21,294 Net income per common share - basic $ 0.07 $ 0.06 $ 0.13 $ 0.16 Net income per common share - diluted $ 0.06 $ 0.06 $ 0.13 $ 0.16 |
8. Dividends
8. Dividends | 9 Months Ended |
Sep. 30, 2016 | |
Dividends [Abstract] | |
Dividends [Text Block] | 8. Dividends During 2016, our Board of Directors declared quarterly dividends as follows: March 31, 2016 June 30, 2016 September 30, 2016 Dividend per share of common stock $ 0.015 $ 0.015 $ 0.015 Dividend record date February 23, 2016 May 23, 2016 August 23, 2016 Dividend payment date March 3, 2016 June 1, 2016 September 9, 2016 |
9. Commitments and Contingencie
9. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Loss Contingency [Abstract] | |
Contingencies Disclosure [Text Block] | 9. Commitments and Contingencies We have agreements with key personnel that provide for severance payments to them in the event of a change in control of the Company, as defined in those agreements, and their employment is terminated in connection with that change in control. In such event, our aggregate severance payments to those employees would be $1.6 million. |
10. Concentration of Business V
10. Concentration of Business Volume and Credit Risk | 9 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 10. Concentration of Business Volume and Credit Risk In order to leverage the resources of third parties, we make our products available for purchase by end users through third-party, channel distributors even though those end users can also purchase those products directly from us. During the 2016 quarter we earned approximately 17% of our revenue from such sales through our largest, third party, channel distributor. During the 2015 quarter there was no single customer that exceeded 10% of sales. During the 2016 nine months and 2015 nine months, we earned approximately 14% and 10%, respectively, of our revenue from such sales through our largest, third party, channel distributor. As of September 30, 2016, approximately 40% of our accounts receivable were due from this third party, channel distributor discussed above and from one other customer, the latter of which did not constitute more than 10% of our revenue for any of the periods presented. Payment for substantially all such amounts has been received subsequent to that date. |
11. Segment and Geographic Disc
11. Segment and Geographic Disclosures | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 11. Segment and Geographic Disclosures Revenues derived from customers and partners located in the United States accounted for approximately 83% and 78% of our total revenues in 2016 and 2015 quarter, respectively, and 78% and 76% of our total revenues for both the 2016 and 2015 nine months. The remaining revenues were from customers and partners located in foreign countries with each individual foreign country accounting for less than 10% of total revenues in all periods. We attribute revenues to countries based on the country in which the customer or partner is located. None of our property and equipment was located in a foreign country as of September 30, 2016 and 2015. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying consolidated financial statements of GlobalSCAPE, Inc. and its wholly-owned subsidiary (collectively referred to as the “Company” or “we”) 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. 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 of the sale is fixed or determinable. · Collection of the sale amount 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 the 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 bill our customers in advance for M&S services and record accounts receivable and deferred revenue in the same amount at the time we issue an invoice. We commence recognition of the deferred revenue as revenue only after the M&S period begins. For our products licensed and delivered under a SaaS 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. Amounts invoiced or paid prior to this revenue recognition are presented as deferred revenue until earned. 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] | Reclassification of Expenses In preparing our financial statements for the year ended December 31, 2015, we revised the manner in which we present cost of revenues and other elements of our statement of operations in response to the changing nature of our business and the resulting differences in the scope and nature of certain expenses we incur. Cost of Revenue Cost of revenue was expanded from one line to three lines to correspond with the associated revenue classifications. Amortization of capitalized software development costs was moved from depreciation and amortization and included in the cost of license revenue. Other costs included in cost of license revenue are royalties we pay to use technology in our products that is developed by others and fees paid to third party service providers who support our cloud based and SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related personnel costs of our employees who deliver the related service to our clients. These costs were previously included in the general and administrative classification. Also included in the cost of professional services revenue are the fees of third party service providers. Selling, General and Administrative We separated selling, general and administrative expenses into two line items – sales and marketing and general and administrative. Depreciation and Amortization After reclassifying amortization of capitalized software development costs to cost of license revenue, the remaining depreciation and amortization costs were included in general and administrative expense and the depreciation and amortization line on our statement of operations was removed. Effect of the reclassifications The reclassifications were between cost of revenues and operating expenses and had no effect on revenue, income from operations, net income or earnings per share. The following tables illustrate the effects of these reclassifications on previously reported amounts for the quarter and the nine months ended September 30, 2015 ($ in thousands): Quarter Ended September 30, 2015 Reclassification of Previously Reported Amounts As Cost Capitalized Personnel Depreciation Selling, As Operating Revenues: Software licenses $ 2,852 $ 2,852 Maintenance and support 4,142 4,142 Professional services 653 653 Total revenues 7,647 7,647 Cost of Revenues: Software licenses 195 367 562 Maintenance and support 341 341 Professional services 263 342 605 Total cost of revenues - 1,508 Gross profit - 6,139 Operating Expenses Sales and marketing - 2,289 2,289 General and administrative - 1,449 1,449 Cost of Revenues 458 (458 ) - Selling, general and administrative 4,355 (683 ) 66 (3,738 ) - Research and development 646 646 Depreciation and amortization 433 (367 ) (66 ) - Total operating expenses 5,892 4,384 Income from operations 1,755 1,755 Other income (expense), net 17 17 Income before income taxes 1,772 1,772 Income tax expense 542 542 Net income $ 1,230 $ 1,230 Comprehensive income $ 1,230 $ 1,230 Net income per common share - Basic $ 0.06 $ 0.06 Diluted $ 0.06 $ 0.06 Nine Months Ended September 30, 2015 Reclassification of Previously Reported Amounts As Previously Reported Cost of Revenues Capitalized Software Cost Amortization Personnel Costs Depreciation Selling, General & Administrative As Now Reported Operating Revenues: Software licenses $ 8,590 $ 8,590 Maintenance and support 12,269 12,269 Professional services 1,531 1,531 Total revenues 22,390 22,390 Cost of Revenues: Software licenses 739 912 1,651 Maintenance and support 1,057 1,057 Professional services 327 930 1,257 Total cost of revenues - 3,965 Gross profit - 18,425 Operating Expenses Sales and marketing - 7,060 7,060 General and administrative - 4,629 4,629 Cost of Revenues 1,066 (1,066 ) - Selling, general and administrative 13,472 (1,987 ) 204 (11,689 ) - Research and development 1,832 1,832 Depreciation and amortization 1,116 (912 ) (204 ) - Total operating expenses 17,486 13,521 Income from operations 4,904 4,904 Other income (expense), net 51 51 Income before income taxes 4,955 4,955 Income tax expense 1,585 1,585 Net income $ 3,370 $ 3,370 Comprehensive income $ 3,370 $ 3,370 Net income per common share - Basic $ 0.16 $ 0.16 Diluted $ 0.16 $ 0.16 |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents includes all cash and highly liquid investments with original maturities of three months or less. |
Investment, Policy [Policy Text Block] | Short Term Investments Short-term investments consist of certificates of deposit held with financial institutions with contractual maturity dates less than one year from the balance sheet date. The Company has the intent and ability to hold these investments until their maturity dates and therefore accounts for them as held-to-maturity. These certificates of deposit are stated at amortized cost, which approximates the fair value of these investments. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment is comprised of furniture and fixtures, software, computer equipment and leasehold improvements which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Furniture, fixtures and equipment have a useful life of five to seven years, computer equipment and software have a useful life of three years and leasehold improvements have a useful life that is the shorter of the term of the lease under which the improvements were made or the estimated useful life of the asset. Expenditures for maintenance and repairs are expensed as incurred. |
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, 2015, 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 its fair market value and that interim testing needed to be performed. |
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 in place 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. We periodically assess the carrying value of capitalized software development costs relative to our estimates of realizability through sales of products in the marketplace. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development We expense research and development costs as incurred. |
Advertising Costs, Policy [Policy Text Block] | Advertising Expense We expense advertising costs as incurred as a component of our sales and marketing expenses. Advertising expense was $480,315 and $334,352 in the 2016 quarter and the 2015 quarter, respectively, and $1,447,078 and $1,116,894 in the 2016 nine months and 2015 nine months, respectively. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Share-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. • We estimate a dividend yield based on our historical and expected future dividend payments. 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. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share We compute basic earnings per share using the weighted-average number of common shares outstanding during the periods. We compute diluted earnings per share using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. Awards of non-vested restricted stock and options are considered potentially dilutive common shares for the purpose of computing earnings per common share. We apply the treasury stock method to non-vested options under which the assumed proceeds include the amount the employee must pay to exercise the option plus the amount of unrecognized cost attributable to future periods less any expected tax benefits. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update (ASU) 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases In November 2015, the FASB, issued ASU No. 2015-17, Income Tax: Balance Sheet Classification of Deferred Taxes In May 2014, FASB issued ASU No. 2014-09 entitled Revenue from Contracts with Customers (Topic 606) |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of consolidated 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 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. |
3. Significant Accounting Pol18
3. Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Reclassification Adjustments [Table Text Block] | The reclassifications were between cost of revenues and operating expenses and had no effect on revenue, income from operations, net income or earnings per share. The following tables illustrate the effects of these reclassifications on previously reported amounts for the quarter and the nine months ended September 30, 2015 ($ in thousands): Quarter Ended September 30, 2015 Reclassification of Previously Reported Amounts As Cost Capitalized Personnel Depreciation Selling, As Operating Revenues: Software licenses $ 2,852 $ 2,852 Maintenance and support 4,142 4,142 Professional services 653 653 Total revenues 7,647 7,647 Cost of Revenues: Software licenses 195 367 562 Maintenance and support 341 341 Professional services 263 342 605 Total cost of revenues - 1,508 Gross profit - 6,139 Operating Expenses Sales and marketing - 2,289 2,289 General and administrative - 1,449 1,449 Cost of Revenues 458 (458 ) - Selling, general and administrative 4,355 (683 ) 66 (3,738 ) - Research and development 646 646 Depreciation and amortization 433 (367 ) (66 ) - Total operating expenses 5,892 4,384 Income from operations 1,755 1,755 Other income (expense), net 17 17 Income before income taxes 1,772 1,772 Income tax expense 542 542 Net income $ 1,230 $ 1,230 Comprehensive income $ 1,230 $ 1,230 Net income per common share - Basic $ 0.06 $ 0.06 Diluted $ 0.06 $ 0.06 Nine Months Ended September 30, 2015 Reclassification of Previously Reported Amounts As Previously Reported Cost of Revenues Capitalized Software Cost Amortization Personnel Costs Depreciation Selling, General & Administrative As Now Reported Operating Revenues: Software licenses $ 8,590 $ 8,590 Maintenance and support 12,269 12,269 Professional services 1,531 1,531 Total revenues 22,390 22,390 Cost of Revenues: Software licenses 739 912 1,651 Maintenance and support 1,057 1,057 Professional services 327 930 1,257 Total cost of revenues - 3,965 Gross profit - 18,425 Operating Expenses Sales and marketing - 7,060 7,060 General and administrative - 4,629 4,629 Cost of Revenues 1,066 (1,066 ) - Selling, general and administrative 13,472 (1,987 ) 204 (11,689 ) - Research and development 1,832 1,832 Depreciation and amortization 1,116 (912 ) (204 ) - Total operating expenses 17,486 13,521 Income from operations 4,904 4,904 Other income (expense), net 51 51 Income before income taxes 4,955 4,955 Income tax expense 1,585 1,585 Net income $ 3,370 $ 3,370 Comprehensive income $ 3,370 $ 3,370 Net income per common share - Basic $ 0.16 $ 0.16 Diluted $ 0.16 $ 0.16 |
4. Capitalized Software Devel19
4. Capitalized Software Development Costs (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 Gross capitalized cost $ 7,012 $ 5,714 Accumulated amortization (3,051 ) (1,732 ) Net balance $ 3,961 $ 3,982 |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Amount capitalized $ 452 $ 506 $ 1,298 $ 1,613 Amortization expense (450 ) (367 ) (1,319 ) (912 ) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized amount at September 30, 2016 $ 5,700 $ 1,312 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Future amortization expense: Three months ending December 31, 2016 452 Year ending December 31, 2017 1,433 2018 699 2019 65 Total $ 2,649 |
5. Stock Options, Restricted 20
5. Stock Options, Restricted Stock and Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Share-based compensation expense $ 221 $ 167 $ 721 $ 482 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Our stock option activity has been as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value (000's) Outstanding at December 31, 2015 2,091,325 $ 2.45 6.09 $ 3,277 Granted 1,055,300 $ 3.58 Forfeited (372,045 ) $ 3.14 Exercised (165,135 ) $ 2.02 Outstanding at September 30, 2016 2,609,445 $ 2.83 6.29 $ 2,015 Exercisable at September 30, 2016 1,351,760 $ 2.26 3.59 $ 1,814 |
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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average fair value of options granted $ 1.61 $ 1.42 $ 1.63 $ 1.38 Intrinsic value of options exercised $ 78,607 $ 105,450 $ 261,061 $ 386,408 Cash received from stock options exercised $ 70,320 $ 98,706 $ 333,329 $ 416,680 Number of options that vested 42,390 93,290 308,736 274,824 Fair value of options that vested $ 42,565 $ 97,679 $ 418,877 $ 296,886 Unrecognized compensation expense related to non-vested options at end of period $ 1,609,593 $ 753,846 $ 1,609,593 $ 753,846 Weighted average years over which non-vested option expense will be recognized 2.3 2.0 2.3 2.0 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | As of September 30, 2016 Range of Exercise Prices Underlying Shares Outstanding Options Outstanding Options Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number of Underlying Shares Weighted Average Exercise Price $ 0.85 - $1.43 168,600 3.16 $ 1.16 168,600 $ 1.16 $ 1.47 - $2.32 612,995 4.05 $ 1.82 607,255 $ 1.82 $ 2.34 - $3.52 1,319,850 7.29 $ 3.13 445,905 $ 2.74 $ 3.53 - $4.21 508,000 7.44 $ 3.83 130,000 $ 4.10 Total options 2,609,445 1,351,760 |
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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Expected volatility 54 % 56 % 55 % 57 % Expected annual dividend yield 1.50 % 2.40 % 1.50 % 2.40 % Risk free rate of return 1.18 % 1.75 % 1.46 % 1.59 % Expected option term (years) 6.00 6.00 6.00 6.00 |
Nonvested Restricted Stock Shares Activity [Table Text Block] | Our restricted stock awards activity has been as follows: Number of Shares Grant Date Fair Value Per Share Total Fair Value of Shares That Vested Restricted Shares Outstanding at December 31, 2015 80,000 $ 3.34 Shares granted with restrictions 80,000 $ 3.31 Shares vested and restrictions removed (80,000 ) $ 3.34 $ 276,000 Restricted Shares Outstanding at September 30, 2016 80,000 $ 3.31 Unrecognized compensation expense for non-vested shares as of September 30,2016 Expense to be recognized in future periods $ 156,999 Weighted average number of months over which expense is expected to be recognized 7 |
6. Income Taxes (Tables)
6. Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of our income tax expense (benefit) are as follows ($ in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Current Deferred Total Current Deferred Total Current Deferred Total Current Deferred Total Federal $ 688 $ (81 ) $ 607 $ 797 $ (254 ) $ 543 $ 1,214 $ (21 ) $ 1,193 $ 1,812 $ (313 ) $ 1,499 Foreign 12 - 12 6 - 6 37 $ 22 33 - $ 33 State 72 (4 ) 68 (4 ) (3 ) (7 ) 133 (15 ) $ 133 60 (7 ) $ 53 Total $ 772 $ (85 ) $ 687 $ 799 $ (257 ) $ 542 $ 1,384 $ (36 ) $ 1,348 $ 1,905 $ (320 ) $ 1,585 |
Federal Income Tax, Current [Table Text Block] | Current taxes per our federal income tax return are presented in these financial statements as follows ($ in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Current federal income tax expense in the statement of operations $ 687 $ 542 $ 1,348 $ 1,585 Tax (deficiency) from stock-based compensation recorded in additional paid-in capital (13 ) (15 ) (26 ) (59 ) Current taxes per our federal income tax return $ 674 $ 527 $ 1,322 $ 1,526 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income taxes on our balance sheet reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows ($ in thousands): September 30, December 31, 2016 2015 Deferred tax assets: Share-based compensation $ 718 $ 677 Deferred revenue 1,185 1,154 Net operating loss carryforward 106 151 Compensation and benefits 164 168 Allowance for doubtful accounts 114 111 Other 52 33 Total deferred tax assets 2,339 2,294 Deferred tax liabilities: Intangible assets 1,356 1,339 Depreciation 7 15 Total gross deferred tax liabilities 1,363 1,354 Net deferred tax assets $ 976 $ 940 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | The aggregate changes in the balance of our gross unrecognized tax benefits were as follows ($ in thousands): 2016 2015 Balance at beginning of year $ 90 $ 125 Increases for tax positions related to the current year 9 - Increases for tax positions related to prior years 11 48 Decreases for tax positions related to prior years - (51 ) Decreases due to settlements related to prior years - (32 ) Balance at September 30 and December 31, respectively $ 110 $ 90 |
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 September 30, Nine months ended September 30, 2016 2015 2016 2015 Income tax expense (benefit) at federal statutory rate $ 710 $ 603 $ 1,397 $ 1,685 Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 44 (5 ) 72 33 Incentive stock options 25 0 60 0 Other (1 ) (13 ) 20 8 R&D tax credit uncertain tax position (net) 10 110 21 59 Research and development credit (55 ) (123 ) (119 ) (123 ) Domestic production activities deduction (46 ) (30 ) (103 ) (77 ) Income tax expense (benefit) per the statement of operations $ 687 $ 542 $ 1,348 $ 1,585 |
7. Earnings per Common Share (T
7. Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 2016 2015 Net income $ 1,399 $ 1,230 $ 2,761 $ 3,370 Weighted average shares outstanding - basic 21,122 20,892 21,061 20,782 Stock options 552 548 579 512 Weighted average shares outstanding - diluted 21,674 21,440 21,640 21,294 Net income per common share - basic $ 0.07 $ 0.06 $ 0.13 $ 0.16 Net income per common share - diluted $ 0.06 $ 0.06 $ 0.13 $ 0.16 |
8. Dividends (Tables)
8. Dividends (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Dividends [Abstract] | |
Schedule of Dividends Payable [Table Text Block] | During 2016, our Board of Directors declared quarterly dividends as follows: March 31, 2016 June 30, 2016 September 30, 2016 Dividend per share of common stock $ 0.015 $ 0.015 $ 0.015 Dividend record date February 23, 2016 May 23, 2016 August 23, 2016 Dividend payment date March 3, 2016 June 1, 2016 September 9, 2016 |
3. Significant Accounting Pol24
3. Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
3. Significant Accounting Policies (Details) [Line Items] | |||||
Goodwill, Impairment Loss | $ 0 | ||||
Advertising Expense | $ 480,315 | $ 334,352 | $ 1,447,078 | $ 1,116,894 | |
Probability of occurrence of event | 50.00% | ||||
Computer Equipment [Member] | |||||
3. Significant Accounting Policies (Details) [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Software and Software Development Costs [Member] | |||||
3. Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||
Minimum [Member] | Furniture and Fixtures [Member] | |||||
3. Significant Accounting Policies (Details) [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Maximum [Member] | Furniture and Fixtures [Member] | |||||
3. Significant Accounting Policies (Details) [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 7 years |
3. Significant Accounting Poli
3. Significant Accounting Policies (Details) - Schedule of Reclassification Adjustments - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Revenues: | ||||
Software licenses | $ 3,373 | $ 2,852 | $ 8,565 | $ 8,590 |
Maintenance and support | 4,713 | 4,142 | 13,843 | 12,269 |
Professional services | 667 | 653 | 2,013 | 1,531 |
Total revenues | 8,753 | 7,647 | 24,421 | 22,390 |
Cost of Revenues: | ||||
Software licenses | 873 | 562 | 2,303 | 1,651 |
Maintenance and support | 363 | 341 | 1,145 | 1,057 |
Professional services | 534 | 605 | 1,689 | 1,257 |
Total cost of revenues | 1,770 | 1,508 | 5,137 | 3,965 |
Gross profit | 6,983 | 6,139 | 19,284 | 18,425 |
Operating Expenses | ||||
Sales and marketing | 2,759 | 2,289 | 8,453 | 7,060 |
General and administrative | 1,638 | 1,449 | 5,083 | 4,629 |
Research and development | 528 | 646 | 1,727 | 1,832 |
Depreciation and amortization | 1,522 | 1,116 | ||
Income from operations | 2,058 | 1,755 | 4,021 | 4,904 |
Other income (expense), net | 28 | 17 | 88 | 51 |
Income before income taxes | 2,086 | 1,772 | 4,109 | 4,955 |
Income tax expense | 687 | 542 | 1,348 | 1,585 |
Net income | 1,399 | 1,230 | 2,761 | 3,370 |
Comprehensive income | $ 1,399 | $ 1,230 | $ 2,761 | $ 3,370 |
Net income per common share - | ||||
Basic (in Dollars per share) | $ 0.07 | $ 0.06 | $ 0.13 | $ 0.16 |
Diluted (in Dollars per share) | $ 0.06 | $ 0.06 | $ 0.13 | $ 0.16 |
Scenario, Previously Reported [Member] | ||||
Operating Revenues: | ||||
Software licenses | $ 2,852 | $ 8,590 | ||
Maintenance and support | 4,142 | 12,269 | ||
Professional services | 653 | 1,531 | ||
Total revenues | 7,647 | 22,390 | ||
Cost of Revenues: | ||||
Total cost of revenues | 0 | |||
Gross profit | 0 | |||
Operating Expenses | ||||
Sales and marketing | 0 | |||
General and administrative | 0 | |||
Cost of Revenues | 458 | 1,066 | ||
Selling, general and administrative | 4,355 | 13,472 | ||
Research and development | 646 | 1,832 | ||
Depreciation and amortization | 433 | 1,116 | ||
Total operating expenses | 5,892 | 17,486 | ||
Income from operations | 1,755 | 4,904 | ||
Other income (expense), net | 17 | 51 | ||
Income before income taxes | 1,772 | 4,955 | ||
Income tax expense | 542 | 1,585 | ||
Net income | 1,230 | 3,370 | ||
Comprehensive income | $ 1,230 | $ 3,370 | ||
Net income per common share - | ||||
Basic (in Dollars per share) | $ 0.06 | $ 0.16 | ||
Diluted (in Dollars per share) | $ 0.06 | $ 0.16 | ||
Scenario, Actual [Member] | ||||
Operating Revenues: | ||||
Software licenses | $ 2,852 | $ 8,590 | ||
Maintenance and support | 4,142 | 12,269 | ||
Professional services | 653 | 1,531 | ||
Total revenues | 7,647 | 22,390 | ||
Cost of Revenues: | ||||
Software licenses | 562 | 1,651 | ||
Maintenance and support | 341 | 1,057 | ||
Professional services | 605 | 1,257 | ||
Total cost of revenues | 1,508 | 3,965 | ||
Gross profit | 6,139 | 18,425 | ||
Operating Expenses | ||||
Sales and marketing | 2,289 | 7,060 | ||
General and administrative | 1,449 | 4,629 | ||
Cost of Revenues | 0 | |||
Selling, general and administrative | 0 | |||
Research and development | 646 | 1,832 | ||
Depreciation and amortization | 0 | |||
Total operating expenses | 4,384 | 13,521 | ||
Income from operations | 1,755 | 4,904 | ||
Other income (expense), net | 17 | 51 | ||
Income before income taxes | 1,772 | 4,955 | ||
Income tax expense | 542 | 1,585 | ||
Net income | 1,230 | 3,370 | ||
Comprehensive income | $ 1,230 | $ 3,370 | ||
Net income per common share - | ||||
Basic (in Dollars per share) | $ 0.06 | $ 0.16 | ||
Diluted (in Dollars per share) | $ 0.06 | $ 0.16 | ||
Cost of Sales [Member] | Restatement Adjustment [Member] | ||||
Cost of Revenues: | ||||
Software licenses | $ 195 | $ 739 | ||
Professional services | 263 | 327 | ||
Operating Expenses | ||||
Cost of Revenues | (458) | (1,066) | ||
Capitalized Software Cost Amortization [Member] | Restatement Adjustment [Member] | ||||
Cost of Revenues: | ||||
Software licenses | 367 | 912 | ||
Operating Expenses | ||||
Depreciation and amortization | (367) | (912) | ||
Personnel Costs [Member] | Restatement Adjustment [Member] | ||||
Cost of Revenues: | ||||
Maintenance and support | 341 | 1,057 | ||
Professional services | 342 | 930 | ||
Operating Expenses | ||||
Selling, general and administrative | (683) | (1,987) | ||
Depreciation [Member] | Restatement Adjustment [Member] | ||||
Operating Expenses | ||||
Selling, general and administrative | 66 | 204 | ||
Depreciation and amortization | (66) | (204) | ||
Selling, General and Administrative Expenses [Member] | Restatement Adjustment [Member] | ||||
Operating Expenses | ||||
Sales and marketing | 2,289 | 7,060 | ||
General and administrative | 1,449 | 4,629 | ||
Selling, general and administrative | $ (3,738) | $ (11,689) |
4. Capitalized Software Develo
4. Capitalized Software Development Costs (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Finite-Lived Intangible Assets [Abstract] | ||
Gross capitalized cost | $ 7,012 | $ 5,714 |
Accumulated amortization | (3,051) | (1,732) |
Net balance | $ 3,961 | $ 3,982 |
4. Capitalized Software Deve27
4. Capitalized Software Development Costs (Details) - Finite-lived Intangible Assets Amortization Expense - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Finite-lived Intangible Assets Amortization Expense [Abstract] | ||||
Amount capitalized | $ 452 | $ 506 | $ 1,298 | $ 1,613 |
Amortization expense | $ (450) | $ (367) | $ (1,319) | $ (912) |
4. Capitalized Software Deve28
4. Capitalized Software Development Costs (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
4. Capitalized Software Development Costs (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||
Gross capitalized amount at September 30, 2016 | $ 7,012 | $ 5,714 |
Released Products [Member] | ||
4. Capitalized Software Development Costs (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||
Gross capitalized amount at September 30, 2016 | 5,700 | |
Unreleased Products [Member] | ||
4. Capitalized Software Development Costs (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||
Gross capitalized amount at September 30, 2016 | $ 1,312 |
4. Capitalized Software Deve29
4. Capitalized Software Development Costs (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense $ in Thousands | Sep. 30, 2016USD ($) |
Future amortization expense: | |
Three months ending December 31, 2016 | $ 452 |
Year ending December 31, | |
2,017 | 1,433 |
2,018 | 699 |
2,019 | 65 |
Total | $ 2,649 |
5. Stock Options, Restricted 30
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
2010 Employee Long-Term Equity Incentive Plan [Member] | ||
5. 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, Number of Shares Available for Grant | 167,335 | |
2015 Directors Plan [Member] | ||
5. 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 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 340,000 | |
Employee Stock Option [Member] | 2010 Employee Long-Term Equity Incentive Plan [Member] | ||
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ||
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 | |
Restricted Stock [Member] | 2010 Employee Long-Term Equity Incentive Plan [Member] | ||
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 2,016 | 2,015 |
Restricted Stock [Member] | 2015 Directors Plan [Member] | ||
5. 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 |
5. Stock Options, Restricted S
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Abstract] | ||||
Share-based compensation expense | $ 221 | $ 167 | $ 721 | $ 482 |
5. Stock Options, Restricted32
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Number of Shares, Outstanding | 2,609,445 | 2,091,325 |
Weighted Average Exercise Price, Outstanding | $ 2.83 | $ 2.45 |
Weighted Average Remaining Contractual Term, Outstanding | 6 years 105 days | 6 years 32 days |
Aggregate Intrinsic Value, Outstanding | $ 2,015 | $ 3,277 |
Granted | 1,055,300 | |
Granted | $ 3.58 | |
Forfeited | (372,045) | |
Forfeited | $ 3.14 | |
Exercised | (165,135) | |
Exercised | $ 2.02 | |
Exercisable at September 30, 2016 | 1,351,760 | |
Exercisable at September 30, 2016 | $ 2.26 | |
Exercisable at September 30, 2016 | 3 years 215 days | |
Exercisable at September 30, 2016 | $ 1,814 |
5. Stock Options, Restricted33
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Abstract] | ||||
Weighted average fair value of options granted (in Dollars per share) | $ 1.61 | $ 1.42 | $ 1.63 | $ 1.38 |
Intrinsic value of options exercised | $ 78,607 | $ 105,450 | $ 261,061 | $ 386,408 |
Cash received from stock options exercised | $ 70,320 | $ 98,706 | $ 333,329 | $ 416,680 |
Number of options that vested (in Shares) | 42,390 | 93,290 | 308,736 | 274,824 |
Fair value of options that vested | $ 42,565 | $ 97,679 | $ 418,877 | $ 296,886 |
Unrecognized compensation expense related to non-vested options at end of period | $ 1,609,593 | $ 753,846 | $ 1,609,593 | $ 753,846 |
Weighted average years over which non-vested option expense will be recognized | 2 years 109 days | 2 years | 2 years 109 days | 2 years |
5. Stock Options, Restricted34
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 2,609,445 |
Underlying Shares, Options Outstanding (in Shares) | shares | 1,351,760 |
$0.85 - $1.43 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 168,600 |
Range of Exercise Price, Upper Limit | $ 1.16 |
Underlying Shares, Options Outstanding (in Shares) | shares | 168,600 |
Weighted Average Remaining Contractual Life, Options Outstanding | 1 year 58 days |
$1.47 - $2.32 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 612,995 |
Range of Exercise Price, Upper Limit | $ 1.82 |
Underlying Shares, Options Outstanding (in Shares) | shares | 607,255 |
Weighted Average Remaining Contractual Life, Options Outstanding | 1 year 299 days |
$2.34 - $3.52 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 1,319,850 |
Range of Exercise Price, Upper Limit | $ 3.13 |
Underlying Shares, Options Outstanding (in Shares) | shares | 445,905 |
Weighted Average Remaining Contractual Life, Options Outstanding | 2 years 270 days |
$3.53 - $4.21 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 508,000 |
Range of Exercise Price, Upper Limit | $ 3.83 |
Underlying Shares, Options Outstanding (in Shares) | shares | 130,000 |
Weighted Average Remaining Contractual Life, Options Outstanding | 4 years 36 days |
5. Stock Options, Restricted35
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract] | ||||
Expected volatility | 54.00% | 56.00% | 55.00% | 57.00% |
Expected annual dividend yield | 1.50% | 2.40% | 1.50% | 2.40% |
Risk free rate of return | 1.18% | 1.75% | 1.46% | 1.59% |
Expected option term (years) | 6 years | 6 years | 6 years | 6 years |
5. Stock Options, Restricted36
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Unrecognized compensation expense for non-vested shares as of September 30,2016 | ||||
Weighted average number of months over which expense is expected to be recognized | 2 years 109 days | 2 years | 2 years 109 days | 2 years |
Restricted Stock [Member] | ||||
5. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity [Line Items] | ||||
Restricted Shares Outstanding at December 31, 2015 | 80,000 | |||
Restricted Shares Outstanding at December 31, 2015 | $ 3.34 | |||
Shares granted with restrictions | 80,000 | |||
Shares granted with restrictions | $ 3.31 | |||
Shares vested and restrictions removed | (80,000) | |||
Shares vested and restrictions removed | $ 3.34 | |||
Shares vested and restrictions removed | $ 276,000 | |||
Restricted Shares Outstanding at September 30, 2016 | 80,000 | 80,000 | ||
Restricted Shares Outstanding at September 30, 2016 | $ 3.31 | $ 3.31 | ||
Unrecognized compensation expense for non-vested shares as of September 30,2016 | ||||
Expense to be recognized in future periods | $ 156,999 | $ 156,999 | ||
Weighted average number of months over which expense is expected to be recognized | 7 years |
6. Income Taxes (Details)
6. Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
6. Income Taxes (Details) [Line Items] | ||
Tax Credit Carryforward, Amount | $ 110,000 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Deferred Tax Assets, Net, Noncurrent | $ 1,012,000 | |
Scenario, Previously Reported [Member] | ||
6. Income Taxes (Details) [Line Items] | ||
Deferred Tax Assets, Net, Current | $ 1,100,000 | 313,000 |
Deferred Tax Assets, Net, Noncurrent | $ 699,000 | |
Domestic Tax Authority [Member] | ||
6. Income Taxes (Details) [Line Items] | ||
Operating Loss Carryforwards | $ 312,000 | |
Domestic Tax Authority [Member] | Minimum [Member] | ||
6. Income Taxes (Details) [Line Items] | ||
Federal Net Operating Loss Carryforwards Expiration Year | 2,030 | |
Domestic Tax Authority [Member] | Maximum [Member] | ||
6. Income Taxes (Details) [Line Items] | ||
Federal Net Operating Loss Carryforwards Expiration Year | 2,031 |
6. Income Taxes (Details) - Sc
6. Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||||
Federal | $ 688 | $ 797 | $ 1,214 | $ 1,812 |
Federal | (81) | (254) | (21) | (313) |
Federal | 607 | 543 | 1,193 | 1,499 |
Foreign | 12 | 6 | 37 | 33 |
Foreign | 0 | 0 | 0 | |
Foreign | 12 | 6 | 22 | 33 |
State | 72 | (4) | 133 | 60 |
State | (4) | (3) | (15) | (7) |
State | 68 | (7) | 133 | 53 |
Total | 772 | 799 | 1,384 | 1,905 |
Total | (85) | (257) | (36) | (320) |
Total | $ 687 | $ 542 | $ 1,348 | $ 1,585 |
6. Income Taxes (Details) - Fe
6. Income Taxes (Details) - Federal Income Tax, Current - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Federal Income Tax, Current [Abstract] | ||||
Current federal income tax expense in the statement of operations | $ 687 | $ 542 | $ 1,348 | $ 1,585 |
Tax (deficiency) from stock-based compensation recorded in additional paid-in capital | (13) | (15) | (26) | (59) |
Current taxes per our federal income tax return | $ 674 | $ 527 | $ 1,322 | $ 1,526 |
6. Income Taxes (Details) - 40
6. Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Share-based compensation | $ 718 | $ 677 |
Deferred revenue | 1,185 | 1,154 |
Net operating loss carryforward | 106 | 151 |
Compensation and benefits | 164 | 168 |
Allowance for doubtful accounts | 114 | 111 |
Other | 52 | 33 |
Total deferred tax assets | 2,339 | 2,294 |
Deferred tax liabilities: | ||
Intangible assets | 1,356 | 1,339 |
Depreciation | 7 | 15 |
Total gross deferred tax liabilities | 1,363 | 1,354 |
Net deferred tax assets | $ 976 | $ 940 |
6. Income Taxes (Details) - 41
6. Income Taxes (Details) - Schedule of Unrecognized Tax Benefits Roll Forward - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Unrecognized Tax Benefits Roll Forward [Abstract] | ||
Balance at beginning of year | $ 90 | $ 125 |
Balance at September 30 and December 31, respectively | 110 | 90 |
Increases for tax positions related to the current year | 9 | 0 |
Increases for tax positions related to prior years | 11 | 48 |
Decreases for tax positions related to prior years | 0 | (51) |
Decreases due to settlements related to prior years | $ 0 | $ (32) |
6. Income Taxes (Details) - 42
6. Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||||
Income tax expense (benefit) at federal statutory rate | $ 710 | $ 603 | $ 1,397 | $ 1,685 |
Increase (decrease) in taxes resulting from: | ||||
State taxes, net of federal benefit | 44 | (5) | 72 | 33 |
Incentive stock options | 25 | 0 | 60 | 0 |
Other | (1) | (13) | 20 | 8 |
R&D tax credit uncertain tax position (net) | 10 | 110 | 21 | 59 |
Research and development credit | (55) | (123) | (119) | (123) |
Domestic production activities deduction | (46) | (30) | (103) | (77) |
Income tax expense (benefit) per the statement of operations | $ 687 | $ 542 | $ 1,348 | $ 1,585 |
7. Earnings per Common Share (
7. Earnings per Common Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net income (in Dollars) | $ 1,399 | $ 1,230 | $ 2,761 | $ 3,370 |
Weighted average shares outstanding - basic | 21,122 | 20,892 | 21,061 | 20,782 |
Stock options | 552 | 548 | 579 | 512 |
Weighted average shares outstanding - diluted | 21,674 | 21,440 | 21,640 | 21,294 |
Net income per common share - basic (in Dollars per share) | $ 0.07 | $ 0.06 | $ 0.13 | $ 0.16 |
Net income per common share - diluted (in Dollars per share) | $ 0.06 | $ 0.06 | $ 0.13 | $ 0.16 |
8. Dividends (Details) - Sched
8. Dividends (Details) - Schedule of Dividends Payable - $ / shares | 3 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | |
Schedule of Dividends Payable [Abstract] | |||
Dividend per share of common stock | $ 0.015 | $ 0.015 | $ 0.015 |
Dividend record date | Aug. 23, 2016 | May 23, 2016 | Feb. 23, 2016 |
Dividend payment date | Sep. 9, 2016 | Jun. 1, 2016 | Mar. 3, 2016 |
9. Commitments and Contingenc45
9. Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2016USD ($) |
Loss Contingency [Abstract] | |
Other Commitment | $ 1.6 |
10. Concentration of Business46
10. Concentration of Business Volume and Credit Risk (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Sales Revenue, Net [Member] | |||
10. Concentration of Business Volume and Credit Risk (Details) [Line Items] | |||
Concentration Risk, Percentage | 17.00% | 14.00% | 10.00% |
Accounts Receivable [Member] | |||
10. Concentration of Business Volume and Credit Risk (Details) [Line Items] | |||
Concentration Risk, Percentage | 40.00% |
11. Segment and Geographic Di47
11. Segment and Geographic Disclosures (Details) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
11. Segment and Geographic Disclosures (Details) [Line Items] | ||||
Concentration Risk, Percentage | 17.00% | 14.00% | 10.00% | |
UNITED STATES | ||||
11. Segment and Geographic Disclosures (Details) [Line Items] | ||||
Concentration Risk, Percentage | 83.00% | 78.00% | 78.00% | 76.00% |