Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | GLOBALSCAPE INC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 17,228,241 | ||
Entity Public Float | $ 51,583,172 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001112920 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 9,173 | $ 11,583 |
Short term certificates of deposit | 0 | 4,291 |
Accounts receivable, net | 6,657 | 5,925 |
Federal income tax receivable | 0 | 822 |
Prepaid expenses and other | 1,521 | 675 |
Total current assets | 17,351 | 23,296 |
Long term certificates of deposit | 0 | 11,503 |
Capitalized software development costs, net | 3,133 | 3,786 |
Goodwill | 12,712 | 12,712 |
Deferred tax asset, net | 395 | 651 |
Property and equipment, net | 399 | 481 |
Other assets | 502 | 84 |
Total assets | 34,492 | 52,513 |
Current liabilities: | ||
Accounts payable | 820 | 1,900 |
Accrued expenses | 1,214 | 1,671 |
Income Tax Payable | 148 | 0 |
Deferred revenue | 13,301 | 13,315 |
Total current liabilities | 15,483 | 16,886 |
Deferred revenue, non-current portion | 2,936 | 3,735 |
Other long term liabilities | 117 | 176 |
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, 22,441,860 and 22,196,712 shares issued at December 31, 2018 and December 31, 2017, respectively | 22 | 22 |
Additional paid-in capital | 25,584 | 23,793 |
Treasury stock, 5,310,942 and 403,581 shares, at cost, at December 31, 2018 and December 31, 2017, respectively | (22,712) | (1,452) |
Retained earnings | 13,062 | 9,353 |
Total stockholders’ equity | 15,956 | 31,716 |
Total liabilities and stockholders’ equity | $ 34,492 | $ 52,513 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 22,441,860 | 22,196,712 |
Treasury stock, shares | 5,310,942 | 403,581 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating revenues: | ||
Total Revenues | $ 34,416 | $ 33,891 |
Costs of revenues | ||
Total cost of revenues | 6,236 | 6,213 |
Gross profit | 28,180 | 27,678 |
Operating expenses | ||
Sales and marketing | 10,009 | 12,840 |
General and administrative | 6,382 | 6,117 |
Legal and Professional | 4,623 | 2,949 |
Severance | 488 | 29 |
Research and development | 1,883 | 3,121 |
Total operating expenses | 23,385 | 25,056 |
Income (loss) from operations | 4,795 | 2,622 |
Other income (expense): | ||
Interest income (expense), net | 86 | 296 |
Total other income (expense) | 86 | 296 |
Income (loss) before income taxes | 4,881 | 2,918 |
Income tax expense (benefit) | 1,227 | 1,547 |
Net income (loss) | 3,654 | 1,371 |
Comprehensive income (loss) | $ 3,654 | $ 1,371 |
Basic (in Dollars per share) | $ 0.18 | $ 0.06 |
Diluted (in Dollars per share) | $ 0.17 | $ 0.06 |
Weighted average shares outstanding: | ||
Basic (in Shares) | 20,721 | 21,702 |
Diluted (in Shares) | 21,017 | 22,154 |
Software and Licenses [Member] | ||
Operating revenues: | ||
Revenues | $ 10,512 | $ 10,929 |
Costs of revenues | ||
Cost of revenues | 2,978 | 2,986 |
Maintenance [Member] | ||
Operating revenues: | ||
Revenues | 21,587 | 20,761 |
Costs of revenues | ||
Cost of revenues | 2,093 | 1,763 |
Professional Services [Member] | ||
Operating revenues: | ||
Revenues | 2,317 | 2,201 |
Costs of revenues | ||
Cost of revenues | $ 1,165 | $ 1,464 |
Consolidated Statement of Stock
Consolidated Statement of Stockholder' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2016 | $ 22 | $ 21,756 | $ (1,452) | $ 9,289 | $ 29,615 |
Balance (in Shares) at Dec. 31, 2016 | 21,920,912 | ||||
Shares issued upon exercise of stock options | 471 | $ 471 | |||
Shares issued upon exercise of stock options (in Shares) | 195,800 | 195,800 | |||
Stock options | 1,257 | $ 1,257 | |||
Restricted stock | 309 | 309 | |||
Restricted stock (in Shares) | 80,000 | ||||
Common stock cash dividends | (1,307) | (1,307) | |||
Net income | 1,371 | 1,371 | |||
Balance at Dec. 31, 2017 | $ 22 | 23,793 | (1,452) | 9,353 | 31,716 |
Balance (in Shares) at Dec. 31, 2017 | 22,196,712 | ||||
Retained Earnings Adjustment due to ASC 606 | 979 | 979 | |||
Purchase of Treasury Stock | (21,260) | (21,260) | |||
Cancellation of Restricted Stock (in Shares) | (40,000) | ||||
Shares issued upon exercise of stock options | 522 | $ 522 | |||
Shares issued upon exercise of stock options (in Shares) | 205,148 | 205,148 | |||
Stock options | 1,055 | $ 1,055 | |||
Restricted stock | 214 | 214 | |||
Restricted stock (in Shares) | 80,000 | ||||
Common stock cash dividends | (924) | (924) | |||
Net income | 3,654 | 3,654 | |||
Balance at Dec. 31, 2018 | $ 22 | $ 25,584 | $ (22,712) | $ 13,062 | $ 15,956 |
Balance (in Shares) at Dec. 31, 2018 | 22,441,860 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholder' Equity (Parentheticals) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Common stock cash dividends per share | $ 0.045 | $ 0.060 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities: | ||
Net income | $ 3,654,000 | $ 1,371,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debt expense (recovery) | (88,000) | 17,000 |
Depreciation and amortization | 2,173,000 | 2,144,000 |
Stock-based compensation | 1,269,000 | 1,566,000 |
Deferred taxes | (4,000) | 399,000 |
Subtotal before changes in operating assets and liabilities | 7,004,000 | 5,497,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (644,000) | 346,000 |
Prepaid expenses | (216,000) | (144,000) |
Federal income taxes | 970,000 | (530,000) |
Accrued interest receivable | 0 | (261,000) |
Other assets | 191,000 | 161,000 |
Accounts payable | (1,080,000) | 970,000 |
Accrued expenses | (457,000) | 68,000 |
Deferred revenues | (813,000) | (395,000) |
Other long-term liabilities | (59,000) | 24,000 |
Net cash provided by operating activities | 4,896,000 | 5,736,000 |
Investing Activities: | ||
Software development costs | (1,276,000) | (1,926,000) |
Purchase of property and equipment | (162,000) | (286,000) |
Redemption of certificates of deposit | 15,794,000 | 0 |
Net cash provided by (used in) investing activities | 14,356,000 | (2,212,000) |
Financing Activities: | ||
Proceeds from exercise of stock options | 522,189 | 471,789 |
Purchase of Treasury Stock | (21,260,000) | 0 |
Dividends paid | (924,000) | (1,307,000) |
Net cash (used in) financing activities | (21,662,000) | (836,000) |
Net increase (decrease) in cash | (2,410,000) | 2,688,000 |
Cash at beginning of period | 11,583,000 | 8,895,000 |
Cash at end of period | 9,173,000 | 11,583,000 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income taxes | $ 253,000 | $ 1,649,000 |
1. Nature of Business
1. Nature of Business | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Nature of Operations [Text Block] | 1. Nature of Business We provide secure information exchange capabilities for enterprises and consumers through the development and distribution of software, delivery of managed and hosted solutions, and provisioning of associated services. Our solution portfolio facilitates transmission of critical information such as financial data, medical records, customer files, vendor files, personnel files, transaction activity, and other similar documents between diverse and geographically separated network infrastructures while supporting a range of information protection approaches to meet privacy and other security requirements. In addition to enabling secure, flexible transmission of critical information using servers, desktop and notebook computers, and a wide range of network-enabled mobile devices, our products also provide customers with the ability to monitor and audit file transfer activities. Our primary product is Enhanced File Transfer, or EFT. We have other products that complement our EFT product. Throughout these notes, unless otherwise noted, our references to 2018 and 2017 refer to the years ended December 31, 2018 and 2017, respectively. |
2. Significant Accounting Polic
2. Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. Significant Accounting Policies Basis of Presentation We follow accounting standards set by the Financial Accounting Standards Board. This board sets GAAP, which we follow in preparing financial statements that report our financial position, results of operations, and sources and uses of cash. We also follow the reporting regulations of the SEC. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our financial statements. It is possible the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations. Principles of Consolidation The accompanying consolidated financial statements of GlobalSCAPE, Inc. and its wholly-owned subsidiary (collectively referred to as “GlobalSCAPE”, the “Company” or “we”) are prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated. Revenue Recognition Products and Services We earn revenue by delivering the following software products and services: ● Perpetual software licenses under which customers install our products in their information systems environment on computers they manage, own or otherwise procure from a cloud services provider. Customers also deploy our products with cloud services providers in a BYOL environment. ● Cloud-based, hosted SaaS solutions that we sell on an ongoing subscription basis resulting in our earning recurring, monthly subscription and usage fees to access the service. ● Maintenance and support services, or M&S, that generally consist of telephone support and access to unspecified future software upgrades. ● Professional services for product integration and configuration that generally do not significantly modify our software products. We earn the majority of our revenue from the sale of perpetual software licenses and associated contracts for M&S. We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to a customer. We measure revenue based upon the consideration set forth in an arrangement or contract with a customer. The revenue recognition criteria we apply to each of our software products and services are as follows: ● Perpetual software licenses – These licenses grant a right to use our functional intellectual property. We recognize revenue at the point in time when we electronically deliver to our customer the software license key that provides the ability to access and use our product. If our customer is a reseller who will further transfer the ability to access and use our product to a third party under a separate arrangement that the reseller has with that third party, we recognize revenue at the time we deliver the software license key to the reseller since our contract is with the reseller. ● Cloud-based, hosted SaaS solutions – These solutions grant a right to access our functional intellectual property. We recognize revenue over time on a monthly basis as we deliver the services to which our customers subscribe. Revenue can include basic monthly fees to access the software and usage fees based upon the volume of certain resources the customer consumes (such as volumes of storage or bandwidth). We are generally paid for these services on a month-to-month basis, but if a customer pays us in advance for services we will deliver in the future, we record as deferred revenue the amount of such payment related to services we have not yet delivered. ● M&S – We provide these services to purchasers of perpetual software licenses under agreements with terms generally ranging from one to three years. We require up-front payment of our M&S fee in an amount that covers the entire term of the agreement. We record as deferred revenue amounts paid that relate to future periods during which we will provide the M&S service. We reduce deferred revenue and recognize revenue ratably in future periods as we deliver the M&S service. ● Professional services – We recognize revenue from these services when the services are completed. If we are paid in advance for these services, we record such payment as deferred revenue until we complete the services. The delivery of our software products and services generally does not involve any variable consideration, financing components or consideration payable to a customer such as rebates or other incentives that reduce amounts owed to us by customers. Deferred Revenue Classification and Activity Deferred revenue related to services we will deliver within one year is presented as a current liability. Deferred revenue related to services that we will deliver more than one year into the future is presented as a non-current liability. The activity in our deferred revenue balances has been as follows ($in thousands): Year Ended December 31, 2018 2017 Deferred revenue, beginning of period $ 17,050 $ 17,445 Deferred revenue resulting from new contracts with customers 21,577 20,451 Deferred revenue at the beginning of the period that was amortized to revenue (20,244 ) (19,248 ) Deferred revenue arising during the period that was amortized to revenue (2,146 ) (1,598 ) Deferred revenue, end of period $ 16,237 $ 17,050 Multi-Element Transactions At the time customers purchase perpetual software licenses, they also typically purchase M&S although it is not mandatory. We do not sell separate M&S to subscribers to our SaaS solutions as M&S is provided as part of their SaaS subscription. Customers may also purchase professional services at the time they purchase perpetual software licenses or a SaaS subscription. Each of the components of these multi-element transactions is a separately identifiable performance obligation. For multi-element transactions, we allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. We determine that stand-alone selling price for each item at the inception of the transaction involving these multiple elements. We sell, as stand-alone transactions, renewals of pre-existing M&S contracts, professional services to customers seeking assistance with products they have previously purchased from us, or SaaS subscriptions to customers not requiring any of our other products or services. Accordingly, we are able to estimate the stand-alone selling price of these items based upon our observation of those transactions. Since most of our sales of perpetual software licenses are part of multi-element transactions that also involve M&S and/or professional services, and because the selling price of those licenses can vary significantly among customers, we use the residual approach under FASB Accounting Standards Codification Top 606, or ASC 606, to estimate the selling price of perpetual software licenses in a multi-element transaction by reference to the total transaction price less the sum of the observable stand-alone selling prices of M&S and/or professional services. We allocate discounts proportionally to all of the components of a multi-element transaction. Sales Tax We collect sales tax on many of our transactions with customers as required under applicable law. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. Allowance for Sales Returns We provide an allowance for sales returns. We estimate this allowance based upon our historical experience and the nature of recent transactions with customers. This amount is included in accrued liabilities in our consolidated balance sheet. Contract Assets We generally bill customers for professional services when we have fully delivered the services specified in the contract. We may incur costs in delivering the services prior to that time. Such costs are generally not material. Accordingly, we do not record a contract asset for professional service engagements in process but not yet billed. Incremental Costs of Obtaining a Contract to Deliver Goods and Services We incur incremental costs in the form of sales commissions paid to our sales personnel and royalties on certain products paid to third parties. These are costs we would not incur if we did not obtain a contract to deliver our goods and services. We account for these costs as follows: ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the customer relationship. Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($in thousands): Year Ended December 31, 2018 Deferred cost, beginning of period $ 1,240 Deferred cost resulting from new contracts with customers 674 Deferred cost amortized to expense (905 ) Deferred cost, end of period $ 1,009 At December 31, 2018, $571,000 was recorded in prepaid and other current assets and $438,000 was recorded in noncurrent other assets in our consolidated balance sheet. GlobalSCAPE, Inc. Condensed Consolidated Balance Sheet (in thousands) As of December 31, 2018 The following tables present our reported results under ASC 606 and a reconciliation to results using the historical accounting method: As Reported Effect of ASC 606 ASC 605 Historical Assets Current assets: Cash and cash equivalents $ 9,173 $ 9,173 Certificates of deposit, short term - - Accounts receivable, net 6,657 (75 ) 6,582 Federal income tax receivable - - Prepaid and other current assets 1,521 (571 ) 950 Total current assets 17,351 (646 ) 16,705 Capitalized software development costs, net 3,133 3,133 Goodwill 12,712 12,712 Deferred tax asset, net 395 137 532 Property and equipment, net 399 399 Other assets 502 (438 ) 64 Total assets $ 34,492 $ (947 ) $ 33,545 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable 820 820 Accrued expenses 1,214 (75 ) 1,139 Federal income tax payable 148 (66 ) 82 Deferred revenue 13,301 13,301 Total current liabilities 15,483 (141 ) 15,342 Deferred revenue, non-current portion 2,936 2,936 Other long term liabilities 117 117 Stockholders' Equity: Preferred stock - - Common stock 22 22 Additional paid-in capital 25,584 25,584 Treasury stock (22,712 ) (22,712 ) Retained earnings 13,062 (806 ) 12,256 Total stockholders’ equity 15,956 (806 ) 15,150 Total liabilities and stockholders’ equity $ 34,492 $ (947 ) $ 33,545 GlobalSCAPE, Inc. Condensed Consolidated Statement of Operations and Comprehensive Income (in thousands, except per share amounts) For the Year Ended December 31, 2018 As Reported Effect of ASC 606 ASC 605 Historical Operating revenues: Software licenses $ 10,512 $ 10,512 Maintenance and support 21,587 21,587 Professional services 2,317 2,317 Total revenues 34,416 - 34,416 Costs of revenues Software licenses 2,978 (26 ) 2,952 Maintenance and support 2,093 2,093 Professional services 1,165 1,165 Total costs of revenues 6,236 (26 ) 6,210 Gross Profit 28,180 26 28,206 Operating expenses Sales and marketing 10,009 (205 ) 9,804 General and administrative 6,382 6,382 Legal and professional 4,623 4,623 Severance 488 488 Research and development 1,883 1,883 Total operating expenses 23,385 (205 ) 23,180 Income from operations 4,795 231 5,026 Interest income (expense), net 86 86 Income before income taxes 4,881 231 5,112 Income tax expense 1,227 58 1,285 Net income $ 3,654 $ 173 $ 3,827 Comprehensive income $ 3,654 $ 173 $ 3,827 Net income per common share - basic $ 0.18 $ 0.01 $ 0.18 Net income per common share - diluted $ 0.17 $ 0.01 $ 0.18 GlobalSCAPE, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2018 As Reported Effect of ASC 606 ASC 605 Historical Operating Activities: Net Income $ 3,654 173 $ 3,827 Items not involving cash at the time they are recorded in the statement of operations: Provision (recoveries) for doubtful accounts receivable (88 ) (88 ) Depreciation and amortization 2,173 2,173 Share-based compensation 1,269 1,269 Deferred taxes (4 ) (4 ) Subtotal before changes in operating assets and liabilities 7,004 173 7,177 Changes in operating assets and liabilities: Accounts receivable (644 ) (75 ) (719 ) Prepaid and other current assets (216 ) (107 ) (323 ) Deferred revenues (813 ) (813 ) Accounts payable (1,080 ) (1,080 ) Accrued expenses (457 ) 75 (382 ) Other assets 191 191 Accrued interest receivable - - Other long-term liabilities (59 ) (59 ) Federal income tax payable 970 (66 ) 904 Net cash provided by operating activities 4,896 - 4,896 Investing Activities: Software development costs (1,276 ) (1,276 ) Purchase of property and equipment (162 ) (162 ) Redemption of Certificates of Deposit 15,794 15,794 Net cash provided by investing activities 14,356 - 14,356 Financing Activities: Proceeds from exercise of stock options 522 522 Purchase of treasury stock (21,260 ) (21,260 ) Dividends paid (924 ) (924 ) Net cash used in financing activities (21,662 ) - (21,662 ) Net increase in cash (2,410 ) (2,410 ) Cash at beginning of period 11,583 - 11,583 Cash at end of period $ 9,173 $ - $ 9,173 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $ - Income tax payments $ 253 $ 253 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. These certificates of deposit are stated at amortized cost, which approximates fair value of these investments. In 2018, we redeemed our certificates to assist with funding the modified Dutch tender offer. Long-Term Investments Long-term investments consist of certificates of deposit held with financial institutions with contractual maturity dates greater than one year from the balance sheet date. These certificates of deposit are stated at amortized cost, which approximates the fair value of these investments. Fair Value of Financial Instruments For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. As of December 31, 2018, we did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy of valuation techniques. In addition, certain non-financial assets and liabilities are to be initially measured at fair value on a non-recurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, capitalized software and property and equipment are measured at fair value using Level 3 inputs, which result in management’s best estimate of fair value from the perspective of a market participant, when there is an indication of impairment and are recorded at fair value only when impairment is recognized. Our financial instruments consist principally of cash and cash equivalents, certificates of deposit, accounts receivable and accounts payable. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable, approximates fair value due to the short term maturity of these instruments, all of which mature within 12 months. The carrying amount of our certificates of deposit approximates fair value based on interest rates readily available in the market with similar terms. 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 using December 31 as the measurement date. 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, 2018, 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 program plan and 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 and our method of amortizing them relative to our estimates of realizability through sales of products in the marketplace. Cost of revenue Cost of revenue consists of expenses associated with the production, delivery and support of the products and services we sell. Cost of license revenue consists primarily of amortization of the capitalized software development costs we incur when producing our software products, royalties we pay to use software developed by others for certain features of our products, and fees we pay to third parties who provide services supporting our SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related costs of our employees and third parties we use to deliver these services. 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 approximately $807,000 and $1.9 million 2018 and 2017, 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 consolidated 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 percent likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. We record the effects of new tax legislation in the period in which it is signed into law. 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. Changes in Accounting Methods, Reclassifications and Revisions As part of our ongoing enhancement and refinement of our financial reporting to fairly present our results of operations and financial position, we may make changes from time-to-time in accounting methods and in the classification and presentation of our business activities in our consolidated financial statements. To ensure comparability between periods, we revise previous period consolidated financial statements presented to conform them to the method of presentation in our current period consolidated financial statements. If the changes increase or decrease previously reported amounts of revenue or expenses, we adjust retained earnings as of the beginning of the earliest period presented for the cumulative effect, if any, on that balance. If these changes affect our financial statements for previously reported interim periods not presented herein, we present revised consolidated financial statements for those periods when they are reported in the future. Recent accounting pronouncements ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (issued September 2017) – ASU 2017-04, Intangibles – Goodwill and Other (issued January 2017) - ASU 2016-13, Financial Instruments – Credit Losses (issued June 2016) ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (issued March 2016) – This standard also permits an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures may be either estimated (as has been the requirement in the past) or recognized when they occur. We elected to continue estimating forfeitures consistent with our existing practices thereby resulting in no change to our application of GAAP for this aspect of computing share-based compensation. ASU 2016-02, Leases (issued February 2016) - ASU 2014-09, Revenue from Contracts with Customers (issued May 2014) ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the customer relationship. |
3. Accounts Receivable, Net
3. Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 3. Accounts Receivable, Net We bill our customers and issue them an invoice when we have delivered our goods or services to them. In addition, when our customers agree to purchase or renew M&S services, we bill and invoice our customers at that time, which could be before the date we begin delivering those services. In that event, we exclude from accounts receivable (and from the related deferred revenue, see Note 6) the invoices we have issued for which the M&S services commencement date is in the future and which have not been paid by the customer as of the date of our financial statements. We continually assess the collectability of our accounts receivable. If we deem it less than probable that we will collect an amount due us, we write-off that balance against our allowance for doubtful accounts. We determine our accounts receivable, net, as follows ($ in thousands): December 31, 2018 2017 Total invoices issued and unpaid $ 7,990 $ 6,644 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,233 ) (441 ) Gross accounts receivable 6,757 6,203 Allowance for sales returns - (100 ) Allowance for doubtful accounts (100 ) (178 ) Accounts receivable, net $ 6,657 $ 5,925 The activity in our allowance for doubtful accounts and sales returns has been as follows ($ in thousands): Year Ended December 31, 2018 2017 Balance, beginning of period $ 278 $ 263 ASC 606 Adjustment (100 ) - Provision for sales returns - - Provision for doubtful accounts (88 ) 17 Accounts written off 10 (2 ) Balance, end of period $ 100 $ 278 |
4. Property and Equipment, Net
4. Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 4. Property and Equipment, Net Property and equipment, at cost, and the related accumulated depreciation consist of the following ($ in thousands): December 31, 2018 2017 Furniture and fixtures $ 835 $ 786 Software 669 662 Equipment 1,558 1,469 Leasehold improvements 559 559 3,621 3,476 Less accumulated depreciation (3,222 ) (2,995 ) Property and equipment, net $ 399 $ 481 |
5. Capitalized Software Develop
5. Capitalized Software Development Costs, Net | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | 5. Capitalized Software Development Costs, Net Our capitalized software development costs balances and activity were as follows ($ in thousands): December 31, 2018 2017 Gross capitalized cost $ 10,454 $ 9,179 Accumulated amortization (7,321 ) (5,393 ) Net balance $ 3,133 $ 3,786 Year Ended December 31, 2018 2017 Amount capitalized $ 1,276 $ 1,926 Amortization expense $ (1,929 ) $ (1,883 ) Released Unreleased Products Products Gross capitalized at December 31, 2018 $ 9,624 $ 830 Accumulated amortization (7,321 ) - Net balance $ 2,303 $ 830 Future amortization expense for the year ending December 31, 2019 $ 1,328 2020 857 2021 118 Total $ 2,303 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. |
6. Deferred Revenue
6. Deferred Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 6. Deferred Revenue As described in Note 3 regarding accounts receivable, when our customers agree to purchase or renew M&S services, we bill and invoice our customers at that time which could be before the date we begin delivering those services. In that event, we exclude from deferred revenue (and from the related accounts receivable) the invoices we have issued for which the M&S services commencement date is in the future and which have not been paid by the customer as of the date of our consolidated financial statements. Accordingly, we determine our deferred revenue as follows ($ in thousands): December 31 2018 2017 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 17,470 $ 17,491 Less: Unpaid invoices at December 31 relating to M&S agreements with a start date subsequent to the balance sheet date (1,233 ) (441 ) Total deferred revenue at December 31 $ 16,237 $ 17,050 Deferred revenue, current portion $ 13,301 $ 13,315 Deferred revenue, non-current portion 2,936 3,735 Total deferred revenue $ 16,237 $ 17,050 |
7. Commitments and Contingencie
7. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 7. Commitments and Contingencies Leases We have an operating lease related to our office space. Minimum rental commitments under operating leases at December 31, 2018 are as follows ($ in thousands): Year Ending December 31, 2019 120 Total $ 120 Rent expense under operating leases was $347,000 in 2018 and 2017. We had a deferred rent liability of $4,000 at December 31, 2018, which we amortize to rent expense on a straight-line basis over the remaining life of the applicable lease. Subsequent to year end we entered into a memorandum of understanding to extend the lease for 10 years at an average annual rent of $408,000. Severance Payments 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 approximately $1.3 million. Legal and Regulatory Matters As previously disclosed in the Company’s Current Report on Form 8-K filed on November 15, 2017, on August 9, 2017, a securities class action complaint, Anthony Giovagnoli v. GlobalSCAPE, Inc. On October 20, 2017, the Company received a demand letter from a stockholder seeking the inspection of books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law (the “Section 220 Demand”). This stockholder’s stated purpose for the demand is, inter alia On October 12, 2018, and November 30, 2018 the Company received letters from stockholders demanding that the Company take action to remedy alleged harm caused to the Company, including to remedy alleged breaches of fiduciary duties by certain current and/or former directors and executive officers of the Company. The stockholder alleges, inter alia, that certain current and former directors and executive officers violated their fiduciary duties beginning at least in July 2016, causing the Company to suffer damages by overstating financial results for the fourth quarter of 2016. The Board has established a special litigation committee (“Special Litigation Committee”) consisting of Thomas Hicks and Frank Morgan to analyze and investigate claims that could potentially be asserted in stockholder derivative litigation related to facts connected to the claims and allegations asserted in the litigation related to the Restatement and the Section 220 Demand (the “Potential Derivative Litigation”). The Special Litigation Committee will determine what actions are appropriate and in the best interests of the Company, and decide whether it is in the best interests of the Company to pursue, dismiss, or consensually resolve any claims that may be asserted in the Potential Derivative Litigation. The Board determined that each member of the Special Litigation Committee is disinterested and independent with respect to the Potential Derivative Litigation. Among other things, the Special Litigation Committee has the power to retain counsel and advisors, as appropriate, to assist it in the investigation, to gather and review relevant documents relating to the claims, to interview persons who may have knowledge of the relevant information, to prepare a report setting forth its conclusions and recommended course of action with respect to the Potential Derivative Litigation, and to take any actions, including, without limitation, directing the filing and prosecution of litigation on behalf of the Company, as the Special Litigation Committee in its sole discretion deems to be in the best interests of the Company in connection with the Potential Derivative Litigation. The Special Litigation Committee’s findings and determinations shall be final and not subject to review by the Board and in all respects shall be binding upon the Company. As disclosed in a Current Report on Form 8-K filed on March 16, 2018, the Fort Worth, Texas Regional Office of the SEC has opened a formal investigation of issues relating to the Restatement, with which the Company is cooperating fully. At this time, the Company is unable to predict the duration, scope, result or related costs associated with the SEC’s investigation. The Company is also unable to predict what, if any, action may be taken by the SEC, or what penalties or remedial actions the SEC may seek. Any determination by the SEC that the Company’s activities were not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses, which could have a material adverse effect on the Company’s financial position, liquidity, or results of operations. On May 31, 2018, the Company was served with a subpoena issued by a grand jury sitting in the United States District Court for the Western District of Texas (the “Grand Jury Subpoena”). The Grand Jury Subpoena requests all documents and emails relating to the Company’s investigation of the potential improper recognition of software license revenue. The Company intends to fully cooperate with the Grand Jury Subpoena and related investigation being conducted by the United States Attorney’s Office for the Western District of Texas (the “U.S. Attorney’s Investigation”). At this time, the Company is unable to predict the duration, scope, result or related costs of the U.S. Attorney’s Investigation. The Company is also unable to predict what, if any, further action may be taken in connection with the Grand Jury Subpoena and the U.S. Attorney’s Investigation, or what, if any, penalties, sanctions or remedial actions may be sought. Any determination by the U.S. Attorney’s office that the Company’s activities were not in compliance with existing laws or regulations, however, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses, which could have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations. |
8. Stock Options, Restricted St
8. Stock Options, Restricted Stock and Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 8. 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): Year Ended December 31, 2018 2017 Share-based compensation expense $ 1,269 $ 1,566 Stock Options We have granted stock options to our officers and employees under long-term equity incentive plans that originated in 2000, 2010 and 2016. During 2018 and 2017, we granted stock options only under the 2016 plan. Provisions and characteristics of the options granted to our officers and employees under our long-term equity incentive plans 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. ● 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, expire ten years from the date of grant, and are exercisable for a period of ninety days after the end of employment. ● Upon exercise of a stock option, we issue new shares from the shares of common stock we are authorized to issue. We currently issue stock-based awards to our officers and employees only under the 2016 plan which authorizes the issuance of up to 5,000,000 shares of common stock for stock-based incentives including stock options and restricted stock awards. As of December 31, 2018, stock-based incentives for up to 3,473,667 shares remained available for issuance in the future under this plan. We have not issued any restricted stock under any of these plans. Our stock option activity has been as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Terms Value (Years) (000's) Outstanding at December 31, 2016 2,407,005 $ 3.00 7.19 $ 2,574 2017 Granted 975,000 $ 3.98 Forfeitures (600,995 ) $ 3.35 Exercised (195,800 ) $ 2.41 Outstanding at December 31, 2017 2,585,210 $ 3.34 6.77 $ 1,015 2018 Granted 1,052,737 $ 3.87 Forfeitures (896,479 ) $ 3.58 Exercised (205,148 ) $ 2.55 Outstanding at December 31, 2018 2,536,320 $ 3.53 6.97 $ 2,464 Exercisable at December 31, 2018 1,103,631 $ 3.07 4.08 $ 1,577 Additional information about our stock options is as follows: 2018 2017 Weighted average fair value of options granted during the year $ 1.57 $ 1.67 Intrinsic value of options exercised during the year $ 266,010 $ 351,893 Cash received from stock options exercised during the year $ 522,189 $ 471,789 Number of options that vested during the year 555,574 528,734 Fair value of options that vested during the year $ 929,480 $ 850,044 Unrecognized compensation expense related to non-vested options at end of year $ 1,874,762 $ 1,751,077 Weighted average years over which non-vested option expense will be recognized 2.60 1.93 Plan Shares outstanding 2000 Stock Option Plan 15,000 2010 Employee LT Equity Incentive Plan 994,987 2016 Employee LT Equity Incentive Plan 1,526,333 Total shares outstanding at December 31, 2018 2,536,320 As of December 31, 2018 Options Outstanding Options Exercisable Weighted Average Weighted Weighted Underlying Remaining Average Number of Average Range of Shares Contractual Exercise Underlying Exercise Exercise Prices Outstanding Life Price Shares Price $1.43 - 2.34 277,350 1.98 $ 1.87 277,350 $ 1.87 $2.35 - 3.53 771,637 5.12 $ 3.32 571,195 $ 3.27 $3.54 - 5.28 1,487,333 8.85 $ 3.95 255,086 $ 3.94 Total options 2,536,320 1,103,631 We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model: Year Ended December 31, 2018 2017 Expected volatility 48 % 49 % Expected annual dividend yield 1.5 % 1.5 % Risk free rate of return 2.88 % 1.95 % Expected option term (years) 5.33 6.00 Due to the Investigation, during a portion of 2017 and 2018, we had in place a moratorium on issuing shares of our common stock in connection with stock option exercises. In September and October 2017, for stock options that were scheduled to expire during the six months ended December 31, 2017, and were not exercisable due to the moratorium, we modified those stock options to extend their expiration date to December 31, 2017. We recorded share-based compensation expense of $255,000 for these modifications for which there was no associated cash payment. None of those options were exercised prior to December 31, 2017, their expiration dates were not extended beyond that date, and they were allowed to expire. As consideration for certain of those expired options, we made cash payments to the option holders and recorded expense totaling $78,000 which was determined based upon the difference between the quoted market price of our common stock as of December 31, 2017, and the exercise price of the stock options. Restricted Stock Awards Our 2015 Non-Employee Directors Long-Term Equity Incentive Plan (“2015 Directors 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 as restricted shares 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, after which time the restrictive legend is removed from the shares. ● Restricted shares participate in dividend payments and may be voted. ● As of December 31, 2018, 240,000 shares of restricted stock have vested and stock based incentives for up to 160,000 shares remained available for issuance in the future under this plan. Our restricted stock awards activity has been as follows: Total Grant Date Fair Value of Number of Fair Value Shares That Shares Per Share Vested Restricted Shares Outstanding at December 31, 2016 80,000 $ 3.31 2017 Shares granted with restrictions 80,000 $ 4.24 Shares vested and restrictions removed (80,000 ) $ 3.31 $ 320,000 Restricted Shares Outstanding at December 31, 2017 80,000 $ 4.24 2018 Shares granted with restrictions 100,000 $ 4.06 Shares vested and restrictions removed (80,000 ) $ 4.24 $ 297,600 Restricted Shares Outstanding at December 31, 2018 100,000 $ 4.06 We have not issued any stock options under the 2015 Directors Plan. The 2015 Directors Plan replaced the 2006 Non-Employee Directors Long-Term Equity Incentive Plan (the “2006 Plan”). We will not issue any additional stock or stock options under the 2006 Plan. At December 31, 2018, we had $313,929 of unrecognized compensation expense related to non-vested stock awards. We expect to recognize that expense in the future over a weighted-average period of four months. |
9. Income Taxes
9. Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 9. Income Taxes The components of our income tax expense (benefit) consist of the following (amounts in thousands): 2018 2017 Current Deferred Total Current Deferred Total Federal $ 993 $ (21 ) $ 972 $ 1,008 $ 416 $ 1,424 State 238 17 255 140 (17 ) 123 Total $ 1,231 $ (4 ) $ 1,227 $ 1,148 $ 399 $ 1,547 The difference between income tax expense and the amount computed by applying the federal statutory income tax rate of 21% for 2018 and 34% for 2017 to income before income taxes consists of the following (amounts in thousands): Year Ended December 31, 2018 2017 Income tax expense at federal statutory rate $ 1,025 $ 992 Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 218 86 Stock based compensation 182 294 Change in US tax rate due to tax reform - 355 R&D tax credit uncertain tax position (net) (46 ) 37 Research and development credit (72 ) (208 ) Domestic production activities deduction - (35 ) Foreign derived intangible income (105 ) Other 25 26 Income tax expense per the statement of operations $ 1,227 $ 1,547 The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted on December 22, 2017. This legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates. The Tax Reform Act permanently reduces the U.S. corporate tax rate from a maximum of 35% to a flat 21% rate effective January 1, 2018. The main impact of the Tax Reform Act on our 2017 consolidated financial statements is the re-measurement of our deferred tax balances from the old corporate tax rate to the new corporate tax rate. Because of the decrease in the U.S. corporate tax rate, we recorded deferred tax expense of $355,000 due to this re-measurement. We have no material or provisional items for which the accounting of the effects of the Tax Reform Act on our consolidated financial statements is incomplete. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in our consolidated financial statements. The components of our deferred income tax assets and liabilities are as follows (amounts in thousands): As of December 31, 2018 2017 Deferred tax assets: Deferred revenue $ 809 $ 775 Share-based compensation 329 351 Compensation and benefits 49 111 Texas franchise tax R&D credit 194 185 Prepaid expenses not deducted for tax - 84 Allowance for doubtful accounts 37 58 Net operating loss carryforward - 20 State deferred tax asset 45 61 Accrued expenses not deducted for tax 6 9 Valuation allowance (194 ) (185 ) Total deferred tax assets 1,275 1,469 Deferred tax liabilities: Intangible assets 667 805 Deferred expenses 213 - Depreciation - 13 Total gross deferred tax liabilities 880 818 Net deferred tax assets $ 395 $ 651 In assessing the realizability of deferred tax assets, we consider whether it is more-likely-than-not that some portion or all the deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We have concluded it is more-likely-than-not that our ability to generate future taxable income will allow us to realize those deferred tax assets. As of December 31, 2018, we have Texas Research and Development tax credit carryforwards of $194,000. We believe it uncertain that we will have sufficient Texas Franchise Tax in the future to support utilization of these carryforward credits. Accordingly, have provided a valuation allowance for the full amount of these credit carryforwards. These carryforwards expire in years 2034 through 2039. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (amounts in thousands): 2018 2017 Balance, beginning of year $ 158 $ 121 Increases for tax positions related to the current year - 22 Increases for tax positions related to prior years 2 15 Decreases for tax positions due to expiring statue (47 ) Balance, end of year $ 113 $ 158 Our unrecognized tax benefit is related to research and development credits taken on our U.S. income tax returns from 2012 to 2017 and the uncertainty related to the realization of a portion of those credits based on prior experience. We believe it reasonably possible that we will not recognize any of our unrecognized tax benefits at least through December 31, 2017. If we realized and recognized any of our unrecognized tax benefits such benefits would reduce our effective tax rate in the year of recognition. We record interest and penalty expense related to income taxes as interest and other expense, respectively. At December 31, 2018, no interest or penalties have been or are required to be accrued. Our open tax years are 2012 and forward for our federal income tax returns and 2014 and forward for most of our state income tax returns. We do not file, and are not required to file, any foreign income tax returns. |
10. Earnings per Share
10. Earnings per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 10. Earnings Per Share Earnings per share for the periods indicated were computed as follows (in thousands except per share amounts): Year ended December 31, 2018 2017 Numerators Numerator for basic and diluted earnings per share: Net income $ 3,654 $ 1,371 Denominators Denominators for basic and diluted earnings per share: Weighted average shares outstanding - basic 20,721 21,702 Dilutive potential common shares Stock options and awards 296 452 Denominator for diluted earnings per share 21,017 22,154 Net income per common share - basic $ 0.18 $ 0.06 Net income per common share – diluted $ 0.17 $ 0.06 Our weighted average shares outstanding has decreased due to the repurchase of our outstanding common stock through a modified Dutch auction tender offer (the “Tender Offer”) and the stock repurchase program announced on October 29, 2018. |
11. Dividends
11. Dividends | 12 Months Ended |
Dec. 31, 2018 | |
Dividends [Abstract] | |
Dividends [Text Block] | 11. Dividends We paid dividends as follows: Year ended December 31, 2018 2017 Dividend per share of common stock $ 0.045 $ 0.060 |
12. Stockholder's Equity
12. Stockholder's Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 12. Stockholder’s Equity On August 20, 2018, the Company announced the launch of a Tender Offer to repurchase for cash up to $15 million in value of outstanding shares of our common stock. The Tender Offer expired on September 19, 2018 and resulted in the purchase of 4,011,013 shares for an aggregate cost of approximately $16.8 million. Included with the shares accepted for purchase were 439,585 shares that the Company elected to purchase pursuant to the right to increase the size of the Tender Offer by up to 2.0% of the Company’s outstanding common stock. On October 29, 2018 the Board of Directors authorized a stock repurchase program in compliance with Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Securities and Exchange Act, which resulted in the purchased of an additional 896,348 shares at an approximate cost of $4.0 million. |
13. Employee Benefit Plan
13. Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | 13. Employee Benefit Plan We provide our employees a 401(k) plan under which we make employer matching contributions in amounts determined by our Board of Directors. Our matching contributions were $132,000 and $156,000, for 2018 and 2017, respectively. |
14. Segment and Geographic Disc
14. Segment and Geographic Disclosures | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 14. Segment and Geographic Disclosures We view our operations and manage our business as principally one segment. As a result, the financial information disclosed herein represents all of the material financial information related to our principal operating segment. Revenues derived from customers and partners located in the United States accounted for approximately 74% and 75% of our total revenues for 2018 and 2017, respectively. The remaining revenues were from customers and partners located in foreign countries, and each individual foreign country accounted for less than 10% of total revenues in each of those years. We attribute revenue to countries based on the country in which the customer or partner is located. We have no property or equipment located outside the United States. |
15. Concentration of Business V
15. Concentration of Business Volume and Credit Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 15. Concentration of Business Volume and Credit Risk Our cash, cash equivalents and long-term investments are on deposit in banks and are collectively insured by the Federal Deposit Insurance Corporation for $750,000. Our balances in excess of that amount are not insured. We may withdraw our cash deposits upon demand. We maintain our cash with multiple financial institutions of reputable credit to minimize our risk of loss. We generally provide credit to our customers under typical invoice payment terms (for example, net 30) that gives rise to trade accounts receivable from those customers. We do not require collateral from our customers. We perform ongoing evaluations of the credit risk related to offering these payment terms. We provide an allowance for uncollectible accounts based on our historical collections experience and the profile of our accounts receivable. In order to leverage the resources of third parties, we make our products available for purchase by end users through third-party channel resellers even though those end users can also purchase those products directly from us. During 2018 and 2017, we earned approximately 14% of our revenue from such sales through our largest, third-party, channel reseller. In 2018 and 2017, approximately 26% and 25%, respectively, of our revenues resulted from sales to customers in foreign countries. We received substantially all of our revenues from foreign customers in U.S. dollars resulting in limited exchange rate risks. Our foreign sales are concentrated mostly in Canada, Western Europe and Latin America. We use software developers outside the United States to perform a portion of the coding for the development and maintenance of our software products. If we were unable to continue using these developers because of political or economic instability, we may have difficulty finding comparably skilled developers or may have to pay considerably more for the same work, which could have a material adverse impact on our financial position and results of operations. |
16. Subsequent Events
16. Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 16. Subsequent Events On February 27, 2019 we entered into an Option Termination Agreement with our former Chief Financial Officer to terminate certain options and option agreements that resulted in a payment of $548,000 to the option holder. We will account for this payment as a reduction of equity during the first quarter of 2019. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 “GlobalSCAPE”, 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 Products and Services We earn revenue by delivering the following software products and services: ● Perpetual software licenses under which customers install our products in their information systems environment on computers they manage, own or otherwise procure from a cloud services provider. Customers also deploy our products with cloud services providers in a BYOL environment. ● Cloud-based, hosted SaaS solutions that we sell on an ongoing subscription basis resulting in our earning recurring, monthly subscription and usage fees to access the service. ● Maintenance and support services, or M&S, that generally consist of telephone support and access to unspecified future software upgrades. ● Professional services for product integration and configuration that generally do not significantly modify our software products. We earn the majority of our revenue from the sale of perpetual software licenses and associated contracts for M&S. We recognize revenue when we have satisfied a performance obligation by transferring control over a product or delivering a service to a customer. We measure revenue based upon the consideration set forth in an arrangement or contract with a customer. The revenue recognition criteria we apply to each of our software products and services are as follows: ● Perpetual software licenses – These licenses grant a right to use our functional intellectual property. We recognize revenue at the point in time when we electronically deliver to our customer the software license key that provides the ability to access and use our product. If our customer is a reseller who will further transfer the ability to access and use our product to a third party under a separate arrangement that the reseller has with that third party, we recognize revenue at the time we deliver the software license key to the reseller since our contract is with the reseller. ● Cloud-based, hosted SaaS solutions – These solutions grant a right to access our functional intellectual property. We recognize revenue over time on a monthly basis as we deliver the services to which our customers subscribe. Revenue can include basic monthly fees to access the software and usage fees based upon the volume of certain resources the customer consumes (such as volumes of storage or bandwidth). We are generally paid for these services on a month-to-month basis, but if a customer pays us in advance for services we will deliver in the future, we record as deferred revenue the amount of such payment related to services we have not yet delivered. ● M&S – We provide these services to purchasers of perpetual software licenses under agreements with terms generally ranging from one to three years. We require up-front payment of our M&S fee in an amount that covers the entire term of the agreement. We record as deferred revenue amounts paid that relate to future periods during which we will provide the M&S service. We reduce deferred revenue and recognize revenue ratably in future periods as we deliver the M&S service. ● Professional services – We recognize revenue from these services when the services are completed. If we are paid in advance for these services, we record such payment as deferred revenue until we complete the services. The delivery of our software products and services generally does not involve any variable consideration, financing components or consideration payable to a customer such as rebates or other incentives that reduce amounts owed to us by customers. Deferred Revenue Classification and Activity Deferred revenue related to services we will deliver within one year is presented as a current liability. Deferred revenue related to services that we will deliver more than one year into the future is presented as a non-current liability. The activity in our deferred revenue balances has been as follows ($in thousands): Year Ended December 31, 2018 2017 Deferred revenue, beginning of period $ 17,050 $ 17,445 Deferred revenue resulting from new contracts with customers 21,577 20,451 Deferred revenue at the beginning of the period that was amortized to revenue (20,244 ) (19,248 ) Deferred revenue arising during the period that was amortized to revenue (2,146 ) (1,598 ) Deferred revenue, end of period $ 16,237 $ 17,050 Multi-Element Transactions At the time customers purchase perpetual software licenses, they also typically purchase M&S although it is not mandatory. We do not sell separate M&S to subscribers to our SaaS solutions as M&S is provided as part of their SaaS subscription. Customers may also purchase professional services at the time they purchase perpetual software licenses or a SaaS subscription. Each of the components of these multi-element transactions is a separately identifiable performance obligation. For multi-element transactions, we allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. We determine that stand-alone selling price for each item at the inception of the transaction involving these multiple elements. We sell, as stand-alone transactions, renewals of pre-existing M&S contracts, professional services to customers seeking assistance with products they have previously purchased from us, or SaaS subscriptions to customers not requiring any of our other products or services. Accordingly, we are able to estimate the stand-alone selling price of these items based upon our observation of those transactions. Since most of our sales of perpetual software licenses are part of multi-element transactions that also involve M&S and/or professional services, and because the selling price of those licenses can vary significantly among customers, we use the residual approach under FASB Accounting Standards Codification Top 606, or ASC 606, to estimate the selling price of perpetual software licenses in a multi-element transaction by reference to the total transaction price less the sum of the observable stand-alone selling prices of M&S and/or professional services. We allocate discounts proportionally to all of the components of a multi-element transaction. Sales Tax We collect sales tax on many of our transactions with customers as required under applicable law. We do not include sales tax collected in our revenue. We record it as a liability payable to taxing authorities. Allowance for Sales Returns We provide an allowance for sales returns. We estimate this allowance based upon our historical experience and the nature of recent transactions with customers. This amount is included in accrued liabilities in our consolidated balance sheet. Contract Assets We generally bill customers for professional services when we have fully delivered the services specified in the contract. We may incur costs in delivering the services prior to that time. Such costs are generally not material. Accordingly, we do not record a contract asset for professional service engagements in process but not yet billed. Incremental Costs of Obtaining a Contract to Deliver Goods and Services We incur incremental costs in the form of sales commissions paid to our sales personnel and royalties on certain products paid to third parties. These are costs we would not incur if we did not obtain a contract to deliver our goods and services. We account for these costs as follows: ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the customer relationship. Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($in thousands): Year Ended December 31, 2018 Deferred cost, beginning of period $ 1,240 Deferred cost resulting from new contracts with customers 674 Deferred cost amortized to expense (905 ) Deferred cost, end of period $ 1,009 At December 31, 2018, $571,000 was recorded in prepaid and other current assets and $438,000 was recorded in noncurrent other assets in our consolidated balance sheet. GlobalSCAPE, Inc. Condensed Consolidated Balance Sheet (in thousands) As of December 31, 2018 The following tables present our reported results under ASC 606 and a reconciliation to results using the historical accounting method: As Reported Effect of ASC 606 ASC 605 Historical Assets Current assets: Cash and cash equivalents $ 9,173 $ 9,173 Certificates of deposit, short term - - Accounts receivable, net 6,657 (75 ) 6,582 Federal income tax receivable - - Prepaid and other current assets 1,521 (571 ) 950 Total current assets 17,351 (646 ) 16,705 Capitalized software development costs, net 3,133 3,133 Goodwill 12,712 12,712 Deferred tax asset, net 395 137 532 Property and equipment, net 399 399 Other assets 502 (438 ) 64 Total assets $ 34,492 $ (947 ) $ 33,545 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable 820 820 Accrued expenses 1,214 (75 ) 1,139 Federal income tax payable 148 (66 ) 82 Deferred revenue 13,301 13,301 Total current liabilities 15,483 (141 ) 15,342 Deferred revenue, non-current portion 2,936 2,936 Other long term liabilities 117 117 Stockholders' Equity: Preferred stock - - Common stock 22 22 Additional paid-in capital 25,584 25,584 Treasury stock (22,712 ) (22,712 ) Retained earnings 13,062 (806 ) 12,256 Total stockholders’ equity 15,956 (806 ) 15,150 Total liabilities and stockholders’ equity $ 34,492 $ (947 ) $ 33,545 GlobalSCAPE, Inc. Condensed Consolidated Statement of Operations and Comprehensive Income (in thousands, except per share amounts) For the Year Ended December 31, 2018 As Reported Effect of ASC 606 ASC 605 Historical Operating revenues: Software licenses $ 10,512 $ 10,512 Maintenance and support 21,587 21,587 Professional services 2,317 2,317 Total revenues 34,416 - 34,416 Costs of revenues Software licenses 2,978 (26 ) 2,952 Maintenance and support 2,093 2,093 Professional services 1,165 1,165 Total costs of revenues 6,236 (26 ) 6,210 Gross Profit 28,180 26 28,206 Operating expenses Sales and marketing 10,009 (205 ) 9,804 General and administrative 6,382 6,382 Legal and professional 4,623 4,623 Severance 488 488 Research and development 1,883 1,883 Total operating expenses 23,385 (205 ) 23,180 Income from operations 4,795 231 5,026 Interest income (expense), net 86 86 Income before income taxes 4,881 231 5,112 Income tax expense 1,227 58 1,285 Net income $ 3,654 $ 173 $ 3,827 Comprehensive income $ 3,654 $ 173 $ 3,827 Net income per common share - basic $ 0.18 $ 0.01 $ 0.18 Net income per common share - diluted $ 0.17 $ 0.01 $ 0.18 GlobalSCAPE, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2018 As Reported Effect of ASC 606 ASC 605 Historical Operating Activities: Net Income $ 3,654 173 $ 3,827 Items not involving cash at the time they are recorded in the statement of operations: Provision (recoveries) for doubtful accounts receivable (88 ) (88 ) Depreciation and amortization 2,173 2,173 Share-based compensation 1,269 1,269 Deferred taxes (4 ) (4 ) Subtotal before changes in operating assets and liabilities 7,004 173 7,177 Changes in operating assets and liabilities: Accounts receivable (644 ) (75 ) (719 ) Prepaid and other current assets (216 ) (107 ) (323 ) Deferred revenues (813 ) (813 ) Accounts payable (1,080 ) (1,080 ) Accrued expenses (457 ) 75 (382 ) Other assets 191 191 Accrued interest receivable - - Other long-term liabilities (59 ) (59 ) Federal income tax payable 970 (66 ) 904 Net cash provided by operating activities 4,896 - 4,896 Investing Activities: Software development costs (1,276 ) (1,276 ) Purchase of property and equipment (162 ) (162 ) Redemption of Certificates of Deposit 15,794 15,794 Net cash provided by investing activities 14,356 - 14,356 Financing Activities: Proceeds from exercise of stock options 522 522 Purchase of treasury stock (21,260 ) (21,260 ) Dividends paid (924 ) (924 ) Net cash used in financing activities (21,662 ) - (21,662 ) Net increase in cash (2,410 ) (2,410 ) Cash at beginning of period 11,583 - 11,583 Cash at end of period $ 9,173 $ - $ 9,173 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $ - Income tax payments $ 253 $ 253 |
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. |
Short Term Investments, 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. These certificates of deposit are stated at amortized cost, which approximates fair value of these investments. In 2018, we redeemed our certificates to assist with funding the modified Dutch tender offer. |
Investment, Policy [Policy Text Block] | Long-Term Investments Long-term investments consist of certificates of deposit held with financial institutions with contractual maturity dates greater than one year from the balance sheet date. These certificates of deposit are stated at amortized cost, which approximates the fair value of these investments. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Significant inputs to the valuation model are unobservable. As of December 31, 2018, we did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy of valuation techniques. In addition, certain non-financial assets and liabilities are to be initially measured at fair value on a non-recurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, capitalized software and property and equipment are measured at fair value using Level 3 inputs, which result in management’s best estimate of fair value from the perspective of a market participant, when there is an indication of impairment and are recorded at fair value only when impairment is recognized. Our financial instruments consist principally of cash and cash equivalents, certificates of deposit, accounts receivable and accounts payable. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable, approximates fair value due to the short term maturity of these instruments, all of which mature within 12 months. The carrying amount of our certificates of deposit approximates fair value based on interest rates readily available in the market with similar terms. |
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 using December 31 as the measurement date. 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, 2018, 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 program plan and 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 and our method of amortizing them relative to our estimates of realizability through sales of products in the marketplace. |
Cost of Sales, Policy [Policy Text Block] | Cost of revenue Cost of revenue consists of expenses associated with the production, delivery and support of the products and services we sell. Cost of license revenue consists primarily of amortization of the capitalized software development costs we incur when producing our software products, royalties we pay to use software developed by others for certain features of our products, and fees we pay to third parties who provide services supporting our SaaS solutions. Cost of M&S revenue and cost of professional services revenue consist primarily of salaries and related costs of our employees and third parties we use to deliver these services. |
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 approximately $807,000 and $1.9 million 2018 and 2017, 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 consolidated 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 percent likelihood of being realized upon ultimate settlement. Unrecognized tax benefits represent tax positions for which reserves have been established. We record the effects of new tax legislation in the period in which it is signed into law. |
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. |
Reclassification, Policy [Policy Text Block] | Changes in Accounting Methods, Reclassifications and Revisions As part of our ongoing enhancement and refinement of our financial reporting to fairly present our results of operations and financial position, we may make changes from time-to-time in accounting methods and in the classification and presentation of our business activities in our consolidated financial statements. To ensure comparability between periods, we revise previous period consolidated financial statements presented to conform them to the method of presentation in our current period consolidated financial statements. If the changes increase or decrease previously reported amounts of revenue or expenses, we adjust retained earnings as of the beginning of the earliest period presented for the cumulative effect, if any, on that balance. If these changes affect our financial statements for previously reported interim periods not presented herein, we present revised consolidated financial statements for those periods when they are reported in the future. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (issued September 2017) – ASU 2017-04, Intangibles – Goodwill and Other (issued January 2017) - ASU 2016-13, Financial Instruments – Credit Losses (issued June 2016) ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (issued March 2016) – This standard also permits an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures may be either estimated (as has been the requirement in the past) or recognized when they occur. We elected to continue estimating forfeitures consistent with our existing practices thereby resulting in no change to our application of GAAP for this aspect of computing share-based compensation. ASU 2016-02, Leases (issued February 2016) - ASU 2014-09, Revenue from Contracts with Customers (issued May 2014) ● If the costs are associated with products and services for which we recognize revenue at a fixed point in time (primarily sales of perpetual software licenses and professional services), we expense these costs in full at the time we recognize that revenue. ● If the costs are associated with services for which we recognize revenue over time (primarily sales of M&S and SaaS subscriptions) for which we believe it is likely that the contract for those services will be renewed for additional terms in the future, provided we deem these costs to be recoverable, we record these costs as a deferred expense asset and amortize that cost to expense as follows: o For the portion of the cost that we determine benefits us primarily only over the term of the specific underlying contract currently in force (such as the term of an M&S contract), we recognize expense ratably each month over that term. o For the portion of the cost that we determine benefits us over an overall customer relationship that is likely to span a period of time that is longer than an initial contract term (for example, an M&S contract renewed for multiple terms in the future), we recognize expense ratably monthly over the estimated life of the customer relationship. |
2. Significant Accounting Pol_2
2. Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
2. Significant Accounting Policies (Tables) [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Accordingly, we determine our deferred revenue as follows ($ in thousands): December 31 2018 2017 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 17,470 $ 17,491 Less: Unpaid invoices at December 31 relating to M&S agreements with a start date subsequent to the balance sheet date (1,233 ) (441 ) Total deferred revenue at December 31 $ 16,237 $ 17,050 Deferred revenue, current portion $ 13,301 $ 13,315 Deferred revenue, non-current portion 2,936 3,735 Total deferred revenue $ 16,237 $ 17,050 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized at December 31, 2018 $ 9,624 $ 830 Accumulated amortization (7,321 ) - Net balance $ 2,303 $ 830 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The following tables present our reported results under ASC 606 and a reconciliation to results using the historical accounting method: As Reported Effect of ASC 606 ASC 605 Historical Assets Current assets: Cash and cash equivalents $ 9,173 $ 9,173 Certificates of deposit, short term - - Accounts receivable, net 6,657 (75 ) 6,582 Federal income tax receivable - - Prepaid and other current assets 1,521 (571 ) 950 Total current assets 17,351 (646 ) 16,705 Capitalized software development costs, net 3,133 3,133 Goodwill 12,712 12,712 Deferred tax asset, net 395 137 532 Property and equipment, net 399 399 Other assets 502 (438 ) 64 Total assets $ 34,492 $ (947 ) $ 33,545 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable 820 820 Accrued expenses 1,214 (75 ) 1,139 Federal income tax payable 148 (66 ) 82 Deferred revenue 13,301 13,301 Total current liabilities 15,483 (141 ) 15,342 Deferred revenue, non-current portion 2,936 2,936 Other long term liabilities 117 117 Stockholders' Equity: Preferred stock - - Common stock 22 22 Additional paid-in capital 25,584 25,584 Treasury stock (22,712 ) (22,712 ) Retained earnings 13,062 (806 ) 12,256 Total stockholders’ equity 15,956 (806 ) 15,150 Total liabilities and stockholders’ equity $ 34,492 $ (947 ) $ 33,545 As Reported Effect of ASC 606 ASC 605 Historical Operating revenues: Software licenses $ 10,512 $ 10,512 Maintenance and support 21,587 21,587 Professional services 2,317 2,317 Total revenues 34,416 - 34,416 Costs of revenues Software licenses 2,978 (26 ) 2,952 Maintenance and support 2,093 2,093 Professional services 1,165 1,165 Total costs of revenues 6,236 (26 ) 6,210 Gross Profit 28,180 26 28,206 Operating expenses Sales and marketing 10,009 (205 ) 9,804 General and administrative 6,382 6,382 Legal and professional 4,623 4,623 Severance 488 488 Research and development 1,883 1,883 Total operating expenses 23,385 (205 ) 23,180 Income from operations 4,795 231 5,026 Interest income (expense), net 86 86 Income before income taxes 4,881 231 5,112 Income tax expense 1,227 58 1,285 Net income $ 3,654 $ 173 $ 3,827 Comprehensive income $ 3,654 $ 173 $ 3,827 Net income per common share - basic $ 0.18 $ 0.01 $ 0.18 Net income per common share - diluted $ 0.17 $ 0.01 $ 0.18 As Reported Effect of ASC 606 ASC 605 Historical Operating Activities: Net Income $ 3,654 173 $ 3,827 Items not involving cash at the time they are recorded in the statement of operations: Provision (recoveries) for doubtful accounts receivable (88 ) (88 ) Depreciation and amortization 2,173 2,173 Share-based compensation 1,269 1,269 Deferred taxes (4 ) (4 ) Subtotal before changes in operating assets and liabilities 7,004 173 7,177 Changes in operating assets and liabilities: Accounts receivable (644 ) (75 ) (719 ) Prepaid and other current assets (216 ) (107 ) (323 ) Deferred revenues (813 ) (813 ) Accounts payable (1,080 ) (1,080 ) Accrued expenses (457 ) 75 (382 ) Other assets 191 191 Accrued interest receivable - - Other long-term liabilities (59 ) (59 ) Federal income tax payable 970 (66 ) 904 Net cash provided by operating activities 4,896 - 4,896 Investing Activities: Software development costs (1,276 ) (1,276 ) Purchase of property and equipment (162 ) (162 ) Redemption of Certificates of Deposit 15,794 15,794 Net cash provided by investing activities 14,356 - 14,356 Financing Activities: Proceeds from exercise of stock options 522 522 Purchase of treasury stock (21,260 ) (21,260 ) Dividends paid (924 ) (924 ) Net cash used in financing activities (21,662 ) - (21,662 ) Net increase in cash (2,410 ) (2,410 ) Cash at beginning of period 11,583 - 11,583 Cash at end of period $ 9,173 $ - $ 9,173 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $ - Income tax payments $ 253 $ 253 |
Incremental Costs of Obtaining a Contract to Deliver Goods and Services [Member] | |
2. Significant Accounting Policies (Tables) [Line Items] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Our activity in deferred costs of obtaining a contract to deliver goods and services has been as follows ($in thousands): Year Ended December 31, 2018 Deferred cost, beginning of period $ 1,240 Deferred cost resulting from new contracts with customers 674 Deferred cost amortized to expense (905 ) Deferred cost, end of period $ 1,009 |
Software License Arrangement [Member] | |
2. Significant Accounting Policies (Tables) [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | The activity in our deferred revenue balances has been as follows ($in thousands): Year Ended December 31, 2018 2017 Deferred revenue, beginning of period $ 17,050 $ 17,445 Deferred revenue resulting from new contracts with customers 21,577 20,451 Deferred revenue at the beginning of the period that was amortized to revenue (20,244 ) (19,248 ) Deferred revenue arising during the period that was amortized to revenue (2,146 ) (1,598 ) Deferred revenue, end of period $ 16,237 $ 17,050 |
3. Accounts Receivable, Net (Ta
3. Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | We determine our accounts receivable, net, as follows ($ in thousands): December 31, 2018 2017 Total invoices issued and unpaid $ 7,990 $ 6,644 Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date (1,233 ) (441 ) Gross accounts receivable 6,757 6,203 Allowance for sales returns - (100 ) Allowance for doubtful accounts (100 ) (178 ) Accounts receivable, net $ 6,657 $ 5,925 |
Allowance for Credit Losses on Financing Receivables [Table Text Block] | The activity in our allowance for doubtful accounts and sales returns has been as follows ($ in thousands): Year Ended December 31, 2018 2017 Balance, beginning of period $ 278 $ 263 ASC 606 Adjustment (100 ) - Provision for sales returns - - Provision for doubtful accounts (88 ) 17 Accounts written off 10 (2 ) Balance, end of period $ 100 $ 278 |
4. Property and Equipment, Net
4. Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment, at cost, and the related accumulated depreciation consist of the following ($ in thousands): December 31, 2018 2017 Furniture and fixtures $ 835 $ 786 Software 669 662 Equipment 1,558 1,469 Leasehold improvements 559 559 3,621 3,476 Less accumulated depreciation (3,222 ) (2,995 ) Property and equipment, net $ 399 $ 481 |
5. Capitalized Software Devel_2
5. Capitalized Software Development Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Our capitalized software development costs balances and activity were as follows ($ in thousands): December 31, 2018 2017 Gross capitalized cost $ 10,454 $ 9,179 Accumulated amortization (7,321 ) (5,393 ) Net balance $ 3,133 $ 3,786 |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Year Ended December 31, 2018 2017 Amount capitalized $ 1,276 $ 1,926 Amortization expense $ (1,929 ) $ (1,883 ) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Released Unreleased Products Products Gross capitalized at December 31, 2018 $ 9,624 $ 830 Accumulated amortization (7,321 ) - Net balance $ 2,303 $ 830 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Future amortization expense for the year ending December 31, 2019 $ 1,328 2020 857 2021 118 Total $ 2,303 |
6. Deferred Revenue (Tables)
6. Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Accordingly, we determine our deferred revenue as follows ($ in thousands): December 31 2018 2017 Total invoiced for M&S contracts for which revenue will be recognized in future periods $ 17,470 $ 17,491 Less: Unpaid invoices at December 31 relating to M&S agreements with a start date subsequent to the balance sheet date (1,233 ) (441 ) Total deferred revenue at December 31 $ 16,237 $ 17,050 Deferred revenue, current portion $ 13,301 $ 13,315 Deferred revenue, non-current portion 2,936 3,735 Total deferred revenue $ 16,237 $ 17,050 |
7. Commitments and Contingenc_2
7. Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | We have an operating lease related to our office space. Minimum rental commitments under operating leases at December 31, 2018 are as follows ($ in thousands): Year Ending December 31, 2019 120 Total $ 120 |
8. Stock Options, Restricted _2
8. Stock Options, Restricted Stock and Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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] | 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): Year Ended December 31, 2018 2017 Share-based compensation expense $ 1,269 $ 1,566 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Our stock option activity has been as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Terms Value (Years) (000's) Outstanding at December 31, 2016 2,407,005 $ 3.00 7.19 $ 2,574 2017 Granted 975,000 $ 3.98 Forfeitures (600,995 ) $ 3.35 Exercised (195,800 ) $ 2.41 Outstanding at December 31, 2017 2,585,210 $ 3.34 6.77 $ 1,015 2018 Granted 1,052,737 $ 3.87 Forfeitures (896,479 ) $ 3.58 Exercised (205,148 ) $ 2.55 Outstanding at December 31, 2018 2,536,320 $ 3.53 6.97 $ 2,464 Exercisable at December 31, 2018 1,103,631 $ 3.07 4.08 $ 1,577 |
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: 2018 2017 Weighted average fair value of options granted during the year $ 1.57 $ 1.67 Intrinsic value of options exercised during the year $ 266,010 $ 351,893 Cash received from stock options exercised during the year $ 522,189 $ 471,789 Number of options that vested during the year 555,574 528,734 Fair value of options that vested during the year $ 929,480 $ 850,044 Unrecognized compensation expense related to non-vested options at end of year $ 1,874,762 $ 1,751,077 Weighted average years over which non-vested option expense will be recognized 2.60 1.93 |
Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plans [Table Text Block] | Plan Shares outstanding 2000 Stock Option Plan 15,000 2010 Employee LT Equity Incentive Plan 994,987 2016 Employee LT Equity Incentive Plan 1,526,333 Total shares outstanding at December 31, 2018 2,536,320 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | As of December 31, 2018 Options Outstanding Options Exercisable Weighted Average Weighted Weighted Underlying Remaining Average Number of Average Range of Shares Contractual Exercise Underlying Exercise Exercise Prices Outstanding Life Price Shares Price $1.43 - 2.34 277,350 1.98 $ 1.87 277,350 $ 1.87 $2.35 - 3.53 771,637 5.12 $ 3.32 571,195 $ 3.27 $3.54 - 5.28 1,487,333 8.85 $ 3.95 255,086 $ 3.94 Total options 2,536,320 1,103,631 |
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: Year Ended December 31, 2018 2017 Expected volatility 48 % 49 % Expected annual dividend yield 1.5 % 1.5 % Risk free rate of return 2.88 % 1.95 % Expected option term (years) 5.33 6.00 |
Nonvested Restricted Stock Shares Activity [Table Text Block] | Our restricted stock awards activity has been as follows: Total Grant Date Fair Value of Number of Fair Value Shares That Shares Per Share Vested Restricted Shares Outstanding at December 31, 2016 80,000 $ 3.31 2017 Shares granted with restrictions 80,000 $ 4.24 Shares vested and restrictions removed (80,000 ) $ 3.31 $ 320,000 Restricted Shares Outstanding at December 31, 2017 80,000 $ 4.24 2018 Shares granted with restrictions 100,000 $ 4.06 Shares vested and restrictions removed (80,000 ) $ 4.24 $ 297,600 Restricted Shares Outstanding at December 31, 2018 100,000 $ 4.06 |
9. Income Taxes (Tables)
9. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of our income tax expense (benefit) consist of the following (amounts in thousands): 2018 2017 Current Deferred Total Current Deferred Total Federal $ 993 $ (21 ) $ 972 $ 1,008 $ 416 $ 1,424 State 238 17 255 140 (17 ) 123 Total $ 1,231 $ (4 ) $ 1,227 $ 1,148 $ 399 $ 1,547 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The difference between income tax expense and the amount computed by applying the federal statutory income tax rate of 21% for 2018 and 34% for 2017 to income before income taxes consists of the following (amounts in thousands): Year Ended December 31, 2018 2017 Income tax expense at federal statutory rate $ 1,025 $ 992 Increase (decrease) in taxes resulting from: State taxes, net of federal benefit 218 86 Stock based compensation 182 294 Change in US tax rate due to tax reform - 355 R&D tax credit uncertain tax position (net) (46 ) 37 Research and development credit (72 ) (208 ) Domestic production activities deduction - (35 ) Foreign derived intangible income (105 ) Other 25 26 Income tax expense per the statement of operations $ 1,227 $ 1,547 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in our consolidated financial statements. The components of our deferred income tax assets and liabilities are as follows (amounts in thousands): As of December 31, 2018 2017 Deferred tax assets: Deferred revenue $ 809 $ 775 Share-based compensation 329 351 Compensation and benefits 49 111 Texas franchise tax R&D credit 194 185 Prepaid expenses not deducted for tax - 84 Allowance for doubtful accounts 37 58 Net operating loss carryforward - 20 State deferred tax asset 45 61 Accrued expenses not deducted for tax 6 9 Valuation allowance (194 ) (185 ) Total deferred tax assets 1,275 1,469 Deferred tax liabilities: Intangible assets 667 805 Deferred expenses 213 - Depreciation - 13 Total gross deferred tax liabilities 880 818 Net deferred tax assets $ 395 $ 651 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (amounts in thousands): 2018 2017 Balance, beginning of year $ 158 $ 121 Increases for tax positions related to the current year - 22 Increases for tax positions related to prior years 2 15 Decreases for tax positions due to expiring statue (47 ) Balance, end of year $ 113 $ 158 |
10. Earnings per Share (Tables)
10. Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Earnings per share for the periods indicated were computed as follows (in thousands except per share amounts): Year ended December 31, 2018 2017 Numerators Numerator for basic and diluted earnings per share: Net income $ 3,654 $ 1,371 Denominators Denominators for basic and diluted earnings per share: Weighted average shares outstanding - basic 20,721 21,702 Dilutive potential common shares Stock options and awards 296 452 Denominator for diluted earnings per share 21,017 22,154 Net income per common share - basic $ 0.18 $ 0.06 Net income per common share – diluted $ 0.17 $ 0.06 |
11. Dividends (Tables)
11. Dividends (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Dividends [Abstract] | |
Schedule of Dividends Payable [Table Text Block] | We paid dividends as follows: Year ended December 31, 2018 2017 Dividend per share of common stock $ 0.045 $ 0.060 |
2. Significant Accounting Pol_3
2. Significant Accounting Policies (Details) - USD ($) | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
2. Significant Accounting Policies (Details) [Line Items] | |||
Deferred Costs, Current | $ 571,000 | ||
Deferred Costs, Noncurrent | 438,000 | ||
Goodwill, Impairment Loss | 0 | ||
Advertising Expense | $ 807,000 | $ 1,900,000 | |
Probability of occurrence of event | 50.00% | ||
Contract with Customer, Deferred Expense | $ 1,200,000 | ||
Computer Equipment [Member] | |||
2. Significant Accounting Policies (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Software and Software Development Costs [Member] | |||
2. Significant Accounting Policies (Details) [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||
Minimum [Member] | Furniture and Fixtures [Member] | |||
2. Significant Accounting Policies (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Maximum [Member] | Furniture and Fixtures [Member] | |||
2. Significant Accounting Policies (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 7 years |
2. Significant Accounting Poli
2. Significant Accounting Policies (Details) - Deferred Revenue, by Arrangement, Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Revenue, by Arrangement, Disclosure [Abstract] | ||
Deferred revenue, beginning of period | $ 17,050 | $ 17,445 |
Deferred revenue resulting from new contracts with customers | 21,577 | 20,451 |
Deferred revenue at the beginning of the period that was amortized to revenue | (20,244) | (19,248) |
Deferred revenue arising during the period that was amortized to revenue | (2,146) | (1,598) |
Deferred revenue, end of period | $ 16,237 | $ 17,050 |
2. Significant Accounting Po_2
2. Significant Accounting Policies (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Deferred Costs, Capitalized, Prepaid, and Other Assets [Abstract] | |
Deferred cost, beginning of period | $ 1,240 |
Deferred cost resulting from new contracts with customers | 674 |
Deferred cost amortized to expense | (905) |
Deferred cost, end of period | $ 1,009 |
2. Significant Accounting Po_3
2. Significant Accounting Policies (Details) - Schedule of New Accounting Pronouncements and Changes in Accounting Principles - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | |||||
Cash and cash equivalents | $ 9,173,000 | $ 11,583,000 | $ 9,173,000 | $ 11,583,000 | $ 8,895,000 |
Accounts receivable, net | 6,657,000 | 5,925,000 | |||
Prepaid and other current assets | 1,521,000 | ||||
Total current assets | 17,351,000 | 23,296,000 | |||
Capitalized software development costs, net | 3,133,000 | 3,786,000 | |||
Goodwill | 12,712,000 | 12,712,000 | |||
Deferred tax asset, net | 395,000 | ||||
Property and equipment, net | 399,000 | 481,000 | |||
Other assets | 502,000 | 84,000 | |||
Total assets | 34,492,000 | 52,513,000 | |||
Current liabilities: | |||||
Accounts payable | 820,000 | 1,900,000 | |||
Accrued expenses | 1,214,000 | 1,671,000 | |||
Federal income tax payable | 148,000 | ||||
Deferred revenue | 13,301,000 | 13,315,000 | |||
Total current liabilities | 15,483,000 | 16,886,000 | |||
Deferred revenue, non-current portion | 2,936,000 | 3,735,000 | |||
Other long term liabilities | 117,000 | 176,000 | |||
Stockholders' Equity: | |||||
Preferred stock | 0 | 0 | |||
Common stock | 22,000 | 22,000 | |||
Additional paid-in capital | 25,584,000 | 23,793,000 | |||
Treasury stock | (22,712,000) | (1,452,000) | |||
Retained earnings | 13,062,000 | 9,353,000 | |||
Total stockholders’ equity | 15,956,000 | 31,716,000 | $ 29,615,000 | ||
Total liabilities and stockholders’ equity | 34,492,000 | 52,513,000 | |||
Operating revenues: | |||||
Total revenues | 34,416,000 | 33,891,000 | |||
Costs of revenues | |||||
Total costs of revenues | 6,236,000 | 6,213,000 | |||
Gross profit | 28,180,000 | 27,678,000 | |||
Operating expenses | |||||
Sales and marketing | 10,009,000 | 12,840,000 | |||
General and administrative | 6,382,000 | 6,117,000 | |||
Legal and professional | 4,623,000 | 2,949,000 | |||
Severance | 488,000 | 29,000 | |||
Research and development | 1,883,000 | 3,121,000 | |||
Total operating expenses | 23,385,000 | ||||
Income (loss) from operations | 4,795,000 | 2,622,000 | |||
Interest income (expense), net | 86,000 | 296,000 | |||
Income (loss) before income taxes | 4,881,000 | 2,918,000 | |||
Income tax expense | 1,227,000 | 1,547,000 | |||
Net income (loss) | 3,654,000 | 1,371,000 | |||
Items not involving cash at the time they are recorded in the statement of operations: | |||||
Provision (recoveries) for doubtful accounts receivable | (88,000) | 17,000 | |||
Depreciation and amortization | 2,173,000 | 2,144,000 | |||
Share-based compensation | 1,269,000 | 1,566,000 | |||
Deferred taxes | (4,000) | 399,000 | |||
Subtotal before changes in operating assets and liabilities | 7,004,000 | 5,497,000 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (644,000) | 346,000 | |||
Prepaid and other current assets | (216,000) | ||||
Deferred revenues | (813,000) | (395,000) | |||
Accounts payable | (1,080,000) | 970,000 | |||
Accrued expenses | (457,000) | 68,000 | |||
Other assets | 191,000 | 161,000 | |||
Other long-term liabilities | (59,000) | 24,000 | |||
Federal income tax payable | 970,000 | ||||
Comprehensive income (loss) | $ 3,654,000 | $ 1,371,000 | |||
Net income (loss) per common share - basic (in Dollars per share) | $ 0.18 | $ 0.06 | |||
Net income (loss) per common share - diluted (in Dollars per share) | $ 0.17 | $ 0.06 | |||
Net loss | $ 3,654,000 | $ 1,371,000 | |||
Net cash provided by operating activities | 4,896,000 | 5,736,000 | |||
Investing Activities: | |||||
Software development costs | (1,276,000) | (1,926,000) | |||
Purchase of property and equipment | (162,000) | (286,000) | |||
Redemption of Certificates of Deposit | 15,794,000 | 0 | |||
Net cash provided by (used in) investing activities | 14,356,000 | (2,212,000) | |||
Financing Activities: | |||||
Proceeds from exercise of stock options | 522,189 | 471,789 | |||
Purchase of treasury stock | (21,260,000) | 0 | |||
Dividends paid | (924,000) | (1,307,000) | |||
Net cash (used in) financing activities | (21,662,000) | (836,000) | |||
Net increase (decrease) in cash | (2,410,000) | 2,688,000 | |||
Cash at beginning of period | 11,583,000 | 8,895,000 | |||
Cash at end of period | 9,173,000 | 11,583,000 | |||
Interest | 0 | 0 | |||
Income tax payments | 253,000 | 1,649,000 | |||
ASC 605 Historical [Member] | |||||
Current assets: | |||||
Cash and cash equivalents | 9,173,000 | 11,583,000 | 9,173,000 | $ 11,583,000 | |
Accounts receivable, net | 6,582,000 | ||||
Prepaid and other current assets | 950,000 | ||||
Total current assets | 16,705,000 | ||||
Capitalized software development costs, net | 3,133,000 | ||||
Goodwill | 12,712,000 | ||||
Deferred tax asset, net | 532,000 | ||||
Property and equipment, net | 399,000 | ||||
Other assets | 64,000 | ||||
Total assets | 33,545,000 | ||||
Current liabilities: | |||||
Accounts payable | 820,000 | ||||
Accrued expenses | 1,139,000 | ||||
Federal income tax payable | 82,000 | ||||
Deferred revenue | 13,301,000 | ||||
Total current liabilities | 15,342,000 | ||||
Deferred revenue, non-current portion | 2,936,000 | ||||
Other long term liabilities | 117,000 | ||||
Stockholders' Equity: | |||||
Preferred stock | 0 | ||||
Common stock | 22,000 | ||||
Additional paid-in capital | 25,584,000 | ||||
Treasury stock | (22,712,000) | ||||
Retained earnings | 12,256,000 | ||||
Total stockholders’ equity | 15,150,000 | ||||
Total liabilities and stockholders’ equity | 33,545,000 | ||||
Operating revenues: | |||||
Total revenues | 34,416,000 | ||||
Costs of revenues | |||||
Total costs of revenues | 6,210,000 | ||||
Gross profit | 28,206,000 | ||||
Operating expenses | |||||
Sales and marketing | 9,804,000 | ||||
General and administrative | 6,382,000 | ||||
Legal and professional | 4,623,000 | ||||
Severance | 488,000 | ||||
Research and development | 1,883,000 | ||||
Total operating expenses | 23,180,000 | ||||
Income (loss) from operations | 5,026,000 | ||||
Interest income (expense), net | 86,000 | ||||
Income (loss) before income taxes | 5,112,000 | ||||
Income tax expense | 1,285,000 | ||||
Net income (loss) | 3,827,000 | ||||
Items not involving cash at the time they are recorded in the statement of operations: | |||||
Provision (recoveries) for doubtful accounts receivable | (88,000) | ||||
Depreciation and amortization | 2,173,000 | ||||
Share-based compensation | 1,269,000 | ||||
Deferred taxes | (4,000) | ||||
Subtotal before changes in operating assets and liabilities | 7,177,000 | ||||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (719,000) | ||||
Prepaid and other current assets | (323,000) | ||||
Deferred revenues | (813,000) | ||||
Accounts payable | (1,080,000) | ||||
Accrued expenses | (382,000) | ||||
Other assets | 191,000 | ||||
Other long-term liabilities | (59,000) | ||||
Federal income tax payable | 904,000 | ||||
Comprehensive income (loss) | $ 3,827,000 | ||||
Net income (loss) per common share - basic (in Dollars per share) | $ 0.18 | ||||
Net income (loss) per common share - diluted (in Dollars per share) | $ 0.18 | ||||
Net loss | $ 3,827,000 | ||||
Net cash provided by operating activities | 4,896,000 | ||||
Investing Activities: | |||||
Software development costs | (1,276,000) | ||||
Purchase of property and equipment | (162,000) | ||||
Redemption of Certificates of Deposit | 15,794,000 | ||||
Net cash provided by (used in) investing activities | 14,356,000 | ||||
Financing Activities: | |||||
Proceeds from exercise of stock options | 522,000 | ||||
Purchase of treasury stock | (21,260,000) | ||||
Dividends paid | (924,000) | ||||
Net cash (used in) financing activities | (21,662,000) | ||||
Net increase (decrease) in cash | (2,410,000) | ||||
Cash at beginning of period | 11,583,000 | ||||
Cash at end of period | 9,173,000 | 11,583,000 | |||
Interest | 0 | ||||
Income tax payments | 253,000 | ||||
Effect of ASC 606 [Member] | |||||
Current assets: | |||||
Accounts receivable, net | (75,000) | ||||
Prepaid and other current assets | (571,000) | ||||
Total current assets | (646,000) | ||||
Deferred tax asset, net | 137,000 | ||||
Other assets | (438,000) | ||||
Total assets | (947,000) | ||||
Current liabilities: | |||||
Accrued expenses | (75,000) | ||||
Federal income tax payable | (66,000) | ||||
Total current liabilities | (141,000) | ||||
Stockholders' Equity: | |||||
Retained earnings | (806,000) | ||||
Total stockholders’ equity | (806,000) | ||||
Total liabilities and stockholders’ equity | $ (947,000) | ||||
Costs of revenues | |||||
Total costs of revenues | (26,000) | ||||
Gross profit | 26,000 | ||||
Operating expenses | |||||
Sales and marketing | (205,000) | ||||
Total operating expenses | (205,000) | ||||
Income (loss) from operations | 231,000 | ||||
Income (loss) before income taxes | 231,000 | ||||
Income tax expense | 58,000 | ||||
Net income (loss) | 173,000 | ||||
Items not involving cash at the time they are recorded in the statement of operations: | |||||
Subtotal before changes in operating assets and liabilities | 173,000 | ||||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (75,000) | ||||
Prepaid and other current assets | (107,000) | ||||
Accrued expenses | 75,000 | ||||
Federal income tax payable | (66,000) | ||||
Comprehensive income (loss) | $ 173,000 | ||||
Net income (loss) per common share - basic (in Dollars per share) | $ 0.01 | ||||
Net income (loss) per common share - diluted (in Dollars per share) | $ 0.01 | ||||
Net loss | $ 173,000 | ||||
Software and Licenses [Member] | |||||
Operating revenues: | |||||
Revenues | 10,512,000 | 10,929,000 | |||
Costs of revenues | |||||
Costs of revenues | 2,978,000 | 2,986,000 | |||
Software and Licenses [Member] | ASC 605 Historical [Member] | |||||
Operating revenues: | |||||
Revenues | 10,512,000 | ||||
Costs of revenues | |||||
Costs of revenues | 2,952,000 | ||||
Software and Licenses [Member] | Effect of ASC 606 [Member] | |||||
Costs of revenues | |||||
Costs of revenues | (26,000) | ||||
Maintenance [Member] | |||||
Operating revenues: | |||||
Revenues | 21,587,000 | 20,761,000 | |||
Costs of revenues | |||||
Costs of revenues | 2,093,000 | 1,763,000 | |||
Maintenance [Member] | ASC 605 Historical [Member] | |||||
Operating revenues: | |||||
Revenues | 21,587,000 | ||||
Costs of revenues | |||||
Costs of revenues | 2,093,000 | ||||
Professional Services [Member] | |||||
Operating revenues: | |||||
Revenues | 2,317,000 | 2,201,000 | |||
Costs of revenues | |||||
Costs of revenues | 1,165,000 | $ 1,464,000 | |||
Professional Services [Member] | ASC 605 Historical [Member] | |||||
Operating revenues: | |||||
Revenues | 2,317,000 | ||||
Costs of revenues | |||||
Costs of revenues | $ 1,165,000 |
3. Accounts Receivabl
3. Accounts Receivable, Net (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Accounts, Notes, Loans and Financing Receivable [Abstract] | ||
Total invoices issued and unpaid | $ 7,990 | $ 6,644 |
Less: Unpaid invoices relating to M&S contracts with a start date subsequent to the balance sheet date | (1,233) | (441) |
Gross accounts receivable | 6,757 | 6,203 |
Allowance for sales returns | 0 | (100) |
Allowance for doubtful accounts | (100) | (178) |
Accounts receivable, net | $ 6,657 | $ 5,925 |
3. Accounts Receiva_2
3. Accounts Receivable, Net (Details) - Allowance for Credit Losses on Financing Receivables - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Credit Losses on Financing Receivables [Abstract] | ||
Balance, beginning of period | $ 278 | $ 263 |
ASC 606 Adjustment | (100) | 0 |
Provision for sales returns | 0 | 0 |
Provision for doubtful accounts | (88) | 17 |
Accounts written off | 10 | (2) |
Balance, end of period | $ 100 | $ 278 |
4. Property and Equipm
4. Property and Equipment, Net (Details) - Property, Plant and Equipment - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,621 | $ 3,476 |
Less accumulated depreciation | (3,222) | (2,995) |
Property and equipment, net | 399 | 481 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 835 | 786 |
Software and Software Development Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 669 | 662 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,558 | 1,469 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 559 | $ 559 |
5. Capitalized Softw
5. Capitalized Software Development Costs, Net (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Finite-Lived Intangible Assets [Abstract] | ||
Gross capitalized cost | $ 10,454 | $ 9,179 |
Accumulated amortization | (7,321) | (5,393) |
Net balance | $ 3,133 | $ 3,786 |
5. Capitalized Sof_2
5. Capitalized Software Development Costs, Net (Details) - Finite-lived Intangible Assets Amortization Expense - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-lived Intangible Assets Amortization Expense [Abstract] | ||
Amount capitalized | $ 1,276 | $ 1,926 |
Amortization expense | $ (1,929) | $ (1,883) |
5. Capitalized Sof_3
5. Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure - Computer Software, Intangible Asset [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Released Products [Member] | |
5. Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |
Gross capitalized at December 31, 2018 | $ 9,624 |
Accumulated amortization | (7,321) |
Total | 2,303 |
Unreleased Products [Member] | |
5. Capitalized Software Development Costs, Net (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | |
Gross capitalized at December 31, 2018 | 830 |
Accumulated amortization | 0 |
Total | $ 830 |
5. Capitalized Sof_4
5. Capitalized Software Development Costs, Net (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense $ in Thousands | Dec. 31, 2018USD ($) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |
2019 | $ 1,328 |
2020 | 857 |
2021 | 118 |
Total | $ 2,303 |
6. Deferred Revenue (D
6. Deferred Revenue (Details) - Schedule of Deferred Revenue, by Arrangement, Disclosure - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Deferred Revenue, by Arrangement, Disclosure [Abstract] | |||
Total invoiced for M&S contracts for which revenue will be recognized in future periods | $ 17,470 | $ 17,491 | |
Less: Unpaid invoices relating to M&S agreements with a start date subsequent to the balance sheet date | (1,233) | (441) | |
Total deferred revenue | 16,237 | 17,050 | $ 17,445 |
Deferred revenue, current portion | 13,301 | 13,315 | |
Deferred revenue, non-current portion | $ 2,936 | $ 3,735 |
7. Commitments and Contingenc_3
7. Commitments and Contingencies (Details) - USD ($) | Dec. 18, 2018 | Sep. 13, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 |
7. Commitments and Contingencies (Details) [Line Items] | |||||
Operating Leases, Rent Expense | $ 347,000 | $ 347,000 | |||
Deferred Rent Credit | 4,000 | ||||
Other Commitment | $ 1,300,000 | ||||
Loss Contingency, Damages Awarded, Value | $ 1,400,000 | ||||
Settlement Liabilities, Percentage | 25.00% | ||||
Settlement Liabilities, Current | $ 350,000 | ||||
Litigation Settlement, Expense | $ 12,721 | ||||
Subsequent Event [Member] | |||||
7. Commitments and Contingencies (Details) [Line Items] | |||||
Lessor, Operating Lease, Term of Contract | 10 years | ||||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 408,000 |
7. Commitments and C
7. Commitments and Contingencies (Details) - Schedule of Future Minimum Rental Payments for Operating Leases $ in Thousands | Dec. 31, 2018USD ($) |
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | |
2019 | $ 120 |
Total | $ 120 |
8. Stock Options, Restricted _3
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 160,000 | |
Cash Payments Made to Option Holders (in Dollars) | $ 78,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 219 days | 1 year 339 days |
Stock-Based Awards [Member] | ||
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,473,667 | |
Long-Term Equity Incentive Plans [Member] | Executive Officer [Member] | ||
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) [Line Items] | ||
Allocated Share-based Compensation Expense (in Dollars) | $ 255,000 | |
Long-Term Equity Incentive Plans [Member] | Employee Stock Option [Member] | ||
8. 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 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 90 days | |
2015 Directors Plan [Member] | ||
8. 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 | |
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 | 240,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | $ 313,929 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 4 months |
8. Stock Options, Re
8. 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 | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Abstract] | ||
Share-based compensation expense | $ 1,269 | $ 1,566 |
8. Stock Options, _2
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | |||
Number of Shares, Outstanding | 2,407,005 | 2,585,210 | |
Weighted Average Exercise Price, Outstanding | $ 3 | $ 3.34 | |
Weighted Average Remaining Contractual Term, Outstanding | 7 years 69 days | 6 years 354 days | 6 years 281 days |
Aggregate Intrinsic Value, Outstanding | $ 2,574 | $ 1,015 | |
2017 | |||
Number of Shares, Granted | 1,052,737 | 975,000 | |
Weighted Average Exercise Price, Granted | $ 3.87 | $ 3.98 | |
Number of Shares, Forfeitures | (896,479) | (600,995) | |
Weighted Average Exercise Price, Forfeitures | $ 3.58 | $ 3.35 | |
Number of Shares, Exercised | (205,148) | (195,800) | |
Weighted Average Exercise Price, Exercised | $ 2.55 | $ 2.41 | |
2018 | |||
Number of Shares, Exercisable | 1,103,631 | ||
Weighted Average Exercise Price, Exercisable | $ 3.07 | ||
Weighted Average Remaining Contractual Term, Exercisable | 4 years 29 days | ||
Aggregate Intrinsic Value, Exercisable | $ 1,577 | ||
Number of Shares, Outstanding | 2,536,320 | 2,585,210 | |
Weighted Average Exercise Price, Outstanding | $ 3.53 | $ 3.34 | |
Aggregate Intrinsic Value, Outstanding | $ 2,464 | $ 1,015 |
8. Stock Options, _3
8. 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 ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
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 during the year (in Dollars per share) | $ 1.57 | $ 1.67 |
Intrinsic value of options exercised during the year | $ 266,010 | $ 351,893 |
Cash received from stock options exercised during the year | $ 522,189 | $ 471,789 |
Number of options that vested during the year (in Shares) | 555,574 | 528,734 |
Fair value of options that vested during the year | $ 929,480 | $ 850,044 |
Unrecognized compensation expense related to non-vested options at end of year | $ 1,874,762 | $ 1,751,077 |
Weighted average years over which non-vested option expense will be recognized | 2 years 219 days | 1 year 339 days |
8. Stock Options, _4
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan - shares | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 30, 2016 |
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |||
Options Outstanding | 2,536,320 | 2,585,210 | 2,407,005 |
2000 Stock Option Plan [Member] | |||
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |||
Options Outstanding | 15,000 | ||
2010 Employee LT Equity Incentive Plan [Member] | |||
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |||
Options Outstanding | 994,987 | ||
2016 Employee LT Equity Incentive Plan [Member] | |||
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Outstanding under Stock Option Plan [Line Items] | |||
Options Outstanding | 1,526,333 |
8. Stock Options, _5
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range shares in Millions | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Underlying Shares Outstanding (in Shares) | shares | 2,536,320 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 1,103,631 |
$1.43 - $2.34 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $ 1.43 |
Range of Exercise Prices, Upper Limit | $ 2.34 |
Underlying Shares Outstanding (in Shares) | shares | 277,350 |
Options Outstanding, Weighted Average Remaining Contractual Life | 1 year 357 days |
Options Outstanding, Weighted Average Exercise Price | $ 1.87 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 277,350 |
Options Exercisable, Weighted Average Exercise Price | $ 1.87 |
$2.35 - $3.53 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 2.35 |
Range of Exercise Prices, Upper Limit | $ 3.53 |
Underlying Shares Outstanding (in Shares) | shares | 771,637 |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 43 days |
Options Outstanding, Weighted Average Exercise Price | $ 3.32 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 571,195 |
Options Exercisable, Weighted Average Exercise Price | $ 3.27 |
$3.54 - $5.28 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | 3.54 |
Range of Exercise Prices, Upper Limit | $ 5.28 |
Underlying Shares Outstanding (in Shares) | shares | 1,487,333 |
Options Outstanding, Weighted Average Remaining Contractual Life | 8 years 310 days |
Options Outstanding, Weighted Average Exercise Price | $ 3.95 |
Options Exercisable, Number of Underlying Shares (in Shares) | shares | 255,086 |
Options Exercisable, Weighted Average Exercise Price | $ 3.94 |
8. Stock Options, _6
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract] | ||
Expected volatility | 48.00% | 49.00% |
Expected annual dividend yield | 1.50% | 1.50% |
Risk free rate of return | 2.88% | 1.95% |
Expected option term (years) | 5 years 120 days | 6 years |
8. Stock Options, _7
8. Stock Options, Restricted Stock and Share-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Nonvested Restricted Stock Shares Activity [Abstract] | ||
Number of Shares, Restricted Shares Outstanding | 80,000 | 80,000 |
Grant Date Fair Value Per Share, Restricted Shares Outstanding | $ 4.24 | $ 3.31 |
2017 | ||
Number of Shares, Shares granted with restrictions | 100,000 | 80,000 |
Grant Date Fair Value Per Share, Shares granted with restrictions | $ 4.06 | $ 4.24 |
Number of Shares, Shares vested and restrictions removed | (80,000) | (80,000) |
Grant Date Fair Value Per Share, Shares vested and restrictions removed | $ 4.24 | $ 3.31 |
Total Fair Value of Shares That Vested, Shares vested and restrictions removed | $ 297,600 | $ 320,000 |
2018 | ||
Number of Shares, Restricted Shares Outstanding | 100,000 | 80,000 |
Grant Date Fair Value Per Share, Restricted Shares Outstanding | $ 4.06 | $ 4.24 |
9. Income Taxes (Details)
9. Income Taxes (Details) - USD ($) | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
9. Income Taxes (Details) [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 34.00% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount (in Dollars) | $ 0 | $ 355,000 | |
Deferred Tax Assets, Tax Credit Carryforwards, Research (in Dollars) | 45,000 | $ 61,000 | |
Research Tax Credit Carryforward [Member] | |||
9. Income Taxes (Details) [Line Items] | |||
Deferred Tax Assets, Tax Credit Carryforwards, Research (in Dollars) | $ 194,000 | ||
Research Tax Credit Carryforward [Member] | Minimum [Member] | |||
9. Income Taxes (Details) [Line Items] | |||
Franchise Tax Credit Carryforwards Expiration Date | 2034 | ||
Research Tax Credit Carryforward [Member] | Maximum [Member] | |||
9. Income Taxes (Details) [Line Items] | |||
Franchise Tax Credit Carryforwards Expiration Date | 2039 |
9. Income Taxes (De
9. Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||
Federal | $ 993 | $ 1,008 |
Federal | (21) | 416 |
Federal | 972 | 1,424 |
State | 238 | 140 |
State | 17 | (17) |
State | 255 | 123 |
Total | 1,231 | 1,148 |
Total | (4) | 399 |
Total | $ 1,227 | $ 1,547 |
9. Income Taxes (_2
9. Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Income tax expense | $ 1,025 | $ 992 |
Increase (decrease) in taxes resulting from: | ||
State taxes, net of federal benefit | 218 | 86 |
Stock based compensation | 182 | 294 |
Change in US tax rate due to tax reform | 0 | 355 |
R&D tax credit uncertain tax position (net) | (46) | 37 |
Research and development credit | (72) | (208) |
Domestic production activities deduction | 0 | (35) |
Foreign derived intangible income | (105) | 0 |
Other | 25 | 26 |
Income tax expense | $ 1,227 | $ 1,547 |
9. Income Taxes (_3
9. Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Deferred revenue | $ 809 | $ 775 |
Share-based compensation | 329 | 351 |
Compensation and benefits | 49 | 111 |
Texas franchise tax R&D credit | 194 | 185 |
Prepaid expenses not deducted for tax | 0 | 84 |
Allowance for doubtful accounts | 37 | 58 |
Net operating loss carryforward | 0 | 20 |
State deferred tax asset | 45 | 61 |
Accrued expenses not deducted for tax | 6 | 9 |
Valuation allowance | (194) | (185) |
Total deferred tax assets | 1,275 | 1,469 |
Intangible assets | 667 | 805 |
Deferred expenses | 213 | 0 |
Depreciation | 0 | 13 |
Total gross deferred tax liabilities | 880 | 818 |
Net deferred tax assets | $ 395 | $ 651 |
9. Income Taxes (_4
9. Income Taxes (Details) - Schedule of Unrecognized Tax Benefits Roll Forward - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Unrecognized Tax Benefits Roll Forward [Abstract] | ||
Balance, beginning of year | $ 158 | $ 121 |
Balance, end of year | 113 | 158 |
Increases for tax positions related to the current year | 0 | 22 |
Increases for tax positions related to prior years | 2 | 15 |
Decreases for tax positions due to expiring statue | $ (47) | $ 0 |
10. Earnings per S
10. Earnings per Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator for basic and diluted earnings per share: | ||
Net income (in Dollars) | $ 3,654 | $ 1,371 |
Denominators for basic and diluted earnings per share: | ||
Weighted average shares outstanding - basic | 20,721 | 21,702 |
Dilutive potential common shares | ||
Stock options and awards | 296 | 452 |
Denominator for diluted earnings per share | 21,017 | 22,154 |
Net income per common share - basic (in Dollars per share) | $ 0.18 | $ 0.06 |
Net income per common share – diluted (in Dollars per share) | $ 0.17 | $ 0.06 |
11. Dividends (De
11. Dividends (Details) - Schedule of Dividends Payable - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Dividends Payable [Abstract] | ||
Dividend per share of common stock | $ 0.045 | $ 0.060 |
12. Stockholder's Equity (Detai
12. Stockholder's Equity (Details) - USD ($) $ in Millions | Oct. 29, 2018 | Sep. 19, 2018 | Aug. 20, 2018 |
Tender Offer [Member] | |||
12. Stockholder's Equity (Details) [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 15 | ||
Stock Repurchased During Period, Shares | 896,348 | 4,011,013 | |
Stock Repurchased During Period, Value | $ 4 | $ 16.8 | |
Stock Repurchase Program, Percentage Increase | 2.00% | ||
Increase in Shares Repurchased [Member] | |||
12. Stockholder's Equity (Details) [Line Items] | |||
Stock Repurchased During Period, Shares | 439,585 |
13. Employee Benefit Plan (Deta
13. Employee Benefit Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 132,000 | $ 156,000 |
14. Segment and Geographic Di_2
14. Segment and Geographic Disclosures (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
14. Segment and Geographic Disclosures (Details) [Line Items] | ||
Number of Operating Segments | 1 | |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||
14. Segment and Geographic Disclosures (Details) [Line Items] | ||
Concentration Risk, Percentage | 14.00% | 14.00% |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | UNITED STATES | ||
14. Segment and Geographic Disclosures (Details) [Line Items] | ||
Concentration Risk, Percentage | 74.00% | 75.00% |
15. Concentration of Business_2
15. Concentration of Business Volume and Credit Risk (Details) - Sales Revenue, Net [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Customer Concentration Risk [Member] | ||
15. Concentration of Business Volume and Credit Risk (Details) [Line Items] | ||
Concentration Risk, Percentage | 14.00% | 14.00% |
Geographic Concentration Risk [Member] | ||
15. Concentration of Business Volume and Credit Risk (Details) [Line Items] | ||
Concentration Risk, Percentage | 26.00% | 25.00% |
16. Subsequent Events (Details)
16. Subsequent Events (Details) | Feb. 27, 2019USD ($) |
Subsequent Event [Member] | Chief Financial Officer [Member] | |
16. Subsequent Events (Details) [Line Items] | |
Adjustments to Additional Paid in Capital, Other | $ 548,000 |