Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SilverSun Technologies, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 4,330,545 | ||
Entity Public Float | $18,912,691 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1236275 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $1,308,337 | $762,892 |
Accounts receivable, net of allowance of $125,000 and $80,000 | 2,097,454 | 1,574,996 |
Unbilled services | 230,000 | 90,000 |
Prepaid expenses and other current assets | 195,779 | 69,276 |
Deferred tax assets - current | 38,000 | 40,000 |
Total current assets | 3,869,570 | 2,537,164 |
Property, plant and equipment, net | 295,054 | 241,895 |
Intangible assets, net | 809,481 | 687,880 |
Goodwill | 56,000 | 0 |
Deferred tax assets | 0 | 80,000 |
Deposits and other assets | 26,725 | 22,836 |
Total assets | 5,056,830 | 3,569,775 |
Current liabilities: | ||
Accounts payable | 1,393,541 | 1,159,719 |
Accrued expenses | 794,157 | 676,510 |
Accrued interest | 14,716 | 13,291 |
Income taxes payable | 76,000 | 0 |
Due to related party | 0 | 2,672 |
Note payable to related party | 0 | 20,000 |
Long term debt – current portion | 174,578 | 175,000 |
Capital lease obligations – current portion | 65,269 | 53,726 |
Deferred revenue | 2,215,114 | 1,715,555 |
Total current liabilities | 4,733,375 | 3,816,473 |
Long term debt net of current portion | 242,926 | 104,517 |
Capital lease obligations net of current portion | 66,922 | 48,624 |
Total liabilities | 5,043,223 | 3,969,614 |
Commitments and Contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, value | 0 | 0 |
Common stock: | ||
Par value $.00001; authorized 75,000,000 shares 3,959,064 and 3,922,566 shares issued and outstanding | 40 | 39 |
Additional paid-in capital | 11,030,043 | 10,809,499 |
Accumulated deficit | -11,016,477 | -11,209,378 |
Total stockholders' equity (deficit) | 13,607 | -399,839 |
Total liabilities and stockholders' equity (deficit) | 5,056,830 | 3,569,775 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock, value | 0 | 0 |
Series B Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock, value | $1 | $1 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance (in Dollars) | $125,000 | $80,000 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, issued | 0 | |
Preferred stock, outstanding | 0 | |
Par value (in Dollars per share) | $0.00 | $0.00 |
Authorized | 75,000,000 | 75,000,000 |
Issued | 3,959,064 | 3,922,566 |
Outstanding | 3,959,064 | 3,922,566 |
Series A Preferred Stock [Member] | ||
Preferred stock, authorized | 2 | 2 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, authorized | 1 | 1 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, issued | 1 | 1 |
Preferred stock, outstanding | 1 | 1 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Software product, net | $3,669,732 | $3,419,154 |
Service, net | 17,794,042 | 13,980,897 |
Total revenues, net | 21,463,774 | 17,400,051 |
Cost of revenues: | ||
Product | 1,871,301 | 1,707,142 |
Service | 11,019,409 | 8,942,768 |
Total cost of revenues | 12,890,710 | 10,649,910 |
Gross profit | 8,573,064 | 6,750,141 |
Operating expenses: | ||
Selling and marketing expenses | 3,326,497 | 3,244,337 |
General and administrative expenses | 4,281,090 | 2,927,622 |
Share-based compensation | 130,253 | 17,616 |
Depreciation and amortization | 364,573 | 301,962 |
Total operating expenses | 8,102,413 | 6,491,537 |
Income from operations | 470,651 | 258,604 |
Other income (expense): | ||
Interest expense, net | -59,750 | -56,056 |
Total other income (expense) | -59,750 | -56,056 |
Income before income taxes | 410,901 | 202,548 |
Income tax provision (benefit) | 218,000 | -120,000 |
Net income | $192,901 | $322,548 |
Basic and diluted net income per common share | ||
Basic (in Dollars per share) | $0.05 | $0.08 |
Diluted (in Dollars per share) | $0.05 | $0.08 |
Weighted average shares outstanding: | ||
Basic (in Shares) | 3,942,836 | 3,902,008 |
Diluted (in Shares) | 3,942,836 | 3,902,008 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (USD $) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Class A [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2012 | $0 | $1 | $39 | $10,717,355 | ($11,531,926) | ($814,531) |
Balance (in Shares) at Dec. 31, 2012 | 0 | 1 | 3,898,364 | |||
Issuance of warrants for services | 28,528 | 28,528 | ||||
Common stock issued in a cashless exercise of warrants (in Shares) | 7,018 | |||||
Issuance of common stock for repayment of accrued liabilities | 25,000 | 25,000 | ||||
Issuance of common stock for repayment of accrued liabilities (in Shares) | 7,184 | |||||
Share-Based Compensation | 17,616 | 17,616 | ||||
Issuance of common stock for services | 21,000 | 21,000 | ||||
Issuance of common stock for services (in Shares) | 10,000 | |||||
Net income (loss) | 322,548 | 322,548 | ||||
Balance at Dec. 31, 2013 | 0 | 1 | 39 | 10,809,499 | -11,209,378 | -399,839 |
Balance (in Shares) at Dec. 31, 2013 | 0 | 1 | 3,922,566 | |||
Common stock issued in a cashless exercise of warrants | -1 | -1 | ||||
Common stock issued in a cashless exercise of warrants (in Shares) | 4,167 | |||||
Issuance of common stock for repayment of accrued liabilities | 20,792 | 20,792 | ||||
Issuance of common stock for repayment of accrued liabilities (in Shares) | 5,331 | |||||
Share-Based Compensation | 130,253 | 130,253 | ||||
Issuance of common stock for services | 1 | 69,500 | 69,501 | |||
Issuance of common stock for services (in Shares) | 27,000 | |||||
Net income (loss) | 192,901 | 192,901 | ||||
Balance at Dec. 31, 2014 | $0 | $1 | $40 | $11,030,043 | ($11,016,477) | $13,607 |
Balance (in Shares) at Dec. 31, 2014 | 0 | 1 | 3,959,064 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net income | $192,901 | $322,548 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred income taxes | 82,000 | -120,000 |
Depreciation | 120,299 | 105,330 |
Amortization of intangibles | 244,274 | 196,633 |
Provision for bad debts | 45,000 | 0 |
Share-based compensation | 130,253 | 17,616 |
Common stock issued for services | 69,503 | 21,000 |
Warrant issued in exchange for services | 0 | 28,528 |
Changes in certain assets and liabilities: | ||
Accounts receivable | -567,458 | -65,464 |
Unbilled services | -140,000 | -90,000 |
Prepaid expenses and other assets | -126,503 | 62,244 |
Deposits and other assets | -3,889 | -840 |
Accounts payable | 233,822 | -27,426 |
Accrued liabilities | 138,436 | -64,527 |
Income tax payable | 76,000 | 0 |
Accrued interest | 1,424 | 869 |
Due to related parties | -2,672 | -3,270 |
Deferred revenues | 499,559 | 357,755 |
Net cash provided by operating activities | 992,949 | 740,996 |
Cash flows from investing activities: | ||
Software development costs | -71,875 | 0 |
Purchases of equipment | -81,116 | -30,364 |
Net cash used in investing activities | -152,991 | -30,364 |
Cash flows from financing activities: | ||
Repayment of notes payable to related parties | -20,000 | 0 |
Repayment of line of credit, net | 0 | -178,633 |
Proceed from term loan | 0 | 350,000 |
Repayments of long term debt | -212,013 | -70,483 |
Principal payment under capital lease obligations | -62,500 | -53,107 |
Net cash (used in) provided by financing activities | -294,513 | 47,777 |
Net increase in cash and cash equivalents | 545,445 | 758,409 |
Cash and cash equivalents, beginning of year | 762,892 | 4,483 |
Cash and cash equivalents, end of year | 1,308,337 | 762,892 |
During the year, cash was paid for the following: | ||
Income taxes | 70,688 | 28,596 |
Interest | $59,780 | $69,134 |
SUPPLEMENTAL_SCHEDULE_OF_NONCA
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | 12 Months Ended | |
Dec. 31, 2014 | ||
Supplemental Cash Flow Elements [Abstract] | ||
Cash Flow, Supplemental Disclosures [Text Block] | SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |
For the Year Ended December 31, 2014: | ||
a) | The company acquired the customer list of ESC for a $350,000 promissory note to the shareholders | |
b) | The company incurred approximately $92,341 in capital lease obligations. | |
c) | The company issued 5,331 shares of common stock with a fair value of $20,792 for repayment of accrued liabilities. | |
For the Year Ended December 31, 2013: | ||
a) | The Company incurred approximately $66,628 in capital lease obligations. | |
b) | The Company issued 7,018 shares of common stock in a cashless exercise of warrants for 8,333 shares at an exercise price of $0.90 per share. | |
c) | The Company issued 7,184 shares of common stock with a fair value of $25,000 for repayment of accrued liabilities in the amount of $25,000. | |
d) | The Company issued 10,000 shares of common stock with a fair value of $21,000 in exchange for services. | |
NOTE_1_DESCRIPTION_OF_BUSINESS
NOTE 1 - DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 - DESCRIPTION OF BUSINESS |
SilverSun Technologies, Inc. (the “Company”) is a value added reseller and master developer for Sage Software’s Sage100/500 and ERP X3 financial and accounting software as well as the publisher of its own proprietary Electronic Data Interchange (EDI) software, “MAPADOC.” The Company sells services and products to various industries including, but not limited to, manufacturers, wholesalers and distributors located throughout the United States. The Company is publicly traded and is currently quoted on the Over-the-Counter Bulletin Board (“OTCBB”) under the symbol “SSNT.” | |
In May 2014, the Company completed the purchase of selected assets of ESC Software (“ESC”), a leading Arizona-based reseller of Sage Software and Acumatica applications. ESC’s customers and business products and services have been integrated into the infrastructure of SWK Technologies, Inc. | |
NOTE_2_SUMMARY_OF_SIGNIFICANT_
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Significant Accounting Policies [Text Block] | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Basis of Presentation | |||||||||
The accompanying consolidated financial statements include the accounts of the “Company” and its wholly-owned subsidiary, SWK Technologies, Inc. (“SWK”). These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. All significant inter-company transactions and accounts have been eliminated in consolidation. | |||||||||
On February 4, 2015 the Company effected the Reverse Stock Split and every thirty (30) shares of outstanding Common Stock decreased to one (1) share of Common Stock. Similarly, the number of shares of Common Stock into which each outstanding option and warrant to purchase Common Stock is to be exercisable decreased on 1-for-30 basis and the exercise price of each outstanding option and warrant to purchase Common Stock increased proportionately. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Goodwill | |||||||||
Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. | |||||||||
Revenue Recognition | |||||||||
Revenue is recognized when products are shipped, or services are rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured. | |||||||||
Product Revenue | |||||||||
Software product revenue is recognized when the product is shipped to the customer. The Company treats the software component and the professional services consulting component as two separate arrangements that represent separate units of accounting. The arrangement consideration is allocated to each unit of accounting based upon that unit’s proportion of the fair value. In a situation where both components are present, software sales revenue is recognized when collectability is reasonably assured and the product is delivered and has stand-alone value based upon vendor specific objective evidence. | |||||||||
Service Revenue | |||||||||
Service revenue is comprised of primarily professional service consulting revenue, maintenance revenue and other ancillary services provided. Professional service revenue is recognized as service time is incurred. | |||||||||
With respect to maintenance services, upon the completion of one year from the date of sale, the Company offers customers an optional annual software maintenance and support agreement for subsequent periods not exceeding one year. Maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements, which typically range from three months to one year and are included in services revenue in the Consolidated Statements of Income. | |||||||||
Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. | |||||||||
Cash and Cash Equivalents | |||||||||
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts. | |||||||||
Concentrations | |||||||||
The Company maintains its cash and cash equivalents with various institutions, which exceed federally insured limits throughout the year. At December 31, 2014, the company had cash on deposit of approximately $1,029,941 in excess of the federally insured limits of $250,000. | |||||||||
For the years ended December 31, 2014 and 2013, our top ten customers accounted for 16% ($3,381,090) and 19% ($3,159,000), respectively, of our total revenues. The Company does not rely on any one specific customer for any significant portion of our revenue base. | |||||||||
For the years ended December 31 2014 and 2013, purchases from one supplier through a “channel partner” agreement were approximately 26% and 31% of cost of revenues, respectively. This channel partner agreement is for a one year term and automatically renews for an additional one year term on the anniversary of the agreements effective date. | |||||||||
For the years ended December 31, 2014 and 2013, one supplier represented approximately 37% and 52% of total accounts payable, respectively. | |||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash and cash equivalents. As of December 31, 2014 the Company believes it has no significant risk related to its concentration of accounts receivable. | |||||||||
Unbilled Services | |||||||||
The Company recognizes revenue on its professional services as those services are performed or certain obligations are met. Unbilled services represents the revenue recognized but not yet invoiced. | |||||||||
Accounts Receivable | |||||||||
Accounts receivable consist primarily of invoices for maintenance and professional services. Full payment for software ordered by customers is due in advance of ordering from the software supplier. Payments for maintenance and support plan renewals are due before the beginning of the maintenance period. Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services. | |||||||||
The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations. | |||||||||
Property and Equipment | |||||||||
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally three to seven years. Maintenance and repairs that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred. | |||||||||
When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Consolidated Statements of Income. | |||||||||
Deferred Revenues | |||||||||
Deferred revenues consist of maintenance service, customer support services, including telephone support and deposits for future consulting services which will be earned as services are performed over the contractual or stated period, which generally ranges from three to twelve months. At December 31, 2014 and December 31, 2013 the customer deposits held for future services were $1,605,970 and $1,103,736 respectively. At December 31, 2014 and December 31, 2013 the deferred maintenance and support revenue was $609,144 and $611,819 respectively. | |||||||||
Income Taxes | |||||||||
Deferred income taxes reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date. | |||||||||
The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code. | |||||||||
The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions if the weight of available evidence indicates that it is more likely than not that the position will not be sustained upon a tax examination with a tax examination being presumed to occur. The Company recognizes interest and penalties as incurred in finance income (expense), net in the Consolidated Statements of Income. | |||||||||
There were no liabilities for uncertain tax positions at December 31, 2014 and 2013. | |||||||||
Fair Value Measurement | |||||||||
The accounting standards define fair value and establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is as follows: | |||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||||
The Company’s current financial assets and liabilities approximate fair value due to their short term nature and include cash, accounts receivable, accounts payable, and accrued liabilities. The carrying value of longer term lease and debt obligations approximate fair value as their stated interest rates approximate the rates currently available. | |||||||||
Definite Lived Intangible Assets and Long-lived Assets | |||||||||
The purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method. | |||||||||
The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. No impairment losses were identified or recorded in the years ended December 31, 2014 and 2013. | |||||||||
Stock-Based Compensation | |||||||||
Compensation expense related to share-based transactions, including employee stock options, is measured and recognized in the financial statements based on a determination of the fair value. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For employee stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. | |||||||||
Earnings per Share | |||||||||
The Company’s basic income per common share is based on net income for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding stock options and warrants to the extent they are dilutive. Diluted income per share does not include common stock equivalents, stock options and warrants, as these shares would have an anti-dilutive effect as their exercise prices were above the market price of the Company’s common stock at December 31, 2014 and 2013. | |||||||||
The computation of EPS is approximately as follows: | |||||||||
Year Ended | Year Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Basic net income per share: | |||||||||
Net income attributable to common stockholders | $ | 192,901 | $ | 322,548 | |||||
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 | |||||||
Basic net income per share attributable to common stockholders | $ | 0.05 | $ | 0.08 | |||||
Diluted net income per share: | |||||||||
Net income attributable to common stockholders | $ | 192,901 | $ | 322,548 | |||||
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 | |||||||
Incremental shares attributable to warrants and convertible promissory note | - | - | |||||||
Total adjusted weighted-average shares | 3,942,836 | 3,902,008 | |||||||
Diluted net income per share attributable to common stockholders | $ | 0.05 | $ | 0.08 | |||||
The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share. | |||||||||
2014 | 2013 | ||||||||
Stock options | 163,846 | 89,116 | |||||||
Warrants | - | 25,000 | |||||||
Total potential dilutive securities not included in loss per share | 163,846 | 114,116 | |||||||
Recent Accounting Pronouncements | |||||||||
In May 2014, the FASB issued Accounting Standard Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this ASU on January 1, 2017. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and management is currently evaluating which transition approach to use. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures. | |||||||||
No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements. | |||||||||
NOTE_3_PROPERTY_AND_EQUIPMENT
NOTE 3 - PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 3 - PROPERTY AND EQUIPMENT | ||||||||
Property and equipment is summarized as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Leasehold improvements | $ | 30,557 | $ | 30,557 | |||||
Equipment, furniture and fixtures | 1,175,378 | 1,001,920 | |||||||
1,205,935 | 1,032,477 | ||||||||
Less: Accumulated depreciation | (910,881 | ) | (790,582 | ) | |||||
Property and equipment, net | $ | 295,054 | $ | 241,895 | |||||
Depreciation and amortization expense related to these assets for the years ended December 31, 2014 and 2013 was $120,299 and $105,330. | |||||||||
NOTE_4_BUSINESS_COMBINATION
NOTE 4 - BUSINESS COMBINATION | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Business Combination Disclosure [Text Block] | NOTE 4 – BUSINESS COMBINATION | ||||||||
On May 6, 2014 SWK entered into an Asset Purchase Agreement with ESC, Inc. d/b/a ESC Software, an Arizona corporation, and Alan H. Hardy and Michael Dobberpuhl in their individual capacity as Shareholders. SWK acquired certain assets of ESC (as defined in the Purchase Agreement). In full consideration for the acquired assets, the Company issued a promissory note in the aggregate principal amount of $350,000. The purchase was initially allocated, based on the Company’s estimate of fair value, to intangible assets, which are expected to consist primarily of customers lists with an estimated life of five years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists was modified from $350,000 to $294,000, with the excess purchase consideration being allocated to goodwill. | |||||||||
The following summarizes the purchase price allocation: | |||||||||
Customer List | $ | 294,000 | |||||||
Goodwill | 56,000 | ||||||||
Fair value of net assets acquired | $ | 350,000 | |||||||
Note to shareholders for acquisition | $ | 350,000 | |||||||
Total purchase price | $ | 350,000 | |||||||
Acquisition costs were approximately $7,500, which are included in general and administrative expenses. | |||||||||
The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisition occurred on January 1, 2013, nor is the financial information indicative of the results of future operations. | |||||||||
Pro Forma | 31-Dec-14 | 31-Dec-13 | |||||||
Net sales | $ | 22,198,709 | $ | 19,071,788 | |||||
Operating expenses | 8,323,173 | 6,897,535 | |||||||
Income before taxes | 497,400 | 234,586 | |||||||
Net income | $ | 233,509 | $ | 373,567 | |||||
Basic and diluted income per common share | $ | 0.06 | $ | 0.1 | |||||
The Company’s consolidated financial statements for the twelve months ending December 31, 2014 include the results of ESC since date of acquisition. For the twelve months ended December 31, 2014 the ESC operations had a net income before taxes of $45,183 that was included in the Company’s Consolidated Statement of Income, which consisted of approximately $903,650 in revenues and $858,467 in expenses. | |||||||||
NOTE_5_INTANGIBLE_ASSETS
NOTE 5 - INTANGIBLE ASSETS | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 5 – INTANGIBLE ASSETS | |||||||||
Intangible assets consist of developed intellectual property carried at cost less accumulated amortization and customer lists acquired at fair value less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives. | ||||||||||
The components of intangible assets are as follows: | ||||||||||
31-Dec-14 | 31-Dec-13 | Estimated Useful Lives | ||||||||
Proprietary developed software | $ | 365,911 | $ | 294,036 | 5 | |||||
Intellectual property, customer list, and acquired contracts | 988,000 | 694,000 | 5 | |||||||
Total intangible assets | $ | 1,353,911 | $ | 988,036 | ||||||
Less: accumulated amortization | (544,430 | ) | (300,156 | ) | ||||||
$ | 809,481 | $ | 687,880 | |||||||
Amortization expense related to the above intangible assets was $244,274 and $196,633, respectively, the years ended December 31, 2014 and 2013. | ||||||||||
The Company expects future amortization expense to be the following: | ||||||||||
Amortization | ||||||||||
2015 | $ | 270,786 | ||||||||
2016 | 270,786 | |||||||||
2017 | 168,237 | |||||||||
2018 | 73,179 | |||||||||
2019 | 26,493 | |||||||||
Total | $ | 809,481 | ||||||||
NOTE_6_LINE_OF_CREDIT_AND_TERM
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Line Of Credit And Term Loan [Abstract] | |||||
Line Of Credit And Term Loan [Text Block] | NOTE 6 – LINE OF CREDIT, TERM LOAN AND PROMISSORY NOTE | ||||
On August 1, 2013, the Company obtained a line of credit and term loan from the bank. The term of the line is for two years and expires on July 31, 2015. The agreement included a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000 at prime plus 1.75% interest (5% at December 31, 2014). The line is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller. The credit facility requires the Company to pay a monitoring fee of $1,000 monthly. At December 31, 2014, the Company was in compliance with the required financial covenants the fixed charge ratio and debt to net worth. As of December 31, 2014, the availability under this line was $750,000. | |||||
The term loan is for $350,000 for two years and matures on July 31, 2015. Monthly payments are $15,776 including interest at 8%. The term loan is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller. At December 31, 2014 the outstanding balance was $106,559. | |||||
On May 6, 2014, SWK acquired certain assets of ESC, Inc. pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $350,000 (the “Note”) and matures on April 1, 2019. Monthly payments are $6,135 including interest at 2% per year. The Note is due sixty (60) months from the closing date, as defined in the Purchase Agreement and bears interest at a rate of two percent (2%) per annum. At December 31, 2014 the outstanding balance was $310,945. | |||||
At December 31, 2014, future payments of term loan and promissory note are as follows over each of the next five fiscal years: | |||||
2015 | $ | 174,578 | |||
2016 | 69,392 | ||||
2017 | 70,793 | ||||
2018 | 72,221 | ||||
2019 | 30,521 | ||||
Total | $ | 417,504 | |||
NOTE_7_INCOME_TAXES
NOTE 7 - INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Tax Disclosure [Text Block] | NOTE 7 - INCOME TAXES | ||||||||
Significant components of the Company's deferred tax assets and liabilities are summarized as follows: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | $ | 2,810,000 | $ | 2,928,000 | |||||
Long lived assets | 262,000 | 270,000 | |||||||
Share based payments | - | 71,000 | |||||||
Other | 58,000 | 35,000 | |||||||
Deferred tax asset | 3,130,000 | 3,304,000 | |||||||
Deferred tax liabilities: | |||||||||
Long lived assets | (89,000 | ) | (44,000 | ) | |||||
Deferred tax liabilities | (89,000 | ) | (44,000 | ) | |||||
Net deferred tax asset | 3,041,000 | 3,260,000 | |||||||
Less: Valuation allowance | (3,003,000 | ) | (3,140,000 | ) | |||||
Net deferred tax asset | $ | 38,000 | $ | 120,000 | |||||
The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income. The Company has federal net operating loss (“NOL”) carryforwards of approximately $7,470,000 as of December 31, 2014, which is subject to limitations under Section 382 of the Internal Revenue Code. These carryforward losses are available to offset future taxable income, and begin to expire in the year 2025 to 2030. A valuation allowance has been recorded, for those deferred tax assets that management does not believe that the realization is more likely than not. | |||||||||
The foregoing amounts are management’s estimates and the actual results could differ from those estimates. Future profitability in this competitive industry depends on continually obtaining and fulfilling new profitable sales agreements and modifying products. The inability to obtain new profitable contracts could reduce estimates of future profitability, which could affect the Company’s ability to realize the deferred tax assets. | |||||||||
A reconciliation of the statutory income tax rate to the effective rate is as follows for the period December 31, 2014 and 2013: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Federal income tax rate | 34 | % | 34 | % | |||||
State income tax, net of federal benefit | 5 | % | 6 | % | |||||
Permanent differences | 13 | % | 6 | % | |||||
Prior year adjustments | 5 | % | (35 | %) | |||||
Change in valuation allowance | (4 | %) | (70 | %) | |||||
Effective income tax rate | 53 | % | (59 | %) | |||||
Income tax provision (benefit): | |||||||||
Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Current: | |||||||||
Federal | $ | 76,000 | $ | - | |||||
State and local | 26,000 | - | |||||||
Total current tax provision | 102,000 | - | |||||||
Deferred: | |||||||||
Federal | 116,000 | - | |||||||
State and local | - | - | |||||||
Release of valuation allowance | - | (120,000 | ) | ||||||
Total deferred tax provision (benefit) | 116,000 | (120,000 | ) | ||||||
Total provision (benefit) | $ | 218,000 | (120,000 | ) | |||||
NOTE_8_CAPITAL_LEASE_OBLIGATIO
NOTE 8 - CAPITAL LEASE OBLIGATIONS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases, Capital [Abstract] | |||||
Capital Leases in Financial Statements of Lessee Disclosure [Text Block] | |||||
NOTE 8 – CAPITAL LEASE OBLIGATIONS | |||||
The Company has entered into lease commitments for equipment that meet the requirements for capitalization. The equipment has been capitalized and is included in equipment, furniture and leasehold improvements in the accompanying balance sheets. The related obligations are also recorded in the accompanying balance sheets and are based upon the present value of the future minimum lease payments with interest rates ranging from 8.5% to 11.0%. | |||||
At December 31, 2014, future payments under capital leases are as follows over each of the next three fiscal years: | |||||
2015 | $ | 75,068 | |||
2016 | 47,785 | ||||
2017 | 24,282 | ||||
Total minimum lease payments | 147,135 | ||||
Less amounts representing interest | (14,944 | ) | |||
Present value of net minimum lease payments | 132,191 | ||||
Less current portion | (65,269 | ) | |||
Long-term capital lease obligation | $ | 66,922 | |||
NOTE_9_RELATED_PARTY_TRANSACTI
NOTE 9 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 9 – RELATED PARTY TRANSACTIONS |
On October 19, 2010, the Company borrowed $45,000 in exchange for issuing a Note payable to Mr. Meller. The Note Payable is not collateralized, and carries an interest rate of 3% per annum on the unpaid balance. In January 2013, Mr. Meller extended the due date of the Note Payable to January 2014. The outstanding balance at December 31, 2014 was $0 and 2013 was $20,000. | |
The Company leases its North Syracuse office space from its current CFO, Crandall Melvin III which expires on May 31, 2015. The monthly rent for this office space is $2,100. | |
NOTE_10_COMMITMENTS
NOTE 10 - COMMITMENTS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies Disclosure [Text Block] | NOTE 10 - COMMITMENTS | ||||
Operating Leases | |||||
Our main offices are located at 5 Regent Street, Livingston, NJ 07039 where we have 6,986 square feet of office space at a monthly rent of $7,400. The lease expires December 31, 2016. The Company has a lease, with a one-year extension, for office space at 6834 Buckley Road, North Syracuse, New York, at a monthly rent of $2,100. The lease expires May 31, 2015. The Company also leases 2,700 square feet of office space for sales and support in Skokie, Illinois with a monthly rent of $3,000. This lease expires April 30, 2018. The Company also leases 500 square feet for sales and support in Minneapolis, Minnesota with a monthly rent of $885 a month. This lease expires February 2016. The company leases 2,105 square feet of office space in Phoenix, AZ starting at $1,271 and escalating to $2,894 per month by the end of the term September 30, 2019. | |||||
Total rent expense under these operating leases for the year ended December 31, 2014 and 2013 was $197,100 and $153,000, respectively. | |||||
The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended December 31, 2014. | |||||
2015 | $ | 152,511 | |||
2016 | 152,966 | ||||
2017 | 68,892 | ||||
2018 | 45,945 | ||||
2019 | 26,046 | ||||
Employment agreements | |||||
The Company has an Employment Agreement with Mark Meller, President and Chief Executive Officer of the Company, which began on September 15, 2003 and was extended on September 15, 2010 and which expires on September 15, 2017. As consideration, the Company agreed to provide Mr. Meller a 10% increase every year thereafter. The employment agreement with Mr. Meller also provides for a severance payment of three hundred percent (300%), less $100,000 of his gross income for services rendered to the Company in each of the five prior calendar years should his employment be terminated following a change in control, as defined in the employment agreement. | |||||
NOTE_11_STOCKHOLDERS_EQUITY
NOTE 11 - STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | |
NOTE 11 – STOCKHOLDERS’ EQUITY | |
Preferred Stock | |
The Company’s certificate of incorporation authorizes the issuance of 1,000,000 shares of Preferred Stock, par value $0.001 per share from time to time. | |
Our board of directors is authorized (by resolution and by filing an amendment to our certificate of incorporation and subject to limitations prescribed by the General Corporation Law of the State of Delaware) to issue, from to time, shares of Preferred Stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and other rights of the shares of each such series and to fix the qualifications, limitations and restrictions thereon, including, but without limiting the generality of the foregoing, the following: the number of shares constituting that series and the distinctive designation of that series; the dividend rate on the shares of that series, whether dividends are cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; whether that series has voting rights, in addition to voting rights provided by law, and, if so, the terms of those voting rights; whether that series has conversion privileges, and, if so, the terms and conditions of conversion, including provisions for adjusting the conversion rate in such events as our board of directors determines; whether or not the shares of that series are redeemable, and, if so, the terms and conditions of redemption, including the dates upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; whether that series has a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of that sinking fund; the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company, and the relative rights of priority, if any, of payment of shares of that series; and any other relative powers, preferences and rights of that series, and qualifications, limitations or restrictions on that series. | |
If we liquidate, dissolve or wind up our affairs, whether voluntarily or involuntarily, the holders of Preferred Stock of each series will be entitled to receive only that amount or those amounts as are fixed by the certificate of designations or by resolution of the board of directors providing for the issuance of that series. | |
Series A Convertible Preferred Stock | |
The Company issued 2 shares of Series A Convertible Preferred Stock (“Series A”), having the rights, preferences, privileges, powers and restrictions set forth in the Certificate of Designation filed with the Secretary of State of Delaware. The Company has the right to convert, at its sole option, each share of Series A into Class A Common Stock equal to 1% of the outstanding shares of Class A Common Stock at the time of conversion. Each one share of Series A shall entitle the Series A Holder to voting rights equal to 88,889 votes of Class A Common Stock. On January 12, 2012, the Series A Convertible Preferred Stock was converted into 79,552 shares of Common Stock. As of December 31, 2014 and 2013, no shares of Series A Convertible Preferred Stock were outstanding. | |
Series B Preferred Stock | |
The Series B Preferred Stock, par value $0.001 per share, has the rights, privileges, preferences and restrictions set for in the Certificate of Designation (the “Certificate of Designation”) filed by the Corporation with the Secretary of State of the State of Delaware (“Delaware Secretary of State”) on September 23, 2011. | |
In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the Series B Preferred holders shall be entitled to receive, on parity with the Common Stock holders, assets of the Company available for distribution to the holders of capital stock of the Company. The holders of Series B preferred shall not have any priority of preference with respect to any assets of the Company. | |
So long as any shares of Series B Preferred are outstanding, the Company shall not, without first obtaining the unanimous written consent of the holders of Series B Preferred, alter or change the rights, preferences or privileges of the Series B Preferred so as to affect adversely the holders of Series B Preferred. | |
The one (1) share of the Series B Preferred shall have voting rights equal to (x) the total issued and outstanding Common Stock and preferred stock eligible to vote at the time of the respective vote divided by (y) forty nine one-hundredths (0.49) minus (z) the total issued and outstanding Common Stock and preferred stock eligible to vote at the time of the respective vote. For the avoidance of doubt, if the total issued and outstanding Common Stock eligible to vote at the time of the respective vote is 5,000,000, the voting rights of the Series B Preferred Stock shall be equal to 5,204,082 (e.g. (5,000,000 / 0.49) – 5,000,000 =,204,082). | |
Common Stock | |
The Company is authorized to issue 75,000,000 shares of common stock, par value $.00001 per share. At December 31, 2014 and December 31, 2013, there were 3,959,064 and 3,922,566 common shares issued and outstanding, respectively. | |
NOTE_12_STOCK_OPTIONS_AND_WARR
NOTE 12 - STOCK OPTIONS AND WARRANTS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure Text Block Supplement [Abstract] | ||||||||||||||
Shareholders' Equity and Share-based Payments [Text Block] | NOTE 12 - STOCK OPTIONS AND WARRANTS | |||||||||||||
2004 Stock Incentive Plan | ||||||||||||||
The Company adopted the 2004 Stock Incentive as amended Plan (the “2004 Plan”) in order to attract and retain qualified employees, directors, independent contractors or agents of the Company. Under the Plan, the Board of Directors (the “Board”), in its discretion may grant stock options (including non-statutory stock options and incentive stock options qualifying under Section 422 of the Code), stock appreciation rights (including free-standing, tandem and limited stock appreciation rights), warrants, dividend equivalents, stock awards, restricted stock, phantom stock, performance shares or other securities or rights that the Board determines to be consistent with the objectives and limitations of the plan at a price to be equal to or greater than 50% of the fair market value of such shares on the date of grant of such award. The Plan terminated on September 29, 2014; options granted before that date were not affected by plan termination. At December 31, 2014 and 2013, 163,846 and 89,116 options remained outstanding under the 2004 Plan, respectively. | ||||||||||||||
2004 Directors’ and Officers’ Stock Incentive Plan | ||||||||||||||
The Company adopted the 2004 Directors’ and Officers’ Stock Incentive Plan (the “2004 D&O Plan”) in order to provide long-term incentive and rewards to officers and directors of the Company and subsidiary and to attract and retain qualified employees, directors, independent contractors or agents of the Company. The Plan terminated on September 29, 2014 with no shares outstanding under the 2004 D&O plan. | ||||||||||||||
2007 Consultant Stock Incentive Plan | ||||||||||||||
The Company adopted the 2007 Consultant Stock Incentive Plan (the “2007 Plan”) to: (i) provide long-term incentives, payment in stock in lieu of cash and rewards to consultants, advisors, attorneys, independent contractors or agents ("Eligible Participants") of the Company; (ii) assist the Company in attracting and retaining independent contractors or agents with experience and/or ability on a basis competitive with industry practices; and (iii) associate the interests of such independent contractors or agents with those of the Company's stockholders. The Company has reserved 19,393 shares for issuance under this plan. Awards under the Plan may include, but need not be limited to, stock options (including non-statutory stock options and incentive stock options qualifying under Section 422 of the Code), stock appreciation rights (including free-standing, tandem and limited stock appreciation rights), warrants, dividend equivalents, stock awards, restricted stock, phantom stock, performance shares or other securities or rights that the Board determines to be consistent with the objectives and limitations of the Plan. The price shall be equal to or greater than 50% of the fair market value of such shares on the date of grant of such award. The Board shall determine the extent to which awards shall be payable in cash, shares of the Company common stock or any combination thereof. The Plan (but not the awards theretofore granted under the Plan) shall terminate on and no awards shall be granted after January 22, 2017. At December 31, 2014 and 2013 zero options were outstanding under the 2007 Plan. | ||||||||||||||
In February 2014, the Company granted 50,000 incentive stock options with an exercise price of $4.50 per option to certain non-executive employees under the 2004 Stock Incentive Plan. Approximately 25,000 of the options vest immediately with the remaining 50% vesting ratably over a three-year period. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 0.71%, volatility at 353.95% and an expected life of 5 years. The Company estimates the forfeiture rate based on historical data. Based on an analysis of historical information, the Company has applied a forfeiture rate of 15%. As a result, the Company estimated the value of these options at $115,488. | ||||||||||||||
In May 2014, the Company granted 20,000 incentive stock options with an exercise price of $4.50 per option to a non -executive employee under the 2004 Stock Incentive Plan. The Company recognizes compensation cost on awards on a straight-line basis over the vesting period, approximately five years. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 1.68%, volatility at 328.76% and an expected life of 5 years. The Company estimates the forfeiture rate based on historical data. Based on an analysis of historical information, the Company has applied a forfeiture rate of 15%. As a result, the Company estimated the value of these options at $77,981. | ||||||||||||||
In July 2014, the Company granted 10,000 incentive stock options with an exercise price of $4.50 per option to a certain non-executive employee under the 2004 Stock Incentive Plan. Options vest immediately. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 1.0%, volatility at 323.81% and an expected life of 5 years. As a result, the Company estimated the value of these options at $44,987. | ||||||||||||||
The Company uses judgment in estimating the amount of stock-based awards that are expected to be forfeited. If actual forfeitures differ significantly from the original estimate, stock-based compensation expense and the results of operations could be impacted. | ||||||||||||||
A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2014 and 2013 and changes during the years are presented below: (in number of options): | ||||||||||||||
Number | Average | Average Remaining | Aggregate | |||||||||||
of Options | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||
Outstanding options at January 1, 2013 | 95,824 | $ | 4.8 | 4.4 years | ||||||||||
Options granted | - | |||||||||||||
Options exercised | - | |||||||||||||
Options canceled/forfeited | (6,708 | ) | $ | 4.8 | ||||||||||
Outstanding options at December 31, 2013 | 89,116 | $ | 4.8 | 3.4 years | $ | -0- | ||||||||
Options granted | 80,000 | $ | 4.5 | 4.3 years | ||||||||||
Options exercised | - | |||||||||||||
Options canceled/forfeited | (5,270 | ) | 4.8 | |||||||||||
Outstanding options at December 31, 2014 | 163,846 | 4.65 | 2.5 years | $ | -0- | |||||||||
Vested Options: | ||||||||||||||
December 31, 2014: | 115,653 | $ | 4.65 | 1.8 years | $ | -0- | ||||||||
December 31, 2013: | 85,044 | $ | 4.8 | 3.4 years | $ | -0- | ||||||||
For the years ended December 31, 2014 and 2013, the unamortized compensation expense for stock options was $98,000 and $21,000, respectively. Unamortized compensation expense is expected to be recognized over a weighted-average period of 3 years. | ||||||||||||||
Warrants Outstanding | ||||||||||||||
During 2013 the Company issued 8,333 warrants for services with a fair value of approximately $29,000, which immediately vested. The estimated fair value of the warrant has been calculated based on a Black-Scholes pricing model using the following assumptions: a) fair market value of stock of $3.60; b) exercise price of $3.60; c) Dividend yield of 0%; d) Risk free interest rate of 0.27%; e) expected volatility of 278.17%; f) Expected life of 2 years. | ||||||||||||||
Warrants Outstanding (continued) | ||||||||||||||
The following table summarizes the warrants transactions: | ||||||||||||||
Warrants | Weighted Average | |||||||||||||
Outstanding | Exercise Price | |||||||||||||
Balance, January 1, 2013 | 25,002 | $ | 4.5 | |||||||||||
Granted | 8,333 | $ | 3.6 | |||||||||||
Exercised | 8,333 | $ | 0.9 | |||||||||||
Canceled | 1 | $ | 3,803.00 | |||||||||||
Balance, December 31, 2013 | 25,001 | $ | 5.2 | |||||||||||
Granted | - | $ | - | |||||||||||
Exercised | 8,333 | $ | 3.6 | |||||||||||
Canceled | 16,668 | $ | 4.2 | |||||||||||
Balance, December 31, 2014 | - | $ | - | |||||||||||
Outstanding and Exercisable, | ||||||||||||||
31-Dec-14 | - | $ | - | |||||||||||
Outstanding and Exercisable, | ||||||||||||||
31-Dec-13 | 25,001 | $ | 5.2 | |||||||||||
NOTE_13_SUBSEQUENT_EVENTS
NOTE 13 - SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 13 – SUBSEQUENT EVENTS |
The Company's board of directors and stockholders authorized a reverse stock split of its outstanding common stock at a ratio of 1-for-30. On February 4, 2015, the reverse stock split was effected. The accompanying consolidated financial statements give retroactive effect as though the 1-for-30 reverse stock split of the Company's common stock occurred for all periods presented, without any change in the par value per share. | |
On January 29, 2015, the Company's board of directors and stockholders authorized (i) a reduction in authorized shares of the Company's common stock from 750,000,000 to 75,000,000, and (ii) the combination of the Company's Class A Common Stock, par value $0.00001 per share, and Class B Common Stock, par value $0.00001 per share, into a general class of common stock, par value $0.00001 per share. | |
On January 29, 2015, Mark Meller resigned as Chief Financial Officer of the Company and Crandall Melvin III was appointed. Mr. Meller continues to be the Company’s President and CEO. | |
On March 11, 2015 SWK entered into an Asset Purchase Agreement with 2000 SOFT, Inc. d/b/a Accounting Technology Resource (ATR), a California corporation, and Karen Espinoza McGarrigle in her individual capacity as Shareholder. In consideration for the acquired assets, the Company paid $80,000 in cash and issued a promissory note in the aggregate principal amount of $175,000 (the “Note”). The Note is due thirty six (36) months from the Closing Date and bears interest at a rate of two percent (2%) per annum. The monthly payments including interest are $5,012. Additionally in connection with the purchase agreement, the Company entered into an employment agreement with Ms. McGarrigle for a term of three years at a base salary of $155,000 per year. Additionally Ms. McGarrigle shall receive 10,000 options to purchase the Company’s common stock at a strike price of $4.00 per share. These options vest at 20% per year over five years. | |
In March 2015, 363,490 of common stock was sold at a price of $4.24 and 181,745 warrants was sold at a price of $0.01. There were also direct underwriting expenses relating to this offering of $142,774, resulting in net proceeds to the Company of approximately $1,400,000. | |
On March 29, 2015, Mr. Meller returned his one share of Series B Preferred to the Company and the Company cancelled the certificate. On March 29, 2015, subject to shareholder approval, the Board approved the cancellation of the Series B Preferred Certificate of Designation. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation | ||||||||
The accompanying consolidated financial statements include the accounts of the “Company” and its wholly-owned subsidiary, SWK Technologies, Inc. (“SWK”). These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. All significant inter-company transactions and accounts have been eliminated in consolidation. | |||||||||
On February 4, 2015 the Company effected the Reverse Stock Split and every thirty (30) shares of outstanding Common Stock decreased to one (1) share of Common Stock. Similarly, the number of shares of Common Stock into which each outstanding option and warrant to purchase Common Stock is to be exercisable decreased on 1-for-30 basis and the exercise price of each outstanding option and warrant to purchase Common Stock increased proportionately. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes. | |||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill | ||||||||
Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. | |||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition | ||||||||
Revenue is recognized when products are shipped, or services are rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured. | |||||||||
Product Revenue | |||||||||
Software product revenue is recognized when the product is shipped to the customer. The Company treats the software component and the professional services consulting component as two separate arrangements that represent separate units of accounting. The arrangement consideration is allocated to each unit of accounting based upon that unit’s proportion of the fair value. In a situation where both components are present, software sales revenue is recognized when collectability is reasonably assured and the product is delivered and has stand-alone value based upon vendor specific objective evidence. | |||||||||
Service Revenue | |||||||||
Service revenue is comprised of primarily professional service consulting revenue, maintenance revenue and other ancillary services provided. Professional service revenue is recognized as service time is incurred. | |||||||||
With respect to maintenance services, upon the completion of one year from the date of sale, the Company offers customers an optional annual software maintenance and support agreement for subsequent periods not exceeding one year. Maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements, which typically range from three months to one year and are included in services revenue in the Consolidated Statements of Income. | |||||||||
Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. | |||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents | ||||||||
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts. | |||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations | ||||||||
The Company maintains its cash and cash equivalents with various institutions, which exceed federally insured limits throughout the year. At December 31, 2014, the company had cash on deposit of approximately $1,029,941 in excess of the federally insured limits of $250,000. | |||||||||
For the years ended December 31, 2014 and 2013, our top ten customers accounted for 16% ($3,381,090) and 19% ($3,159,000), respectively, of our total revenues. The Company does not rely on any one specific customer for any significant portion of our revenue base. | |||||||||
For the years ended December 31 2014 and 2013, purchases from one supplier through a “channel partner” agreement were approximately 26% and 31% of cost of revenues, respectively. This channel partner agreement is for a one year term and automatically renews for an additional one year term on the anniversary of the agreements effective date. | |||||||||
For the years ended December 31, 2014 and 2013, one supplier represented approximately 37% and 52% of total accounts payable, respectively. | |||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash and cash equivalents. As of December 31, 2014 the Company believes it has no significant risk related to its concentration of accounts receivable. | |||||||||
Trade and Other Accounts Receivable, Unbilled Receivables, Policy [Policy Text Block] | Unbilled Services | ||||||||
The Company recognizes revenue on its professional services as those services are performed or certain obligations are met. Unbilled services represents the revenue recognized but not yet invoiced. | |||||||||
Receivables, Policy [Policy Text Block] | Accounts Receivable | ||||||||
Accounts receivable consist primarily of invoices for maintenance and professional services. Full payment for software ordered by customers is due in advance of ordering from the software supplier. Payments for maintenance and support plan renewals are due before the beginning of the maintenance period. Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services. | |||||||||
The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations. | |||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment | ||||||||
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally three to seven years. Maintenance and repairs that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred. | |||||||||
When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Consolidated Statements of Income. | |||||||||
Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenues | ||||||||
Deferred revenues consist of maintenance service, customer support services, including telephone support and deposits for future consulting services which will be earned as services are performed over the contractual or stated period, which generally ranges from three to twelve months. At December 31, 2014 and December 31, 2013 the customer deposits held for future services were $1,605,970 and $1,103,736 respectively. At December 31, 2014 and December 31, 2013 the deferred maintenance and support revenue was $609,144 and $611,819 respectively. | |||||||||
Income Tax, Policy [Policy Text Block] | Income Taxes | ||||||||
Deferred income taxes reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date. | |||||||||
The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code. | |||||||||
The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions if the weight of available evidence indicates that it is more likely than not that the position will not be sustained upon a tax examination with a tax examination being presumed to occur. The Company recognizes interest and penalties as incurred in finance income (expense), net in the Consolidated Statements of Income. | |||||||||
There were no liabilities for uncertain tax positions at December 31, 2014 and 2013. | |||||||||
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurement | ||||||||
The accounting standards define fair value and establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is as follows: | |||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||||
The Company’s current financial assets and liabilities approximate fair value due to their short term nature and include cash, accounts receivable, accounts payable, and accrued liabilities. The carrying value of longer term lease and debt obligations approximate fair value as their stated interest rates approximate the rates currently available. | |||||||||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Definite Lived Intangible Assets and Long-lived Assets | ||||||||
The purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method. | |||||||||
The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. No impairment losses were identified or recorded in the years ended December 31, 2014 and 2013. | |||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation | ||||||||
Compensation expense related to share-based transactions, including employee stock options, is measured and recognized in the financial statements based on a determination of the fair value. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For employee stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. | |||||||||
Earnings Per Share, Policy [Policy Text Block] | Earnings per Share | ||||||||
The Company’s basic income per common share is based on net income for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding stock options and warrants to the extent they are dilutive. Diluted income per share does not include common stock equivalents, stock options and warrants, as these shares would have an anti-dilutive effect as their exercise prices were above the market price of the Company’s common stock at December 31, 2014 and 2013. | |||||||||
The computation of EPS is approximately as follows: | |||||||||
Year Ended | Year Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Basic net income per share: | |||||||||
Net income attributable to common stockholders | $ | 192,901 | $ | 322,548 | |||||
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 | |||||||
Basic net income per share attributable to common stockholders | $ | 0.05 | $ | 0.08 | |||||
Diluted net income per share: | |||||||||
Net income attributable to common stockholders | $ | 192,901 | $ | 322,548 | |||||
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 | |||||||
Incremental shares attributable to warrants and convertible promissory note | - | - | |||||||
Total adjusted weighted-average shares | 3,942,836 | 3,902,008 | |||||||
Diluted net income per share attributable to common stockholders | $ | 0.05 | $ | 0.08 | |||||
The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share. | |||||||||
2014 | 2013 | ||||||||
Stock options | 163,846 | 89,116 | |||||||
Warrants | - | 25,000 | |||||||
Total potential dilutive securities not included in loss per share | 163,846 | 114,116 | |||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements | ||||||||
In May 2014, the FASB issued Accounting Standard Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this ASU on January 1, 2017. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and management is currently evaluating which transition approach to use. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures. | |||||||||
No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements. |
NOTE_2_SUMMARY_OF_SIGNIFICANT_1
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computation of EPS is approximately as follows: | ||||||||
Year Ended | Year Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Basic net income per share: | |||||||||
Net income attributable to common stockholders | $ | 192,901 | $ | 322,548 | |||||
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 | |||||||
Basic net income per share attributable to common stockholders | $ | 0.05 | $ | 0.08 | |||||
Diluted net income per share: | |||||||||
Net income attributable to common stockholders | $ | 192,901 | $ | 322,548 | |||||
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 | |||||||
Incremental shares attributable to warrants and convertible promissory note | - | - | |||||||
Total adjusted weighted-average shares | 3,942,836 | 3,902,008 | |||||||
Diluted net income per share attributable to common stockholders | $ | 0.05 | $ | 0.08 | |||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share. | ||||||||
2014 | 2013 | ||||||||
Stock options | 163,846 | 89,116 | |||||||
Warrants | - | 25,000 | |||||||
Total potential dilutive securities not included in loss per share | 163,846 | 114,116 |
NOTE_3_PROPERTY_AND_EQUIPMENT_
NOTE 3 - PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment [Table Text Block] | Property and equipment is summarized as follows: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Leasehold improvements | $ | 30,557 | $ | 30,557 | |||||
Equipment, furniture and fixtures | 1,175,378 | 1,001,920 | |||||||
1,205,935 | 1,032,477 | ||||||||
Less: Accumulated depreciation | (910,881 | ) | (790,582 | ) | |||||
Property and equipment, net | $ | 295,054 | $ | 241,895 |
NOTE_4_BUSINESS_COMBINATION_Ta
NOTE 4 - BUSINESS COMBINATION (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following summarizes the purchase price allocation: | ||||||||
Customer List | $ | 294,000 | |||||||
Goodwill | 56,000 | ||||||||
Fair value of net assets acquired | $ | 350,000 | |||||||
Note to shareholders for acquisition | $ | 350,000 | |||||||
Total purchase price | $ | 350,000 | |||||||
Business Acquisition, Pro Forma Information [Table Text Block] | The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisition occurred on January 1, 2013, nor is the financial information indicative of the results of future operations. | ||||||||
Pro Forma | 31-Dec-14 | 31-Dec-13 | |||||||
Net sales | $ | 22,198,709 | $ | 19,071,788 | |||||
Operating expenses | 8,323,173 | 6,897,535 | |||||||
Income before taxes | 497,400 | 234,586 | |||||||
Net income | $ | 233,509 | $ | 373,567 | |||||
Basic and diluted income per common share | $ | 0.06 | $ | 0.1 |
NOTE_5_INTANGIBLE_ASSETS_Table
NOTE 5 - INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The components of intangible assets are as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | Estimated Useful Lives | ||||||||
Proprietary developed software | $ | 365,911 | $ | 294,036 | 5 | |||||
Intellectual property, customer list, and acquired contracts | 988,000 | 694,000 | 5 | |||||||
Total intangible assets | $ | 1,353,911 | $ | 988,036 | ||||||
Less: accumulated amortization | (544,430 | ) | (300,156 | ) | ||||||
$ | 809,481 | $ | 687,880 | |||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The Company expects future amortization expense to be the following: | |||||||||
Amortization | ||||||||||
2015 | $ | 270,786 | ||||||||
2016 | 270,786 | |||||||||
2017 | 168,237 | |||||||||
2018 | 73,179 | |||||||||
2019 | 26,493 | |||||||||
Total | $ | 809,481 |
NOTE_6_LINE_OF_CREDIT_AND_TERM1
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Line Of Credit And Term Loan [Abstract] | |||||
Schedule of Maturities of Long-term Debt [Table Text Block] | At December 31, 2014, future payments of term loan and promissory note are as follows over each of the next five fiscal years: | ||||
2015 | $ | 174,578 | |||
2016 | 69,392 | ||||
2017 | 70,793 | ||||
2018 | 72,221 | ||||
2019 | 30,521 | ||||
Total | $ | 417,504 |
NOTE_7_INCOME_TAXES_Tables
NOTE 7 - INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Significant components of the Company's deferred tax assets and liabilities are summarized as follows: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | $ | 2,810,000 | $ | 2,928,000 | |||||
Long lived assets | 262,000 | 270,000 | |||||||
Share based payments | - | 71,000 | |||||||
Other | 58,000 | 35,000 | |||||||
Deferred tax asset | 3,130,000 | 3,304,000 | |||||||
Deferred tax liabilities: | |||||||||
Long lived assets | (89,000 | ) | (44,000 | ) | |||||
Deferred tax liabilities | (89,000 | ) | (44,000 | ) | |||||
Net deferred tax asset | 3,041,000 | 3,260,000 | |||||||
Less: Valuation allowance | (3,003,000 | ) | (3,140,000 | ) | |||||
Net deferred tax asset | $ | 38,000 | $ | 120,000 | |||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the statutory income tax rate to the effective rate is as follows for the period December 31, 2014 and 2013: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Federal income tax rate | 34 | % | 34 | % | |||||
State income tax, net of federal benefit | 5 | % | 6 | % | |||||
Permanent differences | 13 | % | 6 | % | |||||
Prior year adjustments | 5 | % | (35 | %) | |||||
Change in valuation allowance | (4 | %) | (70 | %) | |||||
Effective income tax rate | 53 | % | (59 | %) | |||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax provision (benefit): | ||||||||
Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Current: | |||||||||
Federal | $ | 76,000 | $ | - | |||||
State and local | 26,000 | - | |||||||
Total current tax provision | 102,000 | - | |||||||
Deferred: | |||||||||
Federal | 116,000 | - | |||||||
State and local | - | - | |||||||
Release of valuation allowance | - | (120,000 | ) | ||||||
Total deferred tax provision (benefit) | 116,000 | (120,000 | ) | ||||||
Total provision (benefit) | $ | 218,000 | (120,000 | ) |
NOTE_8_CAPITAL_LEASE_OBLIGATIO1
NOTE 8 - CAPITAL LEASE OBLIGATIONS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases, Capital [Abstract] | |||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | At December 31, 2014, future payments under capital leases are as follows over each of the next three fiscal years: | ||||
2015 | $ | 75,068 | |||
2016 | 47,785 | ||||
2017 | 24,282 | ||||
Total minimum lease payments | 147,135 | ||||
Less amounts representing interest | (14,944 | ) | |||
Present value of net minimum lease payments | 132,191 | ||||
Less current portion | (65,269 | ) | |||
Long-term capital lease obligation | $ | 66,922 |
NOTE_10_COMMITMENTS_Tables
NOTE 10 - COMMITMENTS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended December 31, 2014. | ||||
2015 | $ | 152,511 | |||
2016 | 152,966 | ||||
2017 | 68,892 | ||||
2018 | 45,945 | ||||
2019 | 26,046 |
NOTE_12_STOCK_OPTIONS_AND_WARR1
NOTE 12 - STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure Text Block Supplement [Abstract] | ||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2014 and 2013 and changes during the years are presented below: (in number of options): | |||||||||||||
Number | Average | Average Remaining | Aggregate | |||||||||||
of Options | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||
Outstanding options at January 1, 2013 | 95,824 | $ | 4.8 | 4.4 years | ||||||||||
Options granted | - | |||||||||||||
Options exercised | - | |||||||||||||
Options canceled/forfeited | (6,708 | ) | $ | 4.8 | ||||||||||
Outstanding options at December 31, 2013 | 89,116 | $ | 4.8 | 3.4 years | $ | -0- | ||||||||
Options granted | 80,000 | $ | 4.5 | 4.3 years | ||||||||||
Options exercised | - | |||||||||||||
Options canceled/forfeited | (5,270 | ) | 4.8 | |||||||||||
Outstanding options at December 31, 2014 | 163,846 | 4.65 | 2.5 years | $ | -0- | |||||||||
Vested Options: | ||||||||||||||
December 31, 2014: | 115,653 | $ | 4.65 | 1.8 years | $ | -0- | ||||||||
December 31, 2013: | 85,044 | $ | 4.8 | 3.4 years | $ | -0- | ||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | The following table summarizes the warrants transactions: | |||||||||||||
Warrants | Weighted Average | |||||||||||||
Outstanding | Exercise Price | |||||||||||||
Balance, January 1, 2013 | 25,002 | $ | 4.5 | |||||||||||
Granted | 8,333 | $ | 3.6 | |||||||||||
Exercised | 8,333 | $ | 0.9 | |||||||||||
Canceled | 1 | $ | 3,803.00 | |||||||||||
Balance, December 31, 2013 | 25,001 | $ | 5.2 | |||||||||||
Granted | - | $ | - | |||||||||||
Exercised | 8,333 | $ | 3.6 | |||||||||||
Canceled | 16,668 | $ | 4.2 | |||||||||||
Balance, December 31, 2014 | - | $ | - | |||||||||||
Outstanding and Exercisable, | ||||||||||||||
31-Dec-14 | - | $ | - | |||||||||||
Outstanding and Exercisable, | ||||||||||||||
31-Dec-13 | 25,001 | $ | 5.2 |
SUPPLEMENTAL_SCHEDULE_OF_NONCA1
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) [Line Items] | ||
Capital Lease Obligations Incurred | $92,341 | $66,628 |
Class of Warrant or Rights, Exercised (in Shares) | 8,333 | 8,333 |
Stock Issued as Repayment of Accrued Liabilities [Member] | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) [Line Items] | ||
Stock Issued During Period, Shares, Other (in Shares) | 5,331 | 7,184 |
Stock Issued | 20,792 | 25,000 |
Extinguishment of Debt, Amount | 25,000 | |
Stock Issued for Exercise of Warrants [Member] | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) [Line Items] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities (in Shares) | 7,018 | |
Class of Warrant or Rights, Exercised (in Shares) | 8,333 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $0.90 | |
Stock Issued for Services [Member] | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) [Line Items] | ||
Stock Issued | 21,000 | |
Stock Issued During Period, Shares, Issued for Services (in Shares) | 10,000 | |
ESC Inc. DBA ESC Software [Member] | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) [Line Items] | ||
Noncash or Part Noncash Acquisition, Debt Assumed | $350,000 |
NOTE_2_SUMMARY_OF_SIGNIFICANT_2
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
Feb. 04, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Stockholders' Equity, Reverse Stock Split | 1-for-30 | ||
Cash, Uninsured Amount | $1,029,941 | ||
Cash, FDIC Insured Amount | 250,000 | ||
Customer Deposits, Current | 1,605,970 | 1,103,736 | |
Liability for Uncertain Tax Positions, Current | 0 | 0 | |
Impairment of Intangible Assets, Finite-lived | 0 | 0 | |
Maintenance and Support Revenue [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Deferred Revenue, Noncurrent | 609,144 | 611,819 | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Concentration Risk, Percentage | 16.00% | 19.00% | |
Revenues | $3,381,090 | $3,159,000 | |
Cost of Goods, Total [Member] | Supplier Concentration Risk [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Concentration Risk, Percentage | 26.00% | 31.00% | |
Concentration Risk, Accounts Payable [Member] | Supplier Concentration Risk [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Concentration Risk, Percentage | 37.00% | 52.00% | |
Minimum [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Maximum [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Supplier Concentration Risk [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Purchase Commitment, Description | This channel partner agreement is for a one year term and automatically renews for an additional one year term on the anniversary of the agreements effective date |
NOTE_2_SUMMARY_OF_SIGNIFICANT_3
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Earnings per Share (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Basic net income per share: | ||
Net income attributable to common stockholders (in Dollars) | $192,901 | $322,548 |
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 |
Basic net income per share attributable to common stockholders (in Dollars per share) | $0.05 | $0.08 |
Diluted net income per share: | ||
Net income attributable to common stockholders (in Dollars) | $192,901 | $322,548 |
Weighted-average common shares outstanding | 3,942,836 | 3,902,008 |
Incremental shares attributable to warrants and convertible promissory note | 0 | 0 |
Total adjusted weighted-average shares | 3,942,836 | 3,902,008 |
Diluted net income per share attributable to common stockholders (in Dollars per share) | $0.05 | $0.08 |
NOTE_2_SUMMARY_OF_SIGNIFICANT_4
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities not included in loss per share | 163,846 | 114,116 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities not included in loss per share | 163,846 | 89,116 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities not included in loss per share | 0 | 25,000 |
NOTE_3_PROPERTY_AND_EQUIPMENT_1
NOTE 3 - PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation, Depletion and Amortization | $120,299 | $105,330 |
NOTE_3_PROPERTY_AND_EQUIPMENT_2
NOTE 3 - PROPERTY AND EQUIPMENT (Details) - Schedule of Property and Equipment (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Property and Equipment [Abstract] | ||
Leasehold improvements | $30,557 | $30,557 |
Equipment, furniture and fixtures | 1,175,378 | 1,001,920 |
1,205,935 | 1,032,477 | |
Less: Accumulated depreciation | -910,881 | -790,582 |
Property and equipment, net | $295,054 | $241,895 |
NOTE_4_BUSINESS_COMBINATION_De
NOTE 4 - BUSINESS COMBINATION (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | 6-May-14 | |
NOTE 4 - BUSINESS COMBINATION (Details) [Line Items] | |||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $192,901 | $322,548 | |
Operating Expenses | 8,102,413 | 6,491,537 | |
Customer Lists [Member] | ESC Inc. DBA ESC Software [Member] | Purchase Price Allocation, Modified [Member] | |||
NOTE 4 - BUSINESS COMBINATION (Details) [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 294,000 | ||
Customer Lists [Member] | ESC Inc. DBA ESC Software [Member] | |||
NOTE 4 - BUSINESS COMBINATION (Details) [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 350,000 | ||
Business Combination, Acquisition Related Costs | 7,500 | ||
Notes Payable, Other Payables [Member] | ESC Inc. DBA ESC Software [Member] | |||
NOTE 4 - BUSINESS COMBINATION (Details) [Line Items] | |||
Business Combination, Consideration Transferred, Liabilities Incurred | 350,000 | ||
ESC Inc. DBA ESC Software [Member] | |||
NOTE 4 - BUSINESS COMBINATION (Details) [Line Items] | |||
Business Combination, Consideration Transferred, Liabilities Incurred | 350,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 294,000 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 45,183 | ||
Revenues | 903,650 | ||
Operating Expenses | $858,467 |
NOTE_4_BUSINESS_COMBINATION_De1
NOTE 4 - BUSINESS COMBINATION (Details) - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 4 - BUSINESS COMBINATION (Details) - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Line Items] | ||
Goodwill | $56,000 | $0 |
ESC Inc. DBA ESC Software [Member] | ||
NOTE 4 - BUSINESS COMBINATION (Details) - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Line Items] | ||
Customer List | 294,000 | |
Goodwill | 56,000 | |
Fair value of net assets acquired | 350,000 | |
Note to shareholders for acquisition | 350,000 | |
Total purchase price | $350,000 |
NOTE_4_BUSINESS_COMBINATION_De2
NOTE 4 - BUSINESS COMBINATION (Details) - Schedule of Business Acquisition, Pro Forma Information (ESC Inc. DBA ESC Software [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
ESC Inc. DBA ESC Software [Member] | ||
NOTE 4 - BUSINESS COMBINATION (Details) - Schedule of Business Acquisition, Pro Forma Information [Line Items] | ||
Net sales | $22,198,709 | $19,071,788 |
Operating expenses | 8,323,173 | 6,897,535 |
Income before taxes | 497,400 | 234,586 |
Net income | $233,509 | $373,567 |
Basic and diluted income per common share (in Dollars per share) | $0.06 | $0.10 |
NOTE_5_INTANGIBLE_ASSETS_Detai
NOTE 5 - INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $244,274 | $196,633 |
NOTE_5_INTANGIBLE_ASSETS_Detai1
NOTE 5 - INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $1,353,911 | $988,036 |
Less: accumulated amortization | -544,430 | -300,156 |
809,481 | 687,880 | |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 365,911 | 294,036 |
Intangible asset, estimated useful life | 5 years | |
Intellectual property, customer list, and acquired contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $988,000 | $694,000 |
Intangible asset, estimated useful life | 5 years |
NOTE_5_INTANGIBLE_ASSETS_Detai2
NOTE 5 - INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ||
2015 | $270,786 | |
2016 | 270,786 | |
2017 | 168,237 | |
2018 | 73,179 | |
2019 | 26,493 | |
Total | $809,481 | $687,880 |
NOTE_6_LINE_OF_CREDIT_AND_TERM2
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | 6-May-14 | Aug. 01, 2013 | |
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) [Line Items] | |||
Long-term Debt | $106,559 | ||
Notes Payable to Banks [Member] | |||
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) [Line Items] | |||
Debt Instrument, Term | 2 years | ||
Debt Instrument, Collateral | The term loan is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller. | ||
Debt Instrument, Face Amount | 350,000 | ||
Debt Instrument, Maturity Date | 31-Jul-15 | ||
Debt Instrument, Frequency of Periodic Payment | Monthly | ||
Debt Instrument, Periodic Payment | 15,776 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||
Notes Payable, Other Payables [Member] | ESC Inc. DBA ESC Software [Member] | |||
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) [Line Items] | |||
Debt Instrument, Term | 60 months | ||
Debt Instrument, Face Amount | 350,000 | ||
Debt Instrument, Maturity Date | 1-Apr-19 | ||
Debt Instrument, Periodic Payment | 6,135 | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | ||
Debt Instrument, Description | The Note is due sixty (60) months from the closing date, as defined in the Purchase Agreement and bears interest at a rate of two percent (2%) per annum. | ||
Notes Payable, Current | 310,945 | ||
Line of Credit [Member] | Prime Rate [Member] | |||
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||
Line of Credit [Member] | |||
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) [Line Items] | |||
Debt Instrument, Term | 2 years | ||
Line of Credit Facility, Expiration Date | 31-Jul-15 | ||
Line of Credit Facility, Maximum Borrowing Capacity | 750,000 | ||
Line of Credit Facility, Interest Rate at Period End | 5.00% | ||
Debt Instrument, Collateral | The line is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller. | ||
Debt Instrument, Fee | monitoring fee | ||
Debt Instrument, Fee Amount | 1,000 | ||
Debt Instrument, Frequency of Fee | monthly | ||
Line of Credit Facility, Remaining Borrowing Capacity | $750,000 |
NOTE_6_LINE_OF_CREDIT_AND_TERM3
NOTE 6 - LINE OF CREDIT AND TERM LOAN AND PROMISSORY NOTE (Details) - Schedule of Maturities of Long-term Debt (USD $) | Dec. 31, 2014 |
Schedule of Maturities of Long-term Debt [Abstract] | |
2015 | $174,578 |
2016 | 69,392 |
2017 | 70,793 |
2018 | 72,221 |
2019 | 30,521 |
Total | $417,504 |
NOTE_7_INCOME_TAXES_Details
NOTE 7 - INCOME TAXES (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
NOTE 7 - INCOME TAXES (Details) [Line Items] | |
Operating Loss Carryforwards | 7,470,000 |
Minimum [Member] | |
NOTE 7 - INCOME TAXES (Details) [Line Items] | |
Operating Loss Carryforwards, Expiration Date 1 | 2025 |
Maximum [Member] | |
NOTE 7 - INCOME TAXES (Details) [Line Items] | |
Operating Loss Carryforwards, Expiration Date 1 | 2030 |
NOTE_7_INCOME_TAXES_Details_Sc
NOTE 7 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carry forwards | $2,810,000 | $2,928,000 |
Long lived assets | 262,000 | 270,000 |
Share based payments | 0 | 71,000 |
Other | 58,000 | 35,000 |
Deferred tax asset | 3,130,000 | 3,304,000 |
Deferred tax liabilities: | ||
Long lived assets | -89,000 | -44,000 |
Deferred tax liabilities | -89,000 | -44,000 |
Net deferred tax asset | 3,041,000 | 3,260,000 |
Less: Valuation allowance | -3,003,000 | -3,140,000 |
Net deferred tax asset | $38,000 | $120,000 |
NOTE_7_INCOME_TAXES_Details_Sc1
NOTE 7 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Federal income tax rate | 34.00% | 34.00% |
State income tax, net of federal benefit | 5.00% | 6.00% |
Permanent differences | 13.00% | 6.00% |
Prior year adjustments | 5.00% | -35.00% |
Change in valuation allowance | -4.00% | -70.00% |
Effective income tax rate | 53.00% | -59.00% |
NOTE_7_INCOME_TAXES_Details_Sc2
NOTE 7 - INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (Benefit) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | ||
Federal | $76,000 | $0 |
State and local | 26,000 | 0 |
Total current tax provision | 102,000 | 0 |
Deferred: | ||
Federal | 116,000 | 0 |
State and local | 0 | 0 |
Release of valuation allowance | 0 | -120,000 |
Total deferred tax provision (benefit) | 82,000 | -120,000 |
Total provision (benefit) | $218,000 | ($120,000) |
NOTE_8_CAPITAL_LEASE_OBLIGATIO2
NOTE 8 - CAPITAL LEASE OBLIGATIONS (Details) | Dec. 31, 2014 |
Minimum [Member] | |
NOTE 8 - CAPITAL LEASE OBLIGATIONS (Details) [Line Items] | |
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 8.50% |
Maximum [Member] | |
NOTE 8 - CAPITAL LEASE OBLIGATIONS (Details) [Line Items] | |
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 11.00% |
NOTE_8_CAPITAL_LEASE_OBLIGATIO3
NOTE 8 - CAPITAL LEASE OBLIGATIONS (Details) - Schedule of Future Minimum Lease Payments for Capital Leases (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Future Minimum Lease Payments for Capital Leases [Abstract] | ||
2015 | $75,068 | |
2016 | 47,785 | |
2017 | 24,282 | |
Total minimum lease payments | 147,135 | |
Less amounts representing interest | -14,944 | |
Present value of net minimum lease payments | 132,191 | |
Less current portion | -65,269 | -53,726 |
Long-term capital lease obligation | $66,922 | $48,624 |
NOTE_9_RELATED_PARTY_TRANSACTI1
NOTE 9 - RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Oct. 19, 2010 | |
Chief Executive Officer [Member] | |||
NOTE 9 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||
Debt Instrument, Face Amount | $45,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ||
Notes Payable, Related Parties | 0 | 20,000 | |
Chief Financial Officer [Member] | Building [Member] | |||
NOTE 9 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||
Operating Leases, Rent Expense, Minimum Rentals | $2,100 |
NOTE_10_COMMITMENTS_Details
NOTE 10 - COMMITMENTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Operating Leases, Rent Expense | $197,100 | $153,000 |
Chief Executive Officer [Member] | Employment Agreement [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Increase in Base Salary Year Over Year, Percentage | 10.00% | |
Other Commitments, Description | The employment agreement with Mr. Meller also provides for a severance payment of three hundred percent (300%), less $100,000 of his gross income for services rendered to the Company in each of the five prior calendar years should his employment be terminated following a change in control, as defined in the employment agreement. | |
Building [Member] | Maximum [Member] | Phoenix, AZ [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Operating Leases, Rent Expense, Minimum Rentals | 2,894 | |
Building [Member] | Livingston, New Jersey [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Area of Real Estate Property (in Square Feet) | 6,986 | |
Operating Leases, Rent Expense, Minimum Rentals | 7,400 | |
Lease Expiration Date | 31-Dec-16 | |
Building [Member] | North Syracuse, New York [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Operating Leases, Rent Expense, Minimum Rentals | 2,100 | |
Lease Expiration Date | 31-May-15 | |
Description of Lessee Leasing Arrangements, Operating Leases | The Company has a lease, with a one-year extension | |
Building [Member] | Skokie, Illinois [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Area of Real Estate Property (in Square Feet) | 2,700 | |
Operating Leases, Rent Expense, Minimum Rentals | 3,000 | |
Lease Expiration Date | 30-Apr-18 | |
Building [Member] | Minneapolis, Minnesota [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Area of Real Estate Property (in Square Feet) | 500 | |
Operating Leases, Rent Expense, Minimum Rentals | 885 | |
Description of Lessee Leasing Arrangements, Operating Leases | This lease expires February 2016 | |
Building [Member] | Phoenix, AZ [Member] | ||
NOTE 10 - COMMITMENTS (Details) [Line Items] | ||
Area of Real Estate Property (in Square Feet) | 2,105 | |
Operating Leases, Rent Expense, Minimum Rentals | $1,271 | |
Lease Expiration Date | 30-Sep-19 |
NOTE_10_COMMITMENTS_Details_Sc
NOTE 10 - COMMITMENTS (Details) - Schedule of Minimum Rental Payments for Operating Leases (USD $) | Dec. 31, 2014 |
Schedule of Minimum Rental Payments for Operating Leases [Abstract] | |
2015 | $152,511 |
2016 | 152,966 |
2017 | 68,892 |
2018 | 45,945 |
2019 | $26,046 |
NOTE_11_STOCKHOLDERS_EQUITY_De
NOTE 11 - STOCKHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 11 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | $0.00 |
Conversion of Stock, Shares Issued | 79,552 | |
Preferred Stock, Shares Issued | 0 | |
Preferred Stock, Shares Outstanding | 0 | |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock, Shares, Issued | 3,959,064 | 3,922,566 |
Common Stock, Shares, Outstanding | 3,959,064 | 3,922,566 |
Series A Preferred Stock [Member] | ||
NOTE 11 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||
Preferred Stock, Shares Authorized | 2 | 2 |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | $0.00 |
Stock Issued During Period, Shares, Other | 2 | |
Convertible Preferred Stock, Terms of Conversion | The Company has the right to convert, at its sole option, each share of Series A into Class A Common Stock equal to 1% of the outstanding shares of Class A Common Stock at the time of conversion. | |
Preferred Stock, Voting Rights | Each one share of Series A shall entitle the Series A Holder to voting rights equal to 88,889 votes of Class A Common Stock. | |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
NOTE 11 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||
Preferred Stock, Shares Authorized | 1 | 1 |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | $0.00 |
Preferred Stock, Voting Rights | The one (1) share of the Series B Preferred shall have voting rights equal to (x) the total issued and outstanding Common Stock and preferred stock eligible to vote at the time of the respective vote divided by (y) forty nine one-hundredths (0.49) minus (z) the total issued and outstanding Common Stock and preferred stock eligible to vote at the time of the respective vote. For the avoidance of doubt, if the total issued and outstanding Common Stock eligible to vote at the time of the respective vote is 5,000,000, the voting rights of the Series B Preferred Stock shall be equal to 5,204,082 (e.g. (5,000,000 / 0.49) – 5,000,000 =,204,082). | |
Preferred Stock, Shares Issued | 1 | 1 |
Preferred Stock, Shares Outstanding | 1 | 1 |
NOTE_12_STOCK_OPTIONS_AND_WARR2
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2014 | Jul. 31, 2014 | 31-May-14 | Dec. 31, 2004 | Dec. 31, 2007 | Dec. 31, 2012 | |
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 163,846 | 89,116 | 95,824 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 80,000 | 0 | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $4.50 | |||||||
Class of Warrant or Rights, Granted (in Shares) | 0 | 8,333 | ||||||
Employee Stock Option [Member] | Share-based Compensation Award, Tranche One [Member] | 2004 Stock Incentive Plan [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares (in Shares) | 25,000 | |||||||
Employee Stock Option [Member] | Share-based Compensation Award, Tranche Two [Member] | 2004 Stock Incentive Plan [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | remaining 50% vesting ratably over a three-year period | |||||||
Employee Stock Option [Member] | 2004 Stock Incentive Plan [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 50,000 | 10,000 | 20,000 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | 4.5 | $4.50 | $4.50 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.71% | 1.00% | 1.68% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 353.95% | 323.81% | 328.76% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years | 5 years | 5 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Forfeiture Rate | 15.00% | 15.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Fair Value Grants in Period (in Dollars) | 115,488 | $44,987 | $77,981 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars) | 98,000 | 21,000 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years | |||||||
Warrants for Services [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Class of Warrant or Rights, Granted (in Shares) | 8,333 | |||||||
Warrants, Fair Value of Warrants, Granted (in Dollars) | 29,000 | |||||||
Share Price (in Dollars per share) | 3.6 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | 3.6 | |||||||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.27% | |||||||
Fair Value Assumptions, Expected Volatility Rate | 278.17% | |||||||
Fair Value Assumptions, Expected Term | 2 years | |||||||
2004 Stock Incentive Plan [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | Under the Plan, the Board of Directors (the “Board”), in its discretion may grant stock options (including non-statutory stock options and incentive stock options qualifying under Section 422 of the Code), stock appreciation rights (including free-standing, tandem and limited stock appreciation rights), warrants, dividend equivalents, stock awards, restricted stock, phantom stock, performance shares or other securities or rights that the Board determines to be consistent with the objectives and limitations of the plan at a price to be equal to or greater than 50% of the fair market value of such shares on the date of grant of such award. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 163,846 | 89,116 | ||||||
2007 Consultant Stock Incentive Plan [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The price shall be equal to or greater than 50% of the fair market value of such shares on the date of grant of such award. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 19,393 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | 22-Jan-17 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 0 | 0 | ||||||
2004 Directors' and Officers' Stock Incentive Plan [Member] | ||||||||
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The price shall be equal to or greater than 50% of the fair market value of such shares on the date of grant of such award. |
NOTE_12_STOCK_OPTIONS_AND_WARR3
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Compensation, Stock Options, Activity (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | |||
Outstanding options | 163,846 | 89,116 | 95,824 |
Outstanding options, average exercise price (in Dollars per share) | $4.65 | $4.80 | $4.80 |
Outstanding options, average remaining contractual term | 2 years 6 months | 3 years 146 days | 4 years 146 days |
Outstanding options, aggregate intrinsic value (in Dollars) | $0 | $0 | $0 |
Vested Options: | |||
Vested option balance | 115,653 | 85,044 | |
Vested option balance, average exercise price (in Dollars per share) | $4.65 | $4.80 | |
Vested option balance, average remaining contractual term | 1 year 292 days | 3 years 146 days | |
Vested option balance, aggregate intrinsic value (in Dollars) | $0 | $0 | |
Options granted | 80,000 | 0 | |
Options granted, average exercise price (in Dollars per share) | $4.50 | ||
Options granted | 4 years 109 days | ||
Options exercised | 0 | 0 | |
Options exercised, average exercise price (in Dollars per share) | $0 | ||
Options canceled/forfeited | -5,270 | -6,708 | |
Options canceled/forfeited, average exercise price (in Dollars per share) | $4.80 | $4.80 |
NOTE_12_STOCK_OPTIONS_AND_WARR4
NOTE 12 - STOCK OPTIONS AND WARRANTS (Details) - Schedule of Warrants or Rights, Activity (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Warrants or Rights, Activity [Abstract] | ||
Balance | 25,001 | 25,002 |
Balance | $5.20 | $4.50 |
Outstanding and Exercisable | 0 | 25,001 |
Outstanding and Exercisable | $0 | $5.20 |
Granted | 0 | 8,333 |
Granted | $0 | $3.60 |
Exercised | 8,333 | 8,333 |
Exercised | $3.60 | $0.90 |
Canceled | 16,668 | 1 |
Canceled | $4.20 | $3,803 |
Balance | 0 | 25,001 |
Balance | $0 | $5.20 |
NOTE_13_SUBSEQUENT_EVENTS_Deta
NOTE 13 - SUBSEQUENT EVENTS (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Feb. 04, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 29, 2015 | Mar. 11, 2015 | Feb. 04, 2015 | Mar. 31, 2015 | Jan. 29, 2015 | |
NOTE 13 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-30 | |||||||
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | ||||||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 80,000 | 0 | ||||||
Class of Warrant or Rights, Granted | 0 | 8,333 | ||||||
Series B Preferred Stock [Member] | Subsequent Event [Member] | ||||||||
NOTE 13 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||||
Stock Repurchased and Retired During Period, Shares | 1 | |||||||
Prior to Change [Member] | Subsequent Event [Member] | ||||||||
NOTE 13 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||||
Common Stock, Shares Authorized | 750,000,000 | |||||||
Employment Agreement [Member] | Subsequent Event [Member] | 2000 SOFT, Inc. [Member] | ||||||||
NOTE 13 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||||
Other Commitments, Description | employment agreement with Ms. McGarrigle for a term of three years | |||||||
Other Commitment | $155,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 10,000 | |||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | $4 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 20% per year over five years | |||||||
Subsequent Event [Member] | 2000 SOFT, Inc. [Member] | ||||||||
NOTE 13 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||||
Payments to Acquire Businesses, Gross | 80,000 | |||||||
Notes Issued | 175,000 | |||||||
Debt Instrument, Term | 36 months | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | |||||||
Debt Instrument, Periodic Payment | 5,012 | |||||||
Subsequent Event [Member] | ||||||||
NOTE 13 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-30 | |||||||
Common Stock, Shares Authorized | 75,000,000 | |||||||
Common Stock, Par or Stated Value Per Share | 0.00001 | |||||||
Stock Issued During Period, Shares, New Issues | 363,490 | |||||||
Shares Issued, Price Per Share | $4.24 | |||||||
Class of Warrant or Rights, Granted | 181,745 | |||||||
Warrants Issued, Price Per Warrant | $0.01 | |||||||
Payments of Stock Issuance Costs | 142,774 | |||||||
Proceeds from Issuance or Sale of Equity | $1,400,000 |