| Significant Accounting Policies [Text Block] | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the instructions to Form 10 8 X. not three nine September 30, 2017 not may December 31, 2017. December 31, 2016, 10 February 7, 2017. The accompanying Unaudited Condensed Consolidated Financial Statements of the Company were prepared in accordance with GAAP and include the assets, liabilities, revenues and expenses of the Company ’s wholly-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management of the Company 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 Unaudited Condensed Consolidated Financial Statements. Actual results could differ from these estimates. The Company ’s significant estimates and assumptions include stock-based compensation and the valuation allowance related to the Company’s deferred tax assets, revenue recognition and establishing the fair value of its investments. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates and assumptions. Cash and Cash Equivalents The Company maintains its cash in bank deposit and money market accounts that, at times, may three Short term Investments The Company classifies its investment consisting of a certificate of deposit with a maturity greater than three one Earnings (Loss) per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) applicable to common stock by the weighted-average number of shares of common stock outstanding. Diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the i ssuance of common stock. As of September 30, 2017 2016, September 30, 2017 September 30, 2016 Common Stock options 5,073,832 4,885,499 Convertible Preferred Stock 14,999,000 14,999,000 Potentially dilutive securities 20,072,832 19,884,499 A reconciliation of basic and diluted earnings per share (“EPS”) is given in the following table: Income (in thousands) Shares Amount per Share Three months ended September 30, 2017 Basic EPS $ (446 ) 20,400,368 $ (0.02 ) No e ffect of Dilutive Securities -- -- Diluted EPS $ (446 ) 20,400,368 $ (0.02 ) Three months ended September 30, 2016 Basic EPS $ (1,136 ) 20,741,572 $ (0.05 ) No e ffect of Dilutive Securities -- -- Diluted EPS $ (1,136 ) 20,741,572 $ (0.05 ) Income (in thousands) Shares Amount per Share Nine months ended September 30, 2017 Basic EPS $ (166 ) 20,580,344 $ (0.01 ) No e ffect of Dilutive Securities -- -- Diluted EPS $ (166 ) 20,580,344 $ (0.01 ) Nine months ended September 30, 2016 Basic EPS $ 1,462 20,741,572 $ 0.07 E ffect of Dilutive Securities -- 15,180,606 Diluted EPS $ 1,462 35,922,178 $ 0.04 Revenue Recognition The Company derives its revenue from patent licensing and enforcement. In general, these revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. A significant number of the patent licenses are granted on the entire portfolio rather than individual patents. Most of the intellectual property rights granted are perpetual in nature, extending until the expiration of the related patents, although they can be granted for a defined, relatively short period of time. The Company recognizes licensing and enforcement fees when there is persuasive evidence of a licensing arrangement, fees are fixed or determinable, delivery has occurred and collectability is reasonably assured. Costs Associated with Revenue Contingent legal and consulting fees are expensed in the Unaudited Condensed Consolidated Statements of Operations in the period that the related revenues are recognized. In instances where there are no no may incurred in connection with the services performed pursuant to the underlying legal and consulting services agreement. Legal fees advanced to contingent law firms, if any, that are required to be paid in the event that no Fair Value Measurements The carrying amounts of cash and cash equivalents, short term investment, accounts receivable, and accounts payable, approximate fair value due to the short-term nature of these instruments. Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three Level 1. Quoted prices in active markets for identical assets or liabilities. Level 2. Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not Level 3. Significant unobservable inputs that cannot be corroborated by market data. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. Investment In cases where the Company ’s investment is less than 20% not The Company elected the fair value option for its investment in The Upside Commerce Group, LLC formerly known as Flexible Travel Company, LLC (“Upside”). The investment was classified as a Level 3 December 31, 2016, June 2017. On June 2, 2017, 12,650,000 June 2, 2017, $0.06 $1.43182745 ’s Audit Committee. Net proceeds from the transaction after giving effect to fees and the exercise price was approximately $16.8 no As of December 31, 2016, $14,621 6 The following table sets forth a summary of the changes in the fair value of the Company ’s Level 3 As of September 30, 2017 (Unaudited) December 31, 2016 Beginning balance (fair value of Upside Warrant upon issuance) $ 14,621 $ 672 Change in fair value of Upside Warrant 3,491 18,283 Exercise and sale of Upside Warrant (18,112 ) (4,334 ) Ending balance $ -- $ 14,621 While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The decision to elect the fair value option, which is irrevocable once elected, is determined on an instrument by instrument basis and applied to an entire instrument. The net gains or losses, if any, on an investment for which the fair value option has been elected, are recognized as an unrealized gain on investment in the Unaudited Condensed Consolidated Statements of Operations. Revenue Concentrations The Company considers significant revenue concentrations to be counterparties or customers who account for 10% Revenue for the three nine September 30, 2017 $ 300 one nine September 30, 2016, 72% one three September 30, 2016, 86% one Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally measured on the measurement date and re-measured on each financial reporting date and vesting date until the service period is complete. The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period. The Company recognizes employee stock-based compensation expense on a straight line basis over the requisite service period for each separately vesting tranche of each award. Stock-based compensation expense is reflected within operating expenses and cost of sales in the Unaudited Condensed Consolidated Statements of Operations. Property and Equipment, net Property and equipment consist primarily of computer and network hardware and are stated at cost net of accumulated depreciation and amortization expenses. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining term of the lease. Lease amortization is included in depreciation expense. Equipment and software are depreciated on a straight-line basis over two five Deferred Revenue Deferred revenue represents amounts to be recognized in connection with the amortization of the Upside Warrant (See Note 6 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. 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 is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not not ’s income tax returns are recognized in the Unaudited Condensed Consolidated Financial Statements if such positions are more likely than not Recent Accounting Pronouncements In May 2014, 2014 09, Revenue from Contracts with Customers July 2015, No. 2015 14, December 15, 2017. January 1, 2017. March 2016, No. 2016 08, 2014 09. April 2016, No. 2016 10, May 2016, No. 2016 12, No. 2014 09. February 2017, No. 2017 05, 610.20 No. 2014 09. In January 2017, No. 2017 01, 805 not not 1 2 December 15, 2017. not In May 2017, 2017 09, —Stock Compensation (Topic 718 1 2 718, 718. December 15, 2017. not In July 2017, 2017 11, 260 480 Derivatives and Hedging (Topic 815 Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” which addresses narrow issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. Part I of this Update addresses the complexity of accounting for certain financial instruments with down round features. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this Update addresses the difficulty of navigating Topic 480, no 480 December 15, 2018, early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied in either of the following ways: ( 1 first 2 250 10 45 5 45 10. not not |
