Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Entity Registrant Name | INTELLIGENT SYSTEMS CORP | |
Entity Central Index Key | 320,340 | |
Trading Symbol | ins | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 8,731,299 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 16,868 | $ 18,059 |
Marketable securities | 405 | 396 |
Accounts receivable, net | 965 | 962 |
Other current assets | 824 | 2,846 |
Restricted cash | 2,200 | 2,200 |
Total current assets | 21,262 | 24,463 |
Investments | 308 | 1,015 |
Property and equipment, at cost less accumulated depreciation | 672 | 636 |
Other long-term assets | 44 | 59 |
Total assets | 22,286 | 26,173 |
Current liabilities: | ||
Accounts payable | 191 | 78 |
Deferred revenue, current portion | 1,974 | 1,830 |
Accrued payroll | 589 | 495 |
Accrued expenses | 35 | 25 |
Other current liabilities | $ 275 | 243 |
Liabilities from discontinued operations | 120 | |
Total current liabilities | $ 3,064 | 2,791 |
Deferred revenue, net of current portion | 105 | 195 |
Other long-term liabilities | 18 | 18 |
Intelligent Systems Corporation stockholders’ equity: | ||
Common stock, $0.01 par value, 20,000,000 shares authorized, 8,731,299 issued and outstanding at March 31, 2016 and December 31, 2015 | 87 | 87 |
Additional paid-in capital | 17,824 | 20,875 |
Accumulated other comprehensive loss | (178) | (184) |
Retained earnings | 4,333 | 5,270 |
Total Intelligent Systems Corporation stockholders’ equity | 22,066 | 26,048 |
Noncontrolling interest | (2,967) | (2,879) |
Total stockholders’ equity | 19,099 | 23,169 |
Total liabilities and stockholders’ equity | $ 22,286 | $ 26,173 |
Consolidated Balance Sheets (C3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 8,731,299 | 8,731,299 |
Common stock, shares outstanding (in shares) | 8,731,299 | 8,731,299 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue | ||
Products | $ 230 | $ 136 |
Services | 1,417 | 933 |
Total net revenue | 1,647 | 1,069 |
Cost of revenue | ||
Products | 64 | 59 |
Services | 647 | 547 |
Total cost of revenue | 711 | 606 |
Expenses | ||
Marketing | 96 | 71 |
General and administrative | 556 | 367 |
Research and development | 645 | 694 |
Loss from operations | (361) | (669) |
Other income (loss) | (664) | 2 |
Loss from continuing operations before income taxes | (1,025) | (667) |
Income taxes | (1) | 3 |
Loss from continuing operations | $ (1,024) | (670) |
Gain on sale of discontinued operations, net of taxes | 18,746 | |
Loss from discontinued operations, net of taxes | (3) | |
Net income (loss) | $ (1,024) | 18,073 |
Net loss attributable to noncontrolling interest | 87 | 223 |
Net income (loss) attributable to Intelligent Systems Corporation | $ (937) | $ 18,296 |
Basic | ||
Continuing operations (in dollars per share) | $ (0.11) | $ (0.05) |
Discontinued operations (in dollars per share) | 2.09 | |
Earnings (loss) per share, basic (in dollars per share) | $ (0.11) | 2.04 |
Diluted | ||
Continuing operations (in dollars per share) | $ (0.11) | (0.05) |
Discontinued operations (in dollars per share) | 2.08 | |
Earnings (loss) per share, diluted (in dollars per share) | $ (0.11) | $ 2.03 |
Basic weighted average common shares outstanding (in shares) | 8,731,299 | 8,958,028 |
Diluted weighted average common shares outstanding (in shares) | 8,731,299 | 9,029,273 |
Net income (loss) attributable to Intelligent Systems Corporation: | ||
Loss from continuing operations | $ (937) | $ (447) |
Income from discontinued operations | 18,743 | |
Net income (loss) attributable to Intelligent Systems Corporation | $ (937) | $ 18,296 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net income (loss) | $ (1,024) | $ 18,073 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (4) | (4) |
Unrealized gain on available-for-sale marketable securities | 10 | 2 |
Total comprehensive income (loss) | (1,018) | 18,071 |
Comprehensive loss attributable to noncontrolling interest | 87 | 222 |
Comprehensive income (loss) attributable to Intelligent Systems Corporation | $ (931) | $ 18,293 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ (1,024) | $ 18,073 |
Income from discontinued operations | (18,743) | |
Loss from continuing operations | $ (1,024) | (670) |
Adjustments to reconcile net loss from continuing operations to net cash used for operating activities: | ||
Depreciation and amortization | 59 | 36 |
Stock-based compensation expense | 5 | $ 4 |
Non-cash investment expense | 700 | |
Equity in (income) loss of affiliate company | 6 | $ 6 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2) | 53 |
Other current assets | (225) | 128 |
Other long term assets | 15 | 3 |
Accounts payable | 113 | 36 |
Accrued payroll | 94 | (63) |
Deferred revenue, current portion | 144 | (3) |
Accrued expenses | 10 | $ 7 |
Other current liabilities | 32 | |
Deferred revenue, net of current portion | $ (90) | $ 34 |
Other long-term liabilities | (18) | |
Net cash used for operating activities | $ (163) | (447) |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (95) | $ (10) |
Proceeds from sale of long term investment | $ 2,248 | |
Purchase of long-term investment | $ (30) | |
Net cash used for investing activities | $ 2,153 | $ (40) |
FINANCING Activities: | ||
Distribution of dividend to stockholders | (3,056) | |
Net cash used for financing activities | (3,056) | |
Net cash provided by (used for) operating activities from discontinued operations | $ (120) | $ 415 |
Net cash provided by investing activities from discontinued operations | 18,202 | |
Net cash provided by (used for) discontinued operations | $ (120) | 18,617 |
Effects of exchange rate changes on cash | (5) | (4) |
Net increase (decrease) in cash | (1,191) | 18,126 |
Cash at beginning of period | 18,059 | 2,624 |
Cash at end of period | 16,868 | $ 20,750 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during the period for income taxes | $ 120 |
Note 1
Note 1 | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Throughout this report, the terms “we”, “us”, “ours”, “ISC” and “company” refer to Intelligent Systems Corporation, including its wholly-owned and majority-owned subsidiaries. The unaudited Consolidated Financial Statements presented in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States applicable to interim financial statements. Accordingly, they do not include all of the information and notes required for complete financial statements. In the opinion of ISC management, these Consolidated Financial Statements contain all adjustments (which comprise only normal and recurring accruals) necessary to present fairly the financial position and results of operations as of and for the three month periods ended March 31, 2016 and 2015. The interim results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with our Consolidated Financial Statements and notes thereto for the fiscal year ended December 31, 2015, as filed in our Annual Report on Form 10-K. |
Note 2 - Sales of Subsidiary; D
Note 2 - Sales of Subsidiary; Discontinued Operations | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 2. Sale of Subsidiary; Discontinued Operations The following condensed financial information is provided for the ChemFree discontinued operations for the periods shown: Three Months Ended March 31 , (unaudited, in thousands) 201 6 2015 Net sales $ -- $ 2,902 Operating loss -- (3 ) Net income (loss) before income taxes -- 6 Income taxes -- 9 Net loss from discontinued operations $ -- $ (3 ) The only liabilities of discontinued operations, presented separately on the balance sheet as of December 31, 2015, consist of $120,000 in current tax liabilities, which were paid before March 31, 2016. |
Note 3 - Investment Write-down
Note 3 - Investment Write-down | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Cost-method Investments, Description [Text Block] | 3. Investment Write-down |
Note 4 - Stock-based Compensati
Note 4 - Stock-based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 4. Stock-based Compensation As of March 31, 2016, there is $18,000 of unrecognized compensation cost related to stock options. No options were granted during the three months ended March 31, 2016. The following table summarizes options as of March 31, 2016: # of Shares Wgt Avg Exercise Price Wgt Avg Remaining Contractual Life in Years Aggregate V alue Outstanding at March 31, 2016 274,500 $ 1.76 5.3 $ 465,390 Vested and exercisable at March 31, 2016 254,500 $ 1.72 5.0 $ 443,030 The estimated fair value of options granted is calculated using the Black-Scholes option pricing model with assumptions as previously disclosed in our 2015 Form 10-K. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the company’s closing stock price on the last trading day of the first quarter of 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. The amount of aggregate intrinsic value will change based on the market value of the company’s stock. |
Note 5 - Fair Value of Financia
Note 5 - Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Fair Value, Option [Text Block] | 5. Fair Value of Financial Instruments Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, marketable securities and trade accounts. Our available cash is held in accounts managed by third-party financial institutions. Cash may exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limits. While we monitor cash balances on a regular basis and adjust the balances as appropriate, these balances could be impacted if the underlying financial institutions fail. To date, we have experienced no loss or lack of access to our cash; however, we can provide no assurances that access to our cash will not be impacted by adverse conditions in the financial markets. |
Note 6 - Fair Value Measurement
Note 6 - Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 6. Fair Value Measurements GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable input be used when available. Observable inputs are based on data obtained from sources independent of the company that market participants would use in pricing the asset or liability. Unobservable inputs are inputs that reflect the company’s assumptions about the estimates market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is measured in three levels based on the reliability of inputs: • Level 1 Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. • Level 2 Valuations based on quoted prices in less active, dealer or broker markets. Fair values are primarily obtained from third party pricing services for identical or comparable assets or liabilities. • Level 3 Valuations derived from other valuation methodologies, including pricing models, discounted cash flow models and similar techniques, and not based on market, exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections that are not observable in the market and significant professional judgment is needed in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our available-for-sale investments are classified within Level 1 of the valuation hierarchy. The fair value of equity method and cost method investments has not been determined as it was impracticable to do so due to the fact that the investee companies are relatively small, early stage private companies for which there is no comparable valuation data available without unreasonable time and expense. |
Note 7 - Concentration of Reven
Note 7 - Concentration of Revenue | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | 7. Concentration of Revenue Three Months Ended March 31 , 201 6 2015 Customer A 23.1 % 22.4 % Customer B 6.8 % 12.0 % Customer C 9.4 % 23.2 % Customer D 14.7 % 0.0 % |
Note 8 - Commitments and Contin
Note 8 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Legal Matters and Contingencies [Text Block] | 8. Commitments and Contingencies – |
Note 9 - Income Taxes
Note 9 - Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 9. Income Taxes – There were no unrecognized tax benefits at March 31, 2016 and December 31, 2015. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the periods presented. We have determined we have no uncertain tax positions. We file a consolidated U.S. federal income tax return for all subsidiaries in which our ownership equals or exceeds 80%, as well as individual subsidiary returns in various states and foreign jurisdictions. With few exceptions we are no longer subject to U.S. federal, state and local or foreign income tax examinations by taxing authorities for years before 2012. |
Note 10 - Recent Accounting Pro
Note 10 - Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | 10. Recent Accounting Pronouncements – In March 2016, the FASB issued ASU 2016-08 – Revenue from Contracts with Customers (Topic 606) related to reporting revenue gross versus net, or principal versus agent considerations. This pronouncement is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers, as it pertains to principal versus agent considerations. Specifically, the guidance addresses how entities should identify goods and services being provided to a customer, the unit of account for a principal versus agent assessment, how to evaluate whether a good or service is controlled before being transferred to a customer, and how to assess whether an entity controls services performed by another party. The pronouncement has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We are currently evaluating the effect on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 – Compensations – Stock Compensation (Topic 718) related to simplifications of employee share-based payment accounting. This pronouncement eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. We are currently evaluating the effect on our consolidated financial statements. In April 2016, the FASB issued ASU 2016-10 – Revenue from Contract with Customers (Topic 606) related to identifying performance obligations and licensing. This pronouncement is meant to clarify the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers. Specifically, the guidance addresses an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. The pronouncement has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. We are currently evaluating the effect on our consolidated financial statements. We have considered all other recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our Consolidated Financial Statements. |
Note 2 - Sales of Subsidiary;17
Note 2 - Sales of Subsidiary; Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Income Statement Disclosures [Member] | |
Notes Tables | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | Three Months Ended March 31 , (unaudited, in thousands) 201 6 2015 Net sales $ -- $ 2,902 Operating loss -- (3 ) Net income (loss) before income taxes -- 6 Income taxes -- 9 Net loss from discontinued operations $ -- $ (3 ) |
Note 4 - Stock-based Compensa18
Note 4 - Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Notes Tables | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | # of Shares Wgt Avg Exercise Price Wgt Avg Remaining Contractual Life in Years Aggregate V alue Outstanding at March 31, 2016 274,500 $ 1.76 5.3 $ 465,390 Vested and exercisable at March 31, 2016 254,500 $ 1.72 5.0 $ 443,030 |
Note 7 - Concentration of Rev19
Note 7 - Concentration of Revenue (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Notes Tables | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Three Months Ended March 31 , 201 6 2015 Customer A 23.1 % 22.4 % Customer B 6.8 % 12.0 % Customer C 9.4 % 23.2 % Customer D 14.7 % 0.0 % |
Note 2 - Sales of Subsidiary;20
Note 2 - Sales of Subsidiary; Discontinued Operations (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Chem Free [Member] | Discontinued Operations, Disposed of by Sale [Member] | Restricted Cash and Cash Equivalents after Working Capital Adjustment [Member] | |||
Restricted Cash and Cash Equivalents, Current | $ 880,000 | ||
Chem Free [Member] | Discontinued Operations, Disposed of by Sale [Member] | |||
Disposal Group, Including Discontinued Operation, Consideration | $ 21,600,000 | ||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 18,746,000 | ||
Disposal Group, Including Discontinued Operation, Deferred Tax Liabilities | $ 120,000 | ||
Increase in Restricted Cash | 3,300,000 | ||
Restricted Cash and Cash Equivalents, Current | $ 2,200,000 | 2,200,000 | |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 18,746,000 | ||
Restricted Cash and Cash Equivalents, Current | $ 2,200,000 | 2,200,000 | |
Disposal Group Including Discontinued Operation, Working Capital Adjustment | $ 220,000 |
Note 2 - Condensed Financial In
Note 2 - Condensed Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Chem Free [Member] | Discontinued Operations, Disposed of by Sale [Member] | ||
Net sales | $ 2,902 | |
Operating loss | (3) | |
Net income (loss) before income taxes | 6 | |
Income taxes | 9 | |
Net loss from discontinued operations | $ (3) |
Note 3 - Investment Write-down
Note 3 - Investment Write-down (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Lumense Inc. [Member] | ||
Cost-method Investments, Other than Temporary Impairment | $ 700,000 | |
Cost Method Investments | 50,000 | |
Cost-method Investments, Other than Temporary Impairment | $ 700,000 |
Note 4 - Stock-based Compensa23
Note 4 - Stock-based Compensation (Details Textual) | 3 Months Ended | |
Mar. 31, 2016USD ($)shares | Mar. 31, 2015USD ($) | |
Number of Stock-based Compensation Plans in Effect | 3 | |
Allocated Share-based Compensation Expense | $ 5,000 | $ 4,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 18,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 0 |
Note 4 - Summary of Stock Optio
Note 4 - Summary of Stock Options (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Shares outstanding (in shares) | shares | 274,500 |
Shares outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 1.76 |
Shares outstanding, weighted average remaining contractual life | 5 years 109 days |
Shares outstanding, aggregate intrinsic value | $ | $ 465,390 |
Shares vested and exercisable (in shares) | shares | 254,500 |
Shares vested and exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 1.72 |
Shares vested and exercisable, weighted average remaining contractual life | 5 years |
Shares vested and exercisable, aggregate intrinsic value | $ | $ 443,030 |
Note 7 - Concentration of Rev25
Note 7 - Concentration of Revenue (Details Textual) | 3 Months Ended |
Mar. 31, 2016 | |
Percentage Of Consolidated Revenue | 10.00% |
Note 7 - Concentration of Rev26
Note 7 - Concentration of Revenue (Details) - Customer Concentration Risk [Member] - Sales Revenue, Net [Member] | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Customer A [Member] | ||
Concentration risk | 23.10% | 22.40% |
Customer B [Member] | ||
Concentration risk | 6.80% | 12.00% |
Customer C [Member] | ||
Concentration risk | 9.40% | 23.20% |
Customer D [Member] | ||
Concentration risk | 14.70% | 0.00% |
Note 9 - Income Taxes (Details
Note 9 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Unrecognized Tax Benefits | $ 0 | $ 0 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 0 | 0 |
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 0 | 0 |
Unrecognized Tax Benefits, Income Tax Penalties Expense | $ 0 | $ 0 |