CoreCard (CCRD) 10-Q 8 Nov 18 2018 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 2018
Document Information [Line Items]
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	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		8,817,988
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 30, 2017
Current assets:
Cash	$ 17,350	$ 14,024
Marketable securities	410	438
Accounts receivable, net	3,019	1,208
Notes and interest receivable, current portion	580	16
Other current assets	1,124	2,373
Total current assets	22,483	18,059
Investments	760	1,035
Notes and interest receivable, net of current portion	1,742	1,250
Property and equipment, at cost less accumulated depreciation	1,496	1,262
Other long-term assets	246	173
Total assets	26,727	21,779
Current liabilities:
Accounts payable	269	321
Deferred revenue, current portion	923	853
Accrued payroll	1,319	595
Accrued expenses	71	98
Other current liabilities	749	408
Total current liabilities	3,331	2,275
Deferred revenue, net of current portion	67	51
Intelligent Systems Corporation stockholders’ equity:
Common stock, $0.01 par value, 20,000,000 shares authorized, 8,797,988 and 8,777,988 issued and outstanding at September 30, 2018 and December 31, 2017, respectively	88	88
Additional paid-in capital	14,955	14,877
Accumulated other comprehensive loss	(162)	(143)
Accumulated income	8,448	4,631
Total Intelligent Systems Corporation stockholders’ equity	23,329	19,453
Total liabilities and stockholders’ equity	$ 26,727	$ 21,779

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2018	Dec. 30, 2017
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	20,000,000	20,000,000
Common stock, issued (in shares)	8,797,988	8,777,988
Common stock, outstanding (in shares)	8,797,988	8,777,988

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue
Total net revenue	$ 5,415	$ 1,851	$ 14,046	$ 6,633
Cost of revenue
Total cost of revenue	2,323	808	6,108	3,037
Expenses
Marketing	85	64	240	212
General and administrative	466	343	1,357	1,221
Research and development	805	1,132	2,467	2,961
Income (loss) from operations	1,736	(496)	3,874	(798)
Other income	245	1,868	128	1,842
Income before Income taxes	1,981	1,372	4,002	1,044
Income taxes	115		185	20
Net income	$ 1,866	$ 1,372	$ 3,817	$ 1,024
Earnings per share attributable to Intelligent Systems Corporation:
Basic (in dollars per share)	$ 0.21	$ 0.16	$ 0.43	$ 0.12
Diluted (in dollars per share)	$ 0.21	$ 0.15	$ 0.43	$ 0.12
Basic weighted average common shares outstanding (in shares)	8,797,988	8,777,988	8,789,099	8,762,571
Diluted weighted average common shares outstanding (in shares)	8,976,415	8,894,864	8,943,652	8,883,241
Service [Member]
Revenue
Total net revenue	$ 5,286	$ 1,851	$ 13,757	$ 6,543
Cost of revenue
Total cost of revenue	2,323	808	5,972	2,950
Product [Member]
Revenue
Total net revenue	129		289	90
Cost of revenue
Total cost of revenue			$ 136	$ 87

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net income	$ 1,866	$ 1,372	$ 3,817	$ 1,024
Other comprehensive income:
Foreign currency translation adjustments	(11)		4	(14)
Unrealized gain on available-for-sale marketable securities	(11)	6	(23)	27
Total comprehensive income	$ 1,844	$ 1,378	$ 3,798	$ 1,037

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
OPERATING ACTIVITIES:
Net income	$ 3,817	$ 1,024
Adjustments to reconcile net income from continuing operations to net cash used for operating activities:
Depreciation and amortization	429	238
Stock-based compensation expense	44	39
Gain on sale of long-term investment		(1,838)
Non-cash investment expense	255	93
Non-cash interest income	(37)
Equity in loss of affiliate company	25	50
Changes in operating assets and liabilities:
Accounts receivable	(1,811)	(404)
Other current assets	1,249	142
Interest receivable	16
Other long-term assets	(73)	(58)
Accounts payable	(52)	(109)
Accrued payroll	724	77
Deferred revenue, current portion	70	(214)
Accrued expenses	(27)	56
Other current liabilities	341	(49)
Deferred revenue, net of current portion	16	(52)
Net cash provided by (used for) operating activities	4,986	(1,005)
INVESTING ACTIVITIES:
Purchases of property and equipment	(663)	(432)
Advances of notes receivable	(1,035)	(751)
Proceeds from sale of long-term investment		1,936
Purchase of long-term investment		(1,000)
Net cash used for investing activities	(1,698)	(247)
FINANCING ACTIVITIES:
Sale of capital stock pursuant to exercise of option	34
Net cash provided by financing activities	34
Effects of exchange rate changes on cash	4	(14)
Net increase (decrease) in cash	3,326	(1,266)
Cash at beginning of period	14,024	17,724
Cash at end of period	17,350	16,458
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes		$ 20

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. Basis of Presentation – 10 not three nine September 30, 2018 2017. three nine September 30, 2018 not December 31, 2017, 10 There have been no 2014 09, 606 first 2018 2, 10 December 31, 2017. As a result of the implementation of Topic 606, December 31, 2017 Three Months Ended Twelve Months Ended (in thousands) Dec. 31, 2017 Sept. 30 2017 June 30, 2017 Mar. 31, 2017 Dec. 31, 2017 R evenue Services $ 166 $ 162 $ 159 $ 149 $ 636 Products (166 ) (162 ) (159 ) (149 ) (636 ) Total net revenue − − − − − Cost of Revenue Services 62 51 50 46 209 Products (62 ) (51 ) (50 ) (46 ) (209 ) Total cost of revenue − − − − − Net Income $ − $ − $ − $ − $ −

Note 2 - New Accounting Standar

Note 2 - New Accounting Standards	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	2. New Accounting Standards – Accounting Pronouncements Adopted: In May 2014, 2014 09, 606 2014 09 2014 09 first 2018 not three nine September 30, 2017, $17,000 $123,000, $4,000 $24,000, $13,000 $99,000, Recent Accounting Pronouncements Not In February 2016, 2016 02, 842 December 15, 2018. September 30, 2018, $1,346,000. not We have considered all other recently issued accounting pronouncements and do not

Note 3 - Investments

Note 3 - Investments	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Cost-method Investments, Description [Text Block]	3. Investments – June 30, 2018, $250,000 one not In the quarter ended June 30, 2017, $90,000 June 30, 2017, December 31, 2017, $10,000 In the quarter ended September 30, 2017, one fourth 2015, no no $372,000, third 2017. In the quarter ended September 30, 2017, one ninety-one $1,466,000 $98,000.

Note 4 - Notes Receivable

Note 4 - Notes Receivable	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Financing Receivables [Text Block]	4. Notes Receivable – September 30, 2017, $1,500,000 $750,000. December 31, 2017, $500,000 $1,250,000 December 31, 2017. June 30, 2018, $250,000 6.0 fourth one fourteen Additionally, on March 16, 2018, $250,000, June 13, 2018, $225,000, September 25, 2018, $75,000 three 6.0 six September 16, 2018, first six March 16, 2019. In the quarter ended March 31, 2018, $435,000 $235,000. 5.0 third ten

Note 5 - Stock-based Compensati

Note 5 - Stock-based Compensation	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	5. Stock-based Compensation September 30, 2018, three three nine September 30, 2018 2017 $18,000 $12,000 three September 30, 2018 2017, $44,000 $39,000 nine September 30, 2018 2017, As of September 30, 2018, $91,000 No September 30, 2018. nine September 30, 2018, 20,000 4,000 September 30, 2018: # of Shares Wgt. Avg. Exercise Price Wgt. Avg. Remaining Contractual Life in Years Aggregate Value Outstanding at September 30, 2018 227,500 $ 2.47 4.9 $ 1,843,765 Vested and exercisable at September 30, 2018 199,000 $ 2.03 4.3 $ 1,700,110 The estimated fair value of options granted is calculated using the Black-Scholes option pricing model with assumptions as previously disclosed in our 2017 10 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 third 2018 September 30, 2018.

Note 6 - Fair Value of Financia

Note 6 - Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Fair Value, Option [Text Block]	6. Fair Value of Financial Instruments Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, marketable securities, trade accounts and notes receivable. Our available cash is held in accounts managed by third may no no not

Note 7 - Fair Value Measurement

Note 7 - Fair Value Measurements	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Fair Value Disclosures [Text Block]	7. Fair Value Measurements not 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 • 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 1 • Level 2 Valuations based on quoted prices in less active, dealer or broker markets. Fair values are primarily obtained from third • Level 3 Valuations derived from other valuation methodologies, including pricing models, discounted cash flow models and similar techniques, and not 3 not 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 marketable securities are available-for-sale investments and are classified within Level 1 The fair value of equity method and cost method investments has not no

Note 8 - Concentration of Reven

Note 8 - Concentration of Revenue	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Concentration Risk Disclosure [Text Block]	8. Concentration of Revenue 10 three nine September 30, 2018 2017. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Customer A 3.4% 15.4% 5.8% 10.1% Customer B 3.8% 14.3% 4.5% 11.6% Customer C 7.0% 13.1% 7.1% 11.8% Customer D 17.0% 7.3% 17.4% 27.4% Customer E 37.5% −% 35.3% −%

Note 9 - Commitments and Contin

Note 9 - Commitments and Contingencies	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Legal Matters and Contingencies [Text Block]	9. Commitments and Contingencies – 9 2017 10 April 1, 2018, three April 1, 2018 March 31, 2021 June 1, 2018, three June 1, 2018 May 31, 2021 May 31, 2022 Year ended December 31, (in thousands) 2018 (October 1 – December 31) $ 120 2019 478 2020 462 2021 242 2022 44 Total minimum lease payments $ 1,346

Note 10 - Income Taxes

Note 10 - Income Taxes	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Income Tax Disclosure [Text Block]	10. Income Taxes – not not There were no September 30, 2018 December 31, 2017. no no We file a consolidated U.S. federal income tax return for all subsidiaries in which our ownership equals or exceeds 80%, no 2013.

Note 11 - Shareholders' Equity

Note 11 - Shareholders' Equity	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	11. Shareholders' Equity – Share Repurchase Program: On November 6, 2018, $5,000,000 no may not November 8, 2018.

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation (Tables)	9 Months Ended
	Sep. 30, 2018
Notes Tables
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]	Three Months Ended Twelve Months Ended (in thousands) Dec. 31, 2017 Sept. 30 2017 June 30, 2017 Mar. 31, 2017 Dec. 31, 2017 R evenue Services $ 166 $ 162 $ 159 $ 149 $ 636 Products (166 ) (162 ) (159 ) (149 ) (636 ) Total net revenue − − − − − Cost of Revenue Services 62 51 50 46 209 Products (62 ) (51 ) (50 ) (46 ) (209 ) Total cost of revenue − − − − − Net Income $ − $ − $ − $ − $ −

Note 5 - Stock-based Compensa_2

Note 5 - Stock-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2018
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 Value Outstanding at September 30, 2018 227,500 $ 2.47 4.9 $ 1,843,765 Vested and exercisable at September 30, 2018 199,000 $ 2.03 4.3 $ 1,700,110

Note 8 - Concentration of Rev_2

Note 8 - Concentration of Revenue (Tables)	9 Months Ended
	Sep. 30, 2018
Notes Tables
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Customer A 3.4% 15.4% 5.8% 10.1% Customer B 3.8% 14.3% 4.5% 11.6% Customer C 7.0% 13.1% 7.1% 11.8% Customer D 17.0% 7.3% 17.4% 27.4% Customer E 37.5% −% 35.3% −%

Note 9 - Commitments and Cont_2

Note 9 - Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2018
Notes Tables
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	Year ended December 31, (in thousands) 2018 (October 1 – December 31) $ 120 2019 478 2020 462 2021 242 2022 44 Total minimum lease payments $ 1,346

Note 1 - Basis of Presentatio_2

Note 1 - Basis of Presentation - Impact of Topic 606 (Details) - USD ($) $ in Thousands	3 Months Ended					9 Months Ended		12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Total net revenue	$ 5,415		$ 1,851			$ 14,046	$ 6,633
Total cost of revenue	2,323		808			6,108	3,037
Net Income	1,866		1,372			3,817	1,024
Service [Member]
Total net revenue	5,286		1,851			13,757	6,543
Total cost of revenue	2,323		808			5,972	2,950
Product [Member]
Total net revenue	129					289	90
Total cost of revenue						$ 136	$ 87
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Total net revenue
Total cost of revenue
Net Income
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | Service [Member]
Total net revenue		166	162	159	149			636
Total cost of revenue		62	51	50	46			209
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | Product [Member]
Total net revenue		(166)	(162)	(159)	(149)			(636)
Total cost of revenue		$ (62)	$ (51)	$ (50)	$ (46)			$ (209)

Note 2 - New Accounting Stand_2

Note 2 - New Accounting Standards (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Total	$ 1,866,000	$ 1,372,000	$ 3,817,000	$ 1,024,000
Cost of Revenue, Total	2,323,000	808,000	6,108,000	3,037,000
Operating Leases, Future Minimum Payments Due, Total	$ 1,346,000		$ 1,346,000
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
Cumulative Effect on Retained Earnings, Net of Tax, Total		13,000		99,000
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member]
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Total		17,000		123,000
Cost of Revenue, Total		$ 4,000		$ 24,000

Note 3 - Investments (Details T

Note 3 - Investments (Details Textual) - USD ($)	3 Months Ended				9 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Cost-method Investments, Other than Temporary Impairment					$ 255,000	$ 93,000
Proceeds From Issuance of Restricted Cash			$ 372,000
Gain (Loss) on Sale of Investments, Total						1,838,000
Lumense Inc. [Member]
Cost-method Investments, Other than Temporary Impairment	$ 250,000	$ 10,000		$ 90,000
Privately-held Technology Company [Member]
Cost Method Investments, Percent Sold			91.00%
Gain (Loss) on Sale of Investments, Total			$ 1,466,000
Cost Method Investments			$ 98,000			$ 98,000

Note 4 - Notes Receivable (Deta

Note 4 - Notes Receivable (Details Textual) - USD ($)	Sep. 25, 2018	Jun. 13, 2018	Mar. 16, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017
Privately-Held Identity and Professional Services Company With Ties to the FinTech Industry [Member]
Receivable Commitment to Lend							$ 1,500,000
Payments to Acquire Notes Receivable	$ 75,000	$ 225,000	$ 250,000	$ 250,000		$ 500,000	$ 750,000
Financing Receivable, Gross						$ 1,250,000
Notes Receivable, Stated Interest Rate			6.00%	6.00%
Notes Receivable, Renewal Term				1 year
Warrants, Exercised, Percentage				14.00%
Notes Receiavble Term			180 days
Private Limited India Based Company in the FinTech Industry [Member]
Receivable Commitment to Lend					$ 435,000
Payments to Acquire Notes Receivable					$ 235,000
Notes Receivable, Stated Interest Rate					5.00%
Private Limited India Based Company in the FinTech Industry [Member] | Maximum [Member]
Notes Receivable, Conversion, Percentage					10.00%

Note 5 - Stock-based Compensa_3

Note 5 - Stock-based Compensation (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2018USD ($)shares	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)shares	Sep. 30, 2017USD ($)
Number of Stock-based Compensation Plans in Effect	3		3
Allocated Share-based Compensation Expense, Total | $	$ 18,000	$ 12,000	$ 44,000	$ 39,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $	$ 91,000		$ 91,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period			20,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Total			4,000

Note 5 - Stock-based Compensa_4

Note 5 - Stock-based Compensation - Summary of Stock Options (Details)	9 Months Ended
	Sep. 30, 2018USD ($)$ / sharesshares
Shares outstanding (in shares) | shares	227,500
Shares outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 2.47
Shares outstanding, weighted average remaining contractual life (Year)	4 years 328 days
Shares outstanding, aggregate intrinsic value | $	$ 1,843,765
Shares vested and exercisable (in shares) | shares	199,000
Shares vested and exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 2.03
Shares vested and exercisable, weighted average remaining contractual life (Year)	4 years 109 days
Shares vested and exercisable, aggregate intrinsic value | $	$ 1,700,110

Note 8 - Concentration of Rev_3

Note 8 - Concentration of Revenue - Concentration of Revenue (Details) - Customer Concentration Risk [Member] - Sales Revenue, Net [Member]	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Customer A [Member]
Concentration risk	3.40%	15.40%	5.80%	10.10%
Customer B [Member]
Concentration risk	3.80%	14.30%	4.50%	11.60%
Customer C [Member]
Concentration risk	7.00%	13.10%	7.10%	11.80%
Customer D [Member]
Concentration risk	17.00%	7.30%	17.40%	27.40%
Customer E [Member]
Concentration risk	37.50%		35.30%

Note 9 - Commitments and Cont_3

Note 9 - Commitments and Contingencies - Future Minimum Lease Payments (Details)	Sep. 30, 2018USD ($)
2018 (October 1 – December 31)	$ 120,000
2,019	478,000
2,020	462,000
2,021	242,000
2,022	44,000
Total minimum lease payments	$ 1,346,000

Note 10 - Income Taxes (Details

Note 10 - Income Taxes (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Unrecognized Tax Benefits, Ending Balance	$ 0	$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	0	0
Liability for Uncertainty in Income Taxes, Current	$ 0	$ 0

Note 11 - Shareholders' Equity

Note 11 - Shareholders' Equity (Details Textual)	Nov. 06, 2018USD ($)
Subsequent Event [Member]
Stock Repurchase Program, Authorized Amount	$ 5,000,000