Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 27, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | ID SYSTEMS INC | ||
Entity Central Index Key | 49,615 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 56,600,000 | ||
Entity Common Stock, Shares Outstanding | 17,634,904 | ||
Trading Symbol | IDSY | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,097,000 | $ 4,972,000 |
Restricted cash | 306,000 | 305,000 |
Investments - short term | 1,201,000 | 115,000 |
Accounts receivable, net of allowance for doubtful accounts of $341,000 and $87,000 in 2016 and 2017, respectively | 8,746,000 | 9,585,000 |
Financing receivables - current, net of allowance for doubtful accounts of $-0- in 2016 and 2017 | 1,295,000 | 1,766,000 |
Inventory, net | 4,586,000 | 3,920,000 |
Deferred costs - current | 4,296,000 | 3,750,000 |
Prepaid expenses and other current assets | 3,627,000 | 3,495,000 |
Total current assets | 29,154,000 | 27,908,000 |
Investments - long term | 10,278,000 | 1,499,000 |
Financing receivables - less current portion | 1,557,000 | 2,430,000 |
Deferred costs - less current portion | 4,302,000 | 6,638,000 |
Fixed assets, net | 2,747,000 | 3,075,000 |
Goodwill | 7,318,000 | 1,837,000 |
Intangible assets, net | 5,417,000 | 706,000 |
Other assets | 159,000 | 153,000 |
Total assets | 60,932,000 | 44,246,000 |
Current liabilities: | ||
Short-term borrowings | 2,993,000 | |
Accounts payable and accrued expenses | 7,440,000 | 7,622,000 |
Deferred revenue - current | 9,711,000 | 7,197,000 |
Acquisition related contingent consideration - current | 1,923,000 | |
Total current liabilities | 19,074,000 | 17,812,000 |
Deferred revenue - less current portion | 7,738,000 | 10,066,000 |
Acquisition related contingent consideration - less current portion | 854,000 | |
Deferred rent | 295,000 | 366,000 |
Total liabilities | 27,961,000 | 28,244,000 |
Commitments and Contingencies (Note 20) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock; authorized 5,000,000 shares, $0.01 par value; none issued | ||
Common stock; authorized 50,000,000 shares, $0.01 par value; 14,578,000 and 18,327,000 shares issued at December 31, 2016 and 2017, respectively; shares outstanding, 13,767,000 and 17,440,000 at December 31, 2016 and 2017, respectively | 183,000 | 129,000 |
Additional paid-in capital | 133,569,000 | 111,844,000 |
Accumulated deficit | (95,368,000) | (91,498,000) |
Accumulated other comprehensive loss | (578,000) | (103,000) |
Treasury stock; 811,000 and 887,000 common shares at cost at December 31, 2016 and 2017, respectively | (4,835,000) | (4,370,000) |
Total stockholders’ equity | 32,971,000 | 16,002,000 |
Total liabilities and stockholders’ equity | $ 60,932,000 | $ 44,246,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, accounts receivable current | $ 87,000 | $ 341,000 |
Allowance for doubtful accounts, financial receivables current | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 18,327,000 | 14,578,000 |
Common stock, shares outstanding | 17,440,000 | 13,767,000 |
Treasury stock, shares | 887,000 | 811,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Products | $ 23,552,000 | $ 21,366,000 | $ 24,531,000 |
Services | 17,406,000 | 15,456,000 | 17,253,000 |
Revenue, Net, Total | 40,958,000 | 36,822,000 | 41,784,000 |
Cost of Revenues: | |||
Cost of products | 13,453,000 | 14,036,000 | 18,018,000 |
Cost of services | 6,578,000 | 4,492,000 | 6,743,000 |
Cost of Goods and Services Sold, Total | 20,031,000 | 18,528,000 | 24,761,000 |
Gross Profit | 20,927,000 | 18,294,000 | 17,023,000 |
Operating expenses: | |||
Selling, general and administrative expenses | 21,053,000 | 20,126,000 | 22,750,000 |
Research and development expenses | 3,965,000 | 4,536,000 | 4,556,000 |
Operating Expenses, Total | 25,018,000 | 24,662,000 | 27,306,000 |
Loss from operations | (4,091,000) | (6,368,000) | (10,283,000) |
Interest income | 253,000 | 285,000 | 342,000 |
Interest expense | (342,000) | (293,000) | |
Other (expense) income, net | (1,000) | 6,000 | (11,000) |
Net loss before income taxes | (4,181,000) | (6,370,000) | (9,952,000) |
Income tax benefit - sale of NJ R&D tax credits | 311,000 | ||
Net loss | $ (3,870,000) | $ (6,370,000) | $ (9,952,000) |
Net loss per share - basic and diluted | $ (0.26) | $ (0.49) | $ (0.79) |
Weighted average common shares outstanding - basic and diluted | 14,961,000 | 12,984,000 | 12,614,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (3,870,000) | $ (6,370,000) | $ (9,952,000) |
Other comprehensive (loss) income, net: | |||
Unrealized loss on investments | (103,000) | (5,000) | (28,000) |
Reclassification of net realized investment losses (gains) included in net loss | 1,000 | (6,000) | 43,000 |
Foreign currency translation adjustment | (373,000) | 408,000 | (140,000) |
Total other comprehensive (loss) income | (475,000) | 397,000 | (125,000) |
Comprehensive loss | $ (4,345,000) | $ (5,973,000) | $ (10,077,000) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2014 | $ 124,000 | $ 106,272,000 | $ (75,176,000) | $ (375,000) | $ (3,590,000) | $ 27,255,000 |
Balance, shares at Dec. 31, 2014 | 13,476,000 | |||||
Net loss | (9,952,000) | (9,952,000) | ||||
Foreign currency translation adjustment | (140,000) | (140,000) | ||||
Unrealized (gain) loss on investments, net of realized amounts | 15,000 | 15,000 | ||||
Shares issued pursuant to exercise of stock options | $ 5,000 | 2,235,000 | 2,240,000 | |||
Shares issued pursuant to exercise of stock options, shares | 568,000 | |||||
Issuance of restricted stock | ||||||
Issuance of restricted stock, shares | 232,000 | |||||
Forfeiture of restricted shares | ||||||
Forfeiture of restricted shares, shares | (65,000) | |||||
Shares withheld pursuant to exercise of stock options and restricted stock | (457,000) | (457,000) | ||||
Stock based compensation - restricted stock | 1,325,000 | 1,325,000 | ||||
Stock based compensation - options and performance shares | 284,000 | 284,000 | ||||
Balance at Dec. 31, 2015 | $ 129,000 | 110,116,000 | (85,128,000) | (500,000) | (4,047,000) | 20,570,000 |
Balance, shares at Dec. 31, 2015 | 14,211,000 | |||||
Net loss | (6,370,000) | (6,370,000) | ||||
Foreign currency translation adjustment | 408,000 | 408,000 | ||||
Unrealized (gain) loss on investments, net of realized amounts | (11,000) | (11,000) | ||||
Shares issued pursuant to exercise of stock options | 70,000 | 70,000 | ||||
Shares issued pursuant to exercise of stock options, shares | 20,000 | |||||
Issuance of restricted stock | ||||||
Issuance of restricted stock, shares | 566,000 | |||||
Forfeiture of restricted shares | ||||||
Forfeiture of restricted shares, shares | (219,000) | |||||
Shares withheld pursuant to exercise of stock options and restricted stock | (323,000) | (323,000) | ||||
Stock based compensation - restricted stock | 908,000 | 908,000 | ||||
Stock based compensation - options and performance shares | 750,000 | 750,000 | ||||
Balance at Dec. 31, 2016 | $ 129,000 | 111,844,000 | (91,498,000) | (103,000) | (4,370,000) | 16,002,000 |
Balance, shares at Dec. 31, 2016 | 14,578,000 | |||||
Net loss | (3,870,000) | (3,870,000) | ||||
Foreign currency translation adjustment | (373,000) | (373,000) | ||||
Unrealized (gain) loss on investments, net of realized amounts | (102,000) | (102,000) | ||||
Shares issued pursuant to exercise of stock options | $ 3,000 | 1,274,000 | 1,277,000 | |||
Shares issued pursuant to exercise of stock options, shares | 271,000 | |||||
Issuance of restricted stock | $ 19,000 | (19,000) | ||||
Issuance of restricted stock, shares | 240,000 | |||||
Forfeiture of restricted shares | $ (1,000) | 1,000 | ||||
Forfeiture of restricted shares, shares | (58,000) | |||||
Shares withheld pursuant to exercise of stock options and restricted stock | (465,000) | (465,000) | ||||
Stock based compensation - restricted stock | 1,682,000 | 1,682,000 | ||||
Stock based compensation - options and performance shares | 755,000 | 755,000 | ||||
Shares issued pursuant to an underwritten public offering, net of issuance costs of $1,200,000 | $ 30,000 | 16,035,000 | 16,065,000 | |||
Shares issued pursuant to an underwritten public offering, net of issuance costs of $1,200,000, shares | 3,000,000 | |||||
Shares issued pursuant to Keytroller acquisition | $ 3,000 | 1,997,000 | 2,000,000 | |||
Shares issued pursuant to Keytroller acquisition, shares | 296,000 | |||||
Balance at Dec. 31, 2017 | $ 183,000 | $ 133,569,000 | $ (95,368,000) | $ (578,000) | $ (4,835,000) | $ 32,971,000 |
Balance, shares at Dec. 31, 2017 | 18,327,000 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance costs on shares issued pursuant to an underwritten public offering | $ 1,200,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities (net of net assets acquired): | |||
Net loss | $ (3,870,000) | $ (6,370,000) | $ (9,952,000) |
Adjustments to reconcile net loss to cash used in operating activities: | |||
Inventory reserve | 313,000 | 205,000 | 186,000 |
Stock based compensation expense | 2,437,000 | 1,658,000 | 1,609,000 |
Depreciation and amortization | 1,132,000 | 685,000 | 718,000 |
Bad debt expense | 115,000 | 117,000 | 326,000 |
Change in contingent consideration | 94,000 | ||
Other non-cash items | (69,000) | 2,000 | 106,000 |
Changes in: | |||
Restricted cash | (1,000) | (1,000) | (1,000) |
Accounts receivable | 1,597,000 | 1,174,000 | 3,350,000 |
Financing receivables | 1,344,000 | 832,000 | 943,000 |
Inventory | 87,000 | 3,027,000 | (1,086,000) |
Prepaid expenses and other assets | (138,000) | (1,120,000) | (437,000) |
Deferred costs | 1,790,000 | (3,758,000) | (1,166,000) |
Deferred revenue | 186,000 | 2,939,000 | (347,000) |
Accounts payable and accrued expenses | (1,099,000) | (1,874,000) | (1,151,000) |
Net cash (used in) provided by operating activities | 3,918,000 | (2,484,000) | (6,902,000) |
Cash flows from investing activities: | |||
Acquisition | (7,373,000) | ||
Capital expenditures | (386,000) | (505,000) | (2,182,000) |
Purchases of investments | (11,083,000) | (956,000) | (2,754,000) |
Proceeds from the sale and maturities of investments | 1,113,000 | 932,000 | 8,434,000 |
Net cash provided by (used in) investing activities | (17,729,000) | (529,000) | 3,498,000 |
Cash flows from financing activities: | |||
Net proceeds from underwritten public offering | 16,065,000 | ||
Borrowings under revolving credit facility | 11,655,000 | 14,650,000 | |
Repayments under revolving credit facility | (14,648,000) | (11,657,000) | |
Proceeds from exercise of stock options | 1,277,000 | 70,000 | 2,006,000 |
Principal payments of capital lease obligation | (149,000) | ||
Net cash provided by financing activities | 14,349,000 | 3,063,000 | 1,857,000 |
Effect of foreign exchange rate changes on cash and cash equivalents | (413,000) | 433,000 | 62,000 |
Net (decrease) increase in cash and cash equivalents | 125,000 | 483,000 | (1,485,000) |
Cash and cash equivalents - beginning of period | 4,972,000 | 4,489,000 | 5,974,000 |
Cash and cash equivalents - end of period | 5,097,000 | 4,972,000 | 4,489,000 |
Cash paid for: | |||
Interest | 130,000 | 175,000 | 18,000 |
Non-cash investing and financing activities: | |||
Shares withheld pursuant to stock issuance | 465,000 | 323,000 | 457,000 |
Unrealized gain (loss) on investments | (102,000) | $ (11,000) | $ 15,000 |
Value of shares issued pursuant to acquisition | 2,000,000 | ||
Contingent consideration relating to acquisition | $ 2,683,000 |
Description ofBusiness and Liqu
Description ofBusiness and Liquidity | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business and Liquidity | NOTE 1 - DESCRIPTION OF BUSINESS AND LIQUIDITY I.D. Systems, Inc. and its subsidiaries (collectively, the “Company,” “we,” “our” or “us”) develop, market and sell wireless machine-to-machine (“M2M”) solutions for managing and securing high-value enterprise assets. These assets include industrial vehicles, such as forklifts, airport ground support equipment, rental vehicles and transportation assets, such as dry van trailers, refrigerated trailers, railcars and containers. The Company’s patented wireless asset management system addresses the needs of organizations to control, track, monitor and analyze their assets. Our cloud-based software application called I.D. Systems Analytics (“Analytics”), is designed to provide a single, integrated view of asset activity across multiple locations, generating enterprise-wide benchmarks and peer-industry comparisons to provide an even deeper layer of insights into asset operations. Analytics determines key performance indicators (“KPIs”) relating to the performance of managed assets. The Company’s solutions enable customers to achieve tangible economic benefits by making timely, informed decisions that increase the safety, security, revenue, productivity and efficiency of their operations. The Company outsources its hardware manufacturing operations to contract manufacturers. I.D. Systems, Inc. was incorporated in Delaware in 1993 and commenced operations in January 1994. Public Offering On July 17, 2017, the Company closed an underwritten public offering consisting of 2,608,695 shares of common stock at a price per share of $5.75. In addition, the underwriters of the public offering exercised in full their option to purchase an additional 391,304 shares of common stock. Including this option exercise, the aggregate gross proceeds from the offering of a total of 2,999,999 shares of common stock, before deducting discounts and commissions and offering expenses, were approximately $17.3 million. Net proceeds from the public offering were approximately $16.1 million. The Company used a portion of the net proceeds from the offering to fund the Keytroller Acquisition (as defined below) and intends to use the remaining portion of the net proceeds for general corporate purposes. Keytroller Acquisition On July 31, 2017, we, together with our wholly-owned subsidiary Keytroller, LLC, a Delaware limited liability company (“Keytroller”), acquired substantially all of the assets of Keytroller, LLC, a Florida limited liability company (the “Keytroller Acquisition”). The business we acquired in the Keytroller Acquisition develops and markets electronic products for managing forklifts and construction vehicles. The Keytroller Acquisition gives us a full suite of industrial fleet management product offerings capable of covering any sized fleet and budget and provides our industrial truck business more scale, both from a product and revenue standpoint and markets its line of forklift management devices mainly through a network of lift truck dealers, offering solutions for different fleet sizes at a wide range of price points. Liquidity As of December 31, 2017, we had cash (including restricted cash), cash equivalents and marketable securities of $16.9 million and working capital of $10.1 million. The Company’s primary sources of cash are cash flows from operating activities and the Company’s holdings of cash, cash equivalents and investments from the sale of common stock. To date, the Company has not generated sufficient cash flows solely from operating activities, although we had positive cash flows in 2017, to fund its operations. We believe our available working capital, anticipated level of future revenues, expected cash flows from operations and net proceeds we raised from the underwritten public offering that closed on July 17, 2017 will provide sufficient funds to cover capital requirements through at least March 31, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [A] Principles of consolidation: The consolidated financial statements include the accounts of I.D. Systems, Inc. and its wholly owned subsidiaries, Asset Intelligence, LLC (“AI”), I.D. Systems GmbH (“IDS GmbH”), I.D. Systems (UK) Ltd (formerly Didbox Ltd.) (“IDS Ltd”) and Keytroller (which, as noted above, are collectively referred to herein as the “Company”). All material intercompany balances and transactions have been eliminated in consolidation. [B] Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 revenues and expenses during the reporting period. The Company continually evaluates estimates used in the preparation of the financial statements for reasonableness. The most significant estimates relate to stock-based compensation arrangements, measurements of fair value of assets acquired and liabilities assumed and acquisition-related contingent consideration, realization of deferred tax assets, the impairment of tangible and intangible assets, inventory reserves, allowance for doubtful accounts, warranty reserves and deferred revenue and costs. Actual results could differ from those estimates. [C] Cash and cash equivalents: The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted. The Company’s cash and cash equivalent balances generally exceed FDIC limits. [D] Restricted cash: Restricted cash at December 31, 2016 and 2017 consists of cash held in escrow for purchases from a vendor. [E] Investments: The Company’s investments include debt securities, U.S. Treasury Notes, government and state agency bonds, corporate bonds and commercial paper, which are classified as either available for sale, held to maturity or trading, depending on management’s investment intentions relating to these securities. All of the Company’s investments are currently classified as available for sale. Available for sale securities are measured at fair value based on quoted market values of the securities, with the unrealized gain and (losses) reported as comprehensive income or (loss). The Company has classified as short-term those securities that mature within one year and all other securities are classified as long-term. Realized gains and losses from the sale of available for sale securities are determined on a specific-identification basis. Net realized gains and losses from the sale of investment securities available for sale are included in “other income” in the consolidated statement of operations. Dividend and interest income are recognized when earned. [F] Accounts receivable: Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains reserves against its accounts receivable for potential losses. Allowances for uncollectible accounts are estimated based on the Company’s periodic review of accounts receivable balances. In establishing the required allowance, management considers our customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Accounts receivable are net of an allowance for doubtful accounts in the amount of $341,000 and $87,000 in 2016 and 2017, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. [G] Financing receivables: Financing receivables consists of sales-type lease receivables from the sale of the Company’s products and services. These arrangements meet the criteria to be accounted for as sales-type leases. Accordingly, an asset is established for the “sales-type lease receivable” at the present value of the future minimum lease payments. Amounts collected on sales-type leases are included in net cash provided by operating activities in the consolidated statements of cash flows. Interest income is recognized monthly over the lease term using the effective-interest method. The allowance for uncollectable minimum lease payments represents the Company’s best estimate of the amount of credit losses in the Company’s existing notes and sales-type lease receivable. The allowance is determined on an individual lease basis if it is probable that the Company will not collect all principal and interest contractually due. The Company considers our customers’ financial condition and historical payment patterns in determining the customers’ probability of default. The impairment is measured based on the present value of expected future cash flows discounted at the note’s effective interest rate. There were no impairment losses recognized for the years ended December 31, 2015, 2016 and 2017. The Company does not accrue interest when a lease is considered impaired. When the ultimate collectability of the principal balance of the impaired lease is in doubt, all cash receipts on impaired lease are applied to reduce the principal amount of such lease until the principal has been recovered and are recognized as interest income thereafter. Impairment losses are charged against the allowance and increases in the allowance are charged to bad debt expense. Leases are written off against the allowance when all possible means of collection have been exhausted and the potential for recovery is considered remote. The Company resumes accrual of interest when it is probable that the Company will collect the remaining principal and interest of an impaired lease. Leases become past due based on how recently payments have been received. [H] Revenue recognition: The Company’s revenue is derived from: (i) sales of our wireless asset management systems and spare parts; (ii) remotely hosted SaaS agreements and post-contract maintenance and support agreements; (iii) services, which includes training and technical support; and (iv) periodically, leasing arrangements. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as short-term or long-term based upon the terms of future services to be delivered. Our industrial truck and connected vehicle wireless asset management systems consist of on-asset hardware, communication infrastructure, SaaS, and hosting infrastructure. Revenue derived from the sale of our industrial truck and connected vehicle wireless asset management systems is allocated to each element based upon vendor specific objective evidence (VSOE) of the fair value or best estimate of selling price (“BESP”) of the element. VSOE of the fair value is based upon the price charged when the element is sold separately. BESP is determined based on overall pricing objectives taking into consideration market conditions and entity specific factors. Revenue is recognized as each element is delivered based on the allocation of arrangement consideration to each element based on VSOE or BESP, and when there are no undelivered elements that are essential to the functionality of the delivered elements. The Company’s system is typically implemented by the customer or a third party and, as a result, revenue is recognized when title and risk of loss passes to the customer, which usually is upon delivery of the system, persuasive evidence of an arrangement exists, sales price is fixed and determinable, collectability is reasonably assured and contractual obligations have been satisfied. In some instances, we are also responsible for providing installation services. The additional installation services, which could be performed by third parties, are considered another element in a multi-element deliverable and revenue for installation services is recognized at the time the installation is provided. Training and technical support revenue are recognized at time of performance. The Company recognizes revenues from the sale of transportation asset management systems and spare parts when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. These criteria include requirements that the delivery of future products or services under the arrangement is not required for the delivered items to serve their intended purpose. The Company has determined that the revenue derived from the sale of transportation asset management systems does not have stand-alone value to the customer separate from the SaaS services provided and, therefore, the arrangements constitute a single unit of accounting. Under the applicable accounting guidance, all of the Company’s billings for equipment and the related cost are deferred, recorded, and classified as a current and long-term liability and a current and long-term asset, respectively. Deferred revenue and cost are recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service. The customer service contracts typically range from one to five years. The service revenue for our transportation asset monitoring equipment relates to charges for monthly messaging usage and value-added features charges. The usage fee is a monthly fixed charge based on the expected utilization according to the rate plan chosen by the customer. Service revenue generally commences upon equipment installation and customer acceptance and is recognized over the period such services are provided. Revenue from transportation asset monitoring equipment activation fees is deferred and amortized over the life of the contract. Spare parts sales are reflected in product revenues and recognized on the date of customer receipt of the part. The Company also enters into remotely hosted SaaS agreements and post-contract maintenance and support agreements for its wireless asset management systems. Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred. Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts. The Company also derives revenue under leasing arrangements. Such arrangements provide for monthly payments covering the system sale, maintenance, support and interest. These arrangements meet the criteria to be accounted for as sales-type leases. Accordingly, an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above. Maintenance revenues and interest income are recognized monthly over the lease term. Under certain customer contracts, the Company invoices progress billings once certain milestones are met. The milestone terms vary by customer and can include the receipt of the customer purchase order, delivery, installation and launch. As the systems are delivered, and services are performed, and all of the criteria for revenue recognition are satisfied, the Company recognizes revenue. If the amount of revenue recognized for financial reporting purposes is greater than the amount invoiced, an unbilled receivable is recorded. If the amount invoiced is greater than the amount of revenue recognized for financial reporting purposes, deferred revenue is recorded. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenues in the consolidated statements of operations. [I] Deferred costs: Deferred product costs consist of transportation asset management equipment costs deferred in accordance with our revenue recognition policy. The Company will continue to evaluate the realizability of the carrying amount of the deferred contract costs on a quarterly basis. To the extent the carrying value of the deferred contract costs exceed the contract revenue, an impairment loss will be recognized. [J] Inventory: Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. Inventory valuation reserves are established in order to report inventories at the lower of cost or net realizable value in the consolidated balance sheet. The determination of inventory valuation reserves requires management to make estimates and judgments on the future salability of inventories. Valuation reserves for obsolete and slow-moving inventory are estimated based on assumptions of future sales forecasts, product life cycle expectations, the impact of new product introductions, production requirements, and specific identification of items, such as product discontinuance or engineering/material changes and by comparing the inventory levels to historical usage rates. [K] Fixed assets and depreciation: Fixed assets are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases, or their estimated useful lives, whichever is shorter. For website development costs, the Company capitalizes costs incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three years. [L] Long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and would be charged to earnings. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. [M] Business Combinations: Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill and intangible assets deemed to have indefinite lives are not amortized. Intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Intangible assets consist of trademarks and trade name, patents, customer relationships and other intangible assets. The Company tests goodwill and other intangible assets annually, or when a triggering event occurs between annual impairment tests, to determine if impairment exists and if the use of indefinite lives is currently applicable. For purposes of the goodwill impairment test, the Company’s product lines are aggregated within one reporting unit. For the years ended December 31, 2015, 2016 and 2017, the Company has not incurred an impairment charge. The Company re-measures the fair value of the contingent consideration at each reporting period and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings in the accompanying consolidated statement of operations. Actual results could differ from such estimates in future periods based on the re-measurement of the fair value. [N] Product warranties: The Company typically provides a one-year warranty on its products. Estimated future warranty costs are accrued in the period that the related revenue is recognized. These estimates are derived from historical data and trends of product reliability and costs of repairing and replacing defective products. [O] Research and development: Research and development costs are charged to expense as incurred and consists primarily of salaries and related expenses, supplies and contractor costs. Research and development costs were $4,556,000, $4,536,000 and $3,965,000 in 2015, 2016 and 2017, respectively. [P] Patent costs: Costs incurred in connection with acquiring patent rights are charged to expense as incurred. [Q] Benefit plan: The Company maintains a retirement plan under Section 401(k) of the Internal Revenue Code, which covers all eligible employees. All employees with U.S. source income are eligible to participate in the plan immediately upon employment. The Company did not make any contributions to the plan during the years ended December 31, 2015, 2016 and 2017. [R] Rent expense: Expense related to the Company’s facilities leases is recorded on a straight-line basis over the respective lease terms. The difference between rent expense incurred and the amounts required to be paid in accordance with the lease term is recorded as deferred rent and is amortized over the lease term. [S] Stock-based compensation: The Company accounts for stock-based employee compensation for all share-based payments, including grants of stock options and restricted stock, as an operating expense based on their fair values on grant date. The Company recorded stock-based compensation expense of $1,609,000, $1,658,000 and $2,437,000 for the years ended December 31, 2015, 2016 and 2017, respectively. The Company estimates the fair value of share-based option awards on the grant date using an option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in the Company’s consolidated statement of operations. The Company estimates forfeitures at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The estimate is based on the Company’s historical rates of forfeitures. Estimated forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. [T] Income taxes: The Company uses the asset and liability method of accounting for deferred income taxes. Deferred income taxes are measured by applying enacted statutory rates to net operating loss carryforwards and to the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets are reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes uncertainty in income taxes in the financial statements using a recognition threshold and measurement attribute of a tax position taken or expected to be taken in a tax return. The Company applies the “more-likely-than-not” recognition threshold to all tax positions, commencing at the adoption date of the applicable accounting guidance, which resulted in no unrecognized tax benefits as of such date. Additionally, there have been no unrecognized tax benefits subsequent to adoption. The Company has opted to classify interest and penalties that would accrue according to the provisions of relevant tax law as selling, general, and administrative expenses, in the consolidated statement of operations. For the years ended December 31, 2015, 2016 and 2017, there was no such interest or penalty. The Company files federal income tax returns and separate income tax returns in various states. For federal and certain states, the 2014 through 2017 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations. For certain other states, the 2013 through 2017 tax years remain open for examination by the tax authorities under a four-year statute of limitations. [U] Fair value of financial instruments: Cash and cash equivalents and investments in securities are carried at fair value. The carrying value of financing receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates. The carrying value of accounts receivable, accounts payable and other liabilities approximates their fair values due to the short period to maturity of these instruments. [V] Advertising and marketing expense: Advertising and marketing costs are expensed as incurred. Advertising and marketing expense for the years ended December 31, 2015, 2016 and 2017 amounted to $455,000, $510,000 and $538,000, respectively. [W] Commitments and contingencies: Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. [X] Recently issued accounting pronouncements: In May 2017, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting”. The FASB issued the update to provide clarity and reduce the cost and complexity when applying the guidance in Topic 718. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance requires a prospective adoption. The guidance is effective beginning fiscal year 2021. Early adoption is permitted. The guidance is effective beginning fiscal year 2021. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In January 2017, FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendment was issued to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this ASU provide a screen to determine when a set (inputs and processes that produce an output) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. The requirement is for public business entities to apply the guidance to annual reporting periods beginning after December 15, 2017. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments,” which provides clarification on how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This ASU will be effective for fiscal periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. If an entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments,” which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for an entity’s ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected with a valuation provision. This update standard is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this ASU to the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation” (Topic 718), which includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. This ASU is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted this pronouncement January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s financial results. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842), which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The revised guidance must be applied on a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The revised guidance is effective for the Company beginning in the quarter ending March 31, 2019. The Company is currently evaluating the impact of this ASU on the consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which requires entities to measure most inventory “at the lower of cost and net realizable value (“NRV”),” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company adopted this pronouncement January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s financial results In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). This ASU is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. In July 2015, the FASB approved a deferral of the ASU effective date from annual and interim periods beginning after December 15, 2016 to annual and interim periods beginning after December 15, 2017, while allowing for early adoption for fiscal periods after December 15, 2016. The new revenue standard provides the option between two different methods of adoption. The full retrospective method calls for the Company to present each prior reported period shown in the financial statements under the new guidance. The modified retrospective method requires the Company to calculate the cumulative effect of applying the new guidance as of the date of adoption via adjustment to retained earnings. The Company continues to assess the impact the new revenue standard will have on its consolidated financial statements. The Company expects to adopt this update in its 2018 first quarter using the modified retrospective approach. As part of our ongoing evaluations, the Company does not expect the adoption of the new revenue standard to have a significant impact on our consolidated financial statements as the revenue recognition of the majority of transactions under our current policy are expected to be appropriate under the guidance of the new revenue standard. |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments and Fair Value Measurements | NOTE 3 - INVESTMENTS AND FAIR VALUE MEASUREMENTS The Company’s investments include debt securities, U.S. Treasury Notes, government and state agency bonds, corporate bonds and commercial paper, which are classified as either available for sale, held to maturity or trading, depending on management’s investment intentions relating to these securities. As of December 31, 2016 and 2017, all of the Company’s investments are classified as available for sale. Available for sale securities are measured at fair value based on quoted market values of the securities, with the unrealized gain and (losses) reported as comprehensive income or (loss). For the years ended December 31, 2015, 2016 and 2017, the Company reported unrealized losses, net of realized amounts, of $(28,000), $(5,000) and $(103,000), respectively, on available for sale securities in total comprehensive loss. Realized gains and losses from the sale of available for sale securities are determined on a specific-identification basis. The Company has classified as short-term those securities that mature within one year. All other securities are classified as long-term. The following table summarizes the estimated fair value of investment securities designated as available for sale, classified by the contractual maturity date of the security as of December 31, 2017: Fair Value Due within one year $ 1,201,000 Due one year through three years 8,954,000 Due after three years 1,324,000 $ 11,479,000 The cost, gross unrealized gains (losses) and fair value of available for sale, held-to-maturity and trading by major security type at December 31, 2016 and 2017 were as follows: Unrealized Unrealized Fair December 31, 2017 Cost Gain Loss Value Investments - short term Available for sale U.S. Treasury Notes $ 1,066,000 - (1,000 ) $ 1,065,000 Corporate bonds and commercial paper 136,000 - - 136,000 Total investments - short term 1,202,000 - (1,000 ) 1,201,000 Investments - long term Available for sale U.S. Treasury Notes 3,367,000 - (37,000 ) 3,330,000 Government agency bonds 4,279,000 - (40,000 ) 4,239,000 Corporate bonds and commercial paper 2,744,000 - (35,000 ) 2,709,000 Total investments - long term 10,390,000 - (112,000 ) 10,278,000 Total investments $ 11,592,000 $ - $ (113,000 ) $ 11,479,000 Unrealized Unrealized Fair December 31, 2016 Cost Gain Loss Value Investments - short term Available for sale U.S. Treasury Notes $ 40,000 - - $ 40,000 Government agency bonds 50,000 - - 50,000 Corporate bonds and commercial paper 25,000 - - 25,000 Total investments - short term 115,000 - - 115,000 Investments - long term Available for sale U.S. Treasury Notes 1,027,000 - (7,000 ) 1,020,000 Government agency bonds 100,000 - (1,000 ) 99,000 Corporate bonds and commercial paper 383,000 - (3,000 ) 380,000 Total investments - long term 1,510,000 - (11,000 ) 1,499,000 Total investments $ 1,625,000 $ - $ (11,000 ) $ 1,614,000 The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those levels: ● Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. ● Level 3: Unobservable inputs that reflect the reporting entity’s estimates of market participant assumptions. At December 31, 2016 and 2017, the Company’s investments described above are classified as Level 1 for fair value measurement. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Revenue Recognition | NOTE 4 - REVENUE RECOGNITION The Company’s revenue is derived from: (i) sales of our wireless asset management systems and spare parts; (ii) remotely hosted SaaS agreements and post-contract maintenance and support agreements; (iii) services, which includes training and technical support; and (iv) periodically, leasing arrangements. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as short-term or long-term based upon the terms of future services to be delivered. Deferred revenue consists of the following: December 31, 2016 2017 Deferred activation fees $ 385,000 $ 313,000 Deferred revenue 230,000 2,276,000 Deferred maintenance and SaaS revenue 3,049,000 3,296,000 Deferred transportation asset management product revenue 13,599,000 11,564,000 17,263,000 17,449,000 Less: Current portion 7,197,000 9,711,000 Deferred revenue - less current portion $ 10,066,000 $ 7,738,000 During the years ended December 31, 2015, 2016 and 2017, the Company amortized deferred equipment revenue of $5,373,000, $5,258,000 and $5,785,000, respectively, to product revenue. In April 2015, we entered into a development project with Avis Budget Car Rental, LLC (“ABCR”), a subsidiary of Avis Budget Group, that included certain contractual milestones. This development project was completed during 2016 and the Company recognized milestone revenue of $255,000 for the year ended December 31, 2016 from the completion of milestones in accordance with the milestone method of revenue recognition. Milestone payments are recognized as revenue upon achievement of the milestone only if the following conditions are met: (i) there is substantive uncertainty at the date of entering into the arrangement that the milestone would be achieved; (ii) the milestone is commensurate with either the vendor’s performance to achieve the milestone or the enhancement of the value of the delivered item by the vendor; (iii) the milestone relates solely to past performance; and (iv) be reasonable in relation to the effort expended to achieve the milestone. On March 18, 2017 (the “SOW#4 Effective Date”), the Company entered into a statement of work (the “SOW#4”) with ABCR for the Company’s cellular-enabled rental fleet car management system (the “System”). The SOW#4 provides for a period of exclusivity commencing on the SOW#4 Effective Date and ending fourteen months after the SOW#4 Effective Date, which may be extended in six-month increments by Avis under certain conditions. Avis has the right to cancel or accept the System and pay a lower price if the System cannot retrieve the necessary vehicle data from twenty-five makes and models six months after the SOW#4 Effective Date. Pursuant to the SOW#4, the Company will also provide ABCR with services for ongoing maintenance and support of the System (“Maintenance Services”) for an initial period of sixty months from installation of the equipment. ABCR has the option to renew such period for an additional twelve months upon its expiry, and then after such 12-month period, ABCR can purchase additional Maintenance Services on a month-to-month basis (during which ABCR can terminate the Maintenance Services) for up to forty-eight additional months. ABCR has agreed to pay approximately $21,270,000 to the Company for the System and maintenance and support services which cover 50,000 units. ABCR has an option to purchase additional units. Under the terms of the SOW#4, the Company is entitled to an upfront payment of $3,290,000, which is comprised of a $2,000,000 initial payment for the units to be delivered, $902,000 for development of additional system enhancements and $388,000 for production readiness development. The Company invoiced the upfront payment and the initial payment for the units to be delivered is included in current deferred revenue at December 31, 2017. In September 2017, the Company and ABCR amended SOW#4 for out-of-scope system enhancements performed by the Company. If ABCR exercises its right to terminate the agreement if the System is not able to retrieve the necessary vehicle date from twenty-five makes and models six months after the SOW#4 Effective Date, approximately $1,785,000 of the upfront payment for the units would be refundable. The Company recognizes revenue on the development project, which was completed and approved in December 2017, on a proportional method performance basis, as determined by the relationship of actual labor and material costs incurred to date compared to the estimated total project costs. Estimates of total project costs are reviewed and revised during the term of the project. Revisions to project costs estimates, where applicable, are recorded in the period in which the facts that give rise to such changes become known. The Company recognized development project revenue of $2,470,000 during the year ended December 31, 2017. The SOW#4 may be terminated by ABCR for cause (which is generally the Company’s material breach of its obligations under the SOW#4), for convenience (subject to a termination fee), upon a material adverse change to the Company, or for intellectual property infringement. The Company does not have the right to unilaterally terminate the SOW#4. In the event that ABCR terminates the SOW#4, then ABCR would be liable to the Company for the net present value of all future remaining charges under the SOW#4 at a negotiated discount rate per annum, with the payment due on the effective date of termination. |
Financing Receivables
Financing Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Financing Receivables | NOTE 5 - FINANCING RECEIVABLES Financing receivables include notes and sales-type lease receivables from the sale of the Company’s products and services. The present value of net investment in sales-type lease receivable is principally for three to five-year leases of the Company’s product and is reflected net of unearned income of $293,000 and $164,000 at December 31, 2016 and 2017, respectively, at a weighted-average discount rate of 4% Scheduled maturities of minimum lease payments outstanding as of December 31, 2017 are as follows: Year ending December 31: 2018 $ 1,295,000 2019 802,000 2020 540,000 2021 182,000 2022 33,000 2,852,000 Less: Current portion 1,295,000 Total $ 1,557,000 |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 6 - ACQUISITION On July 31, 2017, the Company completed the Keytroller Acquisition pursuant to an asset purchase agreement (the “Purchase Agreement”) by and among the Company, Keytroller, Keytroller, LLC, a Florida limited liability company (“Keytroller FL”) and the principals of Keytroller FL party thereto. Consideration for the Keytroller Acquisition included (i) $7,098,000 in cash paid at closing, (ii) 295,902 shares of our common stock issued at closing with a fair value of $2,000,000 and (iii) up to $3,000,000 of shares of our common stock as potential earn-out payments, computed in accordance with the terms of the Purchase Agreement. The potential earn-out payments were estimated at a fair value of $2,683,000. During the fourth quarter of 2017, the Company paid a post-closing working capital adjustment of $275,000. The Company incurred acquisition-related expenses of approximately $301,000, which are included in selling, general and administrative expenses for the year ended December 31, 2017. The purchase method of accounting in accordance with ASC805, Business Combinations The changes in contingent consideration through December 31, 2017 is as follows: Balance August 1, 2017 $ 2,683,000 Change in contingent consideration 94,000 Balance as of December 31, 2017 $ 2,777,000 The following table summarizes the approximate preliminary purchase price allocation based on estimated fair values of the net assets acquired at the acquisition date: Accounts receivable $ 835,000 Inventory 1,066,000 Other assets, net 42,000 Intangibles 5,086,000 Goodwill (a) 5,481,000 Less: Current liabilities assumed (454,000 ) Net assets acquired $ 12,056,000 (a) The goodwill is expected to be fully deductible for tax purposes, except the contingent consideration which is deductible only when paid. The results of operations of Keytroller have been included in the consolidated statement of operations as of the effective date of acquisition. The following revenue and operating income of Keytroller are included in the Company’s consolidated results of operations: Year Ended December 31, 2017 Revenues $ 3,468,000 Operating income $ 708,000 The following table represents the combined pro forma revenue and earnings for the years ended December 31, 2015, 2016 and 2017: Year Ended Year Ended Year Ended December 31, 2015 December 31, 2016 December 31, 2017 Historical Pro Forma Combined Historical Pro Forma Combined Historical Pro Forma Combined Revenues $ 41,784,000 $ 47,074,000 $ 36,822,000 $ 43,446,000 $ 40,958,000 $ 44,796,000 Operating loss (10,283,000 ) (9,703,000 ) (6,368,000 ) (5,505,000 ) (4,091,000 ) (3,617,000 ) Net loss per share - basic and diluted $ (0.79 ) $ (0.60 ) $ (0.49 ) $ (0.35 ) $ (0.26 ) $ (0.24 ) The combined pro forma revenue and earnings for the years ended December 31, 2015, 2016 and 2017 were prepared as though the Keytroller Acquisition had occurred as of January 1, 2015. The pro forma results do not include any anticipated cost synergies or other effects of the planned integration of Keytroller. This summary is not necessarily indicative of what the results of operations would have been had the Keytroller Acquisition occurred during such period, nor does it purport to represent results of operations for any future periods. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 7 - INVENTORIES Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. Inventory is shown net of valuation reserves of $208,000 and $266,000 at December 31, 2016 and 2017, respectively. Inventories consist of the following: December 31, 2016 2017 Components $ 1,183,000 $ 1,083,000 Finished goods 2,737,000 3,503,000 $ 3,920,000 $ 4,586,000 |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | NOTE 8 - FIXED ASSETS Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows: December 31, 2016 2017 Equipment $ 1,678,000 $ 1,054,000 Computer software and website development 5,874,000 5,610,000 Computer hardware 2,761,000 2,560,000 Furniture and fixtures 401,000 416,000 Automobiles 60,000 60,000 Leasehold improvements 181,000 181,000 10,955,000 9,881,000 Accumulated depreciation and amortization (7,880,000 ) (7,134,000 ) $ 3,075,000 $ 2,747,000 The Company had expenditures of approximately $1,919,000 and $13,000 for computer equipment and software which had not been placed in service as of December 31, 2016 and 2017, respectively. Depreciation and amortization expense is not recorded for such assets until they are placed in service. Depreciation and amortization expense for the years ended December 31, 2015, 2016 and 2017 was $583,000, $549,000 and $757,000, respectively. This includes amortization of costs associated with computer software and website development for the years ended December 31, 2015, 2016 and 2017 of $156,000, $165,000 and $410,000, respectively. The Company capitalizes in fixed assets the costs of software development and website development. Specifically, the assets comprise an implementation of Enterprise Resource Planning (ERP) software, enhancements to the VeriWise systems, and a customer interface website (which is the primary tool used to provide data to our customers). The website employs updated web architecture and improved functionality and features, including, but not limited to, customization at the customer level, enhanced security features, custom virtual electronic geofencing of landmarks, global positioning system (“GPS”)-based remote mileage reporting, and richer mapping capabilities. The Company capitalized the costs incurred during the “development” and “enhancement” stages of the software and website development. Costs incurred during the “planning” and “post-implementation/operation” stages of development were expensed. The Company capitalized $461,000 and $100,000 for such projects for the years ended December 31, 2016 and 2017, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 9 - INTANGIBLE ASSETS AND GOODWILL The following table summarizes identifiable intangible assets of the Company as of December 31, 2016 and 2017: December 31, 2017 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized: Customer relationships 10 $ 3,123,000 (130,000 ) 2,993,000 Trademark and tradename 10 - 15 1,367,000 (52,000 ) 1,315,000 Patents 11 1,489,000 (1,083,000 ) 406,000 Favorable contract interest 5 388,000 (40,000 ) 348,000 Covenant not to compete 4 208,000 (18,000 ) 190,000 6,575,000 (1,323,000 ) 5,252,000 Unamortized: Customer list 104,000 - 104,000 Trademark and Tradename 61,000 - 61,000 165,000 - 165,000 Total $ 6,740,000 $ (1,323,000 ) $ 5,417,000 December 31, 2016 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized: Patents 11 $ 1,489,000 $ (948,000 ) $ 541,000 Unamortized: Customer list 104,000 - 104,000 Trademark and Tradename 61,000 - 61,000 165,000 - 165,000 Total $ 1,654,000 $ (948,000 ) $ 706,000 The Company tests the goodwill and other intangible assets on an annual basis in the fourth quarter or more frequently if the Company believes indicators of impairment exist. As of December 31, 2016 and 2017, the Company determined that no impairment existed to the goodwill, customer list and trademark and trade name of its acquired intangibles. The Company also determined that the use of indefinite lives for the customer list and remaining trademark and trade name remains applicable at December 31, 2016 and 2017, as the Company expects to continue to derive future benefits from these intangible assets. Amortization expense for the years ended December 31, 2015, 2016 and 2017 was $135,000, $136,000 and $375,000, respectively. Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows: Year ending December 31: 2018 $ 712,000 2019 712,000 2020 712,000 2021 536,000 2022 462,000 Thereafter 2,118,000 $ 5,252,000 The changes in goodwill from January 1, 2017 to December 31, 2017 is as follows: Balance of as January 1, 2017 $ 1,837,000 Keytroller acquisition 5,481,000 Balance as of December 31, 2017 $ 7,318,000 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 10 - NET LOSS PER SHARE December 31, Basic and diluted loss per share 2015 2016 2017 Net loss $ (9,952,000 ) $ (6,370,000 ) $ (3,870,000 ) Weighted-average common shares outstanding - basic and diluted 12,614,000 12,984,000 14,961,000 Net loss per share - basic and diluted $ (0.79 ) $ (0.49 ) $ (0.26 ) Basic loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares. Dilutive potential common shares include outstanding stock options, warrants and restricted stock and performance share awards. For the years ended December 31, 2015, 2016 and 2017, the basic and diluted weighted-average shares outstanding are the same, since the effect from the potential exercise of outstanding stock options, warrants and vesting of restricted stock and performance shares of 1,887,000, 1,896,000 and 1,831,000, respectively, would have been anti-dilutive. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | NOTE 11 - STOCK-BASED COMPENSATION The Company adopted the 1999 Stock Option Plan, pursuant to which the Company had the right to grant stock awards and options to purchase up to 2,813,000 shares of common stock. The 1999 Stock Option Plan expired during 2009 and the Company cannot issue additional options under this plan. The Company adopted the 2007 Equity Compensation Plan, pursuant to which, as amended, the Company may grant options to purchase up to an aggregate of 2,500,000 shares of common stock. The 2007 Equity Compensation Plan expired during 2017 and the Company cannot issue additional options under this plan. The Company also adopted the 2009 Non-Employee Director Equity Compensation Plan, pursuant to which, as amended, the Company may grant options to purchase up to an aggregate of 600,000 shares of common stock. There were 14,000 shares available for future issuance under the 2009 Non-Employee Director Equity Compensation Plan at December 31, 2017. In June 2015, the Company adopted the 2015 Equity Compensation Plan (the “2015 Plan”) pursuant to which the Company may grant stock options, restricted stock and other equity-based awards with respect to up to an aggregate of 1,200,000 shares of common stock. There were 228,000 shares available for future issuance under the 2015 Plan at December 31, 2017.The plans are administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”), which has the authority to determine, among other things, the term during which an option may be exercised (not more than 10 years), the exercise price of an option and the vesting provisions. On December 20, 2016, the Company and Kenneth Ehrman, its former Chief Executive Officer, entered into Amendment No. 2 to Severance Agreement, which amends the Severance Agreement dated September 22, 2009 (as amended, the “Ehrman Severance Agreement”). Under the terms of the Ehrman Severance Agreement, a pro-rata portion of Mr. Ehrman’s unvested stock options and restricted stock were partially vested based on the number of months elapsed since the date of grant as compared to the scheduled vesting date. Due to the modification of the terms of the stock option and restricted stock agreements, the Company recognized a $(26,000) reduction of stock-based compensation expense in the fourth quarter of 2016 which is included in the stock option and restricted stock stock-based compensation expense. [A] Stock options: A summary of the status of the Company’s stock options as of December 31, 2015, 2016 and 2017 and changes during the years then ended, is presented below: 2015 2016 2017 Weighted - Weighted - Weighted - Average Average Average Number of Exercise Number of Exercise Number of Exercise Shares Price Shares Price Shares Price Outstanding at beginning of year 2,209,000 $ 6.84 1,212,000 $ 6.94 1,243,000 $ 5.08 Granted - - 395,000 4.75 350,000 6.00 Exercised (568,000 ) 3.95 (20,000 ) 3.44 (271,000 ) 4.72 Forfeited or expired (429,000 ) 10.36 (344,000 ) 11.36 (32,000 ) 8.26 Outstanding at end of year 1,212,000 $ 6.94 1,243,000 $ 5.08 1,290,000 $ 5.33 Exercisable at end of year 904,000 $ 7.40 822,000 $ 5.07 667,000 $ 5.11 The following table summarizes information about stock options at December 31, 2017: Options Outstanding Options Exercisable Weighted - Average Remaining Weighted- Weighted- Exercise Number Contractual Average Number Average Prices ($) Outstanding Life in Years Exercise Price Outstanding Exercise Price 2.07 – 4.87 330,000 5 $ 4.03 210,000 $ 3.72 4.88 – 5.70 346,000 6 5.35 203,000 5.39 5.71 – 5.97 221,000 5 5.80 209,000 5.81 5.98 – 7.41 393,000 8 6.14 45,000 7.21 1,290,000 6 $ 5.33 667,000 $ 5.11 As of December 31, 2017 Weighted Average Remaining Aggregate Intrinsic Value Contractual Life in Years Options outstanding $ 2,093,000 6 Options exercisable $ 1,232,000 4 The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions: December 31, 2015 2016 2017 Expected volatility - 43.6 % 42.4 % Expected life of options - 4.0 years 4.0 years Risk free interest rate - 1.27 % 1.69 % Dividend yield - 0 % 0 % Weighted-average fair value of options granted during the year $ - $ 1.68 $ 2.11 Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods. For the years ended December 31, 2015, 2016 and 2017, the Company recorded $282,000, $270,000 and $411,000, respectively, of stock-based compensation expense in connection with the stock option grants. The total intrinsic value of options exercised during the years ended December 31, 2015, 2016 and 2017 was $1,524,000, $33,000 and $375,000, respectively. The fair value of options vested during the years ended December 31, 2015, 2016 and 2017 was $505,000, $280,000 and $291,000, respectively. As of December 31, 2017, there was $965,000 of total unrecognized compensation costs related to non-vested options granted under the Company’s stock option plans. That cost is expected to be recognized over a weighted-average period of 2.8 years. [B] Restricted Stock Awards: The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested at the time of grant and, upon vesting, there are no legal restrictions on the stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. A summary of the non-vested shares for the years ended December 31, 2015, 2016 and 2017 is as follows: Weighted - Average Number of Grant Non-vested Date Shares Fair Value Non-vested at January 1, 2015 616,000 $ 5.69 Granted 232,000 6.00 Vested (210,000 ) 5.75 Forfeited (63,000 ) 5.70 Non-vested at December 31, 2015 575,000 $ 5.79 Granted 271,000 4.80 Vested (272,000 ) 5.34 Forfeited (182,000 ) 5.72 Non-vested at December 31, 2016 392,000 $ 5.45 Granted 240,000 6.26 Vested (194,000 ) 5.42 Forfeited (8,000 ) 5.69 Non-vested at December 31, 2017 430,000 $ 5.91 For the years ended December 31, 2015, 2016 and 2017, the Company recorded $1,325,000, $908,000 and $1,682,000 respectively, of stock-based compensation expense in connection with the restricted stock grants. As of December 31, 2017, there was $1,658,000 of total unrecognized compensation cost related to non-vested shares. That cost is expected to be recognized over a weighted-average period of 2.0 years. [C] Performance Shares: In January 2016, the Company granted 295,000 performance shares to employees pursuant to the 2015 Plan. The shares are unvested at the time of grant and, upon vesting, there are no contractual restrictions on the shares. The vesting of the shares is subject to the achievement of performance goals during a two-year period from the date of issuance, with the ability to achieve prorated vesting of the shares during interim annual measurement periods. If the performance goals are not met, the performance shares will not vest and will automatically be returned to the plan. If the performance goals are met, then the shares will be issued to the employees. The fair value of each share is based on the Company’s closing stock price on the date of the grant. The following table summarizes the activity relating to the Company’s performance shares for the years ended December 31, 2015, 2016 and 2017: Weighted- Number of Average Non-vested Grant Date Shares Fair Value Performance shares, non-vested, at January 1, 2015 18,000 $ 0.38 Granted - - Vested - - Forfeited (18,000 ) 0.38 Performance shares, non-vested, at December 31, 2015 - - Granted 295,000 $ 4.07 Vested - - Forfeited (34,000 ) 4.07 Performance shares, non-vested, at December 31, 2016 261,000 4.07 Granted - $ - Vested (100,000 ) 4.07 Forfeited (50,000 ) 4.07 Performance shares, non-vested, December 31, 2017 111,000 $ 4.07 For the years ended December 31, 2015, 2016 and 2017, the Company recorded $-0-, $480,000 and $344,000 respectively, of stock-based compensation expense in connection with the performance shares. As of December 31, 2017, there was $11,000 of total unrecognized compensation cost related to non-vested performance shares. That cost is expected to be recognized over a weighted-average period of 0.1 years. |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | NOTE 12 - REVOLVING CREDIT FACILITY On December 18, 2015, the Company and AI entered into a loan and security agreement (the “Revolver”) with Siena Lending Group LLC. The Revolver provided a revolving credit facility in an aggregate principal amount of up to $7.5 million and a maturity date of December 18, 2017. Effective August 30, 2017, the Company terminated the Revolver. The Company did not incur an early termination penalty as a result of terminating the Revolver. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 13 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following: December 31, 2016 2017 Accounts payable $ 6,195,000 $ 6,233,000 Accrued warranty 472,000 535,000 Accrued severance 609,000 100,000 Accrued compensation 297,000 507,000 Other current liabilities 49,000 65,000 $ 7,622,000 $ 7,440,000 Included in accounts payable and accrued expenses at December 31, 2016 and 2017 is accrued severance of $609,000 and $100,000, respectively, to Kenneth Ehrman and Norman L. Ellis, the former Chief Executive Officer and Chief Operating Officer of the Company, respectively. The accrued severance was payable in equal monthly installments of approximately $37,000 as of December 31, 2017. The Company’s products are warranted against defects in materials and workmanship for a period of 12 months from the date of acceptance of the product by the customer. The customers may purchase an extended warranty providing coverage up to a maximum of 60 months. A provision for estimated future warranty costs is recorded for expected or historical warranty matters related to equipment shipped and is included in accounts payable and accrued expenses in the Consolidated Balance Sheets as of December 31, 2016 and 2017. The following table summarizes warranty activity during the years ended December 31, 2016 and 2017: Year Ended 2016 2017 Accrued warranty reserve, beginning of year $ 614,000 $ 472,000 Accrual for product warranties issued 431,000 253,000 Product replacements and other warranty expenditures (252,000 ) (68,000 ) Expiration of warranties (321,000 ) (122,000 ) Accrued warranty reserve, end of period $ 472,000 $ 535,000 |
Concentration of Customers
Concentration of Customers | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Customers | NOTE 14 - CONCENTRATION OF CUSTOMERS One customer accounted for 16% the Company’s revenue during the year ended and as of December 31, 2017 and two customers accounted for 14% and 11% of the Company’s accounts receivable as of December 31, 2017. One customer accounted for 14% of finance receivables as of December 31, 2017. One customer accounted for 18% the Company’s revenue during the year ended and as of December 31, 2016 and one customer accounted for 12% of the Company’s accounts receivable as of December 31, 2016. One customer accounted for 23% the Company’s revenue during the year ended and as of December 31, 2015 and one customer accounted for 10% of the Company’s accounts receivable as of December 31, 2015. One customer accounted for 11% of finance receivables as of December 31, 2015. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 15 - STOCKHOLDERS’ EQUITY [A] Public Offering: On July 17, 2017, the Company closed an underwritten public offering consisting of 2,608,695 shares of common stock at a price per share of $5.75. In addition, the underwriters of the public offering exercised in full their option to purchase an additional 391,304 shares of common stock. Including this option exercise, the aggregate gross proceeds from the offering of a total of 2,999,999 shares of common stock, before deducting discounts and commissions and offering expenses, were approximately $17.3 million. Net proceeds from the public offering were approximately $16.1 million. The Company used a portion of the net proceeds from the offering to fund the Keytroller Acquisition and intends to use the remaining portion of the net proceeds for general corporate purposes. [B] Preferred stock: The Company is authorized to issue 5,000,000 shares of preferred stock, par value $0.01 per share. The Company’s Board of Directors has the authority to issue shares of preferred stock and to determine the price and terms of those shares. No shares of preferred stock are issued and outstanding. [C] Stock repurchase program: On November 3, 2010, the Company’s Board of Directors authorized the repurchase of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $3,000,000 pursuant to a share repurchase program. The repurchases under the share repurchase program are made from time to time in the open market or in privately negotiated transactions and are funded from the Company’s working capital. The amount and timing of such repurchases is dependent upon the price and availability of shares, general market conditions and the availability of cash, as determined at the discretion of the Company’s management. All shares of common stock repurchased under the Company’s share repurchase program are held as treasury stock. The Company did not purchase any shares of its common stock under the share repurchase program during the years ended December 31, 2015 through 2017. As of December 31, 2017, the Company has purchased a total of approximately 310,000 shares of its common stock in open market transactions under the share repurchase program for an aggregate purchase price of approximately $1,340,000, or an average cost of $ 4.33 per share. [D] Shares withheld: During the year ended December 31, 2017, 76,000 shares of the Company’s common stock were withheld to satisfy minimum tax withholding obligations in connection with the vesting of restricted shares and to pay the exercise price of stock options in the aggregate amount of $465,000. During the year ended December 31, 2016, 67,000 shares of the Company’s common stock were withheld to satisfy minimum tax withholding obligations in connection with the vesting of restricted shares and to pay the exercise price of stock options in the aggregate amount of $323,000. During the year ended December 31, 2015, 80,000 shares of the Company’s common stock were withheld to satisfy minimum tax withholding obligations in connection with the vesting of restricted shares and to pay the exercise price of stock options in the aggregate amount of $457,000. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Comprehensive loss includes net loss and unrealized gains or losses on available-for-sale investments and foreign currency translation gains and losses. Cumulative unrealized gains and losses on available-for-sale investments are reflected as accumulated other comprehensive loss in stockholders’ equity on the Company’s Consolidated Balance Sheets. The accumulated balances for each classification of other comprehensive loss are as follows: Unrealized Accumulated Foreign gain (losses) other currency on comprehensive items investments income Balance at January 1, 2015 $ (360,000 ) $ (15,000 ) $ (375,000 ) Net current period change (140,000 ) 15,000 (125,000 ) Balance at December 31, 2015 (500,000 ) $ - (500,000 ) Net current period change 408,000 (11,000 ) 397,000 Balance at December 31, 2016 (92,000 ) $ (11,000 ) (103,000 ) Net current period change (373,000 ) (102,000 ) (475,000 ) Balance at December 31, 2017 $ (465,000 ) $ (113,000 ) (578,000 ) Income and expense accounts of foreign operations are translated at actual or weighted-average exchange rates during the period. Assets and liabilities of foreign operations that operate in a local currency environment are translated to U.S. dollars at the exchange rates in effect at the balance sheet date. Translation gains or losses are reported as components of accumulated other comprehensive income or loss in consolidated stockholders’ equity. Net translation gains or losses resulting from the translation of foreign currency financial statements and the effect of exchange rate changes on intercompany transactions of a long-term investment nature with IDS GmbH resulted in translation (losses) gains of $(140,000), $408,000 and $(373,000) at December 31, 2015, 2016 and 2017, respectively, which are included in comprehensive loss in the Consolidated Statement of Changes in Stockholders’ Equity. Effective December 1, 2015, the intercompany transactions with IDS GmbH are not considered of a long-term investment nature and the effect of the exchange rate changes subsequent to December 1, 2015 on the intercompany transactions are included selling, general and administrative expenses in the Consolidated Statement of Operations. Gains and losses resulting from foreign currency transactions are included in determining net income or loss. Foreign currency transaction (losses) gains for the years ended December 31, 2015, 2016 and 2017 of $(60,000), $(437,000) and $456,000, respectively, are included in selling, general and administrative expenses in the Consolidated Statement of Operations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 17 - INCOME TAXES At December 31, 2017, the Company had an aggregate net operating loss carryforward of approximately $78,966,000 for U.S. federal income tax purposes. At December 31, 2017, the Company had an aggregate net operating loss carryforward of approximately $56,162,000 for state income tax purposes and a foreign net operating loss carryforward of approximately $2,813,000. Substantially all of the net operating loss carryforwards expire from 2021 through 2037 for federal purposes and from 2018 through 2037 for state purposes. The net operating loss carryforwards may be limited to use in any particular year based on Internal Revenue Code (“IRC”) Section 382 related to change of ownership restrictions. Section 382 of the IRC imposes an annual limitation on the utilization of NOL carryforwards based on long-term bond rates and the value of the corporation at the time of a change in ownership as defined by Section 382 of the IRC. In addition, future stock issuances may subject the Company to further limitations on the utilization of its net operating loss carryforwards under the same Internal Revenue Code provision. At December 31, 2017, the Company has New Jersey net operating loss carryforwards (“NJ NOLs”) included above in the approximate amount of $34,383,000 expiring through 2037, which are available to reduce future earnings which would otherwise be subject to state income tax. In 2017, the Company sold approximately $332,000 of NJ research and development tax credits, subject to a 6.2% seller’s allocation factor for approximately $311,000. On December 22, 2017, the U.S. President signed the Tax Cuts and Jobs Act (the “Tax Act”) into law. Effective January 1, 2018, among other changes, the Tax Act (1) reduces the U.S. federal corporate tax rate from 35 percent to 21 percent, (2) changes the rules relating to net operating loss carryforwards and carrybacks, (3) eliminates the corporate alternative minimum tax (“AMT”) and changes how existing AMT credits can be realized; and (4) requires companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. The Tax Act did not have a material impact on our consolidated financial statements since our deferred temporary differences in the United States are fully offset by a valuation allowance and we do not have any significant off shore earnings from which to record the mandatory transition tax. On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the Tax Act as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. The changes in the Tax Act are broad and complex. The final impacts of the Tax Act may differ from the Company’s estimates due to, among other things, changes in interpretations of the Tax Act, further legislation related to the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates to estimates the Company has utilized to calculate the impacts of the Tax Act. The SEC has issued rules that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the related tax impacts. The Company currently anticipates finalizing any resulting adjustments by the end of our next fiscal year ending December 31, 2018. The Company, based on current knowledge, did estimate the impact of SAB 118 on its income tax provision for the year ended December 31, 2017. The impact on the Company’s consolidated financial statements for the year ended December 31, 2017 is immaterial, primarily because the Company has a valuation allowance on deferred tax assets. The Company has net deferred tax assets of approximately $31,753,000 and $26,112,000 at December 31, 2016 and 2017, respectively. The net deferred tax assets decreased by approximately $10,848,000 with a corresponding decrease to the valuation allowance as a result of the decrease in federal corporate tax rate to 21% as a result of the Tax Act. A significant portion of the deferred tax assets recognized relate to net operating losses. The Company had other temporary differences between financial and tax reporting for stock-based compensation, fixed asset depreciation expense, deferred revenue, deferred expenses, bad debt reserves, inventory reserves, warranty reserves and acquisition-related expenses. For the year ended December 31, 2017, the Company’s valuation allowance has decreased to $26,112,000 compared to $31,753,000 as of December 31, 2016, largely due to the decrease in federal corporate tax rate to 21% as a result of the Tax Act. The Company has provided a valuation allowance against the full amount of its deferred tax assets. The valuation allowance was established because of the uncertainty of realization of the deferred tax assets due to lack of sufficient history of generating taxable income. Realization is dependent upon generating sufficient taxable income prior to the expiration of the net operating loss carryforwards in future periods. The valuation allowance increased (decreased) in 2015, 2016 and 2017 by $4,148,000, $2,287,000 and $(5,641,000) (net of the decrease of $10,848,000 due to the decrease in federal corporate tax rate to 21% as a result of the Tax Act), respectively. Loss before income taxes consists of the following: Year Ended December 31, 2015 2016 2017 U.S. operations $ (9,216,000 ) $ (5,547,000 ) $ (4,425,000 ) Foreign operations (736,000 ) (823,000 ) 244,000 $ (9,952,000 ) $ (6,370,000 ) $ (4,181,000 ) The difference between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations is attributable to the following: Year Ended December 31, 2015 2016 2017 Income tax benefit at the federal statutory rate $ (3,384,000 ) $ (2,166,000 ) $ (1,316,000 ) State and local income taxes, net of effect on federal taxes (791,000 ) (848,000 ) (441,000 ) Increase (decrease) in valuation allowance 4,148,000 2,287,000 (8,509,000 ) Incentive stock options/forfeitures (104,000 ) 624,000 (11,000 ) Change in Federal tax rate 10,848,000 Research and development tax credits - - (1,390,000 ) Permanent differences and other 131,000 103,000 508,000 $ - $ - $ (311,000 ) The change in the valuation allowance is adjusted for the tax effects of ASU No. 2016-09 and other comprehensive loss. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2017 are presented below: December 31, 2016 2017 Deferred tax assets: Net operating loss carryforwards $ 25,999,000 $ 21,007,000 Deferred revenue 7,277,000 4,629,000 Stock-based compensation 888,000 839,000 Federal research and development tax credits - 1,058,000 Intangibles, amortization 1,035,000 675,000 Inventories 178,000 175,000 Acquisition related expenses 328,000 321,000 Bad debt reserve 153,000 30,000 Other deductible temporary differences 693,000 556,000 Total gross deferred tax assets 36,551,000 29,290,000 Less: Valuation allowance (31,753,000 ) (26,112,000 ) 4,798,000 3,178,000 Deferred tax liabilities: Deferred expenses (4,715,000 ) (2,978,000 ) Fixed assets, depreciation (83,000 ) (200,000 ) (4,798,000 ) (3,178,000 ) Net deferred tax assets $ - $ - |
Wholly Owned Foreign Subsidiari
Wholly Owned Foreign Subsidiaries | 12 Months Ended |
Dec. 31, 2017 | |
Wholly Owned Foreign Subsidiaries [Abstract] | |
Wholly Owned Foreign Subsidiaries | NOTE 18 - WHOLLY OWNED FOREIGN SUBSIDIARIES The financial statements of the Company’s wholly owned German subsidiary, IDS GmbH, and United Kingdom subsidiary, IDS Ltd, are consolidated with the financial statements of I.D. Systems, Inc. The net revenue and net loss for IDS GmbH included in the Consolidated Statement of Operations are as follows: Year Ended December 31, 2015 2016 2017 Net revenue $ 1,212,000 $ 1,852,000 $ 1,365,000 Net (loss) income (303,000 ) 211,000 103,000 Total assets of IDS GmbH were $1,012,000 and $1,086,000 as of December 31, 2016 and 2017, respectively. IDS GmbH operates in a local currency environment using the Euro as its functional currency. The net revenue and net loss for IDS Ltd included in the consolidated statement of operations are as follows: Year Ended December 31, 2015 2016 2017 Net revenue $ 434,000 $ 296,000 $ 577,000 Net (loss) income (433,000 ) (612,000 ) 141,000 Total assets of IDS Ltd were $1,130,000 and $1,187,000 as of December 31, 2016 and 2017, respectively. IDS Ltd operates in a local currency environment using the British Pound as its functional currency. |
Reduction in Work Force
Reduction in Work Force | 12 Months Ended |
Dec. 31, 2017 | |
Reduction In Work Force | |
Reduction in Work Force | NOTE 19 - REDUCTION IN WORK FORCE The Company entered into a Separation and General Release Agreement (the “Ellis Separation Agreement”) with Norman L. Ellis, its former Chief Operating Officer, on December 16, 2016 and Amendment No. 2 to Severance Agreement (together with the Ellis Separation Agreement, the “Separation Agreements”) with Kenneth Ehrman, its former Chief Executive Officer, on December 20, 2016. Under the terms of the Separation Agreements, the Company recognized severance costs of $637,000 which are included in selling, general and administrative expenses in the consolidated statement of operations for 2016. On July 31, 2015, the Company eliminated 27 positions, representing approximately 20% of our total personnel. In order to earn a severance payment, affected employees were required to execute a general release agreement. Total severance costs incurred during the year ended December 31, 2015 were $280,000, of which $30,000 is included in research and development expenses and $250,000 is included in selling, general and administrative expenses in the consolidated statement of operations for 2015. As of December 31, 2015, these costs have been paid. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 20 - COMMITMENTS AND CONTINGENCIES Except for normal operating leases, the Company is not currently subject to any material commitments. [A] Contingencies: On June 12, 2017, ACF FinCo I LP (“ACF”) filed a lawsuit against the Company in the District Court for Dallas County, Texas. The complaint alleges that ACF is the successor-in-interest to McDonald Technologies International Inc. (“MTI”), one of our former suppliers, and alleges one cause of action for breach of a May 2015 Master Services Agreement pursuant to which the Company purchased certain products manufactured and services rendered by MTI. The complaint seeks approximately $2.0 million in damages for amounts allegedly due by the Company under this agreement, plus interest and attorney’s fees. On July 7, 2017, the Company filed its answer denying any liability to ACF and asserting various defenses to ACF’s claims against the Company. The lawsuit is currently in active discovery. The Company believes that the lawsuit is without merit and intend to continue to vigorously defend ourselves in this matter. [B] Severance agreements: The Company entered into severance agreements with five of its executive officers. The severance agreements, each of which is substantially identical in form, provide each executive with certain severance and change in control benefits upon the occurrence of a “Trigger Event,” as defined in the severance agreements. As a condition to the Company’s obligations under the severance agreements, each executive has executed and delivered to the Company a restrictive covenants agreement. Under the terms of the severance agreements, in general, each executive is entitled to the following: (i) a cash payment at the rate of the executive’s annual base salary as in effect immediately prior to the Trigger Event for a period of 12, 15 or 18 months, depending on the executive, (ii) continued healthcare coverage during the severance period, (iii) partial accelerated vesting of the executive’s previously granted stock options and restricted stock awards, and (iv) an award of “Performance Shares” under the Restricted Stock Unit Award Agreement previously entered into between the Company and the executive. The Company entered into the Ellis Separation Agreement on December 16, 2016 and amended the Ehrman Severance Agreement on December 20, 2016. Under the terms of the Separation Agreements, the Company recognized severance costs of $637,000 which are included in selling, general and administrative expenses. In addition, a pro-rata portion of Mr. Ehrman’s unvested stock options and restricted stock were partially vested based on the number of months elapsed since the date of grant as compared to the scheduled vesting date. Due to the modification of the terms of the stock option and restricted stock agreements, the Company recognized a $(26,000) reduction of stock-based compensation expense in the fourth quarter of 2016 which is included in the stock option and restricted stock stock-based compensation expense. [C] Operating leases: The office leases for the Company’s executive offices in Woodcliff Lake, New Jersey and sales and administrative office in Plano, Texas, which expire in February 2021 also provide for escalations relating to increases in real estate taxes and certain operating expenses. The Company leases office and storage space in Tampa, Florida which will expire in July 2019 and provides for escalations relating to increases in real estate taxes. In addition, the Company leases sales and administrative offices in Milton Keynes, United Kingdom and Dusseldorf, Germany. The Company’s operating leases provide for minimum annual rental payments as follows: Year Ending December 31, 2018 $ 926,000 2019 913,000 2020 893,000 2021 150,000 2022 - Thereafter - $ 2,882,000 Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods of free rent. Rental expense for operating leases was approximately $860,000, $1,057,000 and $1,021,000 for the years ended December 31, 2015, 2016 and 2017, respectively. |
Quarterly Selected Financial Da
Quarterly Selected Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Selected Financial Data (Unaudited) | NOTE 21 - QUARTERLY SELECTED FINANCIAL DATA (UNAUDITED) The following tables contain selected quarterly financial data for each quarter for the years ended December 31, 2016 and 2017. We believe the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any period are not necessarily indicative of results for any future periods. Year Ended December 31, 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenues: Products $ 4,334,000 $ 6,375,000 $ 6,490,000 $ 6,353,000 Services 3,665,000 4,331,000 4,596,000 4,814,000 7,999,000 10,706,000 11,086,000 11,167,000 Cost of revenues: Cost of products 2,815,000 3,427,000 3,475,000 3,736,000 Cost of services 1,034,000 1,738,000 1,984,000 1,822,000 3,849,000 5,165,000 5,459,000 5,558,000 Gross Profit 4,150,000 5,541,000 5,627,000 5,609,000 Selling, general and administrative expenses 4,782,000 5,189,000 5,213,000 5,869,000 Research and development expenses 1,238,000 854,000 958,000 915,000 Other income, net (16,000 ) (22,000 ) (42,000 ) (10,000 ) Net loss before income tax benefit (1,886,000 ) (524,000 ) (586,000 ) (1,185,000 ) Income tax benefit - sale of NJ R&D tax credits - - - 311,000 Net loss $ (1,886,000 ) $ (524,000 ) $ (586,000 ) $ (874,000 ) Net loss per share - basic and diluted $ (0.14 ) $ (0.04 ) $ (0.04 ) $ (0.05 ) Year Ended December 31, 2016 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenues: Products $ 6,282,000 $ 4,918,000 $ 4,561,000 $ 5,605,000 Services 4,195,000 3,986,000 3,654,000 3,621,000 10,477,000 8,904,000 8,215,000 9,226,000 Cost of revenues: Cost of products 4,186,000 3,142,000 3,018,000 3,690,000 Cost of services 1,093,000 1,037,000 1,195,000 1,167,000 5,279,000 4,179,000 4,213,000 4,857,000 Gross Profit 5,198,000 4,725,000 4,002,000 4,369,000 Selling, general and administrative expenses 4,786,000 5,019,000 4,984,000 5,337,000 Research and development expenses 1,130,000 1,192,000 1,098,000 1,116,000 Other income, net 20,000 (11,000 ) (12,000 ) 1,000 Net loss $ (698,000 ) $ (1,497,000 ) $ (2,092,000 ) $ (2,083,000 ) Net loss per share - basic and diluted $ (0.05 ) $ (0.12 ) $ (0.16 ) $ (0.16 ) |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | [A] Principles of consolidation: The consolidated financial statements include the accounts of I.D. Systems, Inc. and its wholly owned subsidiaries, Asset Intelligence, LLC (“AI”), I.D. Systems GmbH (“IDS GmbH”), I.D. Systems (UK) Ltd (formerly Didbox Ltd.) (“IDS Ltd”) and Keytroller (which, as noted above, are collectively referred to herein as the “Company”). All material intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | [B] Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 revenues and expenses during the reporting period. The Company continually evaluates estimates used in the preparation of the financial statements for reasonableness. The most significant estimates relate to stock-based compensation arrangements, measurements of fair value of assets acquired and liabilities assumed and acquisition-related contingent consideration, realization of deferred tax assets, the impairment of tangible and intangible assets, inventory reserves, allowance for doubtful accounts, warranty reserves and deferred revenue and costs. Actual results could differ from those estimates. |
Cash and Cash Equivalents | [C] Cash and cash equivalents: The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted. The Company’s cash and cash equivalent balances generally exceed FDIC limits. |
Restricted Cash | [D] Restricted cash: Restricted cash at December 31, 2016 and 2017 consists of cash held in escrow for purchases from a vendor. |
Investments | [E] Investments: The Company’s investments include debt securities, U.S. Treasury Notes, government and state agency bonds, corporate bonds and commercial paper, which are classified as either available for sale, held to maturity or trading, depending on management’s investment intentions relating to these securities. All of the Company’s investments are currently classified as available for sale. Available for sale securities are measured at fair value based on quoted market values of the securities, with the unrealized gain and (losses) reported as comprehensive income or (loss). The Company has classified as short-term those securities that mature within one year and all other securities are classified as long-term. Realized gains and losses from the sale of available for sale securities are determined on a specific-identification basis. Net realized gains and losses from the sale of investment securities available for sale are included in “other income” in the consolidated statement of operations. Dividend and interest income are recognized when earned. |
Accounts Receivable | [F] Accounts receivable: Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains reserves against its accounts receivable for potential losses. Allowances for uncollectible accounts are estimated based on the Company’s periodic review of accounts receivable balances. In establishing the required allowance, management considers our customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Accounts receivable are net of an allowance for doubtful accounts in the amount of $341,000 and $87,000 in 2016 and 2017, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. |
Financing Receivables | [G] Financing receivables: Financing receivables consists of sales-type lease receivables from the sale of the Company’s products and services. These arrangements meet the criteria to be accounted for as sales-type leases. Accordingly, an asset is established for the “sales-type lease receivable” at the present value of the future minimum lease payments. Amounts collected on sales-type leases are included in net cash provided by operating activities in the consolidated statements of cash flows. Interest income is recognized monthly over the lease term using the effective-interest method. The allowance for uncollectable minimum lease payments represents the Company’s best estimate of the amount of credit losses in the Company’s existing notes and sales-type lease receivable. The allowance is determined on an individual lease basis if it is probable that the Company will not collect all principal and interest contractually due. The Company considers our customers’ financial condition and historical payment patterns in determining the customers’ probability of default. The impairment is measured based on the present value of expected future cash flows discounted at the note’s effective interest rate. There were no impairment losses recognized for the years ended December 31, 2015, 2016 and 2017. The Company does not accrue interest when a lease is considered impaired. When the ultimate collectability of the principal balance of the impaired lease is in doubt, all cash receipts on impaired lease are applied to reduce the principal amount of such lease until the principal has been recovered and are recognized as interest income thereafter. Impairment losses are charged against the allowance and increases in the allowance are charged to bad debt expense. Leases are written off against the allowance when all possible means of collection have been exhausted and the potential for recovery is considered remote. The Company resumes accrual of interest when it is probable that the Company will collect the remaining principal and interest of an impaired lease. Leases become past due based on how recently payments have been received. |
Revenue Recognition | [H] Revenue recognition: The Company’s revenue is derived from: (i) sales of our wireless asset management systems and spare parts; (ii) remotely hosted SaaS agreements and post-contract maintenance and support agreements; (iii) services, which includes training and technical support; and (iv) periodically, leasing arrangements. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as short-term or long-term based upon the terms of future services to be delivered. Our industrial truck and connected vehicle wireless asset management systems consist of on-asset hardware, communication infrastructure, SaaS, and hosting infrastructure. Revenue derived from the sale of our industrial truck and connected vehicle wireless asset management systems is allocated to each element based upon vendor specific objective evidence (VSOE) of the fair value or best estimate of selling price (“BESP”) of the element. VSOE of the fair value is based upon the price charged when the element is sold separately. BESP is determined based on overall pricing objectives taking into consideration market conditions and entity specific factors. Revenue is recognized as each element is delivered based on the allocation of arrangement consideration to each element based on VSOE or BESP, and when there are no undelivered elements that are essential to the functionality of the delivered elements. The Company’s system is typically implemented by the customer or a third party and, as a result, revenue is recognized when title and risk of loss passes to the customer, which usually is upon delivery of the system, persuasive evidence of an arrangement exists, sales price is fixed and determinable, collectability is reasonably assured and contractual obligations have been satisfied. In some instances, we are also responsible for providing installation services. The additional installation services, which could be performed by third parties, are considered another element in a multi-element deliverable and revenue for installation services is recognized at the time the installation is provided. Training and technical support revenue are recognized at time of performance. The Company recognizes revenues from the sale of transportation asset management systems and spare parts when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. These criteria include requirements that the delivery of future products or services under the arrangement is not required for the delivered items to serve their intended purpose. The Company has determined that the revenue derived from the sale of transportation asset management systems does not have stand-alone value to the customer separate from the SaaS services provided and, therefore, the arrangements constitute a single unit of accounting. Under the applicable accounting guidance, all of the Company’s billings for equipment and the related cost are deferred, recorded, and classified as a current and long-term liability and a current and long-term asset, respectively. Deferred revenue and cost are recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service. The customer service contracts typically range from one to five years. The service revenue for our transportation asset monitoring equipment relates to charges for monthly messaging usage and value-added features charges. The usage fee is a monthly fixed charge based on the expected utilization according to the rate plan chosen by the customer. Service revenue generally commences upon equipment installation and customer acceptance and is recognized over the period such services are provided. Revenue from transportation asset monitoring equipment activation fees is deferred and amortized over the life of the contract. Spare parts sales are reflected in product revenues and recognized on the date of customer receipt of the part. The Company also enters into remotely hosted SaaS agreements and post-contract maintenance and support agreements for its wireless asset management systems. Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred. Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts. The Company also derives revenue under leasing arrangements. Such arrangements provide for monthly payments covering the system sale, maintenance, support and interest. These arrangements meet the criteria to be accounted for as sales-type leases. Accordingly, an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above. Maintenance revenues and interest income are recognized monthly over the lease term. Under certain customer contracts, the Company invoices progress billings once certain milestones are met. The milestone terms vary by customer and can include the receipt of the customer purchase order, delivery, installation and launch. As the systems are delivered, and services are performed, and all of the criteria for revenue recognition are satisfied, the Company recognizes revenue. If the amount of revenue recognized for financial reporting purposes is greater than the amount invoiced, an unbilled receivable is recorded. If the amount invoiced is greater than the amount of revenue recognized for financial reporting purposes, deferred revenue is recorded. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenues in the consolidated statements of operations. |
Deferred Costs | [I] Deferred costs: Deferred product costs consist of transportation asset management equipment costs deferred in accordance with our revenue recognition policy. The Company will continue to evaluate the realizability of the carrying amount of the deferred contract costs on a quarterly basis. To the extent the carrying value of the deferred contract costs exceed the contract revenue, an impairment loss will be recognized. |
Inventory | [J] Inventory: Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. Inventory valuation reserves are established in order to report inventories at the lower of cost or net realizable value in the consolidated balance sheet. The determination of inventory valuation reserves requires management to make estimates and judgments on the future salability of inventories. Valuation reserves for obsolete and slow-moving inventory are estimated based on assumptions of future sales forecasts, product life cycle expectations, the impact of new product introductions, production requirements, and specific identification of items, such as product discontinuance or engineering/material changes and by comparing the inventory levels to historical usage rates. |
Fixed Assets and Depreciation | [K] Fixed assets and depreciation: Fixed assets are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases, or their estimated useful lives, whichever is shorter. For website development costs, the Company capitalizes costs incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three years. |
Long-lived Assets | [L] Long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and would be charged to earnings. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Business Combinations | [M] Business Combinations: Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill and intangible assets deemed to have indefinite lives are not amortized. Intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Intangible assets consist of trademarks and trade name, patents, customer relationships and other intangible assets. The Company tests goodwill and other intangible assets annually, or when a triggering event occurs between annual impairment tests, to determine if impairment exists and if the use of indefinite lives is currently applicable. For purposes of the goodwill impairment test, the Company’s product lines are aggregated within one reporting unit. For the years ended December 31, 2015, 2016 and 2017, the Company has not incurred an impairment charge. The Company re-measures the fair value of the contingent consideration at each reporting period and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings in the accompanying consolidated statement of operations. Actual results could differ from such estimates in future periods based on the re-measurement of the fair value. |
Product Warranties | [N] Product warranties: The Company typically provides a one-year warranty on its products. Estimated future warranty costs are accrued in the period that the related revenue is recognized. These estimates are derived from historical data and trends of product reliability and costs of repairing and replacing defective products. |
Research and Development | [O] Research and development: Research and development costs are charged to expense as incurred and consists primarily of salaries and related expenses, supplies and contractor costs. Research and development costs were $4,556,000, $4,536,000 and $3,965,000 in 2015, 2016 and 2017, respectively. |
Patent Costs | [P] Patent costs: Costs incurred in connection with acquiring patent rights are charged to expense as incurred. |
Benefit Plan | [Q] Benefit plan: The Company maintains a retirement plan under Section 401(k) of the Internal Revenue Code, which covers all eligible employees. All employees with U.S. source income are eligible to participate in the plan immediately upon employment. The Company did not make any contributions to the plan during the years ended December 31, 2015, 2016 and 2017. |
Rent Expense | [R] Rent expense: Expense related to the Company’s facilities leases is recorded on a straight-line basis over the respective lease terms. The difference between rent expense incurred and the amounts required to be paid in accordance with the lease term is recorded as deferred rent and is amortized over the lease term. |
Stock-based Compensation | [S] Stock-based compensation: The Company accounts for stock-based employee compensation for all share-based payments, including grants of stock options and restricted stock, as an operating expense based on their fair values on grant date. The Company recorded stock-based compensation expense of $1,609,000, $1,658,000 and $2,437,000 for the years ended December 31, 2015, 2016 and 2017, respectively. The Company estimates the fair value of share-based option awards on the grant date using an option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in the Company’s consolidated statement of operations. The Company estimates forfeitures at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The estimate is based on the Company’s historical rates of forfeitures. Estimated forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Income Taxes | [T] Income taxes: The Company uses the asset and liability method of accounting for deferred income taxes. Deferred income taxes are measured by applying enacted statutory rates to net operating loss carryforwards and to the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets are reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes uncertainty in income taxes in the financial statements using a recognition threshold and measurement attribute of a tax position taken or expected to be taken in a tax return. The Company applies the “more-likely-than-not” recognition threshold to all tax positions, commencing at the adoption date of the applicable accounting guidance, which resulted in no unrecognized tax benefits as of such date. Additionally, there have been no unrecognized tax benefits subsequent to adoption. The Company has opted to classify interest and penalties that would accrue according to the provisions of relevant tax law as selling, general, and administrative expenses, in the consolidated statement of operations. For the years ended December 31, 2015, 2016 and 2017, there was no such interest or penalty. The Company files federal income tax returns and separate income tax returns in various states. For federal and certain states, the 2014 through 2017 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations. For certain other states, the 2013 through 2017 tax years remain open for examination by the tax authorities under a four-year statute of limitations. |
Fair Value of Financial Instruments | [U] Fair value of financial instruments: Cash and cash equivalents and investments in securities are carried at fair value. The carrying value of financing receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates. The carrying value of accounts receivable, accounts payable and other liabilities approximates their fair values due to the short period to maturity of these instruments. |
Advertising and Marketing Expense | [V] Advertising and marketing expense: Advertising and marketing costs are expensed as incurred. Advertising and marketing expense for the years ended December 31, 2015, 2016 and 2017 amounted to $455,000, $510,000 and $538,000, respectively. |
Commitments and Contingencies | [W] Commitments and contingencies: Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. |
Recently Issued Accounting Pronouncements | [X] Recently issued accounting pronouncements: In May 2017, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting”. The FASB issued the update to provide clarity and reduce the cost and complexity when applying the guidance in Topic 718. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance requires a prospective adoption. The guidance is effective beginning fiscal year 2021. Early adoption is permitted. The guidance is effective beginning fiscal year 2021. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In January 2017, FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendment was issued to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this ASU provide a screen to determine when a set (inputs and processes that produce an output) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. The requirement is for public business entities to apply the guidance to annual reporting periods beginning after December 15, 2017. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments,” which provides clarification on how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This ASU will be effective for fiscal periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. If an entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments,” which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for an entity’s ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected with a valuation provision. This update standard is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this ASU to the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation” (Topic 718), which includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. This ASU is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted this pronouncement January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s financial results. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842), which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The revised guidance must be applied on a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The revised guidance is effective for the Company beginning in the quarter ending March 31, 2019. The Company is currently evaluating the impact of this ASU on the consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which requires entities to measure most inventory “at the lower of cost and net realizable value (“NRV”),” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company adopted this pronouncement January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s financial results In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). This ASU is intended to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. In July 2015, the FASB approved a deferral of the ASU effective date from annual and interim periods beginning after December 15, 2016 to annual and interim periods beginning after December 15, 2017, while allowing for early adoption for fiscal periods after December 15, 2016. The new revenue standard provides the option between two different methods of adoption. The full retrospective method calls for the Company to present each prior reported period shown in the financial statements under the new guidance. The modified retrospective method requires the Company to calculate the cumulative effect of applying the new guidance as of the date of adoption via adjustment to retained earnings. The Company continues to assess the impact the new revenue standard will have on its consolidated financial statements. The Company expects to adopt this update in its 2018 first quarter using the modified retrospective approach. As part of our ongoing evaluations, the Company does not expect the adoption of the new revenue standard to have a significant impact on our consolidated financial statements as the revenue recognition of the majority of transactions under our current policy are expected to be appropriate under the guidance of the new revenue standard. |
Investments and Fair Value Me31
Investments and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Fair Value of Available for Sale Securities | The following table summarizes the estimated fair value of investment securities designated as available for sale, classified by the contractual maturity date of the security as of December 31, 2017: Fair Value Due within one year $ 1,201,000 Due one year through three years 8,954,000 Due after three years 1,324,000 $ 11,479,000 |
Schedule of Available-for-sale Securities Reconciliation | The cost, gross unrealized gains (losses) and fair value of available for sale, held-to-maturity and trading by major security type at December 31, 2016 and 2017 were as follows: Unrealized Unrealized Fair December 31, 2017 Cost Gain Loss Value Investments - short term Available for sale U.S. Treasury Notes $ 1,066,000 - (1,000 ) $ 1,065,000 Corporate bonds and commercial paper 136,000 - - 136,000 Total investments - short term 1,202,000 - (1,000 ) 1,201,000 Investments - long term Available for sale U.S. Treasury Notes 3,367,000 - (37,000 ) 3,330,000 Government agency bonds 4,279,000 - (40,000 ) 4,239,000 Corporate bonds and commercial paper 2,744,000 - (35,000 ) 2,709,000 Total investments - long term 10,390,000 - (112,000 ) 10,278,000 Total investments $ 11,592,000 $ - $ (113,000 ) $ 11,479,000 Unrealized Unrealized Fair December 31, 2016 Cost Gain Loss Value Investments - short term Available for sale U.S. Treasury Notes $ 40,000 - - $ 40,000 Government agency bonds 50,000 - - 50,000 Corporate bonds and commercial paper 25,000 - - 25,000 Total investments - short term 115,000 - - 115,000 Investments - long term Available for sale U.S. Treasury Notes 1,027,000 - (7,000 ) 1,020,000 Government agency bonds 100,000 - (1,000 ) 99,000 Corporate bonds and commercial paper 383,000 - (3,000 ) 380,000 Total investments - long term 1,510,000 - (11,000 ) 1,499,000 Total investments $ 1,625,000 $ - $ (11,000 ) $ 1,614,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of Deferred Revenue | Deferred revenue consists of the following: December 31, 2016 2017 Deferred activation fees $ 385,000 $ 313,000 Deferred revenue 230,000 2,276,000 Deferred maintenance and SaaS revenue 3,049,000 3,296,000 Deferred transportation asset management product revenue 13,599,000 11,564,000 17,263,000 17,449,000 Less: Current portion 7,197,000 9,711,000 Deferred revenue - less current portion $ 10,066,000 $ 7,738,000 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Capital Leases, Future Minimum Payments | Scheduled maturities of minimum lease payments outstanding as of December 31, 2017 are as follows: Year ending December 31: 2018 $ 1,295,000 2019 802,000 2020 540,000 2021 182,000 2022 33,000 2,852,000 Less: Current portion 1,295,000 Total $ 1,557,000 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Changes in Contigent Considertion | The changes in contingent consideration through December 31, 2017 is as follows: Balance August 1, 2017 $ 2,683,000 Change in contingent consideration 94,000 Balance as of December 31, 2017 $ 2,777,000 |
Schedule of Purchase Price Allocation On Net Assets Acquired | The following table summarizes the approximate preliminary purchase price allocation based on estimated fair values of the net assets acquired at the acquisition date: Accounts receivable $ 835,000 Inventory 1,066,000 Other assets, net 42,000 Intangibles 5,086,000 Goodwill (a) 5,481,000 Less: Current liabilities assumed (454,000 ) Net assets acquired $ 12,056,000 (a) The goodwill is expected to be fully deductible for tax purposes, except the contingent consideration which is deductible only when paid. |
Schedule of Revenue and Operating Income | The following revenue and operating income of Keytroller are included in the Company’s consolidated results of operations: Year Ended December 31, 2017 Revenues $ 3,468,000 Operating income $ 708,000 |
Schedule of Combined Pro Forma Revenue and Earnings | The following table represents the combined pro forma revenue and earnings for the years ended December 31, 2015, 2016 and 2017: Year Ended Year Ended Year Ended December 31, 2015 December 31, 2016 December 31, 2017 Historical Pro Forma Combined Historical Pro Forma Combined Historical Pro Forma Combined Revenues $ 41,784,000 $ 47,074,000 $ 36,822,000 $ 43,446,000 $ 40,958,000 $ 44,796,000 Operating loss (10,283,000 ) (9,703,000 ) (6,368,000 ) (5,505,000 ) (4,091,000 ) (3,617,000 ) Net loss per share - basic and diluted $ (0.79 ) $ (0.60 ) $ (0.49 ) $ (0.35 ) $ (0.26 ) $ (0.24 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: December 31, 2016 2017 Components $ 1,183,000 $ 1,083,000 Finished goods 2,737,000 3,503,000 $ 3,920,000 $ 4,586,000 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows: December 31, 2016 2017 Equipment $ 1,678,000 $ 1,054,000 Computer software and website development 5,874,000 5,610,000 Computer hardware 2,761,000 2,560,000 Furniture and fixtures 401,000 416,000 Automobiles 60,000 60,000 Leasehold improvements 181,000 181,000 10,955,000 9,881,000 Accumulated depreciation and amortization (7,880,000 ) (7,134,000 ) $ 3,075,000 $ 2,747,000 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table summarizes identifiable intangible assets of the Company as of December 31, 2016 and 2017: December 31, 2017 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized: Customer relationships 10 $ 3,123,000 (130,000 ) 2,993,000 Trademark and tradename 10 - 15 1,367,000 (52,000 ) 1,315,000 Patents 11 1,489,000 (1,083,000 ) 406,000 Favorable contract interest 5 388,000 (40,000 ) 348,000 Covenant not to compete 4 208,000 (18,000 ) 190,000 6,575,000 (1,323,000 ) 5,252,000 Unamortized: Customer list 104,000 - 104,000 Trademark and Tradename 61,000 - 61,000 165,000 - 165,000 Total $ 6,740,000 $ (1,323,000 ) $ 5,417,000 December 31, 2016 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized: Patents 11 $ 1,489,000 $ (948,000 ) $ 541,000 Unamortized: Customer list 104,000 - 104,000 Trademark and Tradename 61,000 - 61,000 165,000 - 165,000 Total $ 1,654,000 $ (948,000 ) $ 706,000 |
Schedule of Finite-lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows: Year ending December 31: 2018 $ 712,000 2019 712,000 2020 712,000 2021 536,000 2022 462,000 Thereafter 2,118,000 $ 5,252,000 |
Schedule of Changes in Goodwill | The changes in goodwill from January 1, 2017 to December 31, 2017 is as follows: Balance of as January 1, 2017 $ 1,837,000 Keytroller acquisition 5,481,000 Balance as of December 31, 2017 $ 7,318,000 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share Basic and Diluted | December 31, Basic and diluted loss per share 2015 2016 2017 Net loss $ (9,952,000 ) $ (6,370,000 ) $ (3,870,000 ) Weighted-average common shares outstanding - basic and diluted 12,614,000 12,984,000 14,961,000 Net loss per share - basic and diluted $ (0.79 ) $ (0.49 ) $ (0.26 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options Activity | A summary of the status of the Company’s stock options as of December 31, 2015, 2016 and 2017 and changes during the years then ended, is presented below: 2015 2016 2017 Weighted - Weighted - Weighted - Average Average Average Number of Exercise Number of Exercise Number of Exercise Shares Price Shares Price Shares Price Outstanding at beginning of year 2,209,000 $ 6.84 1,212,000 $ 6.94 1,243,000 $ 5.08 Granted - - 395,000 4.75 350,000 6.00 Exercised (568,000 ) 3.95 (20,000 ) 3.44 (271,000 ) 4.72 Forfeited or expired (429,000 ) 10.36 (344,000 ) 11.36 (32,000 ) 8.26 Outstanding at end of year 1,212,000 $ 6.94 1,243,000 $ 5.08 1,290,000 $ 5.33 Exercisable at end of year 904,000 $ 7.40 822,000 $ 5.07 667,000 $ 5.11 |
Summarizes Information About Stock Options Exercisable | The following table summarizes information about stock options at December 31, 2017: Options Outstanding Options Exercisable Weighted - Average Remaining Weighted- Weighted- Exercise Number Contractual Average Number Average Prices ($) Outstanding Life in Years Exercise Price Outstanding Exercise Price 2.07 – 4.87 330,000 5 $ 4.03 210,000 $ 3.72 4.88 – 5.70 346,000 6 5.35 203,000 5.39 5.71 – 5.97 221,000 5 5.80 209,000 5.81 5.98 – 7.41 393,000 8 6.14 45,000 7.21 1,290,000 6 $ 5.33 667,000 $ 5.11 As of December 31, 2017 Weighted Average Remaining Aggregate Intrinsic Value Contractual Life in Years Options outstanding $ 2,093,000 6 Options exercisable $ 1,232,000 4 |
Schedule of Fair Value Stock Option Assumption | The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions: December 31, 2015 2016 2017 Expected volatility - 43.6 % 42.4 % Expected life of options - 4.0 years 4.0 years Risk free interest rate - 1.27 % 1.69 % Dividend yield - 0 % 0 % Weighted-average fair value of options granted during the year $ - $ 1.68 $ 2.11 |
Schedule of Non-vested Share Activity | A summary of the non-vested shares for the years ended December 31, 2015, 2016 and 2017 is as follows: Weighted - Average Number of Grant Non-vested Date Shares Fair Value Non-vested at January 1, 2015 616,000 $ 5.69 Granted 232,000 6.00 Vested (210,000 ) 5.75 Forfeited (63,000 ) 5.70 Non-vested at December 31, 2015 575,000 $ 5.79 Granted 271,000 4.80 Vested (272,000 ) 5.34 Forfeited (182,000 ) 5.72 Non-vested at December 31, 2016 392,000 $ 5.45 Granted 240,000 6.26 Vested (194,000 ) 5.42 Forfeited (8,000 ) 5.69 Non-vested at December 31, 2017 430,000 $ 5.91 |
Schedule of Non-vested Performance-based Units Activity | The following table summarizes the activity relating to the Company’s performance shares for the years ended December 31, 2015, 2016 and 2017: Weighted- Number of Average Non-vested Grant Date Shares Fair Value Performance shares, non-vested, at January 1, 2015 18,000 $ 0.38 Granted - - Vested - - Forfeited (18,000 ) 0.38 Performance shares, non-vested, at December 31, 2015 - - Granted 295,000 $ 4.07 Vested - - Forfeited (34,000 ) 4.07 Performance shares, non-vested, at December 31, 2016 261,000 4.07 Granted - $ - Vested (100,000 ) 4.07 Forfeited (50,000 ) 4.07 Performance shares, non-vested, December 31, 2017 111,000 $ 4.07 |
Accounts Payable and Accrued 40
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses consist of the following: December 31, 2016 2017 Accounts payable $ 6,195,000 $ 6,233,000 Accrued warranty 472,000 535,000 Accrued severance 609,000 100,000 Accrued compensation 297,000 507,000 Other current liabilities 49,000 65,000 $ 7,622,000 $ 7,440,000 |
Schedule of Product Warranty Liability | The following table summarizes warranty activity during the years ended December 31, 2016 and 2017: Year Ended 2016 2017 Accrued warranty reserve, beginning of year $ 614,000 $ 472,000 Accrual for product warranties issued 431,000 253,000 Product replacements and other warranty expenditures (252,000 ) (68,000 ) Expiration of warranties (321,000 ) (122,000 ) Accrued warranty reserve, end of period $ 472,000 $ 535,000 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The accumulated balances for each classification of other comprehensive loss are as follows: Unrealized Accumulated Foreign gain (losses) other currency on comprehensive items investments income Balance at January 1, 2015 $ (360,000 ) $ (15,000 ) $ (375,000 ) Net current period change (140,000 ) 15,000 (125,000 ) Balance at December 31, 2015 (500,000 ) $ - (500,000 ) Net current period change 408,000 (11,000 ) 397,000 Balance at December 31, 2016 (92,000 ) $ (11,000 ) (103,000 ) Net current period change (373,000 ) (102,000 ) (475,000 ) Balance at December 31, 2017 $ (465,000 ) $ (113,000 ) (578,000 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Taxes | Loss before income taxes consists of the following: Year Ended December 31, 2015 2016 2017 U.S. operations $ (9,216,000 ) $ (5,547,000 ) $ (4,425,000 ) Foreign operations (736,000 ) (823,000 ) 244,000 $ (9,952,000 ) $ (6,370,000 ) $ (4,181,000 ) |
Schedule of Income Taxes at Statutory Federal Income Tax Rate and Income Taxes | The difference between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations is attributable to the following: Year Ended December 31, 2015 2016 2017 Income tax benefit at the federal statutory rate $ (3,384,000 ) $ (2,166,000 ) $ (1,316,000 ) State and local income taxes, net of effect on federal taxes (791,000 ) (848,000 ) (441,000 ) Increase (decrease) in valuation allowance 4,148,000 2,287,000 (8,509,000 ) Incentive stock options/forfeitures (104,000 ) 624,000 (11,000 ) Change in Federal tax rate 10,848,000 Research and development tax credits - - (1,390,000 ) Permanent differences and other 131,000 103,000 508,000 $ - $ - $ (311,000 ) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2017 are presented below: December 31, 2016 2017 Deferred tax assets: Net operating loss carryforwards $ 25,999,000 $ 21,007,000 Deferred revenue 7,277,000 4,629,000 Stock-based compensation 888,000 839,000 Federal research and development tax credits - 1,058,000 Intangibles, amortization 1,035,000 675,000 Inventories 178,000 175,000 Acquisition related expenses 328,000 321,000 Bad debt reserve 153,000 30,000 Other deductible temporary differences 693,000 556,000 Total gross deferred tax assets 36,551,000 29,290,000 Less: Valuation allowance (31,753,000 ) (26,112,000 ) 4,798,000 3,178,000 Deferred tax liabilities: Deferred expenses (4,715,000 ) (2,978,000 ) Fixed assets, depreciation (83,000 ) (200,000 ) (4,798,000 ) (3,178,000 ) Net deferred tax assets $ - $ - |
Wholly Owned Foreign Subsidia43
Wholly Owned Foreign Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
I.D. Systems GmbH [Member] | |
Schedule of Financial Statements of Foreign Subsidiary | The net revenue and net loss for IDS GmbH included in the Consolidated Statement of Operations are as follows: Year Ended December 31, 2015 2016 2017 Net revenue $ 1,212,000 $ 1,852,000 $ 1,365,000 Net (loss) income (303,000 ) 211,000 103,000 |
I.D. Systems (UK) Ltd [Member] | |
Schedule of Financial Statements of Foreign Subsidiary | The net revenue and net loss for IDS Ltd included in the consolidated statement of operations are as follows: Year Ended December 31, 2015 2016 2017 Net revenue $ 434,000 $ 296,000 $ 577,000 Net (loss) income (433,000 ) (612,000 ) 141,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Year Ending December 31, 2018 $ 926,000 2019 913,000 2020 893,000 2021 150,000 2022 - Thereafter - $ 2,882,000 |
Quarterly Selected Financial 45
Quarterly Selected Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Financial Information | The operating results for any period are not necessarily indicative of results for any future periods. Year Ended December 31, 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenues: Products $ 4,334,000 $ 6,375,000 $ 6,490,000 $ 6,353,000 Services 3,665,000 4,331,000 4,596,000 4,814,000 7,999,000 10,706,000 11,086,000 11,167,000 Cost of revenues: Cost of products 2,815,000 3,427,000 3,475,000 3,736,000 Cost of services 1,034,000 1,738,000 1,984,000 1,822,000 3,849,000 5,165,000 5,459,000 5,558,000 Gross Profit 4,150,000 5,541,000 5,627,000 5,609,000 Selling, general and administrative expenses 4,782,000 5,189,000 5,213,000 5,869,000 Research and development expenses 1,238,000 854,000 958,000 915,000 Other income, net (16,000 ) (22,000 ) (42,000 ) (10,000 ) Net loss before income tax benefit (1,886,000 ) (524,000 ) (586,000 ) (1,185,000 ) Income tax benefit - sale of NJ R&D tax credits - - - 311,000 Net loss $ (1,886,000 ) $ (524,000 ) $ (586,000 ) $ (874,000 ) Net loss per share - basic and diluted $ (0.14 ) $ (0.04 ) $ (0.04 ) $ (0.05 ) Year Ended December 31, 2016 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenues: Products $ 6,282,000 $ 4,918,000 $ 4,561,000 $ 5,605,000 Services 4,195,000 3,986,000 3,654,000 3,621,000 10,477,000 8,904,000 8,215,000 9,226,000 Cost of revenues: Cost of products 4,186,000 3,142,000 3,018,000 3,690,000 Cost of services 1,093,000 1,037,000 1,195,000 1,167,000 5,279,000 4,179,000 4,213,000 4,857,000 Gross Profit 5,198,000 4,725,000 4,002,000 4,369,000 Selling, general and administrative expenses 4,786,000 5,019,000 4,984,000 5,337,000 Research and development expenses 1,130,000 1,192,000 1,098,000 1,116,000 Other income, net 20,000 (11,000 ) (12,000 ) 1,000 Net loss $ (698,000 ) $ (1,497,000 ) $ (2,092,000 ) $ (2,083,000 ) Net loss per share - basic and diluted $ (0.05 ) $ (0.12 ) $ (0.16 ) $ (0.16 ) |
Description of Business and Liq
Description of Business and Liquidity (Details Narrative) - USD ($) | Jul. 17, 2017 | Dec. 31, 2017 |
Shares issued pursuant to exercise of stock options | 391,304 | |
Proceeds from public offering | $ 16,065,000 | |
Cash, cash equivalents and marketable securities | 16,900,000 | |
Working capital | $ 10,100,000 | |
Public Offering [Member] | ||
Sale of stock shares issued | 2,608,695 | |
Sale of stock price per share | $ 5.75 | |
Number of common stock issued | 2,999,999 | |
Gross proceeds from public offering | $ 17,300,000 | |
Proceeds from public offering | $ 16,100,000 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts receivable | $ 87,000 | $ 341,000 | $ 87,000 | $ 341,000 | |||||||
Impairment losses | |||||||||||
Research and development costs | $ 915,000 | $ 958,000 | $ 854,000 | $ 1,238,000 | $ 1,116,000 | $ 1,098,000 | $ 1,192,000 | $ 1,130,000 | 3,965,000 | 4,536,000 | 4,556,000 |
Stock-based compensation expense | 2,437,000 | 1,658,000 | 1,609,000 | ||||||||
Interest or penalty | |||||||||||
Advertising and marketing expense | $ 538,000 | $ 510,000 | $ 455,000 | ||||||||
Internal-use Software [Member] | |||||||||||
Fixed assets estimated useful life | 3 years | ||||||||||
Minimum [Member] | |||||||||||
Fixed assets estimated useful life | 3 years | ||||||||||
Maximum [Member] | |||||||||||
Fixed assets estimated useful life | 10 years |
Investments and Fair Value Me48
Investments and Fair Value Measuremets (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |||
Unrealized (loss) gain on investments | $ (103,000) | $ (5,000) | $ (28,000) |
Investments and Fair Value Me49
Investments and Fair Value Measurements - Schedule of Fair Value of Available for Sale Securities (Details) | Dec. 31, 2017USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Due within one year | $ 1,201,000 |
Due one year through three years | 8,954,000 |
Due after three years | 1,324,000 |
Long term | $ 11,479,000 |
Investments and Fair Value Me50
Investments and Fair Value Measurements - Schedule of Available-for-sale Securities Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 11,592,000 | $ 1,625,000 |
Unrealized Gain | ||
Unrealized Loss | (113,000) | (11,000) |
Fair Value | 11,479,000 | 1,614,000 |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 1,202,000 | 115,000 |
Unrealized Gain | ||
Unrealized Loss | (1,000) | |
Fair Value | 1,201,000 | 115,000 |
Short-term Investments [Member] | U.S. Treasury Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 1,066,000 | 40,000 |
Unrealized Gain | ||
Unrealized Loss | (1,000) | |
Fair Value | 1,065,000 | 40,000 |
Short-term Investments [Member] | Corporate Bonds and Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 136,000 | 25,000 |
Unrealized Gain | ||
Unrealized Loss | ||
Fair Value | 136,000 | 25,000 |
Short-term Investments [Member] | Government Agency Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 50,000 | |
Unrealized Gain | ||
Unrealized Loss | ||
Fair Value | 50,000 | |
Long-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 10,390,000 | 1,510,000 |
Unrealized Gain | ||
Unrealized Loss | (112,000) | (11,000) |
Fair Value | 10,278,000 | 1,499,000 |
Long-term Investments [Member] | U.S. Treasury Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 3,367,000 | 1,027,000 |
Unrealized Gain | ||
Unrealized Loss | (37,000) | (7,000) |
Fair Value | 3,330,000 | 1,020,000 |
Long-term Investments [Member] | Corporate Bonds and Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 2,744,000 | 383,000 |
Unrealized Gain | ||
Unrealized Loss | (35,000) | (3,000) |
Fair Value | 2,709,000 | 380,000 |
Long-term Investments [Member] | Government Agency Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 4,279,000 | 100,000 |
Unrealized Gain | ||
Unrealized Loss | (40,000) | (1,000) |
Fair Value | $ 4,239,000 | $ 99,000 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Integer | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Deferred Revenue Arrangement [Line Items] | |||
Amortization of deferred equipment revenue | $ 5,785,000 | $ 5,258,000 | $ 5,373,000 |
Avis Budget Car Rental LLC [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Revenue recognition, milestone method, revenue recognized | $ 255,000 | ||
Revenue recognition, milestone method, description | Milestone payments are recognized as revenue upon achievement of the milestone only if the following conditions are met: (i) there is substantive uncertainty at the date of entering into the arrangement that the milestone would be achieved; (ii) the milestone is commensurate with either the vendors performance to achieve the milestone or the enhancement of the value of the delivered item by the vendor; (iii) the milestone relates solely to past performance; and (iv) be reasonable in relation to the effort expended to achieve the milestone. | ||
Cost of services, maintenance costs | $ 21,270,000 | ||
Number of system and maintenance and support services units | Integer | 50,000 | ||
Upfront payment | $ 3,290,000 | ||
Initial payment | 2,000,000 | ||
Payment for development cost | 902,000 | ||
Payment for production readiness development | 388,000 | ||
Refundable upfront payment | 1,785,000 | ||
Revenue recognized | $ 2,470,000 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Deferred Revenue (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 17,449,000 | $ 17,263,000 |
Less: Current portion | 9,711,000 | 7,197,000 |
Deferred revenue - less current portion | 7,738,000 | 10,066,000 |
Deferred Activation Fees [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 313,000 | 385,000 |
Deferred Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 2,276,000 | 230,000 |
Deferred Maintenance and SaaS Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 3,296,000 | 3,049,000 |
Deferred Transportation Asset Management Product Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 11,564,000 | $ 13,599,000 |
Financing Receivables (Details
Financing Receivables (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Recorded Investment [Line Items] | ||
Unearned income on sales type leases | $ 164,000 | $ 293,000 |
Discount rate of unearned income | 4.00% | |
Minimum [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Investment lease receivable term | 3 years | |
Maximum [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Investment lease receivable term | 5 years |
Financing Receivables - Schedul
Financing Receivables - Schedule of Capital Leases, Future Minimum Payments (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
2,018 | $ 1,295,000 | |
2,020 | 540,000 | |
2,021 | 182,000 | |
2,022 | 33,000 | |
Capital Leases, Future Minimum Payments | 2,852,000 | |
Less: Current portion | 1,295,000 | $ 1,766,000 |
Sales-type Lease Receivable - Less current portion | $ 1,557,000 | $ 2,430,000 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | |
Number of common stock issued, value | $ 2,000,000 | ||
Post-closing working capital adjustment | $ 275,000 | ||
Acquisition related expenses | 301,000 | ||
Contingent consideration relating to acquisition | $ 2,683,000 | ||
Business combination contingent consideration weighted average discount rate | 14.60% | ||
Asset Purchase Agreement [Member] | Keytroller DE [Member] | |||
Cash | $ 7,098,000 | ||
Number of common stock issued | 295,902 | ||
Number of common stock issued, value | $ 2,000,000 | ||
Potential earn-out payments | 3,000,000 | ||
Fair value of potential earn-out payments | $ 2,683,000 |
Acquisition - Schedule of Chang
Acquisition - Schedule of Changes in Contigent Considertion (Details) - USD ($) | 5 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||||
Contingent consideration, beginning | $ 2,683,000 | |||
Change in contingent consideration | 94,000 | $ 94,000 | ||
Contingent consideration, ending | $ 2,777,000 | $ 2,777,000 |
Acquisition - Schedule of Purch
Acquisition - Schedule of Purchase Price Allocation On Net Assets Acquired (Details) - Keytroller DE [Member] | Dec. 31, 2017USD ($) | |
Accounts receivable | $ 835,000 | |
Inventory | 1,066,000 | |
Other assets, net | 42,000 | |
Intangibles | 5,086,000 | |
Goodwill | 5,481,000 | [1] |
Less: Current liabilities assumed | (454,000) | |
Net assets acquired | $ 12,056,000 | |
[1] | The goodwill is expected to be fully deductible for tax purposes, except the contingent consideration which is deductible only when paid. |
Acquisition - Schedule of Reven
Acquisition - Schedule of Revenue and Operating Income (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating income | $ (4,091,000) | $ (6,368,000) | $ (10,283,000) |
Keytroller DE [Member] | |||
Revenues | 3,468,000 | ||
Operating income | $ 708,000 |
Acquisition - Schedule of Combi
Acquisition - Schedule of Combined Pro Forma Revenue and Earnings (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | $ 44,796,000 | $ 43,446,000 | $ 47,074,000 |
Operating loss | $ (3,617,000) | $ (5,505,000) | $ (9,703,000) |
Net loss per share - basic and diluted | $ (0.24) | $ (0.35) | $ (0.60) |
Historical [Member] | |||
Revenues | $ 40,958,000 | $ 36,822,000 | $ 41,784,000 |
Operating loss | $ (4,091,000) | $ (6,368,000) | $ (10,283,000) |
Net loss per share - basic and diluted | $ (0.26) | $ (0.49) | $ (0.79) |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 266,000 | $ 208,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Components | $ 1,083,000 | $ 1,183,000 |
Finished goods | 3,503,000 | 2,737,000 |
Inventory, Net | $ 4,586,000 | $ 3,920,000 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 757,000 | $ 549,000 | $ 583,000 |
Software development and website development projects costs | 100,000 | 461,000 | |
Computer Equipment and Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Computer equipment not yet placed in service | 13,000 | 1,919,000 | |
Computer Software and Website Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Amortization expense | $ 410,000 | $ 165,000 | $ 156,000 |
Fixed Assets - Schedule of Fixe
Fixed Assets - Schedule of Fixed Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 9,881,000 | $ 10,955,000 |
Accumulated depreciation and amortization | (7,134,000) | (7,880,000) |
Property, plant and equipment, net | 2,747,000 | 3,075,000 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,054,000 | 1,678,000 |
Computer Software and Website Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,610,000 | 5,874,000 |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,560,000 | 2,761,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 416,000 | 401,000 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 60,000 | 60,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 181,000 | $ 181,000 |
Intangible Assets and Goodwil64
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment charge | |||
Amortization expense | $ 136,000 | $ 135,000 | $ 375,000 |
Intangible Assets and Goodwil65
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 6,575,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,323,000) | |
Finite-Lived Intangible Assets, Net, Total | 5,252,000 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Gross | 165,000 | $ 165,000 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 165,000 | 165,000 |
Intangible Assets Gross | 6,740,000 | 1,654,000 |
Intangible Assets, Accumulated Amortization | (1,323,000) | (948,000) |
Total | 5,417,000 | 706,000 |
Trademark and Tradename [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,367,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (52,000) | |
Finite-Lived Intangible Assets, Net, Total | 1,315,000 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Gross | 61,000 | 61,000 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 61,000 | 61,000 |
Trademark and Tradename [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Trademark and Tradename [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Customer List [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill), Gross | $ 104,000 | 104,000 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 104,000 | $ 104,000 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Finite-Lived Intangible Assets, Gross | $ 3,123,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (130,000) | |
Finite-Lived Intangible Assets, Net, Total | $ 2,993,000 | |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 11 years | 11 years |
Finite-Lived Intangible Assets, Gross | $ 1,489,000 | $ 1,489,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,083,000) | (948,000) |
Finite-Lived Intangible Assets, Net, Total | $ 406,000 | $ 541,000 |
Favorable Contract Interest [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Finite-Lived Intangible Assets, Gross | $ 388,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (40,000) | |
Finite-Lived Intangible Assets, Net, Total | $ 348,000 | |
Covenant not to Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Finite-Lived Intangible Assets, Gross | $ 208,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (18,000) | |
Finite-Lived Intangible Assets, Net, Total | $ 190,000 |
Intangible Assets and Goodwil66
Intangible Assets and Goodwill - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 712,000 |
2,019 | 712,000 |
2,020 | 712,000 |
2,021 | 536,000 |
2,022 | 462,000 |
Thereafter | 2,118,000 |
Finite-Lived Intangible Assets, Net, Total | $ 5,252,000 |
Intangible Assets and Goodwil67
Intangible Assets and Goodwill - Schedule of Changes in Goodwill (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance of as January 1, 2017 | $ 1,837,000 |
Keytroller acquisition | 5,481,000 |
Balance as of September 30, 2017 | $ 7,318,000 |
Net Loss Per Share (Details Nar
Net Loss Per Share (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 1,831,000 | 1,896,000 | 1,887,000 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Net Loss Per Share Basic and Diluted (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss | $ (874,000) | $ (586,000) | $ (524,000) | $ (1,886,000) | $ (2,083,000) | $ (2,092,000) | $ (1,497,000) | $ (698,000) | $ (3,870,000) | $ (6,370,000) | $ (9,952,000) |
Weighted-average common shares outstanding - basic and diluted | 14,961,000 | 12,984,000 | 12,614,000 | ||||||||
Net loss per share - basic and diluted | $ (0.05) | $ (0.04) | $ (0.04) | $ (0.14) | $ (0.16) | $ (0.16) | $ (0.12) | $ (0.05) | $ (0.26) | $ (0.49) | $ (0.79) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation expense | $ 411,000 | $ 270,000 | $ 282,000 | ||
Share-based compensation, options exercised | 375,000 | 33,000 | 1,524,000 | ||
Share-based compensation, options vested | 291,000 | 280,000 | 505,000 | ||
Share-based compensation, nonvested awards, not yet recognized | $ 965,000 | ||||
Share-based compensation, nonvested awards, not yet recognized, period for recognition | 2 years 9 months 18 days | ||||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation expense | $ 1,682,000 | $ 908,000 | $ 1,325,000 | ||
Share-based compensation, nonvested awards, not yet recognized | $ 1,658,000 | ||||
Share-based compensation, nonvested awards, not yet recognized, period for recognition | 2 years | ||||
Share-based compensation, non-vested shares, granted | 240,000 | 271,000 | 232,000 | ||
Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation expense | $ 344,000 | $ 480,000 | $ 0 | ||
Share-based compensation, nonvested awards, not yet recognized | $ 11,000 | ||||
Share-based compensation, nonvested awards, not yet recognized, period for recognition | 1 month 6 days | ||||
Share-based compensation, non-vested shares, granted | 295,000 | ||||
Ehrman Severance Agreement [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation expense | $ (26,000) | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option vested term | 10 years | ||||
Stock Option Plan 1999 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 2,813,000 | ||||
Equity Compensation Plan 2007 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 2,500,000 | ||||
Non-Employee Director Equity Compensation 2009 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 600,000 | ||||
Shares available for future issuance | 14,000 | ||||
Equity Compensation Plan 2015 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 1,200,000 | ||||
Shares available for future issuance | 228,000 | ||||
Equity Compensation Plan 2015 [Member] | Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation, non-vested shares, granted | 295,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Options Activity (Details) - $ / shares | Jul. 17, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options, Exercised | (391,304) | |||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options, Outstanding at beginning of year | 1,243,000 | 1,212,000 | 2,209,000 | |
Options, Granted | 350,000 | 395,000 | ||
Options, Exercised | (271,000) | (20,000) | (568,000) | |
Options, Forfeited or expired | (32,000) | (344,000) | (429,000) | |
Options, Outstanding at end of period | 1,290,000 | 1,243,000 | 1,212,000 | |
Options, Exercisable at end of period | 667,000 | 822,000 | 904,000 | |
Weighted-Average Exercise Price, Outstanding at beginning of year | $ 5.08 | $ 6.94 | $ 6.84 | |
Weighted-Average Exercise Price, Granted | 6 | 4.75 | ||
Weighted-Average Exercise Price, Exercised | 4.72 | 3.44 | 3.95 | |
Weighted-Average Exercise Price, Forfeited or expired | 8.26 | 11.36 | 10.36 | |
Weighted-Average Exercise Price, Outstanding at end of period | 5.33 | 5.08 | 6.94 | |
Weighted-Average Exercise Price, Exercisable at end of period | $ 5.11 | $ 5.07 | $ 7.40 |
Stock-based Compensation - Summ
Stock-based Compensation - Summarizes Information About Stock Options Exercisable (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of Options Outstanding | shares | 1,290,000 |
Options Outstanding Weighted-Average Remaining Contractual Life in Years | 6 years |
Options Outstanding Weighted-Average Exercise Price | $ 5.33 |
Options Exercisable Number Outstanding | shares | 667,000 |
Options Exercisable Weighted-Average Exercise Price | $ 5.11 |
Aggregate Intrinsic Value Options Outstanding | $ | $ 2,093,000 |
Aggregate Intrinsic Value Options Exercisable | $ | $ 1,232,000 |
Weighted-Average Remaining Contractual Term, Options Outstanding at End of Period | 6 years |
Weighted-Average Remaining Contractual Term, Options Exercisable at End of Period | 4 years |
Exercise Price One [Member] | |
Options Outstanding Exercise Prices, Lower Range Limit | $ 2.07 |
Options Outstanding Exercise Prices, Upper Range Limit | $ 4.87 |
Number of Options Outstanding | shares | 330,000 |
Options Outstanding Weighted-Average Remaining Contractual Life in Years | 5 years |
Options Outstanding Weighted-Average Exercise Price | $ 4.03 |
Options Exercisable Number Outstanding | shares | 210,000 |
Options Exercisable Weighted-Average Exercise Price | $ 3.72 |
Exercise Price Two [Member] | |
Options Outstanding Exercise Prices, Lower Range Limit | 4.88 |
Options Outstanding Exercise Prices, Upper Range Limit | $ 5.70 |
Number of Options Outstanding | shares | 346,000 |
Options Outstanding Weighted-Average Remaining Contractual Life in Years | 6 years |
Options Outstanding Weighted-Average Exercise Price | $ 5.35 |
Options Exercisable Number Outstanding | shares | 203,000 |
Options Exercisable Weighted-Average Exercise Price | $ 5.39 |
Exercise Price Three [Member] | |
Options Outstanding Exercise Prices, Lower Range Limit | 5.71 |
Options Outstanding Exercise Prices, Upper Range Limit | $ 5.97 |
Number of Options Outstanding | shares | 221,000 |
Options Outstanding Weighted-Average Remaining Contractual Life in Years | 5 years |
Options Outstanding Weighted-Average Exercise Price | $ 5.80 |
Options Exercisable Number Outstanding | shares | 209,000 |
Options Exercisable Weighted-Average Exercise Price | $ 5.81 |
Exercise Price Four [Member] | |
Options Outstanding Exercise Prices, Lower Range Limit | 5.98 |
Options Outstanding Exercise Prices, Upper Range Limit | $ 7.41 |
Number of Options Outstanding | shares | 393,000 |
Options Outstanding Weighted-Average Remaining Contractual Life in Years | 8 years |
Options Outstanding Weighted-Average Exercise Price | $ 6.14 |
Options Exercisable Number Outstanding | shares | 45,000 |
Options Exercisable Weighted-Average Exercise Price | $ 7.21 |
Stock-Based Compensation - Sc73
Stock-Based Compensation - Schedule of Fair Value Stock Option Assumption (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected volatility | 42.40% | 43.60% | |
Expected life of options | 4 years | 4 years | 0 years |
Risk free interest rate | 1.69% | 1.27% | |
Dividend yield | 0.00% | 0.00% | |
Weighted average fair value of options granted during the period | $ 2.11 | $ 1.68 |
Stock-Based Compensation - Sc74
Stock-Based Compensation - Schedule of Non-vested Share Activity (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Non-vested shares, beginning of year | 392,000 | 575,000 | 616,000 |
Number of Non-vested Shares, Granted | 240,000 | 271,000 | 232,000 |
Number of Non-vested Shares, Vested | (194,000) | (272,000) | (210,000) |
Number of Non-vested Shares, Forfeited | (8,000) | (182,000) | (63,000) |
Number of Non-vested shares, end of period | 430,000 | 392,000 | 575,000 |
Weighted- Average Grant Date Fair Value, Non-vested, beginning of year | $ 5.45 | $ 5.79 | $ 5.69 |
Weighted- Average Grant Date Fair Value, Granted | 6.26 | 4.80 | 6 |
Weighted- Average Grant Date Fair Value, Vested | 5.42 | 5.34 | 5.75 |
Weighted- Average Grant Date Fair Value, Forfeited | 5.69 | 5.72 | 5.70 |
Weighted- Average Grant Date Fair Value, Non-vested, end of period | $ 5.91 | $ 5.45 | $ 5.79 |
Stock-Based Compensation - Sc75
Stock-Based Compensation - Schedule of Non-vested Performance-based Units Activity (Details) - Performance Shares [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Non-vested shares, beginning of year | 261,000 | 18,000 | |
Number of Non-vested Shares, Granted | 295,000 | ||
Number of Non-vested Shares, Vested | (100,000) | ||
Number of Non-vested Shares, Forfeited | (50,000) | (34,000) | (18,000) |
Number of Non-vested shares, end of period | 111,000 | 261,000 | |
Weighted- Average Grant Date Fair Value, Non-vested, beginning of year | $ 4.07 | $ 0.38 | |
Weighted- Average Grant Date Fair Value, Granted | 4.07 | ||
Weighted- Average Grant Date Fair Value, Vested | 4.07 | ||
Weighted- Average Grant Date Fair Value, Forfeited | 4.07 | 4.07 | 0.38 |
Weighted- Average Grant Date Fair Value, Non-vested, end of period | $ 4.07 | $ 4.07 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details Narrative) - Revolving Credit Facility [Member] | Dec. 18, 2015USD ($) |
Credit facility maximum borrowing capacity | $ 7,500,000 |
Credit facility, maturity period | Dec. 18, 2017 |
Accounts Payable and Accrued 77
Accounts Payable and Accrued Expenses (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Payables and Accruals [Abstract] | ||
Accrued severance | $ 100,000 | $ 609,000 |
Accrued severance payable equal monthly installments | $ 37,000 | |
Product warranty period | 12 months | |
Extended warranty coverage term | 60 months |
Accounts Payable and Accrued 78
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 6,233,000 | $ 6,195,000 |
Accrued warranty | 535,000 | 472,000 |
Accrued severance | 100,000 | 609,000 |
Accrued compensation | 507,000 | 297,000 |
Other current liabilities | 65,000 | 49,000 |
Accounts payable and accrued expenses | $ 7,440,000 | $ 7,622,000 |
Accounts Payable and Accrued 79
Accounts Payable and Accrued Expenses - Schedule of Product Warranty Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Payables and Accruals [Abstract] | ||
Accrued warranty reserve, beginning of year | $ 472,000 | $ 614,000 |
Accrual for product warranties issued | 253,000 | 431,000 |
Product replacements and other warranty expenditures | (68,000) | (252,000) |
Expiration of warranties | (122,000) | (321,000) |
Accrued warranty reserve, end of period | $ 535,000 | $ 472,000 |
Concentration of Customers (Det
Concentration of Customers (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Customer One [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | 18.00% | 23.00% |
Customer One [Member] | Accounts Receivables [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | 12.00% | 10.00% |
Customer One [Member] | Finance Receivables [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | 11.00% | |
Customer Two [Member] | Accounts Receivables [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jul. 17, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 03, 2010 |
Equity, Class of Treasury Stock [Line Items] | |||||
Shares issued pursuant to exercise of stock options | 391,304 | ||||
Proceeds from public offering | $ 16,065,000 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Preferred stock, shares issued | |||||
Preferred stock, shares outstanding | |||||
Restricted Stock [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares paid for tax withholding for share based compensation | 76,000 | 67,000 | 80,000 | ||
Adjustments related to tax withholding for share-based compensation | $ 465,000 | $ 323,000 | $ 457,000 | ||
Share Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 3,000,000 | ||||
Treasury stock, shares | 310,000 | ||||
Treasury stock, value | $ 1,340,000 | ||||
Treasury stock acquired, average cost per share | $ 4.33 | ||||
Public Offering [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Sale of stock shares issued | 2,608,695 | ||||
Sale of stock price per share | $ 5.75 | ||||
Number of common stock issued | 2,999,999 | ||||
Gross proceeds from public offering | $ 17,300,000 | ||||
Proceeds from public offering | $ 16,100,000 |
Accumulated Other Comprehensi82
Accumulated Other Comprehensive Income (Loss) (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Other comprehensive gain (loss) foreign currency translation adjustment | $ (373,000) | $ 408,000 | $ (140,000) |
Foreign currency transaction gains (losses) | $ 456,000 | $ (437,000) | $ (60,000) |
Accumulated Other Comprehensi83
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency items, Balance at Beginning | $ (92,000) | $ (500,000) | $ (360,000) |
Foreign currency items, Net current period change | (373,000) | 408,000 | (140,000) |
Foreign currency items, Balance at End | (465,000) | (92,000) | (500,000) |
Unrealized gain (losses) on investments, Balance at Beginning | (11,000) | (15,000) | |
Unrealized gain (losses) on investments, Net current period change | (102,000) | (11,000) | 15,000 |
Unrealized gain (losses) on investments, Balance at End | (113,000) | (11,000) | |
Accumulated other comprehensive income, Balance at Beginning | (103,000) | (500,000) | (375,000) |
Accumulated other comprehensive income, Net current period change | (475,000) | 397,000 | (125,000) |
Accumulated other comprehensive income, Balance at End | $ (578,000) | $ (103,000) | $ (500,000) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Line Items] | |||
Sale approved | $ 332,000 | ||
Sale approved percentage | 6.20% | ||
Proceeds from sale of tax benefits | $ 311,000 | ||
Net deferred tax assets | 26,112,000 | $ 31,753,000 | |
Valuation allowance, deferred tax asset, increase (decrease), amount | (5,641,000) | $ 2,287,000 | $ 4,148,000 |
Foreign Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | 78,966,000 | ||
Deferred tax assets, operating loss carryforwards, state and local | 56,162,000 | ||
Deferred tax assets, operating loss carryforwards, foreign | $ 2,813,000 | ||
Federal Jurisdiction [Member] | Minimum [Member] | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2,021 | ||
Federal Jurisdiction [Member] | Maximum [Member] | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2,037 | ||
State and Local Jurisdiction [Member] | Minimum [Member] | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2,018 | ||
State and Local Jurisdiction [Member] | Maximum [Member] | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, expiration year | 2,037 | ||
New Jersey [Member] | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | $ 34,383,000 | ||
Operating loss carryforwards, expiration year | 2,037 | ||
Tax Cuts and Jobs Act [Member] | |||
Income Taxes [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 10,848,000 | ||
Decrease in federal corporate tax rate | 21.00% |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||
U.S. operations | $ (4,425,000) | $ (5,547,000) | $ (9,216,000) | ||||
Foreign operations | 244,000 | (823,000) | (736,000) | ||||
Net loss before income taxes | $ (1,185,000) | $ (586,000) | $ (524,000) | $ (1,886,000) | $ (4,181,000) | $ (6,370,000) | $ (9,952,000) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Taxes at Statutory Federal Income Tax Rate and Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||
Income tax benefit at the federal statutory rate | $ (1,316,000) | $ (2,166,000) | $ (3,384,000) | ||||
State and local income taxes, net of effect on federal taxes | (441,000) | (848,000) | (791,000) | ||||
Increase (decrease) in valuation allowance | (8,509,000) | 2,287,000 | 4,148,000 | ||||
Incentive stock options/forfeitures | (11,000) | 624,000 | (104,000) | ||||
Change in Federal tax rate | (10,848,000) | ||||||
Research and development tax credits | (1,390,000) | ||||||
Permanent differences and other | 508,000 | 103,000 | 131,000 | ||||
Income Tax Expense (Benefit) | $ 311,000 | $ (311,000) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 21,007,000 | $ 25,999,000 |
Deferred revenue | 4,629,000 | 7,277,000 |
Stock-based compensation | 839,000 | 888,000 |
Federal research and development tax credits | 1,058,000 | |
Intangibles, amortization | 675,000 | 1,035,000 |
Inventories | 175,000 | 178,000 |
Acquisition related expenses | 321,000 | 328,000 |
Bad debt reserve | 30,000 | 153,000 |
Other deductible temporary differences | 556,000 | 693,000 |
Total gross deferred tax assets | 29,290,000 | 36,551,000 |
Less: Valuation allowance | (26,112,000) | (31,753,000) |
Deferred Tax Assets, Net of Valuation Allowance | 3,178,000 | 4,798,000 |
Deferred expenses | (2,978,000) | (4,715,000) |
Fixed assets, depreciation | (200,000) | (83,000) |
Deferred Tax Liabilities, Net, Current | (3,178,000) | (4,798,000) |
Net deferred tax assets |
Wholly Owned Foreign Subsidia88
Wholly Owned Foreign Subsidiaries (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Foreign Subsidiaries Financial Information Disclosure [Line Items] | ||
Assets, total | $ 60,932,000 | $ 44,246,000 |
I.D. Systems GmbH [Member] | ||
Foreign Subsidiaries Financial Information Disclosure [Line Items] | ||
Assets, total | 1,086,000 | 1,012,000 |
I.D. Systems (UK) Ltd [Member] | ||
Foreign Subsidiaries Financial Information Disclosure [Line Items] | ||
Assets, total | $ 1,187,000 | $ 1,130,000 |
Wholly Owned Foreign Subsidia89
Wholly Owned Foreign Subsidiaries - Schedule of Financial Statements of Foreign Subsidiary (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Foreign Subsidiaries Financial Information Disclosure [Line Items] | |||||||||||
Net revenue | $ 11,167,000 | $ 11,086,000 | $ 10,706,000 | $ 7,999,000 | $ 9,226,000 | $ 8,215,000 | $ 8,904,000 | $ 10,477,000 | $ 40,958,000 | $ 36,822,000 | $ 41,784,000 |
Net (loss) income | $ (874,000) | $ (586,000) | $ (524,000) | $ (1,886,000) | $ (2,083,000) | $ (2,092,000) | $ (1,497,000) | $ (698,000) | (3,870,000) | (6,370,000) | (9,952,000) |
I.D. Systems GmbH [Member] | |||||||||||
Foreign Subsidiaries Financial Information Disclosure [Line Items] | |||||||||||
Net revenue | 1,365,000 | 1,852,000 | 1,212,000 | ||||||||
Net (loss) income | 103,000 | 211,000 | (303,000) | ||||||||
I.D. Systems (UK) Ltd [Member] | |||||||||||
Foreign Subsidiaries Financial Information Disclosure [Line Items] | |||||||||||
Net revenue | 577,000 | 296,000 | 434,000 | ||||||||
Net (loss) income | $ 141,000 | $ (612,000) | $ (433,000) |
Reduction in Work Force (Detail
Reduction in Work Force (Details Narrative) - USD ($) | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Severance costs | $ 280,000 | ||
Percentage of total personnel | 20.00% | ||
Selling, General and Administrative Expenses [Member] | |||
Severance costs | $ 637,000 | 250,000 | |
Research and Development Expense [Member] | |||
Severance costs | $ 30,000 |
Commitments and Contingencies91
Commitments and Contingencies (Details Narrative) | Jun. 12, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($)Integer | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Other Commitments [Line Items] | |||||
Number of executive officers | Integer | 5 | ||||
Severance costs | $ 280,000 | ||||
Allocated share-based compensation expense | $ 411,000 | $ 270,000 | 282,000 | ||
Operating leases, rent expense | $ 1,021,000 | $ 1,057,000 | $ 860,000 | ||
Texas [Member] | |||||
Other Commitments [Line Items] | |||||
Operating lease expire date | Feb. 28, 2021 | ||||
Florida [Member] | |||||
Other Commitments [Line Items] | |||||
Operating lease expire date | Jul. 31, 2019 | ||||
Master Services Agreement [Member] | ACF FinCo I LP [Member] | |||||
Other Commitments [Line Items] | |||||
Loss contingency, damages sought value | $ 2,000,000 | ||||
Ehrman Severance Agreement [Member] | |||||
Other Commitments [Line Items] | |||||
Severance agreements description | Under the terms of the severance agreements, in general, each executive is entitled to the following: (i) a cash payment at the rate of the executives annual base salary as in effect immediately prior to the Trigger Event for a period of 12, 15 or 18 months, depending on the executive, (ii) continued healthcare coverage during the severance period, (iii) partial accelerated vesting of the executives previously granted stock options and restricted stock awards, and (iv) an award of Performance Shares under the Restricted Stock Unit Award Agreement previously entered into between the Company and the executive. | ||||
Severance costs | $ 637,000 | ||||
Allocated share-based compensation expense | $ (26,000) |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 926,000 |
2,019 | 913,000 |
2,020 | 893,000 |
2,021 | 150,000 |
2,022 | |
Thereafter | |
Operating Leases, Future Minimum Payments Due | $ 2,882,000 |
Quarterly Selected Financial 93
Quarterly Selected Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |||||||||||
Products | $ 6,353,000 | $ 6,490,000 | $ 6,375,000 | $ 4,334,000 | $ 5,605,000 | $ 4,561,000 | $ 4,918,000 | $ 6,282,000 | $ 23,552,000 | $ 21,366,000 | $ 24,531,000 |
Services | 4,814,000 | 4,596,000 | 4,331,000 | 3,665,000 | 3,621,000 | 3,654,000 | 3,986,000 | 4,195,000 | 17,406,000 | 15,456,000 | 17,253,000 |
Revenue, Net | 11,167,000 | 11,086,000 | 10,706,000 | 7,999,000 | 9,226,000 | 8,215,000 | 8,904,000 | 10,477,000 | 40,958,000 | 36,822,000 | 41,784,000 |
Cost of products | 3,736,000 | 3,475,000 | 3,427,000 | 2,815,000 | 3,690,000 | 3,018,000 | 3,142,000 | 4,186,000 | 13,453,000 | 14,036,000 | 18,018,000 |
Cost of services | 1,822,000 | 1,984,000 | 1,738,000 | 1,034,000 | 1,167,000 | 1,195,000 | 1,037,000 | 1,093,000 | 6,578,000 | 4,492,000 | 6,743,000 |
Cost of revenues Total | 5,558,000 | 5,459,000 | 5,165,000 | 3,849,000 | 4,857,000 | 4,213,000 | 4,179,000 | 5,279,000 | 20,031,000 | 18,528,000 | 24,761,000 |
Gross Profit | 5,609,000 | 5,627,000 | 5,541,000 | 4,150,000 | 4,369,000 | 4,002,000 | 4,725,000 | 5,198,000 | 20,927,000 | 18,294,000 | 17,023,000 |
Selling, general and administrative expenses | 5,869,000 | 5,213,000 | 5,189,000 | 4,782,000 | 5,337,000 | 4,984,000 | 5,019,000 | 4,786,000 | 21,053,000 | 20,126,000 | 22,750,000 |
Research and development expenses | 915,000 | 958,000 | 854,000 | 1,238,000 | 1,116,000 | 1,098,000 | 1,192,000 | 1,130,000 | 3,965,000 | 4,536,000 | 4,556,000 |
Other income, net | (10,000) | (42,000) | (22,000) | (16,000) | 1,000 | (12,000) | (11,000) | 20,000 | (1,000) | 6,000 | (11,000) |
Net loss before income tax benefit | (1,185,000) | (586,000) | (524,000) | (1,886,000) | (4,181,000) | (6,370,000) | (9,952,000) | ||||
Income tax benefit - sale of NJ R&D tax credits | 311,000 | (311,000) | |||||||||
Net loss | $ (874,000) | $ (586,000) | $ (524,000) | $ (1,886,000) | $ (2,083,000) | $ (2,092,000) | $ (1,497,000) | $ (698,000) | $ (3,870,000) | $ (6,370,000) | $ (9,952,000) |
Net loss per share - basic and diluted | $ (0.05) | $ (0.04) | $ (0.04) | $ (0.14) | $ (0.16) | $ (0.16) | $ (0.12) | $ (0.05) | $ (0.26) | $ (0.49) | $ (0.79) |