Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'INTRUSION INC | ' |
Entity Central Index Key | '0000736012 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 12,172,017 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current Assets: | ' | ' |
Cash and cash equivalents | $458,000 | $52,000 |
Accounts receivable | 1,765,000 | 946,000 |
Inventories, net | 19,000 | 5,000 |
Prepaid expenses | 36,000 | 48,000 |
Total current assets | 2,278,000 | 1,051,000 |
Property and equipment, net | 245,000 | 260,000 |
Other assets | 52,000 | 48,000 |
TOTAL ASSETS | 2,575,000 | 1,359,000 |
Current Liabilities: | ' | ' |
Accounts payable and accrued expenses | 1,109,000 | 707,000 |
Dividends payable | 397,000 | 279,000 |
Line of credit payable | ' | 130,000 |
Obligations under capital lease, current portion | 96,000 | 96,000 |
Deferred revenue | 434,000 | 52,000 |
Loan payable to officer | 1,530,000 | ' |
Total current liabilities | 3,566,000 | 1,264,000 |
Loan payable to officer | ' | 1,530,000 |
Obligations under capital lease, noncurrent portion | 68,000 | 116,000 |
Commitments and contingencies | ' | ' |
Stockholders' deficit: | ' | ' |
Common stock, $0.01 par value: Authorized shares - 80,000 Issued shares - 12,182 Outstanding shares - 12,172 | 122,000 | 122,000 |
Common stock held in treasury, at cost - 10 shares | -362,000 | -362,000 |
Additional paid-in capital | 55,894,000 | 55,837,000 |
Accumulated deficit | -58,612,000 | -59,047,000 |
Accumulated other comprehensive loss | -107,000 | -107,000 |
Total stockholders' deficit | -1,059,000 | -1,551,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 2,575,000 | 1,359,000 |
Series 1 | ' | ' |
Stockholders' deficit: | ' | ' |
Preferred stock | 778,000 | 778,000 |
Series 2 | ' | ' |
Stockholders' deficit: | ' | ' |
Preferred stock | 724,000 | 724,000 |
Series 3 | ' | ' |
Stockholders' deficit: | ' | ' |
Preferred stock | $504,000 | $504,000 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, Authorized shares | 5,000 | 5,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, Authorized shares | 80,000 | 80,000 |
Common stock, Issued shares | 12,182 | 12,182 |
Common stock, Outstanding shares | 12,172 | 12,172 |
Common stock held in treasury, shares | 10 | 10 |
Series 1 | ' | ' |
Preferred stock, shares issued | 220 | ' |
Preferred stock, shares outstanding | 220 | ' |
Preferred stock, Liquidation preference (in dollars per share) | $1,238 | ' |
Series 2 | ' | ' |
Preferred stock, shares issued | 460 | ' |
Preferred stock, shares outstanding | 460 | ' |
Preferred stock, Liquidation preference (in dollars per share) | $1,299 | ' |
Series 3 | ' | ' |
Preferred stock, shares issued | 354 | ' |
Preferred stock, shares outstanding | 354 | ' |
Preferred stock, Liquidation preference (in dollars per share) | $872 | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' | ' |
Net product revenue | $1,954 | $1,823 | $5,760 | $5,102 |
Net customer support and maintenance revenue | 21 | 32 | 65 | 100 |
Total revenue | 1,975 | 1,855 | 5,825 | 5,202 |
Cost of product revenue | 785 | 769 | 2,135 | 2,161 |
Cost of customer support and maintenance revenue | 5 | 5 | 16 | 16 |
Total cost of revenue | 790 | 774 | 2,151 | 2,177 |
Gross profit | 1,185 | 1,081 | 3,674 | 3,025 |
Operating expenses: | ' | ' | ' | ' |
Sales and marketing | 336 | 317 | 1,083 | 1,016 |
Research and development | 361 | 414 | 1,138 | 1,125 |
General and administrative | 281 | 270 | 921 | 891 |
Operating income (loss) | 207 | 80 | 532 | -7 |
Interest expense, net | -34 | -32 | -97 | -85 |
Income (loss) before income tax provision | 173 | 48 | 435 | -92 |
Net income (loss) | 173 | 48 | 435 | -92 |
Preferred stock dividends accrued | -38 | -39 | -113 | -116 |
Net income (loss) attributable to common stockholders | $135 | $9 | $322 | ($208) |
Net income (loss) per share attributable to common stockholders: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.01 | $0 | $0.03 | ($0.02) |
Diluted (in dollars per share) | $0.01 | $0 | $0.02 | ($0.02) |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 12,172 | 12,072 | 12,172 | 12,011 |
Diluted (in shares) | 14,532 | 13,922 | 14,532 | 12,011 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating Activities: | ' | ' |
Net income (loss) | $435 | ($92) |
Adjustments to reconcile net income (loss) to net cash provided by in operating activities: | ' | ' |
Depreciation and amortization | 110 | 113 |
Stock-based compensation | 148 | 165 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -819 | -121 |
Inventories | -14 | ' |
Prepaid expenses and other assets | 7 | 40 |
Accounts payable and accrued expenses | 407 | 158 |
Deferred revenue | 382 | -34 |
Net cash provided by operating activities | 656 | 229 |
Investing Activities: | ' | ' |
Purchases of property and equipment | -60 | -21 |
Financing Activities: | ' | ' |
Proceeds from line of credit | 508 | 720 |
Payments on line of credit | -638 | -757 |
Penalties and waived penalties on dividends | 22 | 14 |
Proceeds from stock options exercised | ' | 8 |
Proceeds from warrants exercised | ' | 44 |
Principal payments on capital leases | -82 | -70 |
Net cash used in financing activities | -190 | -41 |
Net increase in cash and cash equivalents | 406 | 167 |
Cash and cash equivalents at beginning of period | 52 | 308 |
Cash and cash equivalents at end of period | 458 | 475 |
Cash paid during the year for interest | 144 | 13 |
SUPPLEMENTAL DISCLOSURE OF NON CASH FINANCING ACTIVITIES: | ' | ' |
Preferred stock dividends accrued | 113 | 116 |
Purchase of leased equipment under capital lease | $34 | $153 |
Description_of_Business
Description of Business | 9 Months Ended |
Sep. 30, 2013 | |
Description of Business | ' |
Description of Business | ' |
1. Description of Business | |
We develop, market and support a family of security products directed toward entity identification, advanced persistent threat (APT) detection, data mining, regulated information compliance, data privacy protection and network intrusion prevention/detection. Our products include: | |
· TraceCop™ for identity discovery and disclosure, | |
· Savant™ for Advanced Persistent Threat (APT) detection and network data mining, | |
· Compliance Commander™ for regulated information and data privacy protection, and | |
· SecureNet™ for network intrusion prevention and detection. | |
We market and distribute our products through a direct sales force to: | |
· end-users, | |
· value-added resellers, | |
· system integrators, | |
· managed service providers, and | |
· distributors. | |
Our end-user customers include: | |
· U.S. federal government entities, | |
· foreign government entities, | |
· local government entities, | |
· large commercial entities, | |
· banks, | |
· credit unions, | |
· other financial institutions, | |
· hospitals and other healthcare providers, and | |
· other customers. | |
We were organized in Texas in September 1983 and reincorporated in Delaware in October 1995. For more than 15 years, we provided local area networking equipment and were known as Optical Data Systems or ODS Networks. On April 17, 2000, we announced plans to sell, or otherwise dispose of, our networking divisions, which included our Essential Communications division and our local area networking assets. On June 1, 2000, we changed our name from ODS Networks, Inc. to Intrusion.com, Inc., and our ticker symbol from ODSI to INTZ to reflect our focus on intrusion prevention and detection solutions, along with information compliance and data privacy protection products. On November 1, 2001, we changed our name from Intrusion.com, Inc. to Intrusion Inc. | |
Our principal executive offices are located at 1101 East Arapaho Road, Suite 200, Richardson, Texas 75081, and our telephone number is (972) 234-6400. Our website URL is www.intrusion.com. References to “we”, “us”, “our” or “Intrusion Inc.” refer to Intrusion Inc. and its subsidiaries. Compliance Commander™, SecureNet™ and TraceCop™ are trademarks of Intrusion Inc. | |
As of September 30, 2013, we had cash and cash equivalents of approximately $458,000, up from approximately $52,000 as of December 31, 2012. We generated net income of $173,000 for the quarter ended September 30, 2013 compared to a net income of $48,000 for the comparable quarter ended September 30, 2012. As of September 30, 2013, in addition to cash and cash equivalents of $458,000, we had $500,000 in funding available under our $0.625 million line of credit at Silicon Valley Bank (“SVB”) and $670,000 funding available from a promissory note to borrow up to $2.2 million from G. Ward Paxton, the Company’s Chief Executive Officer. We are obligated to make payments of accrued dividends on all our outstanding shares of preferred stock that will reduce our available cash resources. Based on projections of growth in revenue and net income in the coming quarters, and the borrowings available previously mentioned, we believe that we will have sufficient cash resources to finance our operations and expected capital expenditures for the next twelve months. We expect to fund our operations through Company profits, our line of credit, borrowings from the Company’s CEO, and possibly additional investments of private equity and debt, which, if we are able to obtain, will have the effect of diluting our existing common stockholders, perhaps significantly. Any equity or debt financings, if available at all, may be on terms which are not favorable to us and, in the case of equity financings, may result in dilution to our stockholders. If our operations do not generate positive cash flow in the upcoming year, or if we are not able to obtain additional debt or equity financing on terms and conditions acceptable to us, if at all, we may be unable to implement our business plan, fund our liquidity needs or even continue our operations. |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
2. Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Item 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The December 31, 2012 balance sheet was derived from audited financial statements, but does not include all the disclosures required by accounting principles generally accepted in the United States. However, we believe that the disclosures are adequate to make the information presented not misleading. In our opinion, all the adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. The results of operations for the nine month period ended September 30, 2013 are not necessarily indicative of the results that may be achieved for the full fiscal year or for any future period. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2012, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 28, 2013. | |
The Company calculates the fair value of its assets and liabilities which qualify as financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different from the carrying value of these financial instruments. The estimated fair value of accounts receivable, accounts payable and accrued expenses, and dividends payable approximate their carrying amounts due to the relatively short maturity of these instruments. Loans payable to officer are with a related party and as a result do not bear market rates of interest. Management believes based on its current financial position that it could not obtain comparable amounts of third party financing, and as such cannot estimate the fair value of the loans payable to officer. None of these instruments are held for trading purposes. |
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
3. Inventories (In thousands) | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Inventories consist of: | ||||||||
Finished products | $ | 19 | $ | 5 | ||||
Net inventory | $ | 19 | 5 | |||||
Loan_Payable_to_Officer
Loan Payable to Officer | 9 Months Ended |
Sep. 30, 2013 | |
Loan Payable to Officer | ' |
Loan Payable to Officer | ' |
4. Loan Payable to Officer | |
On February 7, 2013, the Company entered into an unsecured revolving promissory note to borrow up to $2,200,000 from G. Ward Paxton, the Company’s Chief Executive Officer. Under the terms of the note, the Company may borrow, repay and reborrow on the loan as needed up to an outstanding principal balance due of $2,200,000 at any given time through March 2014. | |
Amounts borrowed from this officer accrue interest at a floating rate per annum equal to SVB’s prime rate plus 1% (5% at September 30, 2013). All outstanding borrowings and accrued but unpaid interest is due on March 31, 2014. As of September 30, 2013, the borrowings outstanding totaled $1,530,000 and accrued interest totaled $57,000. |
Line_of_Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2013 | |
Line of Credit | ' |
Line of Credit | ' |
5. Line of Credit | |
On March 29, 2006, we entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”) to establish a $1.0 million line of credit (the “2006 Credit Line”). On June 30, 2008, we entered into an Amended and Restated Loan and Security Agreement with SVB to, among other things, replace the 2006 Credit Line with a $2.5 million line of credit (the “2008 Credit Line”). On June 24, 2013, we entered into the Fifth Amendment to the Amended and Restated Loan and Security Agreement (as amended, the “Loan Agreement”) with SVB to replace our expiring line with a $0.625 million line of credit (the “Current Line of Credit”). Our obligations under the Loan Agreement are secured by substantially all of our assets, including all of our intellectual property. In addition, G. Ward Paxton, the Company’s Chairman, President and Chief Executive Officer, has established a Guaranty Agreement with SVB securing all outstanding balances under the Current Line of Credit. Borrowings under the Current Line of Credit are based on advances (each an “Advance”) against certain of our accounts receivable that are approved by SVB (each an “Eligible Account”). SVB may make an Advance of up to eighty percent (80%) of each Eligible Account, or such other percentage SVB may determine in its sole discretion. Each Advance is subject to a finance charge calculated as a daily rate that is based on a 360-day annual rate of the greater of the prime rate plus 2.0% or 7.0%. Finance charges are payable at the same time its related Advance is due. Each Advance is also subject to a monthly collateral handling fee of 0.5% of all outstanding Advances, depending on certain qualifying financial factors specified in the Loan Agreement. The collateral handling fee is payable at the same time its related Advance is due. Each Advance must be repaid at the earliest of (a) the date that the Eligible Account related to the Advance is paid, (b) the date the Eligible Account is no longer eligible under the Loan Agreement, or (c) the date on which any “Adjustment” (as defined in the Loan Agreement) is asserted to the Eligible Account. We have certain non-financial and financial covenants, including a liquidity coverage ratio and a rolling EBITDA computation, as defined in the Loan Agreement. On June 24, 2014, the Loan Agreement terminates and all outstanding Advances, accrued but unpaid finance charges, outstanding collateral handing fees, and other amounts become due under the Loan Agreement and related documents. As of September 30, 2013 we had no borrowings outstanding under the current Line of Credit. |
Accounting_for_StockBased_Comp
Accounting for Stock-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting for Stock-Based Compensation | ' | |||||||||||||
Accounting for Stock-Based Compensation | ' | |||||||||||||
6. Accounting for Stock-Based Compensation | ||||||||||||||
During the three month periods ended September 30, 2013 and 2012, the Company granted 3,000 and 3,000 stock options, respectively, to employees. The Company recognized $39,000 and $47,000, respectively, stock-based compensation expense for the three month periods ended September 30, 2013 and 2012. During the nine month periods ended September 30, 2013 and 2012, the Company granted 286,000 and 328,000, respectively, stock options to employees and directors. The Company recognized $148,000 and $165,000, respectively, stock-based compensation expense for the nine month periods ended September 30, 2013 and 2012. | ||||||||||||||
During the three month periods ended September 30, 2013 and 2012, no options were exercised under the 2005 Plan, respectively. During the nine month periods ended September 30, 2013 and 2012, none and 130,000 options were exercised under the 2005 Plan, respectively. | ||||||||||||||
Valuation Assumptions | ||||||||||||||
The fair values of employee and director option awards were estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: | ||||||||||||||
For Three Months | For Three Months | For Nine | For Nine | |||||||||||
Ended | Ended | Months Ended | Months Ended | |||||||||||
September 30, 2013 | September 30, 2012 | September 30, | September 30, 2012 | |||||||||||
2013 | ||||||||||||||
Weighted average grant date fair value | $ | 0.91 | $ | 0.56 | $ | 0.48 | $ | 0.63 | ||||||
Weighted average assumptions used: | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | ||||||
Risk-free interest rate | 1.34 | % | 0.75 | % | 0.82 | % | 0.84 | % | ||||||
Expected volatility | 227 | % | 216 | % | 225.2 | % | 213.2 | % | ||||||
Expected life (in years) | 5 | 5 | 4.9 | 4.9 | ||||||||||
Expected volatility is based on historical volatility and in part on implied volatility. The expected term considers the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate is based on the rates in effect on the grant date for U.S. Treasury instruments with maturities matching the relevant expected term of the award. Options granted to non-employees are valued using the fair market value on each measurement date of the option. |
Net_Income_Loss_Per_Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2013 | |
Net Income (Loss) Per Share | ' |
Net Income (Loss) Per Share | ' |
7. Net Income (Loss) Per Share | |
Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares and dilutive common stock equivalents outstanding for the period. Our common stock equivalents include all common stock issuable upon conversion of preferred stock and the exercise of outstanding options and warrants. The aggregate number of common stock equivalents excluded from the diluted income (loss) per share calculation for the three and nine month periods ending September 30, 2013 and 2012 are 379,822 and 1,158,881 and 1,082,117 and 4,054,528, respectively as they are antidilutive. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2013 | |
Concentrations | ' |
Concentrations | ' |
8. Concentrations | |
Our operations are concentrated in one area—network security/entity identification. Sales to the U.S. Government through direct and indirect channels totaled 45.8% of total revenues for the third quarter of 2013 compared to 34.3% of total revenues for the third quarter of 2012, and 51.9% of total revenues for the nine months ended September 30, 2013 compared to 35.2% of total revenues for the nine months ended September 30, 2012. During the third quarter of 2013, approximately 30.9% of total revenues were attributable to two government customers compared to approximately 26.1% of total revenues attributable to two government customers in the third quarter of 2012. There were two individual commercial customers in the third quarter of 2013 attributable for 53.2% of total revenue compared 64.0% of total revenue to one individual commercial customer for the same period in 2012 that exceeded 10% of total revenues for that quarter. Our similar product and service offerings are not viewed as individual segments, as our management analyzes the business as a whole and expenses are not allocated to each product offering. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
9. Commitments and Contingencies | |
We are subject from time to time to various legal proceedings and claims that arise during the ordinary course of our business. We do not believe that the outcome of those “routine” legal matters should have a material adverse affect on our consolidated financial position, operating results or cash flows; however, we can provide no assurances that legal claims that may arise will not have such a material impact in the future. |
Dividends_Payable
Dividends Payable | 9 Months Ended |
Sep. 30, 2013 | |
Dividends Payable | ' |
Dividends Payable | ' |
10. Dividends Payable | |
During the quarter ended September 30, 2013, we accrued $14,000 in dividends payable to the holders of our 5% Preferred Stock, $14,000 in dividends payable to the holders of our Series 2 5% Preferred Stock and $10,000 in dividends payable to the holders of our Series 3 5% Preferred Stock. As of September 30, 2013, we have $397,000 in accrued and unpaid dividends included in current liabilities. | |
Delaware law provides that we may only pay dividends out of our capital surplus or, if no surplus is available, out of our net profits for the fiscal year the dividend is declared and/or the preceding fiscal year. These dividends continue to accrue on all our outstanding shares of preferred stock, regardless of whether we are legally able to pay them. If we are unable to pay dividends on our preferred stock, we will be required to accrue an additional late fee penalty of 18% per annum on the unpaid dividends for the Series 2 Preferred Stock and Series 3 Preferred Stock. Our CEO, CFO and one outside board member who are holders of our Series 2 and Series 3 Preferred Stock have waived any possible late fee penalties. In addition to this late penalty, the holders of our Series 2 Preferred Stock and Series 3 Preferred Stock could elect to present us with written notice of our failure to pay dividends as scheduled, in which case we would have 45 days to cure such a breach. In the event that we failed to cure the breach, the holders of these shares of preferred stock would then have the right to require us to redeem their shares of preferred stock for a cash amount calculated in accordance with their respective certificates of designation. If we were required to redeem all shares of Series 2 Preferred Stock and Series 3 Preferred Stock as of October 31, 2013, the aggregate redemption price we would owe would be $2.0 million. |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventories | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories (In thousands) | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Inventories consist of: | ||||||||
Finished products | $ | 19 | $ | 5 | ||||
Net inventory | $ | 19 | 5 | |||||
Accounting_for_StockBased_Comp1
Accounting for Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting for Stock-Based Compensation | ' | |||||||||||||
Schedule of assumptions used to estimate the fair values of employee and director options awards at the date of grant using a Black-Scholes option-pricing model | ' | |||||||||||||
For Three Months | For Three Months | For Nine | For Nine | |||||||||||
Ended | Ended | Months Ended | Months Ended | |||||||||||
September 30, 2013 | September 30, 2012 | September 30, | September 30, 2012 | |||||||||||
2013 | ||||||||||||||
Weighted average grant date fair value | $ | 0.91 | $ | 0.56 | $ | 0.48 | $ | 0.63 | ||||||
Weighted average assumptions used: | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | ||||||
Risk-free interest rate | 1.34 | % | 0.75 | % | 0.82 | % | 0.84 | % | ||||||
Expected volatility | 227 | % | 216 | % | 225.2 | % | 213.2 | % | ||||||
Expected life (in years) | 5 | 5 | 4.9 | 4.9 | ||||||||||
Description_of_Business_Detail
Description of Business (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Jun. 24, 2013 | Sep. 30, 2013 | Feb. 07, 2013 | |
Current Line of Credit | Current Line of Credit | Promissory note | Promissory note | |||||||
G. Ward Paxton, chief executive officer | G. Ward Paxton, chief executive officer | |||||||||
Description of Business | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum number of years for which local area networking equipment was provided | ' | ' | '15 years | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $458,000 | $475,000 | $458,000 | $475,000 | $52,000 | $308,000 | ' | ' | ' | ' |
Net income | 173,000 | 48,000 | 435,000 | -92,000 | ' | ' | ' | ' | ' | ' |
Period during which the entity expects to have sufficient cash resources to finance its operations and capital expenditures | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' |
Description of Business | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Funding available | ' | ' | ' | ' | ' | ' | 500,000 | ' | 670,000 | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | $625,000 | $625,000 | $2,200,000 | $2,200,000 |
Basis_of_Presentation_Details
Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2013 | |
item | |
Basis of Presentation | ' |
Number of instruments held for trading purposes | 0 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventories consist of: | ' | ' |
Finished products | $19 | $5 |
Net inventory | $19 | $5 |
Loan_Payable_to_Officer_Detail
Loan Payable to Officer (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Feb. 07, 2013 | |
Borrowing from Officer | ' | ' |
Loan payable to officer | $1,530,000 | ' |
G. Ward Paxton, chief executive officer | Revolving promissory note | ' | ' |
Borrowing from Officer | ' | ' |
Maximum borrowing capacity | 2,200,000 | 2,200,000 |
Floating rate base | 'prime rate | ' |
Percentage points added in interest rate | 1.00% | ' |
Interest rate (as a percent) | 5.00% | ' |
Loan payable to officer | 1,530,000 | ' |
Accrued interest | $57,000 | ' |
Line_of_Credit_Details
Line of Credit (Details) (USD $) | Mar. 29, 2006 | Jun. 30, 2008 | Sep. 30, 2013 | Jun. 24, 2013 | Sep. 30, 2013 |
2006 Credit Line | 2008 Credit Line | Current Line of Credit | Current Line of Credit | Current Line of Credit | |
Maximum | |||||
Line of Credit | ' | ' | ' | ' | ' |
Maximum borrowing capacity | $1,000,000 | $2,500,000 | $625,000 | $625,000 | ' |
Contingent advances as a percentage of each Eligible Account | ' | ' | ' | ' | 80.00% |
Period of annual rate for calculating daily rate of finance charge on each advance | ' | ' | '360 days | ' | ' |
Finance charge basis | ' | ' | 'prime rate | ' | ' |
Percentage points added in daily rate of finance charge | ' | ' | 2.00% | ' | ' |
Minimum interest rate (as a percent) | ' | ' | 7.00% | ' | ' |
Monthly collateral handling fee (as a percent) | ' | ' | 0.50% | ' | ' |
Borrowings outstanding | ' | ' | $0 | ' | ' |
Accounting_for_StockBased_Comp2
Accounting for Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accounting for Stock-Based Compensation | ' | ' | ' | ' |
Stock-based compensation expense | $39,000 | $47,000 | $148,000 | $165,000 |
Options exercised (in shares) | 0 | 0 | 0 | 130,000 |
Valuation Assumptions | ' | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | $0.91 | $0.56 | $0.48 | $0.63 |
Weighted average assumptions used: | ' | ' | ' | ' |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (as a percent) | 1.34% | 0.75% | 0.82% | 0.84% |
Expected volatility (as a percent) | 227.00% | 216.00% | 225.20% | 213.20% |
Expected life | '5 years | '5 years | '4 years 10 months 24 days | '4 years 10 months 24 days |
Employees | ' | ' | ' | ' |
Accounting for Stock-Based Compensation | ' | ' | ' | ' |
Stock options granted (in shares) | 3,000 | 3,000 | ' | ' |
Employees and directors | ' | ' | ' | ' |
Accounting for Stock-Based Compensation | ' | ' | ' | ' |
Stock options granted (in shares) | ' | ' | 286,000 | 328,000 |
Net_Income_Loss_Per_Share_Deta
Net Income (Loss) Per Share (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net Income (Loss) Per Share | ' | ' | ' | ' |
Number of common stock equivalents excluded from the diluted income (loss) per share calculation (in shares) | 379,822 | 1,158,881 | 1,082,117 | 4,054,528 |
Concentrations_Details
Concentrations (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Concentrations | ' | ' | ' | ' |
Number of areas in which operations are concentrated | ' | ' | 1 | ' |
Two government customers | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Number of customers | 2 | 2 | ' | ' |
One individual commercial customer | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Number of customers | ' | 1 | ' | ' |
Two individual commercial customers | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Number of customers | 2 | ' | ' | ' |
Total revenues | Customer | U.S. Government | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Percentage of revenue | 45.80% | 34.30% | 51.90% | 35.20% |
Total revenues | Customer | Two government customers | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Percentage of revenue | 30.90% | 26.10% | ' | ' |
Total revenues | Customer | One individual commercial customer | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Percentage of revenue | ' | 64.00% | ' | ' |
Total revenues | Customer | Two individual commercial customers | ' | ' | ' | ' |
Concentrations | ' | ' | ' | ' |
Percentage of revenue | 53.20% | ' | ' | ' |
Dividends_Payable_Details
Dividends Payable (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
5% preferred stock | 5% preferred stock | Series 2 preferred stock and series 3 preferred stock | Series 2 preferred stock and series 3 preferred stock | Series 2 5% preferred stock | Series 2 5% preferred stock | Series 3 5% preferred stock | Series 3 5% preferred stock | ||||||
item | |||||||||||||
Dividends Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock dividends accrued during the period | $38,000 | $39,000 | $113,000 | $116,000 | ' | $14,000 | ' | ' | ' | $14,000 | ' | $10,000 | ' |
Accrued and unpaid dividends | 397,000 | ' | 397,000 | ' | 279,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend rate (as a percent) | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | 5.00% | ' | 5.00% |
Percentage of additional late fee penalty payable on unpaid dividends | ' | ' | ' | ' | ' | ' | ' | 18.00% | ' | ' | ' | ' | ' |
Number of outside board members invested in preferred stock | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Period within which entity must cure breach | ' | ' | ' | ' | ' | ' | ' | '45 days | ' | ' | ' | ' | ' |
Redemption price | ' | ' | ' | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | ' | ' |