Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | INFORMATION ANALYSIS INC | |
Entity Central Index Key | 803,578 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 11,201,760 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 2,797,537 | $ 2,167,928 |
Accounts receivable, net | 1,293,513 | 1,298,029 |
Prepaid expenses and other current assets | 497,565 | 603,340 |
Note receivable, current | 3,589 | 0 |
Total current assets | 4,592,204 | 4,069,297 |
Property and equipment, net | 31,576 | 42,039 |
Other assets | 6,281 | 6,281 |
Total assets | 4,630,061 | 4,117,617 |
Current liabilities: | ||
Accounts payable | 1,136,306 | 64,599 |
Commissions payable | 907,524 | 959,052 |
Deferred revenue | 463,854 | 581,102 |
Accrued payroll and related liabilities | 218,366 | 261,202 |
Other accrued liabilities | 131,757 | 74,472 |
Total liabilities | 2,857,807 | 1,940,427 |
Stockholders' equity: | ||
Common stock, par value $0.01, 30,000,000 shares authorized; 12,844,376 shares issued, 11,201,760 shares outstanding as of September 30, 2016 and December 31, 2015 | 128,443 | 128,443 |
Additional paid-in capital | 14,630,681 | 14,622,352 |
Accumulated deficit | (12,056,659) | (11,643,394) |
Treasury stock, 1,642,616 shares at cost | (930,211) | (930,211) |
Total stockholders' equity | 1,772,254 | 2,177,190 |
Total liabilities and stockholders' equity | $ 4,630,061 | $ 4,117,617 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Stockholders Equity | ||
Common Stock shares par value | $ 0.01 | $ 0.01 |
Common Stock shares Authorized | 30,000,000 | 30,000,000 |
Common Stock shares Issued | 12,844,376 | 12,844,376 |
Common Stock shares Outstanding | 11,201,760 | 11,201,760 |
Treasury Stock | 1,642,616 | 1,642,616 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Professional fees | $ 885,505 | $ 1,217,234 | $ 2,655,006 | $ 3,329,766 |
Software sales | 1,146,048 | 241,655 | 2,667,567 | 915,119 |
Total revenues | 2,031,553 | 1,458,889 | 5,322,573 | 4,244,885 |
Cost of revenues | ||||
Cost of professional fees | 468,556 | 788,066 | 1,509,281 | 2,023,609 |
Cost of software sales | 1,006,912 | 226,566 | 2,373,788 | 856,561 |
Total cost of revenues | 1,475,468 | 1,014,632 | 3,883,069 | 2,880,170 |
Gross profit | 556,085 | 444,257 | 1,439,504 | 1,364,715 |
Selling, general and administrative expenses | 428,852 | 434,954 | 1,451,423 | 1,301,322 |
Commissions expense | 187,030 | 109,630 | 408,695 | 349,295 |
Loss from operations | (59,797) | (100,327) | (420,614) | (285,902) |
Other income | 2,559 | 2,585 | 7,349 | 7,680 |
Loss before provision for income taxes | (57,238) | (97,742) | (413,265) | (278,222) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | (57,238) | (97,742) | (413,265) | (278,222) |
Comprehensive loss | $ (57,238) | $ (97,742) | $ (413,265) | $ (278,222) |
Net loss per common share: | ||||
Basic: | $ (0.01) | $ (0.01) | $ (0.04) | $ (0.02) |
Diluted: | $ (0.01) | $ (0.01) | $ (0.04) | $ (0.02) |
Weighted average common shares outstanding | ||||
Basic | 11,201,760 | 11,201,760 | 11,201,760 | 11,201,760 |
Diluted | 11,201,760 | 11,201,760 | 11,201,760 | 11,201,760 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (413,265) | $ (278,222) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 22,044 | 22,475 |
Stock-based compensation | 8,329 | 7,826 |
Bad debt expense | 13,781 | 107 |
Forgiveness of notes receivable | 0 | 7,863 |
Changes in operating assets and liabilities | ||
Accounts receivable | (9,265) | (18,680) |
Prepaid expenses and other current assets | 105,775 | 454,737 |
Accounts payable, accrued payroll and related liabilities, and other accrued liabilities | 1,086,156 | 306,420 |
Commissions payable | (51,528) | (110,481) |
Deferred revenue | (117,248) | (457,133) |
Net cash provided by (used in) operating activities | 644,779 | (65,088) |
Cash flows from investing activities: | ||
Acquisition of furniture and equipment | (11,581) | (10,727) |
Increase in notes receivable - employees | (5,768) | 0 |
Payments received on note receivable | 2,179 | 1,135 |
Net cash used in investing activities | (15,170) | (9,592) |
Net increase (decrease) in cash and cash equivalents | 629,609 | (74,680) |
Cash and cash equivalents, beginning of the period | 2,167,928 | 2,450,006 |
Cash and cash equivalents, end of the period | 2,797,537 | 2,375,326 |
Supplemental cash flow information | ||
Interest paid | 0 | 0 |
Income taxes paid | $ 0 | $ 0 |
1. Basis of Presentation
1. Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Basis Of Presentation | |
1. Basis of Presentation | Organization and Business Founded in 1979, Information Analysis Incorporated (“We”, the “Company”), to which we sometimes refer as IAI, is in the business of developing and maintaining information technology (IT) systems, modernizing client information systems, and performing professional services to government and commercial organizations. We presently concentrate our technology, services and experience to developing web-based and mobile device solutions (including electronic forms conversions), data analytics, cyber security applications, and legacy software migration and modernization for various agencies of the federal government. We provide software and services to government and commercial customers throughout the United States, with a concentration in the Washington, D.C. metropolitan area. Unaudited Interim Financial Statements The accompanying unaudited financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited financial statements include all adjustments necessary (which are of a normal and recurring nature) for the fair and not misleading presentation of the results of the interim periods presented. These unaudited financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2015 included in the Annual Report on Form 10-K filed by the Company with the SEC on March 29, 2016 (the “Annual Report”). The accompanying December 31, 2015 balance sheet and financial information was derived from our audited financial statements included in the Annual Report. The results of operations for any interim periods are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year. There have been no changes in the Company’s significant accounting policies as of September 30, 2016 as compared to the significant accounting policies disclosed in Note 1, "Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 that was filed with the SEC on March 29, 2016. Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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 revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates. Income Taxes As of September 30, 2016, there have been no material changes to the Company’s uncertain tax position disclosures as provided in Note 7 of the Annual Report. The Company does not anticipate that total unrecognized tax benefits will significantly change prior to September 30, 2017. |
2. Recent Accounting Pronouncem
2. Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
2. Recent Accounting Pronouncements | From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB"), or other standard setting bodies that the Company adopts as of the specified effective date. In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" . “Revenue from Contracts with Customers: Topic 606 There have been three new ASUs issued amending certain aspects of ASU 2014-09. ASU 2016-08, " Principal versus Agent Considerations (Reporting Revenue Gross Versus Net) "Identifying Performance Obligations and Licensing" "Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients" In February 2016, the FASB issued ASU 2016-02, “ Leases: Topic 842,” In March 2016, the FASB issued ASU 2016-09, “ Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” |
3. Stock-Based Compensation
3. Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation [Abstract] | |
3. Stock-Based Compensation | During the nine months ended September 30, 2016, the Company had three stock-based compensation plans. The 1996 Stock Option Plan was adopted in 1996 (“1996 Plan”) and had options granted under it through May 29, 2006. The last of the options granted under the 1996 Plan expired on May 18, 2016. The 2006 Stock Incentive Plan was adopted in 2006 (“2006 Plan”) and had options granted under it through April 12, 2016. On June 1, 2016, the shareholders ratified the IAI 2016 Stock Incentive Plan (“2016 Plan”), which had been approved by the Board of Directors on April 4, 2016. Total compensation expense related to these plans was $2,857 and $2,112 for the quarters ended September 30, 2016 and 2015, respectively, none of which related to options awarded to non-employees. Total compensation expense related to these plans was $8,329 and $7,826 for the nine months ended September 30, 2016 and 2015, respectively, none of which related to options awarded to non-employees. The Company estimates the fair value of options granted using a Black-Scholes valuation model to establish the expense. When stock-based compensation is awarded to employees, the expense is recognized ratably over the vesting period. When stock-based compensation is awarded to non-employees, the expense is recognized over the period of performance. The fair values of option awards granted in the three months and nine months ended September 30, 2016 and 2015, were estimated using the Black-Scholes option pricing model using the following assumptions: Three Months ended September 30, Nine Months ended September 30, 2016 2015 2016 2015 Risk free interest rate n/a n/a 0.70% - 1.73% 1.61% - 1.97% Dividend yield n/a n/a 0% 0% Expected term n/a n/a 2-10 years 5-10 years Expected volatility n/a n/a 34.9% - 50.4% 41.2% - 54.2% 2016 Stock Incentive Plan The 2016 Plan became effective June 1, 2016, and expires April 4, 2026. The 2016 Plan provides for the granting of equity awards to key employees, including officers and directors. The maximum number of shares for which equity awards may be granted under the 2016 Plan is 1,000,000. Options under the 2016 Plan expire no later than ten years from the date of grant or when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. The minimum exercise price of each option is the quoted market price of the Company’s stock on the date of grant. At September 30, 2016, there were no options yet issued under the 2016 Plan. 2006 Stock Incentive Plan The 2006 Plan became effective May 18, 2006, and expired April 12, 2016. The 2006 Plan provides for the granting of equity awards to key employees, including officers and directors. The maximum number of shares for which equity awards could be granted under the 2006 Plan was 1,950,000. Options under the 2006 Plan expire no later than ten years from the date of grant or when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. There were 1,193,500 and 992,500 unexpired exercisable options remaining from the 2006 Plan at September 30, 2016 and 2015, respectively. 1996 Stock Option Plan The 1996 Plan provided for the granting of options to purchase shares of our common stock to key employees, including officers and directors. The maximum number of shares for which options could be granted under the 1996 Plan was 3,075,000. Options expired no later than ten years from the date of grant or when employment ceases, whichever came first, and vested over periods determined by the Board of Directors. There were zero and 98,000 unexpired exercisable options remaining from the 1996 Plan at September 30, 2016 and 2015, respectively. The status of the options issued as of September 30, 2016 and changes during the nine months ended September 30, 2016 and 2015 were as follows: Options outstanding Number of shares Weighted average exercise price per share Balance at December 31, 2015 1,193,000 $0.24 Options granted 50,000 0.14 Options exercised - - Options expired or forfeited (3,000) 0.70 Balance at March 31, 2016 1,240,000 $0.24 Options granted 235,000 0.26 Options exercised - - Options expired or forfeited (145,000) 0.45 Balance at June 30, 2016 1,330,000 $0.22 Options granted - - Options exercised - - Options expired or forfeited (17,000) 0.18 Balance at September 30, 2016 1,313,000 $0.22 Options outstanding Number of shares Weighted average exercise price per share Balance at December 31, 2014 1,264,000 $0.26 Options granted 20,000 0.20 Options exercised - - Options expired or forfeited (1,000) 0.24 Balance at March 31, 2015 1,283,000 $0.26 Options granted - - Options exercised - - Options expired or forfeited (5,000) 0.52 Balance at June 30, 2015 1,278,000 $0.25 Options granted - - Options exercised - - Options expired or forfeited (10,000) 0.38 Balance at September 30, 2015 1,268,000 $0.25 The following tables summarize information about options at September 30, 2016: Options outstanding Options exercisable Total shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value Total shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value 1,313,000 $0.22 5.45 $3,305 1,193,500 $0.23 5.07 $2,455 Nonvested option awards as of September 30, 2016 and changes during the nine months ended September 30, 2016 were as follows: Nonvested Number of shares Weighted average grant date fair value Balance at December 31, 2015 49,500 $0.07 Granted 50,000 0.04 Vested (5,000) 0.08 Expired before vesting - - Balance at March 31, 2016 94,500 $0.05 Granted 235,000 0.03 Vested (165,000) 0.08 Expired before vesting (35,000) 0.15 Balance at June 30, 2016 129,500 $0.06 Granted - - Vested (10,000) 0.07 Expired before vesting - - Balance at September 30, 2016 119,500 $0.06 As of September 30, 2016 and 2015, unrecognized compensation cost associated with non-vested share-based compensation totaled $1,378 and $1,846, respectively, which are expected to be recognized over weighted average periods of four months and five months, respectively. |
4. Loss Per Share
4. Loss Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Net loss per common share: | |
4. Loss Per Share | Basic loss per share excludes dilution and is computed by dividing loss available to common shareholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, except for periods when the Company reports a net loss because the inclusion of such items would be antidilutive. The following is a reconciliation of the amounts used in calculating basic and diluted net loss per common share: Net Loss Shares Per Share Amount Basic net loss per common share for the three months ended September 30, 2016: Loss available to common stockholders $ (57,238 ) 11,201,760 $ (0.01 ) Effect of dilutive stock options — — — Diluted net loss per common share for the three months ended September 30, 2016 $ (57,238 ) 11,201,760 $ (0.01 ) Basic net loss per common share for the three months ended September 30, 2015: Loss available to common stockholders $ (97,742 ) 11,201,760 $ (0.01 ) Effect of dilutive stock options — — — Diluted net loss per common share for the three months ended September 30, 2015 $ (97,742 ) 11,201,760 $ (0.01 ) Net Loss Shares Per Share Amount Basic net loss per common share for the nine months ended September 30, 2016: Loss available to common stockholders $ (413,265 ) 11,201,760 $ (0.04 ) Effect of dilutive stock options — — — Diluted net loss per common share for the nine months ended September 30, 2016 $ (413,265 ) 11,201,760 $ (0.04 ) Basic net loss per common share for the nine months ended September 30, 2015: Loss available to common stockholders $ (278,222 ) 11,201,760 $ (0.02 ) Effect of dilutive stock options — — — Diluted net loss per common share for the nine months ended September 30, 2015 $ (278,222 ) 11,201,760 $ (0.02 ) |
5. Financial Instruments
5. Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Financial Instruments | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are: · Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. · Level 2—Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. · Level 3—Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of the Company’s funds. The fair value of short-term financial instruments (primarily cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities) approximate their carrying values because of their short-term nature. |
1. Basis of Presentation (Polic
1. Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Organization and Business | Founded in 1979, Information Analysis Incorporated (“We”, the “Company”), to which we sometimes refer as IAI, is in the business of developing and maintaining information technology (IT) systems, modernizing client information systems, and performing professional services to government and commercial organizations. We presently concentrate our technology, services and experience to developing web-based and mobile device solutions (including electronic forms conversions), data analytics, cyber security applications, and legacy software migration and modernization for various agencies of the federal government. We provide software and services to government and commercial customers throughout the United States, with a concentration in the Washington, D.C. metropolitan area. |
Unaudited Interim Financial Statements | The accompanying unaudited financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited financial statements include all adjustments necessary (which are of a normal and recurring nature) for the fair and not misleading presentation of the results of the interim periods presented. These unaudited financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2015 included in the Annual Report on Form 10-K filed by the Company with the SEC on March 29, 2016 (the “Annual Report”). The accompanying December 31, 2015 balance sheet and financial information was derived from our audited financial statements included in the Annual Report. The results of operations for any interim periods are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year. There have been no changes in the Company’s significant accounting policies as of September 30, 2016 as compared to the significant accounting policies disclosed in Note 1, "Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 that was filed with the SEC on March 29, 2016. |
Use of Estimates and Assumptions | The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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 revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates. |
Income Taxes | As of September 30, 2016, there have been no material changes to the Company’s uncertain tax position disclosures as provided in Note 7 of the Annual Report. The Company does not anticipate that total unrecognized tax benefits will significantly change prior to September 30, 2017. |
3. Stock Based Compensation (Ta
3. Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Black-Scholes option pricing model assumptions | Three Months ended September 30, Nine Months ended September 30, 2016 2015 2016 2015 Risk free interest rate n/a n/a 0.70% - 1.73% 1.61% - 1.97% Dividend yield n/a n/a 0% 0% Expected term n/a n/a 2-10 years 5-10 years Expected volatility n/a n/a 34.9% - 50.4% 41.2% - 54.2% |
Options outstanding | Options outstanding Number of shares Weighted average exercise price per share Balance at December 31, 2015 1,193,000 $0.24 Options granted 50,000 0.14 Options exercised - - Options expired or forfeited (3,000) 0.70 Balance at March 31, 2016 1,240,000 $0.24 Options granted 235,000 0.26 Options exercised - - Options expired or forfeited (145,000) 0.45 Balance at June 30, 2016 1,330,000 $0.22 Options granted - - Options exercised - - Options expired or forfeited (17,000) 0.18 Balance at September 30, 2016 1,313,000 $0.22 Options outstanding Number of shares Weighted average exercise price per share Balance at December 31, 2014 1,264,000 $0.26 Options granted 20,000 0.20 Options exercised - - Options expired or forfeited (1,000) 0.24 Balance at March 31, 2015 1,283,000 $0.26 Options granted - - Options exercised - - Options expired or forfeited (5,000) 0.52 Balance at June 30, 2015 1,278,000 $0.25 Options granted - - Options exercised - - Options expired or forfeited (10,000) 0.38 Balance at September 30, 2015 1,268,000 $0.25 |
Options Summary | Options outstanding Options exercisable Total shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value Total shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value 1,313,000 $0.22 5.45 $3,305 1,193,500 $0.23 5.07 $2,455 |
Nonvested Stock awards | Nonvested Number of shares Weighted average grant date fair value Balance at December 31, 2015 49,500 $0.07 Granted 50,000 0.04 Vested (5,000) 0.08 Expired before vesting - - Balance at March 31, 2016 94,500 $0.05 Granted 235,000 0.03 Vested (165,000) 0.08 Expired before vesting (35,000) 0.15 Balance at June 30, 2016 129,500 $0.06 Granted - - Vested (10,000) 0.07 Expired before vesting - - Balance at September 30, 2016 119,500 $0.06 |
4. (Loss) Income Per Share (Tab
4. (Loss) Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Reconciliation of Loss per Share | Net Loss Shares Per Share Amount Basic net loss per common share for the three months ended September 30, 2016: Loss available to common stockholders $ (57,238 ) 11,201,760 $ (0.01 ) Effect of dilutive stock options — — — Diluted net loss per common share for the three months ended September 30, 2016 $ (57,238 ) 11,201,760 $ (0.01 ) Basic net loss per common share for the three months ended September 30, 2015: Loss available to common stockholders $ (97,742 ) 11,201,760 $ (0.01 ) Effect of dilutive stock options — — — Diluted net loss per common share for the three months ended September 30, 2015 $ (97,742 ) 11,201,760 $ (0.01 ) Net Loss Shares Per Share Amount Basic net loss per common share for the nine months ended September 30, 2016: Loss available to common stockholders $ (413,265 ) 11,201,760 $ (0.04 ) Effect of dilutive stock options — — — Diluted net loss per common share for the nine months ended September 30, 2016 $ (413,265 ) 11,201,760 $ (0.04 ) Basic net loss per common share for the nine months ended September 30, 2015: Loss available to common stockholders $ (278,222 ) 11,201,760 $ (0.02 ) Effect of dilutive stock options — — — Diluted net loss per common share for the nine months ended September 30, 2015 $ (278,222 ) 11,201,760 $ (0.02 ) |
3. Stock-Based Compensation (De
3. Stock-Based Compensation (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | [1] | Sep. 30, 2015 | [1] | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based Compensation Details | ||||||
Risk free interest rate, minimum | 0.70% | 1.61% | ||||
Risk free interest rate, maximum | 1.73% | 1.97% | ||||
Dividend yield | 0.00% | 0.00% | ||||
Expected term, minimum | 0 years | 0 years | 2 years | 5 years | ||
Expected term, maximum | 0 years | 0 years | 10 years | 10 years | ||
Expected volatility, minimum | 34.90% | 41.20% | ||||
Expected volatility, maximum | 50.40% | 54.20% | ||||
[1] | n/a |
3. Stock-Based Compensation (15
3. Stock-Based Compensation (Details 1) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |
Stock-based Compensation Details 1 | ||||||
Beginning Balance | 1,330,000 | 1,240,000 | 1,193,000 | 1,278,000 | 1,283,000 | 1,264,000 |
Options granted | 0 | 235,000 | 50,000 | 0 | 0 | 20,000 |
Options exercised | 0 | 0 | 0 | 0 | 0 | 0 |
Options expired or forfeited | (17,000) | (145,000) | (3,000) | (10,000) | (5,000) | (1,000) |
Ending Balance | 1,313,000 | 1,330,000 | 1,240,000 | 1,268,000 | 1,278,000 | 1,283,000 |
Weighted average price per share, beginning balance | $ .22 | $ .24 | $ .24 | $ .25 | $ .26 | $ .26 |
Weighted average price per share, Options granted | 0 | .26 | .14 | 0 | 0 | .20 |
Weighted average price per share, Options exercised | 0 | 0 | 0 | 0 | 0 | 0 |
Weighted average exercise price per share, Options expired or forfeited | .18 | .45 | .70 | .38 | .52 | .24 |
Weighted average price per share, ending balance | $ .22 | $ .22 | $ .24 | $ .25 | $ .25 | $ .26 |
3. Stock-Based Compensation (16
3. Stock-Based Compensation (Details 2) - USD ($) | 9 Months Ended | |||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Stock-based Compensation Details 2 | ||||||||
Options outstanding | 1,313,000 | 1,330,000 | 1,240,000 | 1,193,000 | 1,268,000 | 1,278,000 | 1,283,000 | 1,264,000 |
Weighted Average Price per share | $ .22 | $ .22 | $ .24 | $ .24 | $ .25 | $ .25 | $ .26 | $ .26 |
Weighted average remaing contractual life in years | 5 years 5 months 12 days | |||||||
Aggregate intrinsic value | $ 3,305 | |||||||
Options exercisable | 1,193,500 | |||||||
Options exercisable weighted average exercise price | $ .23 | |||||||
Options exercisable weighted average remaining contractual life | 5 years 25 days | |||||||
Options exercisable aggregate intrinsic value | $ 2,455 |
3. Stock-Based Compensation (17
3. Stock-Based Compensation (Details 3) - $ / shares | 3 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | |
Number of Shares | |||
Nonvested Stock Awards Beginning Balance | 129,500 | 94,500 | 49,500 |
Granted | 0 | 235,000 | 50,000 |
Vested | (10,000) | (165,000) | (5,000) |
Expired before Vesting | 0 | (35,000) | 0 |
Nonvested Stock Awards Ending Balance | 119,500 | 129,500 | 94,500 |
Weighted Average Grant Date Fair Value | |||
Nonvested Stock Awards Beginning Balance | $ .06 | $ .05 | $ .07 |
Granted | 0 | .03 | .04 |
Vested | .07 | .08 | .08 |
Expired before Vesting | 0 | .15 | 0 |
Nonvested Stock Awards Ending Balance | $ .06 | $ .06 | $ .05 |
3. Stock-Based Compensation (18
3. Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based Compensation Details Narrative | ||||
Total compensation expense for stock options | $ 2,857 | $ 2,112 | $ 8,329 | $ 7,826 |
Options awarded to non-employees expense | 0 | 0 | 0 | 0 |
Unrecognized compensation cost associated with non-vested share-based compensation | $ 1,378 | $ 1,846 | $ 1,378 | $ 1,846 |
4. (Loss) Income Per Share (Det
4. (Loss) Income Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Loss Income Per Share Details | ||||
Basic net loss | $ (57,238) | $ (97,742) | $ (413,265) | $ (278,222) |
Basic shares | 11,201,760 | 11,201,760 | 11,201,760 | 11,201,760 |
Basic net loss per common share | $ (0.01) | $ (0.01) | $ (0.04) | $ (0.02) |
Effect of dilutive stock options | 0 | 0 | 0 | 0 |
Diluted Net Loss | $ (57,238) | $ (97,742) | $ (413,265) | $ (278,222) |
Diluted shares | 11,201,760 | 11,201,760 | 11,201,760 | 11,201,760 |
Diluted earnings per share | $ (0.01) | $ (0.01) | $ (0.04) | $ (0.02) |