Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
DocumentAndEntityInformationAbstract | ' | ' |
Entity Registrant Name | 'E DIGITAL CORP | ' |
Entity Central Index Key | '0000886328 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--03-31 | ' |
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 | ' | 293,328,330 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
Current | ' | ' |
Cash and cash equivalents | $1,951,359 | $1,787,863 |
Accounts receivable | 237,155 | 238,623 |
Inventory | 13,824 | 14,208 |
Deposits and prepaid expenses | 69,987 | 65,264 |
Total current assets | 2,272,325 | 2,105,958 |
Inventory, long-term | 38,883 | 39,711 |
Property, equipment and intangibles, net of accumulated depreciation and amortization of $136,568 and $135,276, respectively | 12,767 | 14,059 |
Total assets | 2,323,975 | 2,159,728 |
Current | ' | ' |
Accounts payable, trade | 250,666 | 65,705 |
Accrued and other liabilities | 166,887 | 230,569 |
Total current liabilities | 417,553 | 296,274 |
Stockholders' equity | ' | ' |
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock, $0.001 par value, authorized 350,000,000, 293,328,330 issued and outstanding each period | 293,328 | 293,328 |
Additional paid-in capital | 82,855,028 | 82,842,499 |
Accumulated deficit | -81,241,934 | -81,272,373 |
Total stockholders' equity | 1,906,422 | 1,863,454 |
Total liabilities and stockholders' equity | $2,323,975 | $2,159,728 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
ASSETS | ' | ' |
Accumulated depreciation | $136,568 | $135,276 |
Stockholders' equity | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 293,328,330 | 293,328,330 |
Common stock, shares outstanding | 293,328,330 | 293,328,330 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Revenues: | ' | ' |
Products and services | $50,248 | $57,458 |
Patent license | 632,500 | 392,000 |
Total Revenues | 682,748 | 449,458 |
Operating costs and expenses: | ' | ' |
Products and services | 53,791 | 108,010 |
Patent licensing and litigation costs | 112,500 | 112,500 |
Contingent legal fees and expenses | 206,664 | 15,128 |
Selling and administrative | 186,770 | 202,387 |
Research and development | 92,584 | 82,870 |
Total operating costs and expenses | 652,309 | 520,895 |
Operating income (loss) before provision for income taxes | 30,439 | -71,437 |
Income tax benefit (expense) | 0 | 0 |
Net Income (loss) for the period | $30,439 | ($71,437) |
Income (loss) per common share - basic and diluted | $0 | $0 |
Weighted average common shares outstanding | ' | ' |
Basic | 293,328,330 | 293,186,908 |
Diluted | 294,188,377 | 293,186,908 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
OPERATING ACTIVITIES | ' | ' |
Net income (loss) for period | $30,439 | ($71,437) |
Adjustments to reconcile income (loss) to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 1,292 | 1,239 |
Inventory market and reserve adjustment | 0 | 48,552 |
Warranty provision | 0 | 383 |
Stock-based compensation | 12,529 | 2,646 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | 1,468 | 122,218 |
Inventory | 1,212 | -907 |
Deposits and prepaid expenses | -4,723 | 1,766 |
Accounts payable, trade | 184,961 | 62,159 |
Accrued and other liabilities | -63,682 | -105,279 |
Cash provided by operating activities | 163,496 | 61,340 |
Net increase in cash and cash equivalents | 163,496 | 61,340 |
Cash and cash equivalents, beginning of period | 1,787,863 | 1,741,439 |
Cash and cash equivalents, end of period | $1,951,359 | $1,802,779 |
1_NATURE_OF_OPERATIONS_AND_BAS
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 3 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION | ' |
e.Digital Corporation is a holding company incorporated under the laws of Delaware that operates through a wholly-owned California subsidiary of the same name. The Company is developing and marketing an intellectual property portfolio including (a) licensing and enforcing its Flash-R™ portfolio of patents related to the use of flash memory in portable devices, and (b) developing new licenseable intellectual property related to context and interpersonal awareness systems (“Nunchi” technology), advanced data security technologies (“microSignet” technology) and other technologies. The Company also markets its eVU® mobile entertainment system and services for the travel industry. | |
Unaudited Interim Financial Statements | |
These unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These interim condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments considered necessary for a fair statement of the Company's financial position at June 30, 2014, and the results of its operations and cash flows for the periods presented, consisting only of normal and recurring adjustments. All significant intercompany transactions have been eliminated in consolidation. Operating results for the three months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2015. For further information, refer to the Company's consolidated financial statements and footnotes thereto for the year ended March 31, 2014 filed on Form 10-K. | |
Estimates | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
2_RECENT_ACCOUNTING_PRONOUNCEM
2. RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
2. RECENT ACCOUNTING PRONOUNCEMENTS | ' |
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The new standard applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The amendment is effective for annual reporting periods beginning after December 15, 2014 and interim periods within those annual periods. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements. | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The amendment is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. The Company is currently evaluating the new standard. |
3_INCOME_LOSS_PER_SHARE
3. INCOME (LOSS) PER SHARE | 3 Months Ended |
Jun. 30, 2014 | |
Earnings Per Share, Basic, Other Disclosures [Abstract] | ' |
3. INCOME (LOSS) PER SHARE | ' |
Basic income (loss) per common share is computed by dividing income (loss) for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income (loss) attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities included outstanding stock options. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. These securities were not included in the computation of diluted income (loss) per share for the periods because they are antidilutive or of no effect, but they could potentially dilute earnings per share in future periods. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. For the periods presented potential dilutive securities were not included in the computation of diluted income (loss) per share because they had no effect or were antidilutive, but they could potentially dilute earnings per share in future periods. There was no difference in basic and diluted income (loss) per share or basic and diluted weighted average shares outstanding for the periods presented. |
4_INVENTORIES
4. INVENTORIES | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
4. INVENTORIES | ' | ||||||||
Inventory is recorded at the lower of cost or net realizable value. The cost of substantially all the Company’s inventory is determined by the weighted average cost method. We also have finished goods that we have determined to be slow-moving and have classified this portion of inventory as a long-term asset. Inventories consisted of the following: | |||||||||
June 30, | March 31, | ||||||||
2014 | 2014 | ||||||||
$ | $ | ||||||||
Raw materials | 38,111 | 38,303 | |||||||
Work in process | 12,842 | 13,393 | |||||||
Finished goods | 31,030 | 31,858 | |||||||
81,983 | 83,554 | ||||||||
Reserve for obsolescence | (29,276 | ) | (29,635 | ) | |||||
52,707 | 53,919 | ||||||||
Less current portion | 13,824 | 14,208 | |||||||
Inventory, long term | 38,883 | 39,711 | |||||||
The foregoing is net of an aggregate lower-of-cost-or-market inventory adjustment of $70,858 at June 30, 2014 and $81,609 at March 31, 2014. |
5_STOCKBASED_COMPENSATION_COST
5. STOCK-BASED COMPENSATION COSTS | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ' | ||||||||
5. STOCK-BASED COMPENSATION COSTS | ' | ||||||||
The Company accounts for stock-based compensation under the provisions of ASC 718, Share-Based Payment and ASC 505-50, Equity-Based Payments to Non-Employees. ASC 718 requires measurement of all employee stock-based awards using a fair-value method and recording of related compensation expense in the consolidated financial statements over the requisite service period. Further, as required under ASC 718, the Company estimates forfeitures for stock-based awards that are not expected to vest. The Company recorded stock-based compensation in its consolidated statements of operations for the relevant periods as follows: | |||||||||
Three Months Ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
Research and development | 2,547 | 849 | |||||||
Selling and administrative | 9,982 | 1,797 | |||||||
Total stock-based compensation expense | 12,529 | 2,646 | |||||||
As of June 30, 2014 total estimated compensation cost of stock options granted but not yet vested was $61,800 and is expected to be recognized over the weighted average period of 1.2 years. | |||||||||
No stock options were granted during the three-month periods ended June 30, 2014 and 2013. | |||||||||
See Note 7 for further information on outstanding stock options. |
6_WARRANTY_RESERVE
6. WARRANTY RESERVE | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Product Warranties Disclosures [Abstract] | ' | ||||||||
6. WARRANTY RESERVE | ' | ||||||||
Details of the estimated warranty liability included in accrued and other liabilities are as follows: | |||||||||
Three Months Ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
Beginning balance | – | 657 | |||||||
Warranty provision | – | 383 | |||||||
Warranty deductions | – | (592 | ) | ||||||
Ending balance | – | 448 |
7_STOCKHOLDERS_EQUITY
7. STOCKHOLDERS' EQUITY | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Stockholders' equity | ' | ||||||||||||||||||||
7. STOCKHOLDERS' EQUITY | ' | ||||||||||||||||||||
The following table summarizes stockholders’ equity transactions during the three-month period ended June 30, 2014: | |||||||||||||||||||||
Common stock | Additional | Accumulated | Total stockholders' | ||||||||||||||||||
Shares | Amount | paid-in capital | deficit | equity | |||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||
Balance, April 1, 2014 | 293,328,330 | 293,328 | 82,842,499 | (81,272,373 | ) | 1,863,454 | |||||||||||||||
Stock-based compensation | – | – | 12,529 | 12,529 | |||||||||||||||||
Income for the period | – | – | – | 30,439 | 30,439 | ||||||||||||||||
Balance, June 30, 2014 | 293,328,330 | 293,328 | 82,855,028 | (81,241,934 | ) | 1,906,422 | |||||||||||||||
Options | |||||||||||||||||||||
The following table summarizes stock option activity for the period: | |||||||||||||||||||||
Weighted average | Aggregate | ||||||||||||||||||||
Shares | exercise price | intrinsic value | |||||||||||||||||||
# | $ | $ | |||||||||||||||||||
Outstanding April 1, 2014 | 6,613,578 | 0.0624 | |||||||||||||||||||
Granted | – | – | |||||||||||||||||||
Exercised | – | – | |||||||||||||||||||
Canceled/expired | (1,890,000 | ) | 0.09 | ||||||||||||||||||
Outstanding June 30, 2014 | 4,723,578 | 0.0514 | 29,713 | ||||||||||||||||||
Exercisable at June 30, 2014 | 2,878,578 | 0.0491 | 29,713 | ||||||||||||||||||
-1 | Options outstanding are exercisable at prices ranging from $0.022 to $0.11 and expire over the period from 2014 to 2018. | ||||||||||||||||||||
-2 | Aggregate intrinsic value is based on the closing price of our common stock on June 30, 2014 of $0.0411 and excludes the impact of options that were not in-the-money. | ||||||||||||||||||||
8_FAIR_VALUE_MEASUREMENTS
8. FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jun. 30, 2014 | |
Fair Value Disclosures [Abstract] | ' |
8. FAIR VALUE MEASUREMENTS | ' |
Cash and cash equivalents are measured at fair value in the Company’s consolidated financial statements. Accounts receivable are financial assets with carrying values that approximate fair value due to the short-term nature of these assets. Accounts payable, and accrued and other liabilities are financial liabilities with carrying values that approximate fair value due to the short-term nature of these liabilities. Effective April 1, 2008 the Company adopted and follows ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) which established a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instruments categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. | |
The Company’s cash and cash equivalents are valued using unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs under ASC 820). |
9_SEGMENT_INFORMATION
9. SEGMENT INFORMATION | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Segment Reporting, Measurement Disclosures [Abstract] | ' | ||||||||
9. SEGMENT INFORMATION | ' | ||||||||
ASC 280 Segment Reporting provides annual and interim reporting standards for an enterprise’s business segments and related disclosures about its products, services, geographical areas and major customers. The Company has two operating segments: (1) patent licensing and (2) products and services. Patent licensing consists of intellectual property revenues from the Flash-R patent portfolio and products and services consist of sales of the Company’s electronic eVU mobile entertainment device and related content services. | |||||||||
Accounting policies for each of the operating segments are the same as on a consolidated basis. | |||||||||
Reportable segment information for the three months ended June 30, 2014 and 2013 is as follows: | |||||||||
For the three months ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
SEGMENT REVENUES: | |||||||||
Products and services | 50,248 | 57,458 | |||||||
Patent license | 632,500 | 392,000 | |||||||
Total revenue | 682,748 | 449,458 | |||||||
SEGMENT COST OF REVENUES: | |||||||||
Products and services | 53,791 | 108,010 | |||||||
Patent licensing and litigation costs | 112,500 | 112,500 | |||||||
Contingent legal fees and expenses | 206,664 | 15,128 | |||||||
Total cost of revenues | 372,955 | 235,638 | |||||||
RECONCILIATION: | |||||||||
Segment income (loss) before corporate costs | 309,793 | 213,820 | |||||||
Other corporate operating costs | 279,354 | 285,257 | |||||||
Operating (loss) before provision for income taxes | 30,439 | (71,437 | ) | ||||||
The Company does not have significant assets employed in the patent license segment and does not track capital expenditures or assets by reportable segment. Consequently it is not practicable to show this information. | |||||||||
Revenue by geographic region is determined based on the location of the Company’s direct customers or distributors for product sales and services. Patent license revenue is considered United States revenue as payments are for licenses for United States operations irrespective of the location of the licensee’s home domicile. | |||||||||
For the three months ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
United States | 632,500 | 392,000 | |||||||
International | 50,248 | 57,458 | |||||||
Total revenue | 682,748 | 449,458 | |||||||
Revenues from five licensees comprised 20%, 18%, 15%, 15% and 11% of revenue for the three months ended June 30, 2014, with no other licensee or customer accounting for more than 10% of revenues. Revenues from five licensees comprised 22%, 18%, 18% 12% and 12% of revenue for the three months ended June 30, 2013, with no other customer accounting for more than 10% of revenues. Accounts receivable from two licensees comprised 53% and 32% of net accounts receivable at June 30, 2014. Accounts receivable from three customers comprised 50%, 32% and 10% of net accounts receivable at June 30, 2013. |
10_COMMITMENTS_AND_CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
10. COMMITMENTS AND CONTINGENCIES | ' |
Legal Matters | |
Intellectual Property Litigation | |
In fiscal 2013 and fiscal 2014 the Company commenced new rounds of enforcement action with respect to its patent portfolio and as of August 4, 2014, has active a total of 29 complaints in the U.S. District Court for the Southern District of California, asserting that products made and sold by the defendant companies infringe the Company’s U.S. patent portfolio. | |
Commitment Related to Intellectual Property Legal Services | |
In September 2012 the Company terminated the legal representation of Duane Morris LLP related to Flash-R™ patent enforcement activities. The Company remains obligated to pay contingency fees on certain future royalty payments from previous matters. | |
In September 2012 the Company engaged Handal and Associates (“Handal”) to provide IP legal services in connection with licensing and prosecuting claims of infringement of the Company’s flash memory patent portfolio (“Patent Enforcement Matters”). Pursuant to a partial contingent fee arrangement, the Company is paying a monthly retainer fee of $30,000 to Handal creditable against future contingency recoveries. Handal has agreed to advance related expenses excluding experts and prior art search firms. The Company has agreed to pay Handal a fee ranging from 33-40% of any license fee or settlement related to Patent Enforcement Matters, less prior retainers and expenses. The Company may terminate the representation at any time but would be obligated to pay fees and advances. | |
Facility Lease | |
In January 2012, the Company entered into a sixty-two month facility lease for its corporate office location, commencing May 1, 2012, for approximately 3,253 square feet at 16870 West Bernardo Drive, Suite 120, San Diego, California. The aggregate monthly payment is $6,343 excluding utilities and costs. The aggregate payments adjust annually with maximum payments totaling $7,157 in the forty-ninth through sixty-second months. Future lease commitments at June 30, 2014 total $245,602. The Company recognizes rent expense by the straight-line method over the lease term. As of June 30, 2014, deferred rent totaled $31,878. | |
Concentration of Credit Risk and Sources of Supply | |
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and trade receivables. The Company maintains cash and cash equivalent accounts with Federal Deposit Insurance Corporation (“FDIC”) insured financial institutions. Certain of the Company’s accounts are each insured up to $250,000 by the FDIC. The Company’s exposure for amounts in excess of FDIC insured limits at June 30, 2014 was approximately $1.74 million. The Company has not experienced any losses in such accounts. The Company does not believe that it is subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. The Company performs periodic evaluations of the relative credit standing of these financial institutions. The Company has not experienced any significant losses on its cash equivalents. | |
Concentrations of credit risk with respect to trade accounts receivable are limited due to the number and nature of customers comprising the Company’s customer base and their geographic dispersion. The Company has not incurred any significant credit related losses. | |
The Company relies on one third-party contract manufacturer to produce its eVU mobile entertainment product and generally relies on single suppliers for batteries, charging stations and other components. The Company also relies on one legal firm to represent it in patent licensing and enforcement matters. | |
Guarantees and Indemnifications | |
The Company enters into standard indemnification agreements in the ordinary course of business. Some of the Company’s product sales and services agreements include a limited indemnification provision for claims from third parties relating to the Company’s intellectual property. Such indemnification provisions are accounted for in accordance with ASC 450, Contingencies. The indemnification is generally limited to the amount paid by the customer. To date, there have been no claims under such indemnification provisions. | |
The Company provides a one-year limited warranty for most of its products. | |
Employee Benefit – 401K Plan | |
In September 2012, the Company adopted a defined contribution plan (401(k)) covering its employees. Matching contributions are made on behalf of all participants, according to the applicable safe harbor provision. The Company matches 100% (dollar for dollar) on deferrals of up to 4% of employee compensation deferred. As of June 30, 2014, the Company made matching contributions totaling $3,677. |
11_INCOME_TAXES
11. INCOME TAXES | 3 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
11. INCOME TAXES | ' |
There is no provision for income taxes for the three months ended June 30, 2014 and 2013 as the Company currently estimates its effective tax rate to be zero due to uncertainty of income in future interim quarters of the current year and due to net operating loss carryforwards. | |
At June 30, 2014 and 2013, the Company had deferred tax assets associated with federal net operating losses (“NOLs”), related state NOLs, foreign tax credits and certain Federal and California research and development tax credits, but recorded a corresponding full valuation allowance as it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |
The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. At June 30, 2014, the Company has no liabilities for uncertain tax positions. |
4_INVENTORIES_Tables
4. INVENTORIES (Tables) | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
June 30, | March 31, | ||||||||
2014 | 2014 | ||||||||
$ | $ | ||||||||
Raw materials | 38,111 | 38,303 | |||||||
Work in process | 12,842 | 13,393 | |||||||
Finished goods | 31,030 | 31,858 | |||||||
81,983 | 83,554 | ||||||||
Reserve for obsolescence | (29,276 | ) | (29,635 | ) | |||||
52,707 | 53,919 | ||||||||
Less current portion | 13,824 | 14,208 | |||||||
Inventory, long term | 38,883 | 39,711 |
5_STOCKBASED_COMPENSATION_COST1
5. STOCK-BASED COMPENSATION COSTS (Tables) | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ' | ||||||||
Stock-based compensation in its consolidated statements of operations for the relevant periods | ' | ||||||||
Three Months Ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
Research and development | 2,547 | 849 | |||||||
Selling and administrative | 9,982 | 1,797 | |||||||
Total stock-based compensation expense | 12,529 | 2,646 |
6_WARRANTY_RESERVE_Tables
6. WARRANTY RESERVE (Tables) | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Warranty Reserve Tables | ' | ||||||||
Estimated warranty liability included in accrued and other liabilities | ' | ||||||||
Three Months Ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
Beginning balance | – | 657 | |||||||
Warranty provision | – | 383 | |||||||
Warranty deductions | – | (592 | ) | ||||||
Ending balance | – | 448 |
7_STOCKHOLDERS_EQUITY_Tables
7. STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Stockholders' equity | ' | ||||||||||||||||||||
Summarizes stockholders' equity transactions | ' | ||||||||||||||||||||
Common stock | Additional | Accumulated | Total stockholders' | ||||||||||||||||||
Shares | Amount | paid-in capital | deficit | equity | |||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||
Balance, April 1, 2014 | 293,328,330 | 293,328 | 82,842,499 | (81,272,373 | ) | 1,863,454 | |||||||||||||||
Stock-based compensation | – | – | 12,529 | 12,529 | |||||||||||||||||
Income for the period | – | – | – | 30,439 | 30,439 | ||||||||||||||||
Balance, June 30, 2014 | 293,328,330 | 293,328 | 82,855,028 | (81,241,934 | ) | 1,906,422 | |||||||||||||||
Summarizes stock option activity | ' | ||||||||||||||||||||
Weighted average | Aggregate | ||||||||||||||||||||
Shares | exercise price | intrinsic value | |||||||||||||||||||
# | $ | $ | |||||||||||||||||||
Outstanding April 1, 2014 | 6,613,578 | 0.0624 | |||||||||||||||||||
Granted | – | – | |||||||||||||||||||
Exercised | – | – | |||||||||||||||||||
Canceled/expired | (1,890,000 | ) | 0.09 | ||||||||||||||||||
Outstanding June 30, 2014 | 4,723,578 | 0.0514 | 29,713 | ||||||||||||||||||
Exercisable at June 30, 2014 | 2,878,578 | 0.0491 | 29,713 |
9_SEGMENT_INFORMATION_Tables
9. SEGMENT INFORMATION (Tables) | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Segment Reporting, Measurement Disclosures [Abstract] | ' | ||||||||
Reportable segment information | ' | ||||||||
For the three months ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
SEGMENT REVENUES: | |||||||||
Products and services | 50,248 | 57,458 | |||||||
Patent license | 632,500 | 392,000 | |||||||
Total revenue | 682,748 | 449,458 | |||||||
SEGMENT COST OF REVENUES: | |||||||||
Products and services | 53,791 | 108,010 | |||||||
Patent licensing and litigation costs | 112,500 | 112,500 | |||||||
Contingent legal fees and expenses | 206,664 | 15,128 | |||||||
Total cost of revenues | 372,955 | 235,638 | |||||||
RECONCILIATION: | |||||||||
Segment income (loss) before corporate costs | 309,793 | 213,820 | |||||||
Other corporate operating costs | 279,354 | 285,257 | |||||||
Operating (loss) before provision for income taxes | 30,439 | (71,437 | ) | ||||||
Revenue by geographic region | ' | ||||||||
For the three months ended | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
$ | $ | ||||||||
United States | 632,500 | 392,000 | |||||||
International | 50,248 | 57,458 | |||||||
Total revenue | 682,748 | 449,458 |
4_INVENTORIES_Details
4. INVENTORIES (Details) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $38,111 | $38,303 |
Work in process | 12,842 | 13,393 |
Finished goods | 31,030 | 31,858 |
Total Current Inventory | 81,983 | 83,554 |
Reserve for obsolescence | -29,276 | -29,635 |
Inventory, Total | 52,707 | 53,919 |
Less current portion | 13,824 | 14,208 |
Inventory, long term | $38,883 | $39,711 |
4_INVENTORIES_Details_Narrativ
4. INVENTORIES (Details Narratives) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
Inventory Disclosure [Abstract] | ' | ' |
Aggregate lower of cost-or-market adjustment | $70,858 | $81,609 |
5_STOCKBASED_COMPENSATION_COST2
5. STOCK-BASED COMPENSATION COSTS (Details) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Total stock-based compensation expense | $12,529 | $2,646 |
Research and Development Expense [Member] | ' | ' |
Total stock-based compensation expense | 2,547 | 849 |
Selling, General and Administrative Expenses [Member] | ' | ' |
Total stock-based compensation expense | $9,982 | $1,797 |
5_STOCKBASED_COMPENSATION_COST3
5. STOCK-BASED COMPENSATION COSTS (Details Narrative) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ' | ' |
Compensation cost of options granted but not yet vested | $61,800 | ' |
Nonvested weighted average period | '1 year 2 months 12 days | ' |
Stock options granted during period | 0 | 0 |
6_WARRANTY_RESERVE_Details
6. WARRANTY RESERVE (Details) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Product Warranties Disclosures [Abstract] | ' | ' |
Beginning balance | $0 | $657 |
Warranty provision | 0 | 383 |
Warranty deductions | 0 | -592 |
Ending balance | $0 | $448 |
7_STOCKHOLDERS_EQUITY_Details
7. STOCKHOLDERS' EQUITY (Details) (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, amount at Mar. 31, 2014 | $293,328 | $82,842,499 | ($81,272,373) | $1,863,454 |
Beginning balance, shares at Mar. 31, 2014 | 293,328,330 | ' | ' | ' |
Stock-based compensation | ' | 12,529 | ' | 12,529 |
Income for the period | ' | ' | 30,439 | 30,439 |
Ending balance, amount at Jun. 30, 2014 | $293,328 | $82,855,028 | ($81,241,934) | $1,906,422 |
Ending balance, shares at Jun. 30, 2014 | 293,328,330 | ' | ' | ' |
7_STOCKHOLDERS_EQUITY_DetailsS
7. STOCKHOLDERS' EQUITY (Details-Stock Option Activity) (USD $) | 3 Months Ended |
Jun. 30, 2014 | |
Shares | ' |
Options Outstanding, beginning balance | 6,613,578 |
Granted | 0 |
Exercised | 0 |
Canceled/expired | -1,890,000 |
Outstanding, ending balance | 4,723,578 |
Exercisable | 2,878,578 |
Weighted average exercise price | ' |
Options Outstanding, beginning balance | $0.06 |
Granted | ' |
Exercised | ' |
Canceled/expired | $0.09 |
Outstanding, ending balance | $0.05 |
Exercisable | $0.05 |
Aggregate Intrinsic Value | ' |
Outstanding, ending balance | $29,713 |
Exercisable | $29,713 |
7_STOCKHOLDERS_EQUITY_Details_
7. STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 3 Months Ended |
Jun. 30, 2014 | |
Stockholders' equity | ' |
Options outstanding exercisable at prices range Minimum | $0.02 |
Options outstanding exercisable at prices range Maximum | $0.11 |
Aggregate intrinsic value | $0.04 |
9_SEGMENT_INFORMATION_Details_
9. SEGMENT INFORMATION (Details - Segment info) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Total revenue | $682,748 | $449,458 |
Total cost of revenues | 372,955 | 235,638 |
Segment income (loss) before corporate costs | 309,793 | 213,820 |
Other corporate operating costs | 279,354 | 285,257 |
Operating income (loss) before provision for income taxes | 30,439 | -71,437 |
Products And Services [Member] | ' | ' |
Total revenue | 50,248 | 57,458 |
Total cost of revenues | 53,791 | 108,010 |
Patent Licensing | ' | ' |
Total revenue | 632,500 | 392,000 |
Patent licensing and litigation costs | ' | ' |
Total cost of revenues | 112,500 | 112,500 |
Contingent Legal Fees [Member] | ' | ' |
Total cost of revenues | $206,664 | $15,128 |
9_SEGMENT_INFORMATION_Details_1
9. SEGMENT INFORMATION (Details - Revenue by Geographic Region) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Total revenue | $682,748 | $449,458 |
United States | ' | ' |
Total revenue | 632,500 | 392,000 |
International | ' | ' |
Total revenue | $50,248 | $57,458 |
9_SEGMENT_INFORMATION_Details_2
9. SEGMENT INFORMATION (Details Narrative) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Revenue | Customer1 | ' | ' |
Concentration percentage | 20.00% | 22.00% |
Revenue | Customer2 | ' | ' |
Concentration percentage | 18.00% | 18.00% |
Revenue | Customer3 | ' | ' |
Concentration percentage | 15.00% | 18.00% |
Revenue | Customer4 | ' | ' |
Concentration percentage | 15.00% | 12.00% |
Revenue | Customer5 | ' | ' |
Concentration percentage | 11.00% | 12.00% |
Accounts Receivable | Customer1 | ' | ' |
Concentration percentage | 53.00% | 50.00% |
Accounts Receivable | Customer2 | ' | ' |
Concentration percentage | 32.00% | 32.00% |
Accounts Receivable | Customer3 | ' | ' |
Concentration percentage | ' | 10.00% |
10_COMMITMENTS_AND_CONTINGENCI1
10. COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 3 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Monthly retainer fee | $30,000 |
Future lease commitments | 245,602 |
Deferred rent | 31,878 |
Cash in excess of FDIC insured limits | 1,740,000 |
Company matching contributions to 401K Plan | $3,677 |
11_INCOME_TAXES_Details_Narrat
11. INCOME TAXES (Details Narrative) (USD $) | 3 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Provision for income taxes | $0 |
Effective tax rate | 0.00% |
Liabilities for uncertain tax positions | $0 |