Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 24, 2014 | Jun. 30, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'CICERO INC | ' | ' |
Entity Central Index Key | '0000945384 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
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 Public Float | ' | ' | $4,384,699 |
Entity Common Stock, Shares Outstanding | ' | 85,806,247 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $5 | $69 |
Trade accounts receivable, net | 1,125 | 1,247 |
Prepaid expenses and other current assets | 208 | 289 |
Total current assets | 1,338 | 1,605 |
Property and equipment, net | 29 | 47 |
Intangible asset, net (Note 4) | ' | 28 |
Goodwill (Note 4) | 2,832 | 2,832 |
Total assets | 4,199 | 4,512 |
LIABILITIES AND STOCKHOLDERS DEFICIT | ' | ' |
Short-term debt (Note 5) | 456 | 826 |
Accounts payable | 3,178 | 2,887 |
Accrued expenses: | ' | ' |
Salaries, wages, and related items | 1,235 | 1,119 |
Other | 417 | 271 |
Deferred revenue | 1,382 | 1,389 |
Total current liabilities | 6,668 | 6,492 |
Long-term debt (Note 6) | 6,134 | 3,509 |
Total liabilities | 12,802 | 10,001 |
Stockholders deficit: | ' | ' |
Convertible preferred stock, $0.001 par value, 10,000,000 shares authorized Series A-1 – 1,541.6 shares issued and outstanding at December 31, 2013 and 2012, $500 per share liquidation preference (aggregate liquidation value of $771) | ' | ' |
Series B – 10,400 shares issued and outstanding at December 31, 2013 and 2012, $500 per share liquidation preference (aggregate liquidation value of $5,200) | ' | ' |
Common stock, $0.001 par value, 215,000,000 shares authorized at December 31, 2013 and 2012; 85,806,247 issued and outstanding at December 31, 2013 and 73,094,286 issued and outstanding at December 31, 2012 (Note 10) | 86 | 73 |
Common stock - subscribed | ' | 10 |
Additional paid-in capital | 237,135 | 236,919 |
Accumulated deficit | -245,824 | -242,491 |
Total stockholders deficit | -8,603 | -5,489 |
Total liabilities and stockholders deficit | $4,199 | $4,512 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders deficit: | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares series A issued | 1,541.60 | 1,541.60 |
Preferred stock shares series A outstanding | 1,541.60 | 1,541.60 |
Preferred stock shares series B issued | 10,400 | 10,400 |
Preferred stock shares series B outstanding | 10,400 | 10,400 |
Common stock, par value | $0.00 | $0.00 |
Common stock shares authorized | 215,000,000 | 215,000,000 |
Common stock shares issued | 85,806,247 | 73,094,286 |
Common stock shares outstanding | 85,806,247 | 73,094,286 |
Common stock subscribed | ' | 10,200,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | ' | ' |
Software | $124 | $4,061 |
Maintenance | 1,440 | 1,333 |
Service | 628 | 603 |
Total operating revenue | 2,192 | 5,997 |
Cost of revenue | ' | ' |
Software | 28 | 701 |
Maintenance | 110 | 145 |
Services | 964 | 979 |
Total cost of revenue | 1,102 | 1,825 |
Gross margin | 1,090 | 4,172 |
Operating expenses: | ' | ' |
Sales and marketing | 1,423 | 1,897 |
Research and product development | 1,272 | 1,476 |
General and administrative | 1,055 | 949 |
Total operating expenses | 3,750 | 4,322 |
Loss from operations before other income (charges) | -2,660 | -150 |
Other income (charges): | ' | ' |
Interest expense | -545 | -547 |
Other (Note 1) | -1 | 509 |
Total other income/(expense) | -546 | -38 |
Net loss | -3,206 | -188 |
8% preferred stock Series B dividend | 127 | 127 |
Net loss applicable to common stockholders | ($3,333) | ($315) |
Loss per share – basic and diluted | ($0.04) | $0 |
Average shares outstanding – basic and diluted | 85,198 | 67,038 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders Deficit (USD $) | Common Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
In Thousands, except Share data | |||||
Beginning Balance, Amount at Dec. 31, 2011 | $47 | ' | $232,506 | ($242,176) | ($9,623) |
Beginning Balance, Shares at Dec. 31, 2011 | 47,444,524 | 11,941 | ' | ' | ' |
Dividend for preferred B stock | ' | ' | ' | -127 | -127 |
Beneficial conversion of preferred A stock | 1,000 | ' | ' | ' | ' |
Issuance of stock for payment of debt and interest, Shares | 23,884,429 | ' | ' | ' | ' |
Issuance of stock for payment of debt and interest, Amount | 24 | ' | 3,560 | ' | 3,584 |
Issuance of stock for payment of accrued dividends, Shares | 1,765,333 | ' | ' | ' | ' |
Issuance of stock for payment of accrued dividends, Amount | 2 | ' | 263 | ' | 265 |
Common Stock – Subscription, Shares | 10,200,000 | ' | ' | ' | ' |
Common Stock – Subscription, Amount | 10 | ' | 500 | ' | 510 |
Options issued as compensation | ' | ' | 48 | ' | 48 |
Restricted shares issued as compensation | ' | ' | 42 | ' | 42 |
Net income | ' | ' | ' | -188 | -188 |
Ending Balance, Amount at Dec. 31, 2012 | 83 | ' | 236,919 | -242,491 | -5,489 |
Ending Balance, Shares at Dec. 31, 2012 | 83,294,286 | 11,941 | ' | ' | ' |
Dividend for preferred B stock | ' | ' | ' | -127 | -127 |
Issuance of common stock, Shares | 1,640,241 | ' | ' | ' | ' |
Issuance of common stock, Amount | 2 | ' | 80 | ' | 82 |
Issuance of stock for payment of debt and interest, Shares | 198,000 | ' | ' | ' | ' |
Issuance of stock for payment of debt and interest, Amount | ' | ' | 10 | ' | 10 |
Issuance of stock for payment of consulting services, Shares | 673,720 | ' | ' | ' | ' |
Issuance of stock for payment of consulting services, Amount | 1 | ' | 34 | ' | 35 |
Options issued as compensation | ' | ' | 8 | ' | 8 |
Restricted shares issued as compensation | ' | ' | 84 | ' | 84 |
Net income | ' | ' | ' | -3,206 | -3,206 |
Ending Balance, Amount at Dec. 31, 2013 | $86 | ' | $237,135 | ($245,824) | ($8,603) |
Ending Balance, Shares at Dec. 31, 2013 | 85,806,247 | 11,941 | ' | ' | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($3,206) | ($188) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 55 | 725 |
Stock compensation expense | 92 | 90 |
Stock issuance for external consulting fees | 35 | ' |
Bad debt expense | ' | 18 |
Gain on forgiveness of debt | ' | -598 |
Gain on write down of accrued liability | ' | -390 |
Changes in assets and liabilities: | ' | ' |
Trade accounts receivable | 122 | -404 |
Prepaid expenses and other assets | 81 | 123 |
Accounts payable and accrued expenses | 453 | 354 |
Deferred revenue | -7 | -222 |
Net cash used in operating activities | -2,375 | -492 |
Cash flows from investing activities: | ' | ' |
Purchases of equipment | -9 | -39 |
Net cash used in investing activities | -9 | -39 |
Cash flows from financing activities: | ' | ' |
Issuance of common stock | 65 | ' |
Common stock subscription | ' | 187 |
Borrowings under short and long-term debt | 2,671 | 1,998 |
Repayments of short and long-term debt | -416 | -1,769 |
Net cash provided by financing activities | 2,320 | 416 |
Net decrease in cash | -64 | -115 |
Cash at beginning of year | 69 | 184 |
Cash at end of year | 5 | 69 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ' | ' |
Income taxes | 12 | 15 |
Interest | $19 | $263 |
1_SUMMARY_OF_OPERATIONS_SIGNIF
1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS | ' | ||||||||
Cicero Inc., (''Cicero'' or the ''Company''), is a provider of business integration software which enables organizations to integrate new and existing information and processes at the desktop. Business integration software addresses the emerging need for a company's information systems to deliver enterprise-wide views of the company's business information processes. Cicero Inc. was incorporated in New York in 1988 as Level 8 Systems, Inc. and re-incorporated in Delaware in 1999. | |||||||||
Going Concern and Management Plans: | |||||||||
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred an operating loss of approximately $3,206,000 for the year ended December 31, 2013, and has a history of operating losses. Management believes that its repositioned strategy of leading with its Discovery product to measure how work happens and then follow with its integration capabilities through its XM product will shorten the sales cycle and allow for value based selling to our customers and prospects. The Company anticipates a continued success in this regard based upon current discussions with active customers and prospects. The Company has borrowed $1,998,000 and $2,671,000 and also retired approximately $1,796,000 and $416,000 of debt in 2012 and 2013, respectively. Additionally, the Company converted $3,800,000 of debt into common stock and has received notification of additional forgiveness of liabilities of $404,000 during 2012. Should the Company be unable to secure customer contracts that will drive sufficient cash flow to sustain operations, the Company will be forced to seek additional capital in the form of debt or equity financing; however, there can be no assurance that such debt or equity financing will be available. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. | |||||||||
Principles of Consolidation: | |||||||||
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All of the Company's subsidiaries are wholly-owned for the periods presented. | |||||||||
All significant inter-company accounts and transactions are eliminated in consolidation. | |||||||||
Use of Estimates: | |||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. Significant estimates include the recoverability of long-lived assets, valuation and recoverability of goodwill, stock based compensation, deferred taxes and related valuation allowances and valuation of equity instruments. | |||||||||
Financial Instruments: | |||||||||
The carrying amount of the Company’s financial instruments, representing accounts receivable, accounts payable and short-term debt approximate their fair value due to their short term nature. | |||||||||
The fair value and carrying amount of long-term debt were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Fair Value | $ | 6,110,141 | $ | 3,420,397 | |||||
Carrying Value | $ | 6,134,000 | $ | 3,509,000 | |||||
Valuations for long-term debt are determined based on borrowing rates currently available to the Company for loans with similar terms and maturities. These loans have been determined to be Level 3 within the fair value hierarchy and use a discounted cash flow model to determine its valuation. There have been no changes to the valuation technique. | |||||||||
Cash: | |||||||||
The Company places substantially all cash with various financial institutions. The Federal Deposit Insurance Corporation (FDIC) covers $250,000 for substantially all depository accounts. The Company from time to time may have amounts on deposit in excess of the insured limits. As of December 31, 2013, the Company did not exceed these insured amounts. | |||||||||
Trade Accounts Receivable: | |||||||||
Trade accounts receivable are stated in the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to the allowance of doubtful accounts based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance of doubtful accounts and a credit to trade accounts receivable. Changes in the allowance for doubtful accounts have not been material to the financial statements. | |||||||||
Property and Equipment: | |||||||||
Property and equipment purchased in the normal course of business is stated at cost, and property and equipment acquired in business combinations is stated at its fair market value at the acquisition date. All property and equipment is depreciated using the straight-line method over estimated useful lives. | |||||||||
Expenditures for repairs and maintenance are charged to expense as incurred. | |||||||||
The cost and related accumulated depreciation of property and equipment are removed from the accounts upon retirement or other disposition and any resulting gain or loss is reflected in the Consolidated Statements of Operations. | |||||||||
Software Development Costs: | |||||||||
The Company capitalizes certain software costs after technological feasibility of the product has been established. Generally, an original estimated economic life of three years is assigned to capitalized software costs, once the product is available for general release to customers. Costs incurred prior to the establishment of technological feasibility are charged to research and product development expense. | |||||||||
Capitalized software costs are amortized over related sales on a product-by-product basis using the straight-line method over the remaining estimated economic life of the product. | |||||||||
The establishment of technological feasibility and the ongoing assessment of recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological feasibility, anticipated future gross revenue, estimated economic life and changes in software and hardware technologies. | |||||||||
Long-Lived Assets: | |||||||||
The Company reviews the recoverability of long-lived intangible assets when circumstances indicate that the carrying amount of assets may not be recoverable. This evaluation is based on various analyses including undiscounted cash flow projections. In the event undiscounted cash flow projections indicate impairment, the Company would record an impairment based on the fair value of the assets at the date of the impairment. The Company accounts for impairments under the Financial Accounting Standards Board ("FASB") guidance now codified as Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. | |||||||||
Accrued Other: | |||||||||
Accrued other is primarily comprised of accrued dividends of $233,000 and $106,000 at December 31, 2013 and 2012, respectively, and the remaining balance is comprised of accrued auditing, royalty, consulting and other. | |||||||||
Revenue Recognition: | |||||||||
We derive revenue from three sources: license fees, recurring revenue and professional services. Recurring revenue includes software maintenance and support. Maintenance and support consists of technical support. Professional services primarily consists of consulting, implementation services and training. Significant management judgments and estimates are made and used to determine the revenue recognized in any accounting period. Material differences may result in changes to the amount and timing of our revenue for any period if different conditions were to prevail. We present revenue, net of taxes collected from customers and remitted to governmental authorities. | |||||||||
We apply the provisions of ASC 985-605, Software Revenue Recognition, to all transactions involving the licensing of software products. In the event of a multiple element arrangement for a license transaction, we evaluate the transaction as if each element represents a separate unit of accounting taking into account all factors following the accounting standards. When such estimates are not available, the completed contract method is utilized. Under the completed contract method, revenue is recognized only when a contract is completed or substantially complete. | |||||||||
When licenses are sold together with system implementation and consulting services, license fees are recognized upon delivery, provided that (i) payment of the license fees is not dependent upon the performance of the consulting and implementation services, (ii) the services are available from other vendors, (iii) the services qualify for separate accounting as we have sufficient experience in providing such services, have the ability to estimate cost of providing such services, and have vendor-specific objective evidence of fair value, and (iv) the services are not essential to the functionality of the software. | |||||||||
We use signed software license and services agreements and order forms as evidence of an arrangement for sales of software, maintenance and support. We use signed engagement letters to evidence an arrangement for professional services. | |||||||||
License Revenue | |||||||||
We recognize license revenue when persuasive evidence of an arrangement exists, the product has been delivered, no significant obligations remain, the fee is fixed or determinable, and collection of the resulting receivable is probable. In software arrangements that include rights to multiple software products and/or services, we use the residual method under which revenue is allocated to the undelivered elements based on vendor-specific objective evidence of the fair value of such undelivered elements. The residual amount of revenue is allocated to the delivered elements and recognized as revenue, assuming all other criteria for revenue recognition have been met. Such undelivered elements in these arrangements typically consist of software maintenance and support, implementation and consulting services. | |||||||||
Software is delivered to customers electronically. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction. We have standard payment terms included in our contracts. We assess collectability based on a number of factors, including the customer’s past payment history and its current creditworthiness. If we determine that collection of a fee is not reasonably assured, we defer the revenue and recognize it at the time collection becomes reasonably assured, which is generally upon receipt of cash payment. If an acceptance period is required, revenue is recognized upon the earlier of customer acceptance or the expiration of the acceptance period. | |||||||||
We consider a software element to exist when we determine that the customer has the contractual right to take possession of our software. Professional services are recognized as described below under “Professional Services Revenue.” If vendor-specific evidence of fair value cannot be established for the undelivered elements of an agreement, the entire amount of revenue from the arrangement is recognized ratably over the period that these elements are delivered. | |||||||||
Maintenance Revenue | |||||||||
Included in recurring revenue is revenue derived from maintenance and support services. We use vendor-specific objective evidence of fair value for maintenance and support to account for the arrangement using the residual method, regardless of any separate prices stated within the contract for each element. Maintenance and support revenue is recognized ratably over the term of the maintenance contract, which is typically one year. Maintenance and support is renewable by the customer on an annual basis. Maintenance and support rates, including subsequent renewal rates, are typically established based upon a specified percentage of net license fees as set forth in the arrangement. | |||||||||
Professional Services Revenue | |||||||||
Included in professional services revenue is revenue derived from system implementation, consulting and training. For software transactions, the majority of our consulting and implementation services and accompanying agreements qualify for separate accounting. We use vendor-specific objective evidence of fair value for the services to account for the arrangement using the residual method, regardless of any separate prices stated within the contract for each element. Our consulting and implementation service contracts are bid on a fixed-fee basis. For fixed fee contracts, where the services are not essential to the functionality, we recognize revenue as services are performed. If the services are essential to functionality, then both the product license revenue and the service revenue are deferred until the services are performed. | |||||||||
Training revenue that meets the criteria to be accounted for separately is recognized when training is provided. | |||||||||
Cost of Revenue: | |||||||||
The primary component of the Company's cost of revenue for its software products is the amortization of software for the assets acquired from SOAdesk in January 2010. (See Note 4) | |||||||||
The primary component of the Company's cost of revenue for maintenance and services is compensation expense. | |||||||||
Advertising Expenses: | |||||||||
The Company expenses advertising costs as incurred. Advertising expenses were approximately $388,000 and $506,000, for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Research and Product Development: | |||||||||
Research and product development costs are expensed as incurred. Research and development expenses were approximately $1,272,000 and $1,476,000, for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Other Income/(Charges): | |||||||||
Other income (net) in fiscal 2012 consists primarily of a write off of certain debt forgiveness of $414,000. | |||||||||
Income Taxes: | |||||||||
The Company uses FASB guidance now codified as ASC 740 “Income Taxes” to account for income taxes. This statement requires an asset and liability approach that recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, all expected future events, other than enactments of changes in the tax law or rates, are generally considered. A valuation allowance is recorded when it is ''more likely than not'' that recorded deferred tax assets will not be realized. (See Note 8.) | |||||||||
Loss Per Share: | |||||||||
Basic loss per share is computed based upon the weighted average number of common shares outstanding. Diluted loss per share is computed based upon the weighted average number of common shares outstanding and any potentially dilutive securities. During 2013 and 2012, potentially dilutive securities included stock options, warrants to purchase common stock, and preferred stock. | |||||||||
The following table sets forth the potential shares that are not included in the diluted net loss per share calculation because to do so would be anti-dilutive for the periods presented: | |||||||||
2013 | 2012 | ||||||||
Stock options | 3,396,210 | 3,921,493 | |||||||
Warrants | 6,281,333 | 5,928,285 | |||||||
Preferred stock | 11,941,618 | 11,941,618 | |||||||
21,619,161 | 21,791,396 | ||||||||
$127,000 was accrued for dividends on the Series B Preferred Stock in fiscal 2013 and 2012, respectively. During March 2012, the Company converted $265,000 of accrued dividends into 1,765,333 common shares of the Company. | |||||||||
Stock-Based Compensation: | |||||||||
The Company adopted ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The Company granted 25,000 options in fiscal 2013 at an exercise price of $0.05 per share and recognized approximately $8,000 of stock-based compensation. The Company granted 70,000 options in fiscal 2012 at exercise prices between $0.05 and $0.19 per share and recognized approximately $48,000 of stock-based compensation. The Company recognized as stock-based compensation approximately $36,000 in fiscal 2013 and 2012 for the restricted shares issued in 2007 to John Broderick, the Chief Executive Officer. Additionally, the Company recognized as stock based compensation approximately $48,000 and $6,000 in fiscal 2013 and 2012 for the 1,500,000 restricted shares issued in 2012 to John Broderick. | |||||||||
The fair value of the Company's stock-based awards to employees was estimated as of the date of the grant using the Black-Scholes option-pricing model, using the following weighted-average assumptions: | |||||||||
2013 | 2012 | ||||||||
Fair value of common stock | $ | 0.05 | $ | 0.14 | |||||
Expected life (in years) | 9.99 years | 9.85 years | |||||||
Expected volatility | 169 | % | 186 | % | |||||
Risk free interest rate | 0.4 | % | 0.19 | % | |||||
Expected dividend yield | 0 | % | 0 | % | |||||
Recent Accounting Pronouncements: | |||||||||
None applicable. |
2_ACCOUNTS_RECEIVABLE
2. ACCOUNTS RECEIVABLE | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Receivables [Abstract] | ' | ||||||||
ACCOUNTS RECEIVABLE | ' | ||||||||
Trade accounts receivable was composed of the following at December 31 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Current trade accounts receivable | $ | 1,125 | $ | 1,247 |
3_PROPERTY_AND_EQUIPMENT
3. PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
Property and equipment was composed of the following at December 31 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Computer equipment | $ | 143 | $ | 134 | |||||
Furniture and fixtures | 24 | 24 | |||||||
Office equipment | 35 | 35 | |||||||
202 | 193 | ||||||||
Less: accumulated depreciation and amortization | (173 | ) | (146 | ) | |||||
$ | 29 | $ | 47 | ||||||
Depreciation and amortization expense of property and equipment was $27,000 and $24,000 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
4_INTANGIBLE_ASSET_NET_AND_GOO
4. INTANGIBLE ASSET, NET AND GOODWILL | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
INTANGIBLE ASSET, NET AND GOODWILL | ' |
The Company accounts for goodwill in accordance ASC Topic 350 “Intangibles – Goodwill and Other” which requires that goodwill and intangible assets with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. | |
Goodwill includes the excess of the purchase price over the fair value of net assets acquired of $2,832,000 in connection with the SOAdesk LLC acquisition in 2010. ASC Topic 350 requires that goodwill be tested for impairment at the reporting unit level. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. | |
Pursuant to recent authoritative accounting guidance, the Company may elect to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Company is not required to calculate the fair value of a reporting unit unless the Company determines that it is more likely than not that its fair value is less than its carrying amount. If the Company determines that it is more likely than not that its fair value is less than its carrying amount, then the two-step goodwill impairment test is performed. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying value exceeds its fair value, the second step would need to be conducted; otherwise, no further steps are necessary as no potential impairment exists. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of that goodwill. Any excess of the goodwill carrying value over the respective implied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. Through December 31, 2013, no impairment of goodwill has been identified. | |
The Company’s intangible asset with a finite life in the amount of $2,103,000 is being amortized over its estimated useful life of 3 years for software acquired from SOAdesk LLC. Amortization expense is $28,000 and $701,000 for fiscal 2013 and 2012, respectively. At December 31, 2013, the intangible asset has been fully amortized. | |
Based upon our annual evaluation testing, we have determined that the implied fair value of goodwill exceeds the carrying value of the goodwill as of December 31, 2013. |
5_SHORT_TERM_DEBT
5. SHORT TERM DEBT | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Debt Disclosure [Abstract] | ' | |||
SHORT TERM DEBT | ' | |||
Term loan, notes payable, and notes payable to related party consist of the following at December 31 (in thousands): | ||||
2013 | 2012 | |||
Note payable related parties (a) | $ 21 | $ 3 | ||
Notes payable (b) | 435 | 823 | ||
$ 456 | $ 826 | |||
(a) During 2012 and 2013, the Company entered into various short term notes payable with John Broderick, the Chief Executive Officer and Chief Financial Officer, for various working capital needs. The notes bear interest at 12% and were unsecured. At December 31, 2012, the Company was indebted to Mr. Broderick in the approximate amount of $3,000. No interest was paid in fiscal 2012. At December 31, 2013, the Company was indebted to Mr. Broderick in the approximate amount of $6,000. No interest was paid in fiscal 2013. | ||||
During 2013, the Company entered into a short term note payable with Antony Castagno, the Chief Technology Officer, for various working capital needs. The note was non-interest bearing and unsecured. At December 31, 2013, the Company was indebted to Mr. Castagno in the approximate amount of $15,000. No interest was paid in fiscal 2013. | ||||
(b) | The Company has issued a series of short term promissory notes with private lenders, which provide for short term borrowings, both secured by accounts receivable and unsecured. The notes in the aggregate amount of $435,000 and $407,000, respectively, as of December 31, 2013, and 2012 bear interest between 10% and 36% per annum. In March 2012, the Company converted $235,000 of these previously held notes into 1,566,667 shares of Company’s common stock. | |||
In July 2012, the Company entered into a restructuring settlement with a private lender whereby the lender agreed to accept $495,000 in full satisfaction of all principal and interest due under the Note agreements, as of June 1, 2012, plus interest in the amount of approximately $21,000 for the period from June 1, 2012 to July 31, 2012. In addition, the Company agreed to pay interest for the period after July 31, 2012 in the aggregate amount of approximately $67,000. This interest was paid in seven monthly installments of approximately $9,750 each from August 2012 through February 2013. The final payment of the remaining principal of approximately $416,000 was paid in February 2013. | ||||
6_LONGTERM_DEBT
6. LONG-TERM DEBT | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Debt Disclosure [Abstract] | ' | |||
LONG-TERM DEBT | ' | |||
Long-term loan and notes payable consist of the following at December 31 (in thousands): | ||||
2013 | 2012 | |||
Note payable asset purchase agreement (a) | $ 700 | $ 700 | ||
Note payable – related party (b) | 4,398 | 1,773 | ||
Other long-term debt (c) | 1,036 | 1,036 | ||
$ 6,134 | $ 3,509 | |||
(a) | In January 2010, per the Asset Purchase Agreement, the Company entered into an unsecured convertible promissory note with SOAdesk for $700,000 with an annual interest rate of 5%. The note was originally scheduled to mature on March 31, 2010 but was subsequently amended through a series of amendments, the maturity date was extended to June 30, 2015. At December 31, 2013, the Company was indebted to SOAdesk in the amount of $700,000 in principal and $139,000 in interest. | |||
The note is convertible into shares of Series B Convertible Preferred Stock at the rate of one share per every $150 of principal and interest due under the note. The Company is obligated to repay any principal of the loan with fifty percent of any gross proceeds of any Series B Preferred capital raised through maturity of the note. The note is convertible at the holder’s option at any time or at maturity. | ||||
(b) | From time to time during 2012 through 2013, the Company entered into several short term notes payable with John L. (Launny) Steffens, the Chairman of the Board of Directors, for various working capital needs. The notes bear interest at 12% per year and are unsecured. In December 2012, Mr. Steffens converted $300,000 of his debt into a subscription of 6,000,000 shares of the Company’s common stock at a price of $0.05 per share as part of a private investment in the Company’s stock. At December 31, 2012, the Company was indebted to Mr. Steffens in the approximate amount of $1,773,000 of principal and $148,000 in interest. In March 2013, Mr. Steffens agreed to extend the maturity date of all outstanding short term notes until April 1, 2014. As such this amount has been classified as long term debt as of December 31, 2012. At December 31, 2013, the Company was indebted to Mr. Steffens in the approximate amount of $4,398,000 of principal and $505,000 in interest. In March 2014, Mr. Steffens agreed to extend the maturity date of all outstanding short term notes until June 30, 2015. As such this amount has been classified as long term debt. | |||
(c) | In January 2010, as part of the Asset Purchase Agreement, the Company entered into an unsecured Convertible Promissory Note with SOAdesk in the amount of $1,000,000. The note bears interest at 5% and is due January 14, 2015. The note is only convertible into shares of the Company’s common stock at the rate of one share for every $0.15 of principal and interest due under the note. The note is convertible at the option of the holder with one-third convertible in January 2011, two-thirds convertible in January 2012, and the entire note convertible in January 2013 or at maturity. In March 2012, SOAdesk elected to convert $300,000 of the outstanding note balance into 2,000,000 shares of Company’s Common Stock. At December 31, 2012 the Company was indebted to SOAdesk in the amount of $700,000 of principal and $137,000 in interest. At December 31, 2013, the Company was indebted to SOAdesk in the amount of $700,000 of principal and $172,000 in interest. | |||
In March 2012, certain private lenders agreed to refinance $83,000 of debt and $301,000 of accrued interest at an interest rate of 12% and a maturity date of March 31, 2013. In March 2013, the maturity date of the note was extended to April 4, 2014. As such this amount has been reclassified to long term debt at December 31, 2012. In March 2014, the maturity date of the note was extended to June 30, 2015. As such this amount has been reclassified to long term debt at December 31, 2013. | ||||
Scheduled maturities of the above long-term debt are as follows: | ||||
Year | ||||
2015 | $ 6,134,000 | |||
$6,134,000 | ||||
7_CONVERSION_OF_DEBT_TO_EQUITY
7. CONVERSION OF DEBT TO EQUITY | 12 Months Ended |
Dec. 31, 2013 | |
Supplemental Cash Flow Elements [Abstract] | ' |
CONVERSION OF DEBT TO EQUITY | ' |
On March 30, 2012, the Company entered into agreements with private lenders and investors, and officers, directors and significant shareholders of the Company; including John L. Steffens, the Chairman of the Board of Directors, to convert $3,243,502 of debt and $33,013 of interest into 21,843,429 common shares of the Company’s stock. The Company accounted for the transaction pursuant to Topic ASC 470-50, Modification and Extinguishment of Debt. Pursuant to ASC 470-50, when debt is extinguished by delivering noncash assets owned by the debtor, the gain or loss on the extinguishment should be measured by the difference between the net carrying amount of the debt and the fair value of the noncash assets. Any difference between the fair value and the carrying amount of the noncash assets should be recognized as a gain or loss on transfer. As part of management’s analysis in determining the fair market value, the Company engaged an independent expert to help management determine the fair market value of the Company stock and whether a discount to the price of the stock needed to be applied. In analysis of historical studies of discounts attributable to trading restrictions as well as analysis from an option pricing model of protective puts of the Company’s stock, the Company determined that a 25% discount to the closing stock price on the day of the transaction would be required to establish fair market value. The Company calculated an approximately $246,000 gain on the extinguishment of the debt, however, due to the fact that 20,000,000 shares of the transaction were being issued to Mr. Steffens, the Company determined that this was not an arm’s length agreement and as such has recorded the gain through additional paid in capital. |
8_INCOME_TAXES
8. INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
The Company follows the provisions of ASC Topic 740, “Income Taxes”, and recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company applies ASC Topic 740 to all tax positions for which the statute of limitations remains open. | |||||||||
The Company has identified its federal tax return and its state tax return in North Carolina as “major” tax jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The evaluation was performed for the tax years 2010 through 2012, and may be subject to audits for amounts related to net operating loss carryforwards generated in periods prior to December 31, 2009. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. The tax returns for the prior three years are generally subject to review by federal and state taxing authorities. | |||||||||
The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense. There were no amounts accrued for penalties and interest as of or during the period for the tax years 2012 and 2013. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payment, accruals or material deviations from its position. | |||||||||
A reconciliation of expected income tax at the statutory federal rate with the actual income tax provision is as follows for the years ended December 31 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Expected income tax benefit at statutory rate (34%) | $ | (1,090 | ) | $ | (64 | ) | |||
State taxes, net of federal tax benefit | (192 | ) | (10 | ) | |||||
Effect of change in valuation allowance | (9,876 | ) | (9,848 | ) | |||||
Non-deductible expenses | 4 | 6 | |||||||
Expiration of net operating loss deductions | 11,154 | 9,916 | |||||||
Total | $ | -- | $ | -- | |||||
Significant components of the net deferred tax asset (liability) at December 31 were as follows: | |||||||||
2013 | 2012 | ||||||||
Current assets: | |||||||||
Accrued expenses, non-tax deductible | $ | 99 | $ | 5 | |||||
Deferred revenue | 553 | 556 | |||||||
Contingent payments | (831 | ) | (831 | ) | |||||
Noncurrent assets: | |||||||||
Stock compensation expense | 580 | 543 | |||||||
Loss carryforwards | 61,942 | 71,122 | |||||||
Depreciation and amortization | 1,105 | 1,929 | |||||||
63,448 | 73,324 | ||||||||
Less: valuation allowance | (63,448 | ) | (73,324 | ) | |||||
$ | -- | $ | -- | ||||||
At December 31, 2013, the Company had net operating loss carryforwards of approximately $154,858,000, which may be applied against future taxable income. These carryforwards will expire at various times between 2014 and 2033. Net operating loss carryforwards include tax deductions for the disqualifying dispositions of incentive stock options. When the Company utilizes the net operating losses related to these deductions, the tax benefit will be reflected in additional paid-in capital and not as a reduction of tax expense. The total amount of these deductions included in the net operating loss carryforwards is $21,177,000. | |||||||||
The Company provided a full valuation allowance on the total amount of its deferred tax assets at December 31, 2013 and 2012 since management does not believe that it is more likely than not that these assets will be realized. |
9_STOCKHOLDERS_EQUITY
9. STOCKHOLDER'S EQUITY | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
STOCKHOLDER'S EQUITY | ' | ||||||||||||||
Preferred Stock: | |||||||||||||||
In April 2010, the Company issued to a certain accredited investor 1,333 shares of Series B Convertible Preferred Stock at $150 per share for a total of $200,000. The Series B Convertible Preferred Stock bears an annual dividend of 8%. The Series B stock may convert into common stock at a conversion rate of $0.15 per share. Additionally, the Series B stock provides warrants to purchase common stock of the Company at a strike price of $0.25 per share. The warrants expire in five years. 333,333 warrants were issued to the investor. In January 2010, the Company issued to certain accredited investors 9,067 shares of Series B Convertible Preferred Stock at $150 per share for a total of $1,360,000, including $500,000 in cash, the cancellation of $710,000 of existing indebtedness. The Series B Convertible Preferred Stock bears an annual dividend of 8%. The Series B stock may convert into common stock at a conversion rate of $0.15 per share. Additionally, the Series B stock investors were issued warrants to purchase common stock of the Company at a strike price of $0.25 per share. The warrants expire in five years. 2,266,667 warrants were issued to these investors. | |||||||||||||||
Common Stock: | |||||||||||||||
During February 2013, the Company converted approximately $10,000 of interest payable to a private lender by issuing 198,000 shares of its common stock. | |||||||||||||||
In December 2012, the Company had stock subscription of 10,200,000 shares of their common stock at a price of $0.05 per share. This was part of an offering in a private investment in the Company’s common stock. The stock subscription was made up of $186,132 of cash from private investors, the extinguishment of $23,868 of interest on a note with one of the private investors, and the exchange of $300,000 of short term debt with Mr. John Steffens, the Company’s Chairman. Additionally, the investors were issued warrants to purchase common stock of the Company at a strike price of $0.20 per share. The warrants expire in five years. 2,040,000 warrants were issued to these investors. In 2013, an additional investment in the offering was made up of $60,000 of cash from private investors and the exchange of $15,000 of short term debt and the extinguishment of $2,012 of interest on a note with one of the private investors for 1,640,241 shares of the Company’s common stock and 328,048 warrants. In March 2013, the offering was officially closed and the Company issued 11,840,241 common shares in exchange for $592,012. | |||||||||||||||
In April 2012, the Company converted approximately $6,000 of accounts payable to a vendor by issuing 40,000 shares of its common stock. | |||||||||||||||
In March 2012, the Company converted approximately $265,000 of accrued Series B Preferred Stock dividends by issuing 1,765,333 shares of its common stock. | |||||||||||||||
In March 2012, the Company converted approximately $3,544,000 of debt and $33,000 of interest payable to certain directors and significant shareholders of the Company and other private lenders by issuing 23,843,429 shares of its common stock. | |||||||||||||||
Stock Grants: | |||||||||||||||
In November 2012, the Company issued Mr. John P. Broderick, our Chief Executive Officer, a restricted stock award in the amount of 1,500,000 shares which will vest to him upon his termination, or change in control. The Company valued the award at the fair market value of the date of the award and is amortizing the total expense of $75,000 over the implicit service period of 2 years. The Company recorded expense of approximately $48,000 and $6,000 in fiscal 2013 and 2012, respectively. The Company has unrecognized compensation expense of approximately $28,000 associated with this grant. | |||||||||||||||
In August 2007, the Company issued Mr. John P. Broderick, our Chief Executive Officer, a restricted stock award in the amount of 549,360 shares which will vest to him upon his resignation or termination. The Company used the Black-Scholes method to value these shares and assumed a life of 7 years. The Company recorded compensation expense of approximately $36,000 for fiscal 2013 and 2012. The Company has unrecognized compensation expense of approximately $43,000 associated with this grant. | |||||||||||||||
Stock Options: | |||||||||||||||
In 2007, the Board of Directors approved the 2007 Cicero Employee Stock Option Plan which permits the issuance of incentive and nonqualified stock options, stock appreciation rights, performance shares, and restricted and unrestricted stock to employees, officers, directors, consultants, and advisors. The aggregate number of shares of common stock which may be issued under this Plan shall not exceed 4,500,000 shares upon the exercise of awards and provide that the term of each award be determined by the Board of Directors. The Company also has a stock incentive plan for outside directors and the Company has set aside 1,200 shares of common stock for issuance under this plan. | |||||||||||||||
Under the terms of the Plans, the exercise price of the incentive stock options may not be less than the fair market value of the stock on the date of the award and the options are exercisable for a period not to exceed ten years from date of grant. Stock appreciation rights entitle the recipients to receive the excess of the fair market value of the Company's stock on the exercise date, as determined by the Board of Directors, over the fair market value on the date of grant. Performance shares entitle recipients to acquire Company stock upon the attainment of specific performance goals set by the Board of Directors. Restricted stock entitles recipients to acquire Company stock subject to the right of the Company to repurchase the shares in the event conditions specified by the Board are not satisfied prior to the end of the restriction period. The Board may also grant unrestricted stock to participants at a cost not less than 85% of fair market value on the date of sale. Options granted vest at varying periods up to five years and expire in ten years. | |||||||||||||||
Activity for stock options issued under these plans for the years ending December 31, 2013 and 2012 was as follows: | |||||||||||||||
Weighted Average | Aggregate Intrinsic Value | ||||||||||||||
Number of Options | Option Price | Exercise Price | |||||||||||||
Per Share | |||||||||||||||
Balance at December 31, 2011 | 4,296,193 | 0.06-39.00 | $0.39 | ||||||||||||
Granted | 70,000 | 0.05-0.19 | $0.14 | ||||||||||||
Forfeited | -440,000 | 0.06-31.00 | $0.35 | ||||||||||||
Expired | -4,700 | 34.00-39.00 | $36.39 | ||||||||||||
Balance at December 31, 2012 | 3,921,493 | 0.06-46.00 | $0.36 | ||||||||||||
Granted | 25,000 | 0.05 | $0.05 | ||||||||||||
Forfeited | -544,733 | 0.06-46.00 | $0.44 | ||||||||||||
Expired | -5,550 | 22.00-26.00 | $25.57 | ||||||||||||
Balance at December 31, 2013 | 3,396,210 | 0.05-46.00 | $0.31 | $0.00 | |||||||||||
Activity for non-vested stock options under these plans for the fiscal year ending December 31, 2013 and 2012 was as follows: | |||||||||||||||
Weighted Average | |||||||||||||||
Number of Options | Option Price | Exercise Price | |||||||||||||
Per Share | |||||||||||||||
Balance at December 31, 2011 | 952,414 | 0.06-0.10 | $0.08 | ||||||||||||
Granted | 70,000 | 0.05-0.19 | $0.14 | ||||||||||||
Vested | -805,747 | 0.05-0.09 | $0.08 | ||||||||||||
Forfeited | -75,000 | 0.08-0.09 | $0.08 | ||||||||||||
Balance at December 31, 2012 | 141,667 | 0.05-0.19 | $0.10 | ||||||||||||
Granted | 25,000 | 0.05 | $0.05 | ||||||||||||
Vested | -33,334 | 0.05-0.19 | $0.12 | ||||||||||||
Forfeited | -8,333 | 0.16 | $0.16 | ||||||||||||
Balance at December 31, 2013 | 125,000 | 0.05-0.19 | $0.08 | ||||||||||||
There were 25,000 options granted during 2013 and 70,000 options granted during 2012. The weighted average grant date fair value of options issued during the years ended December 31, 2013 and 2012 was equal to $0.05 and $0.14 per share, respectively. There were no option grants issued below fair market value during 2013 and 2012. | |||||||||||||||
At December 31, 2013, there was unrecognized compensation cost of $2,000 related to stock options which is expected to be recognized over a weighted-average amortization period of one year. | |||||||||||||||
At December 31, 2013 and 2012, options to purchase 3,271,210 and 3,779,826 and shares of common stock were exercisable, respectively, pursuant to the plans at prices ranging from $0.05 to $46.00. The following table summarizes information about stock options outstanding at December 31, 2013: | |||||||||||||||
Remaining Contractual Life for Options Outstanding | Weighted Average Exercise Price | ||||||||||||||
Number | Number Exercisable | ||||||||||||||
Exercise Price | Outstanding | ||||||||||||||
$ 0.05-0.08 | 725,000 | 7.7 | 608,333 | $ 0.07 | |||||||||||
0.09 | 997,750 | 6.6 | 997,750 | 0.09 | |||||||||||
0.10-0.37 | 370,000 | 5.4 | 361,667 | 0.15 | |||||||||||
0.38-31.00 | 1,303,460 | 3.6 | 1,303,460 | 0.65 | |||||||||||
3,396,210 | 5.6 | 3,271,210 | $0.32 | ||||||||||||
Preferred Stock: | |||||||||||||||
Series A-1 | |||||||||||||||
The holders of the Series A-1 preferred stock shall have the rights and preferences set forth in the Certificate of Designations filed with the Secretary of State of the State of Delaware upon the approval of the Recapitalization. The rights and interests of the Series A-1 preferred stock of the Company will be substantially similar to the rights and interests of each of the series of the former Level 8 preferred stock other than for (i) anti-dilution protections that have been permanently waived and (ii) certain voting, redemption and other rights that holders of Series A-1 preferred stock will not be entitled to. All shares of Series A-1 preferred stock will have a liquidation preference pari passu with all other Series A-1 preferred stock. | |||||||||||||||
The Series A-1 preferred stock is convertible at any time at the option of the holder into an initial conversion ratio of 1,000 shares of common stock for each share of Series A-1 preferred stock. The initial conversion ratio shall be adjusted in the event of any stock splits, stock dividends and other recapitalizations. The Series A-1 preferred stock is also convertible on an automatic basis in the event that (i) the Company closes on an additional $5,000,000 equity financing from strategic or institutional investors, or (ii) the Company has four consecutive quarters of positive cash flow as reflected on the Company’s financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) and filed with the Commission. The holders of Series A-1 preferred stock are entitled to receive equivalent dividends on an as-converted basis whenever the Company declares a dividend on its common stock, other than dividends payable in shares of common stock. The holders of the Series A-1 preferred stock are entitled to a liquidation preference of $500 per share of Series A-1 preferred stock upon the liquidation of the Company. The Series A-1 preferred stock is not redeemable. | |||||||||||||||
The holders of Series A-1 preferred stock also possess the following voting rights. Each share of Series A-1 preferred stock shall represent that number of votes equal to the number of shares of common stock issuable upon conversion of a share of Series A-1 preferred stock. The holders of Series A-1 preferred stock and the holders of common stock shall vote together as a class on all matters except: (i) regarding the election of the Board of Directors of the Company (as set forth below); (ii) as required by law; or (iii) regarding certain corporate actions to be taken by the Company (as set forth below). | |||||||||||||||
The approval of at least two-thirds of the holders of Series A-1 preferred stock voting together as a class, shall be required in order for the Company to: (i) merge or sell all or substantially all of its assets or to recapitalize or reorganize; (ii) authorize the issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 preferred stock; (iii) redeem, repurchase or acquire indirectly or directly any of its equity securities, or to pay any dividends on the Company’s equity securities; (iv) amend or repeal any provisions of its certificate of incorporation or bylaws that would adversely affect the rights, preferences or privileges of the Series A-1 preferred stock; (v) effectuate a significant change in the principal business of the Company as conducted at the effective time of the Recapitalization; (vi) make any loan or advance to any entity other than in the ordinary course of business unless such entity is wholly owned by the Company; (vii) make any loan or advance to any person, including any employees or directors of the Company or any subsidiary, except in the ordinary course of business or pursuant to an approved employee stock or option plan; and (viii) guarantee, directly or indirectly any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. In addition, the unanimous vote of the Board of Directors is required for any liquidation, dissolution, recapitalization or reorganization of the Company. The voting rights of the holders of Series A-1 preferred stock set forth in this paragraph shall be terminated immediately upon the closing by the Company of at least an additional $5,000,000 equity financing from strategic or institutional investors. | |||||||||||||||
In addition to the voting rights described above, the holders of a majority of the shares of Series A-1 preferred stock are entitled to appoint two observers to the Company’s Board of Directors who shall be entitled to receive all information received by members of the Board of Directors, and shall attend and participate without a vote at all meetings of the Company’s Board of Directors and any committees thereof. At the option of a majority of the holders of Series A-1 preferred stock, such holders may elect to temporarily or permanently exchange their board observer rights for two seats on the Company’s Board of Directors, each having all voting and other rights attendant to any member of the Company’s Board of Directors. There are two current members of the Board of Directors that are holders of the Series A-1 preferred stock. As part of the Recapitalization, the right of the holders of Series A-1 preferred stock to elect a majority of the voting members of the Company’s Board of Directors shall be terminated. | |||||||||||||||
Series B | |||||||||||||||
The Series B Preferred Stock ranks senior to the Common Stock and on parity with the Company’s outstanding Series A-1 Preferred Stock. As required by the Certificate of Designations applicable to the Series A-1 Preferred Stock, the Company obtained the consent of a holder representing in excess of two thirds of the outstanding shares of Series A-1 Preferred Stock to authorize and issue the shares of Series B Preferred Stock. | |||||||||||||||
Dividends will accrue on each share of Series B Preferred Stock at the rate per annum of eight percent (8%). Dividends will accrue from the date on which a share of Series B Preferred Stock was issued by the Company until paid, whether or not declared, and shall be cumulative; provided, however, that except as set forth in the Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock (the “Series B Certificate”), such dividends will be payable only when, as, and if declared by the Board of Directors, and the Company will be under no obligation to pay such dividends. | |||||||||||||||
Each share of Series B Preferred Stock is convertible, at the option of the holder, into that number of shares of common stock equal to $150.00 (the “Series B Original Issue Price”) divided by the conversion price of the Series B Preferred Stock then in effect, which is initially $0.15, subject to adjustment under certain circumstances as set forth in the Series B Certificate. | |||||||||||||||
In the event of certain specified liquidation events, the holders of Series B Preferred Stock will be entitled to receive an amount per share equal to the Series B Original Issue Price plus any dividends accrued or declared but unpaid thereon before the payment of any amount to the holders of Common Stock and other junior securities. | |||||||||||||||
The holders of Series B Preferred Stock will be entitled to vote, on an as-converted basis, on all matters submitted to a vote of the stockholders of the Company, and the holders of Series B Preferred Stock, Series A-1 Preferred Stock and common stock will vote together as a single class. In addition, until such time as the Company consummates at least an additional $5,000,000 equity financing from institutional or strategic investors, the approval of the holders of at least 2/3 of the outstanding shares of the Series B Preferred Stock voting together separately as a class will be required for the Company to take certain specified actions set forth in the Series B Certificate. | |||||||||||||||
Stock Warrants: | |||||||||||||||
The Company values warrants based on the Black-Scholes pricing model. In accordance with ASC 815, these warrants are classified as equity. The warrants were issued in conjunction with certain promissory notes, the Series B preferred Stock offering, and the private investment in the Company’s shares. At December 31, 2013, there were 6,281,333 exercisable warrants at an exercise price between $0.08 and $0.25 per share. | |||||||||||||||
Number of Warrants | Warrant Price | ||||||||||||||
Per Share | |||||||||||||||
Balance at December 31, 2012 | 5,928,285 | $0.08-$0.25 | $ | 0.22 | |||||||||||
Issued | 353,048 | $0.10-$0.20 | $ | 0.19 | |||||||||||
Exercised | — | — | — | ||||||||||||
Forfeited | — | — | — | ||||||||||||
Balance at December 31, 2013 | 6,281,333 | $0.10-$0.25 | $ | 0.22 | |||||||||||
10_EMPLOYEE_BENEFIT_PLANS
10. EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2013 | |
Earnings Per Share [Abstract] | ' |
EMPLOYEE BENEFIT PLANS | ' |
The Company sponsors one defined contribution plan for its employees - the Cicero Inc. 401(K) Plan. Under the terms of the Plan, the Company, at its discretion, provides a 50% matching contribution up to 6% of an employee’s salary. Participants must be eligible and employed at December 31 of each calendar year to be eligible for employer matching contributions. The Company opted not to make any matching contributions for 2013 and 2012. |
11_SIGNIFICANT_CUSTOMERS_AND_C
11. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Disclosures [Abstract] | ' |
SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK | ' |
In 2013, three customers accounted for 46%, 13% and 12% of operating revenues and one customer accounted for 89% of accounts receivable at December 31, 2013. In 2012, three customers accounted for 43%, 21% and 19% of operating revenues and two customers accounted for 80% and 10% of accounts receivable at December 31, 2012. |
12_RELATED_PARTY_INFORMATION
12. RELATED PARTY INFORMATION | 12 Months Ended |
Dec. 31, 2013 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | ' |
RELATED PARTY INFORMATION | ' |
From time to time during 2012 through 2013, the Company entered into several short term notes payable with John L. (Launny) Steffens, the Chairman of the Board of Directors, for various working capital needs. The notes bear interest at 12% per year and are unsecured. In December 2012, Mr. Steffens converted $300,000 of his debt into a subscription of 6,000,000 shares of the Company’s common stock at a price of $0.05 per share as part of a private investment in the Company’s stock. At December 31, 2012, the Company was indebted to Mr. Steffens in the approximate amount of $1,773,000 of principal and $148,000 in interest. In March 2013, Mr. Steffens agreed to extend the maturity date of all outstanding short term notes until April 1, 2014. As such this amount has been classified as long term debt as of December 31, 2012. At December 31, 2013, the Company was indebted to Mr. Steffens in the approximate amount of $4,398,000 of principal and $505,000 in interest. In March 2014, Mr. Steffens agreed to extend the maturity date of all outstanding short term notes until June 30, 2015. As such this amount has been classified as long term debt as of December 31, 2013. (See Note 6) | |
During 2012 and 2013, the Company entered into several short term notes payable with John Broderick, the Chief Executive Officer and Chief Financial Officer, for various working capital needs. The notes bear interest at 12% and were unsecured. At December 31, 2012, the Company was indebted to Mr. Broderick in the approximate amount of $3,000. No interest was paid in fiscal 2012. At December 31, 2013, the Company was indebted to Mr. Broderick in the approximate amount of $6,000. No interest was paid in fiscal 2013. | |
Antony Castagno, the Company’s Chief Technology Officer, is part-owner of SOAdesk LLC. During 2013, the Company entered into a short term note payable with Mr. Castagno for various working capital needs. The note was non-interest bearing and was unsecured. At December 31, 2013, the Company was indebted to Mr. Castagno in the approximate amount of $15,000. | |
13_COMMITMENTS_AND_EMPLOYMENT_
13. COMMITMENTS AND EMPLOYMENT AGREEMENTS | 12 Months Ended | |
Dec. 31, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
COMMITMENTS AND EMPLOYMENT AGREEMENTS | ' | |
The Company leases certain facilities and equipment under various operating leases. Future minimum lease commitments on operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2013 consisted of only one lease as follows (in thousands): | ||
Lease | ||
Commitments | ||
2014 | $ 59 | |
$ 59 | ||
Rent expense was $98,000 and $96,000 for each year ended December 31, 2013 and 2012, respectively. As of December 31, 2013 and 2012, the Company had no sublease arrangements. | ||
Per the Asset Purchase Agreement with SOAdesk LLC in 2010, the Company was obligated to make additional payments of up to $2,410,000 over an 18 month period from January 15, 2010 through July 31, 2011, based upon the achievement of certain revenue performance targets. At December 31, 2013 and 2012 the Company has recorded $843,000 in accounts payable for the earn-out earned through July 31, 2011. | ||
Under the employment agreement between the Company and Mr. Broderick effective January 1, 2014, we agreed to pay Mr. Broderick an annual base salary of $175,000 and performance bonuses in cash of up to $275,000 per annum based upon exceeding certain revenue goals and operating metrics, as determined by the Compensation Committee, in its discretion. Upon termination of Mr. Broderick’s employment by the Company without cause, we agreed to pay Mr. Broderick a lump sum payment of one year of Mr. Broderick’s then current base salary within 30 days of termination and any unpaid deferred salaries and bonuses. In the event there occurs a substantial change in Mr. Broderick’s job duties, there is a decrease in or failure to provide the compensation or vested benefits under the employment agreement or there is a change in control of the Company, we agreed to pay Mr. Broderick a lump sum payment of one year of Mr. Broderick’s then current base salary within thirty (30) days of termination. Additionally, as part of his employment agreement for fiscal 2012, Mr. Broderick will be entitled to receive 1,500,000 shares of the Company’s common stock in the event of the termination, with or without cause, of his employment by the Company or his resignation from the Company with or without cause or in the event of a change of control (as that term is defined in the Employment Agreement) of the Company. Mr. Broderick will have thirty (30) days from the date written notice is given about either a change in his duties or the announcement and closing of a transaction resulting in a change in control of the Company to resign and execute his rights under this agreement. If Mr. Broderick’s employment is terminated for any reason, Mr. Broderick has agreed that, for two (2) years after such termination, he will not directly or indirectly solicit or divert business from us or assist any business in attempting to do so or solicit or hire any person who was our employee during the term of his employment agreement or assist any business in attempting to do so. | ||
Under the employment agreement between the Company and Mr. Castagno effective January 1, 2013, we agreed to pay Mr. Castagno an annual base salary of $150,000. Upon termination of Mr. Castagno’s employment by the Company without cause, we agreed to pay Mr. Castagno an amount of $75,000 which is equivalent to six (6) months of Mr. Castagno’s then current base salary in equal semi-monthly installments over the six (6) month period following the termination. If Mr. Castagno’s employment is terminated for any reason, Mr. Castagno has agreed that, for two (2) years after such termination, he will not directly or indirectly solicit or divert business from us or assist any business in attempting to do so or solicit or hire any person who was our employee during the term of his employment agreement or assist any business in attempting to do so. During 2013 the Company amended Mr. Castagno’s employment agreement to provide that Mr. Castagno could engage in consulting services on behalf of the Company and would be compensated for any revenues in excess of his base salary as a bonus. |
14_CONTINGENCIES
14. CONTINGENCIES | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
The Company, from time to time, is involved in legal matters arising in the ordinary course of its business including matters involving proprietary technology. While management believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is or could become involved in litigation, will not have a material adverse effect on its business, financial condition or results of operations. | |
In October 2003, we were served with a summons and complaint in Superior Court of North Carolina regarding unpaid invoices for services rendered by one of our subcontractors. The amount in dispute was approximately $200,000 and is included in accounts payable. Subsequent to March 31, 2004, we settled this litigation. Under the terms of the settlement agreement, we agreed to pay a total of $189,000 plus interest over a 19-month period ending November 15, 2005. The Company has not made any additional payments and has a remaining liability of approximately $88,000. | |
During 2011, the Company was served with a writ of summons by a creditor who holds several short-term notes. Several notes in the aggregate of $250,000 were due and outstanding under the Note agreements. The loans bore interest at 36% per annum. In July 2012, the Company entered into a restructuring settlement with the lender whereby the lender agreed to accept $495,000 in full satisfaction of all principal and interest due under the Note agreements, as of June 1, 2012, plus interest in the amount of approximately $21,000 for the period from June 1, 2012 to July 31, 2012. In addition, the Company agreed to pay interest for the period after July 31, 2012 in the aggregate amount of approximately $67,000. This interest was paid in seven monthly installments of approximately $9,750 each from August 2012 through February 2013. The final payment of the remaining principal of approximately $416,000 was paid in February 2013. | |
Under the indemnification clause of the Company’s standard reseller agreements and software license agreements, the Company agrees to defend the reseller/licensee against third party claims asserting infringement by the Company’s products of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay any judgments entered on such claims against the reseller/licensee. There were no claims against the Company as of December 31, 2013 and 2012. | |
The Company is currently in discussions with the State of Delaware regarding the possible underpayment of its annual franchise tax dating back to 2002. The Company has recently filed with the IRS amended federal tax returns, upon which the Delaware franchise tax is partially based, for years 1999 through 2011 and has submitted those amended federal tax returns to the State of Delaware. The Company believes the value of its assets reflected in such amended tax returns should ameliorate the possible underpayment, and that if the State of Delaware re-calculates the Company’s franchise taxes based upon its amended returns, the Company would have no outstanding balance for its Delaware franchise tax. Upon resolution thereof, the Company’s Certificate of Incorporation would be reinstated. However, should the State of Delaware not accept the amended tax returns, or accept the amended tax returns but not re-calculate franchise tax based thereon, the Company believes, based on certain conversations with an employee of the Delaware Franchise Tax Bureau, it would be exposed to a franchise tax liability of approximately $1.6 million, and possibly more depending on interest and penalties which could be assessed. Should the Company not be able to re-instate its Certificate of Incorporation with the State of Delaware, its corporate powers would continue to be inoperative. | |
15_SUBSEQUENT_EVENTS
15. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
In March 2014, the Company amended various promissory notes of approximately $4,398,000 with John L. (Launny) Steffens, the Chairman of the Board of Directors, its promissory note of $700,000 with SOAdesk LLC, and its promissory note of approximately $336,000 with a private lender. The notes were all amended to extend the maturity date on each note until June 30, 2015. | |
In January 2014, the Company entered into various note payables totaling $135,000 with Mr. Steffens. The notes bear interest at 12%. They are unsecured and mature on June 30, 2015. | |
1_SUMMARY_OF_OPERATIONS_SIGNIF1
1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Going Concern and Management Plans | ' | ||||||||
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred an operating loss of approximately $3,206,000 for the year ended December 31, 2013, and has a history of operating losses. Management believes that its repositioned strategy of leading with its Discovery product to measure how work happens and then follow with its integration capabilities through its XM product will shorten the sales cycle and allow for value based selling to our customers and prospects. The Company anticipates a continued success in this regard based upon current discussions with active customers and prospects. The Company has borrowed $1,998,000 and $2,671,000 and also retired approximately $1,796,000 and $416,000 of debt in 2012 and 2013, respectively. Additionally, the Company converted $3,800,000 of debt into common stock and has received notification of additional forgiveness of liabilities of $404,000 during 2012. Should the Company be unable to secure customer contracts that will drive sufficient cash flow to sustain operations, the Company will be forced to seek additional capital in the form of debt or equity financing; however, there can be no assurance that such debt or equity financing will be available. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. | |||||||||
Principles of Consolidation | ' | ||||||||
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All of the Company's subsidiaries are wholly-owned for the periods presented. | |||||||||
All significant inter-company accounts and transactions are eliminated in consolidation. | |||||||||
Use of Estimates | ' | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. Significant estimates include the recoverability of long-lived assets, valuation and recoverability of goodwill, stock based compensation, deferred taxes and related valuation allowances and valuation of equity instruments. | |||||||||
Financial Instruments | ' | ||||||||
The carrying amount of the Company’s financial instruments, representing accounts receivable, accounts payable and short-term debt approximate their fair value due to their short term nature. | |||||||||
The fair value and carrying amount of long-term debt were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Fair Value | $ | 6,110,141 | $ | 3,420,397 | |||||
Carrying Value | $ | 6,134,000 | $ | 3,509,000 | |||||
Valuations for long-term debt are determined based on borrowing rates currently available to the Company for loans with similar terms and maturities. These loans have been determined to be Level 3 within the fair value hierarchy and use a discounted cash flow model to determine its valuation. There have been no changes to the valuation technique. | |||||||||
Cash | ' | ||||||||
The Company places substantially all cash with various financial institutions. The Federal Deposit Insurance Corporation (FDIC) covers $250,000 for substantially all depository accounts. The Company from time to time may have amounts on deposit in excess of the insured limits. As of December 31, 2013, the Company did not exceed these insured amounts. | |||||||||
Trade Accounts Receivable | ' | ||||||||
Trade accounts receivable are stated in the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to the allowance of doubtful accounts based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance of doubtful accounts and a credit to trade accounts receivable. Changes in the allowance for doubtful accounts have not been material to the financial statements. | |||||||||
Property and Equipment | ' | ||||||||
Property and equipment purchased in the normal course of business is stated at cost, and property and equipment acquired in business combinations is stated at its fair market value at the acquisition date. All property and equipment is depreciated using the straight-line method over estimated useful lives. | |||||||||
Expenditures for repairs and maintenance are charged to expense as incurred. | |||||||||
The cost and related accumulated depreciation of property and equipment are removed from the accounts upon retirement or other disposition and any resulting gain or loss is reflected in the Consolidated Statements of Operations. | |||||||||
Software Development Costs | ' | ||||||||
The Company capitalizes certain software costs after technological feasibility of the product has been established. Generally, an original estimated economic life of three years is assigned to capitalized software costs, once the product is available for general release to customers. Costs incurred prior to the establishment of technological feasibility are charged to research and product development expense. | |||||||||
Capitalized software costs are amortized over related sales on a product-by-product basis using the straight-line method over the remaining estimated economic life of the product. | |||||||||
The establishment of technological feasibility and the ongoing assessment of recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological feasibility, anticipated future gross revenue, estimated economic life and changes in software and hardware technologies. | |||||||||
Long-Lived Assets | ' | ||||||||
The Company reviews the recoverability of long-lived intangible assets when circumstances indicate that the carrying amount of assets may not be recoverable. This evaluation is based on various analyses including undiscounted cash flow projections. In the event undiscounted cash flow projections indicate impairment, the Company would record an impairment based on the fair value of the assets at the date of the impairment. The Company accounts for impairments under the Financial Accounting Standards Board ("FASB") guidance now codified as Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. | |||||||||
Accrued Other | ' | ||||||||
Accrued other is primarily comprised of accrued dividends of $233,000 and $106,000 at December 31, 2013 and 2012, respectively, and the remaining balance is comprised of accrued auditing, royalty, consulting and other. | |||||||||
Revenue Recognition | ' | ||||||||
We derive revenue from three sources: license fees, recurring revenue and professional services. Recurring revenue includes software maintenance and support. Maintenance and support consists of technical support. Professional services primarily consists of consulting, implementation services and training. Significant management judgments and estimates are made and used to determine the revenue recognized in any accounting period. Material differences may result in changes to the amount and timing of our revenue for any period if different conditions were to prevail. We present revenue, net of taxes collected from customers and remitted to governmental authorities. | |||||||||
We apply the provisions of ASC 985-605, Software Revenue Recognition, to all transactions involving the licensing of software products. In the event of a multiple element arrangement for a license transaction, we evaluate the transaction as if each element represents a separate unit of accounting taking into account all factors following the accounting standards. When such estimates are not available, the completed contract method is utilized. Under the completed contract method, revenue is recognized only when a contract is completed or substantially complete. | |||||||||
When licenses are sold together with system implementation and consulting services, license fees are recognized upon delivery, provided that (i) payment of the license fees is not dependent upon the performance of the consulting and implementation services, (ii) the services are available from other vendors, (iii) the services qualify for separate accounting as we have sufficient experience in providing such services, have the ability to estimate cost of providing such services, and have vendor-specific objective evidence of fair value, and (iv) the services are not essential to the functionality of the software. | |||||||||
We use signed software license and services agreements and order forms as evidence of an arrangement for sales of software, maintenance and support. We use signed engagement letters to evidence an arrangement for professional services. | |||||||||
License Revenue | |||||||||
We recognize license revenue when persuasive evidence of an arrangement exists, the product has been delivered, no significant obligations remain, the fee is fixed or determinable, and collection of the resulting receivable is probable. In software arrangements that include rights to multiple software products and/or services, we use the residual method under which revenue is allocated to the undelivered elements based on vendor-specific objective evidence of the fair value of such undelivered elements. The residual amount of revenue is allocated to the delivered elements and recognized as revenue, assuming all other criteria for revenue recognition have been met. Such undelivered elements in these arrangements typically consist of software maintenance and support, implementation and consulting services. | |||||||||
Software is delivered to customers electronically. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction. We have standard payment terms included in our contracts. We assess collectability based on a number of factors, including the customer’s past payment history and its current creditworthiness. If we determine that collection of a fee is not reasonably assured, we defer the revenue and recognize it at the time collection becomes reasonably assured, which is generally upon receipt of cash payment. If an acceptance period is required, revenue is recognized upon the earlier of customer acceptance or the expiration of the acceptance period. | |||||||||
We consider a software element to exist when we determine that the customer has the contractual right to take possession of our software. Professional services are recognized as described below under “Professional Services Revenue.” If vendor-specific evidence of fair value cannot be established for the undelivered elements of an agreement, the entire amount of revenue from the arrangement is recognized ratably over the period that these elements are delivered. | |||||||||
Maintenance Revenue | |||||||||
Included in recurring revenue is revenue derived from maintenance and support services. We use vendor-specific objective evidence of fair value for maintenance and support to account for the arrangement using the residual method, regardless of any separate prices stated within the contract for each element. Maintenance and support revenue is recognized ratably over the term of the maintenance contract, which is typically one year. Maintenance and support is renewable by the customer on an annual basis. Maintenance and support rates, including subsequent renewal rates, are typically established based upon a specified percentage of net license fees as set forth in the arrangement. | |||||||||
Professional Services Revenue | |||||||||
Included in professional services revenue is revenue derived from system implementation, consulting and training. For software transactions, the majority of our consulting and implementation services and accompanying agreements qualify for separate accounting. We use vendor-specific objective evidence of fair value for the services to account for the arrangement using the residual method, regardless of any separate prices stated within the contract for each element. Our consulting and implementation service contracts are bid on a fixed-fee basis. For fixed fee contracts, where the services are not essential to the functionality, we recognize revenue as services are performed. If the services are essential to functionality, then both the product license revenue and the service revenue are deferred until the services are performed. | |||||||||
Training revenue that meets the criteria to be accounted for separately is recognized when training is provided. | |||||||||
Cost of Revenue | ' | ||||||||
The primary component of the Company's cost of revenue for its software products is the amortization of software for the assets acquired from SOAdesk in January 2010. (See Note 4) | |||||||||
The primary component of the Company's cost of revenue for maintenance and services is compensation expense. | |||||||||
Advertising Expenses | ' | ||||||||
The Company expenses advertising costs as incurred. Advertising expenses were approximately $388,000 and $506,000, for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Research and Product Development | ' | ||||||||
Research and product development costs are expensed as incurred. Research and development expenses were approximately $1,272,000 and $1,476,000, for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Other Income/(Charges) | ' | ||||||||
Other income (net) in fiscal 2012 consists primarily of a write off of certain debt forgiveness of $414,000. | |||||||||
Income Taxes | ' | ||||||||
The Company uses FASB guidance now codified as ASC 740 “Income Taxes” to account for income taxes. This statement requires an asset and liability approach that recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, all expected future events, other than enactments of changes in the tax law or rates, are generally considered. A valuation allowance is recorded when it is ''more likely than not'' that recorded deferred tax assets will not be realized. (See Note 8.) | |||||||||
Loss Per Share | ' | ||||||||
Basic loss per share is computed based upon the weighted average number of common shares outstanding. Diluted loss per share is computed based upon the weighted average number of common shares outstanding and any potentially dilutive securities. During 2013 and 2012, potentially dilutive securities included stock options, warrants to purchase common stock, and preferred stock. | |||||||||
The following table sets forth the potential shares that are not included in the diluted net loss per share calculation because to do so would be anti-dilutive for the periods presented: | |||||||||
2013 | 2012 | ||||||||
Stock options | 3,396,210 | 3,921,493 | |||||||
Warrants | 6,281,333 | 5,928,285 | |||||||
Preferred stock | 11,941,618 | 11,941,618 | |||||||
21,619,161 | 21,791,396 | ||||||||
$127,000 was accrued for dividends on the Series B Preferred Stock in fiscal 2013 and 2012, respectively. During March 2012, the Company converted $265,000 of accrued dividends into 1,765,333 common shares of the Company. | |||||||||
Stock-Based Compensation | ' | ||||||||
The Company adopted ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The Company granted 25,000 options in fiscal 2013 at an exercise price of $0.05 per share and recognized approximately $8,000 of stock-based compensation. The Company granted 70,000 options in fiscal 2012 at exercise prices between $0.05 and $0.19 per share and recognized approximately $48,000 of stock-based compensation. The Company recognized as stock-based compensation approximately $36,000 in fiscal 2013 and 2012 for the restricted shares issued in 2007 to John Broderick, the Chief Executive Officer. Additionally, the Company recognized as stock based compensation approximately $48,000 and $6,000 in fiscal 2013 and 2012 for the 1,500,000 restricted shares issued in 2012 to John Broderick. | |||||||||
The fair value of the Company's stock-based awards to employees was estimated as of the date of the grant using the Black-Scholes option-pricing model, using the following weighted-average assumptions: | |||||||||
2013 | 2012 | ||||||||
Fair value of common stock | $ | 0.05 | $ | 0.14 | |||||
Expected life (in years) | 9.99 years | 9.85 years | |||||||
Expected volatility | 169 | % | 186 | % | |||||
Risk free interest rate | 0.4 | % | 0.19 | % | |||||
Expected dividend yield | 0 | % | 0 | % | |||||
Recent Accounting Pronouncements | ' | ||||||||
None applicable. |
1_SUMMARY_OF_OPERATIONS_SIGNIF2
1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary Of Operations Significant Accounting Policies And Recent Accounting Pronouncements Tables | ' | ||||||||
Fair value and carrying amount of long-term debt | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Fair Value | $ | 6,110,141 | $ | 3,420,397 | |||||
Carrying Value | $ | 6,134,000 | $ | 3,509,000 | |||||
Diluted net loss per share | ' | ||||||||
2013 | 2012 | ||||||||
Stock options | 3,396,210 | 3,921,493 | |||||||
Warrants | 6,281,333 | 5,928,285 | |||||||
Preferred stock | 11,941,618 | 11,941,618 | |||||||
21,619,161 | 21,791,396 | ||||||||
Stock-Based Compensation | ' | ||||||||
2013 | 2012 | ||||||||
Fair value of common stock | $ | 0.05 | $ | 0.14 | |||||
Expected life (in years) | 9.99 years | 9.85 years | |||||||
Expected volatility | 169 | % | 186 | % | |||||
Risk free interest rate | 0.4 | % | 0.19 | % | |||||
Expected dividend yield | 0 | % | 0 | % |
2_ACCOUNTS_RECEIVABLE_Tables
2. ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounts Receivable Tables | ' | ||||||||
Trade accounts receivable | ' | ||||||||
2013 | 2012 | ||||||||
Current trade accounts receivable | $ | 1,125 | $ | 1,247 |
3_PROPERTY_AND_EQUIPMENT_Table
3. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property And Equipment Tables | ' | ||||||||
Property and equipment | ' | ||||||||
2013 | 2012 | ||||||||
Computer equipment | $ | 143 | $ | 134 | |||||
Furniture and fixtures | 24 | 24 | |||||||
Office equipment | 35 | 35 | |||||||
202 | 193 | ||||||||
Less: accumulated depreciation and amortization | (173 | ) | (146 | ) | |||||
$ | 29 | $ | 47 |
5_SHORT_TERM_DEBT_Tables
5. SHORT TERM DEBT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Short-term debt, and notes payable to related party | ' | ||||||||
2013 | 2012 | ||||||||
Note payable related parties (a) | $ | 21 | $ | 3 | |||||
Notes payable (b) | 435 | 823 | |||||||
$ | 456 | $ | 826 |
6_LONGTERM_DEBT_Tables
6. LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Debt Disclosure [Abstract] | ' | |||||||||
Long term debt | ' | |||||||||
2013 | 2012 | |||||||||
Note payable asset purchase agreement (a) | $ | 700 | $ | 700 | ||||||
Note payable – related party (b) | 4,398 | 1,773 | ||||||||
Other long-term debt (c) | 1,036 | 1,036 | ||||||||
$ | 6,134 | $ | 3,509 | |||||||
Maturities of the long-term debt | ' | |||||||||
Year | ||||||||||
2015 | $ | 6,134,000 | ||||||||
$ | 6,134,000 |
8_INCOME_TAXES_Tables
8. INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Taxes Tables | ' | ||||||||
Reconciliation of expected income tax at the statutory federal rate with the actual income tax provision | ' | ||||||||
2013 | 2012 | ||||||||
Expected income tax benefit at statutory rate (34%) | $ | (1,090 | ) | $ | (64 | ) | |||
State taxes, net of federal tax benefit | (192 | ) | (10 | ) | |||||
Effect of change in valuation allowance | (9,876 | ) | (9,848 | ) | |||||
Non-deductible expenses | 4 | 6 | |||||||
Expiration of net operating loss deductions | 11,154 | 9,916 | |||||||
Total | $ | -- | $ | -- | |||||
Net deferred tax asset (liability) | ' | ||||||||
2013 | 2012 | ||||||||
Current assets: | |||||||||
Accrued expenses, non-tax deductible | $ | 99 | $ | 5 | |||||
Deferred revenue | 553 | 556 | |||||||
Contingent payments | (831 | ) | (831 | ) | |||||
Noncurrent assets: | |||||||||
Stock compensation expense | 580 | 543 | |||||||
Loss carryforwards | 61,942 | 71,122 | |||||||
Depreciation and amortization | 1,105 | 1,929 | |||||||
63,448 | 73,324 | ||||||||
Less: valuation allowance | (63,448 | ) | (73,324 | ) | |||||
$ | -- | $ | -- |
9_STOCKHOLDERS_EQUITY_Tables
9. STOCKHOLDER'S EQUITY (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Stockholders Equity Tables | ' | ||||||||||||||||||
Activity for stock options issued | ' | ||||||||||||||||||
Number of Options | Option Price | Weighted Average | Aggregate Intrinsic Value | ||||||||||||||||
Per Share | Exercise Price | ||||||||||||||||||
Balance at December 31, 2011 | 4,296,193 | 0.06-39.00 | $ | 0.39 | |||||||||||||||
Granted | 70,000 | 0.05-0.19 | $ | 0.14 | |||||||||||||||
Forfeited | (440,000 | ) | 0.06-31.00 | $ | 0.35 | ||||||||||||||
Expired | (4,700 | ) | 34.00-39.00 | $ | 36.39 | ||||||||||||||
Balance at December 31, 2012 | 3,921,493 | 0.06-46.00 | $ | 0.36 | |||||||||||||||
Granted | 25,000 | 0.05 | $ | 0.05 | |||||||||||||||
Forfeited | (544,733 | ) | 0.06-46.00 | $ | 0.44 | ||||||||||||||
Expired | (5,550 | ) | 22.00-26.00 | $ | 25.57 | ||||||||||||||
Balance at December 31, 2013 | 3,396,210 | 0.05-46.00 | $ | 0.31 | $ | 0 | |||||||||||||
Activity for non-vested stock options | ' | ||||||||||||||||||
Number of Options | Option Price | Weighted Average | |||||||||||||||||
Per Share | Exercise Price | ||||||||||||||||||
Balance at December 31, 2011 | 952,414 | 0.06-0.10 | $ | 0.08 | |||||||||||||||
Granted | 70,000 | 0.05-0.19 | $ | 0.14 | |||||||||||||||
Vested | (805,747 | ) | 0.05-0.09 | $ | 0.08 | ||||||||||||||
Forfeited | (75,000 | ) | 0.08-0.09 | $ | 0.08 | ||||||||||||||
Balance at December 31, 2012 | 141,667 | 0.05-0.19 | $ | 0.1 | |||||||||||||||
Granted | 25,000 | 0.05 | $ | 0.05 | |||||||||||||||
Vested | (33,334 | ) | 0.05-0.19 | $ | 0.12 | ||||||||||||||
Forfeited | (8,333 | ) | 0.16 | $ | 0.16 | ||||||||||||||
Balance at December 31, 2013 | 125,000 | 0.05-0.19 | $ | 0.08 | |||||||||||||||
Stock options outstanding | ' | ||||||||||||||||||
Exercise Price | Number | Remaining Contractual Life for Options Outstanding | Number Exercisable | Weighted Average Exercise Price | |||||||||||||||
Outstanding | |||||||||||||||||||
$ | 0.05-0.08 | 725,000 | 7.7 | 608,333 | $ | 0.07 | |||||||||||||
0.09 | 997,750 | 6.6 | 997,750 | 0.09 | |||||||||||||||
0.10-0.37 | 370,000 | 5.4 | 361,667 | 0.15 | |||||||||||||||
0.38-31.00 | 1,303,460 | 3.6 | 1,303,460 | 0.65 | |||||||||||||||
3,396,210 | 5.6 | 3,271,210 | $ | 0.32 |
13_COMMITMENTS_AND_EMPLOYMENT_1
13. COMMITMENTS AND EMPLOYMENT AGREEMENTS (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments And Employment Agreements Tables | ' | |||
Future minimum lease commitments on operating leases | ' | |||
Lease | ||||
Commitments | ||||
2014 | $ | 59 | ||
$ | 59 |
1_SUMMARY_OF_OPERATIONS_SIGNIF3
1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Summary Of Operations Significant Accounting Policies And Recent Accounting Pronouncements Details | ' | ' |
Fair Value | $6,110,141 | $3,420,397 |
Carrying Value | $6,134,000 | $3,509,000 |
1_SUMMARY_OF_OPERATIONS_SIGNIF4
1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details 1) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Total | 21,619,161 | 21,791,396 |
Stock Options [Member] | ' | ' |
Total | 3,396,210 | 3,921,493 |
Warrant [Member] | ' | ' |
Total | 6,281,333 | 5,928,285 |
Preferred Stock | ' | ' |
Total | 11,941,618 | 11,941,618 |
1_SUMMARY_OF_OPERATIONS_SIGNIF5
1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Notes to Financial Statements | ' | ' |
Fair value of common stock | $0.05 | $0.14 |
Expected life (in years) | '9 years 11 months 26 days | '9 years 10 months 6 days |
Expected volatility | 169.00% | 186.00% |
Risk free interest rate | 0.40% | 0.19% |
Expected dividend yield | 0.00% | 0.00% |
2_ACCOUNTS_RECEIVABLE_Details
2. ACCOUNTS RECEIVABLE (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Receivables [Abstract] | ' | ' |
Current trade accounts receivable | $1,125 | $1,247 |
3_PROPERTY_AND_EQUIPMENT_Detai
3. PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Computer equipment | $143 | $134 |
Furniture and fixtures | 24 | 24 |
Office equipment | 35 | 35 |
Property and equipment, gross | 202 | 193 |
Less: accumulated depreciation and amortization | -173 | -146 |
Property and equipment, net | $29 | $47 |
3_PROPERTY_AND_EQUIPMENT_Detai1
3. PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Depreciation and amortization | $27 | $24 |
4_INTANGIBLE_ASSET_NET_AND_GOO1
4. INTANGIBLE ASSET, NET AND GOODWILL (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Asset Net And Goodwill Details Narrative | ' | ' |
Amortization expense | $28,000 | $701,000 |
Net intangible asset | $0 | $28,000 |
5_SHORT_TERM_DEBT_Details
5. SHORT TERM DEBT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Short Term Debt Details | ' | ' |
Note payable - related party (b) | $21 | $3 |
Note payable (c) | 435 | 823 |
Short-term Debt | $456 | $826 |
6_LONGTERM_DEBT_Details
6. LONG-TERM DEBT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Long-Term Debt Details | ' | ' |
Note payable asset purchase agreement (a) | $700 | $700 |
Note payable - related party (b) | 4,398 | 1,773 |
Other long-term debt (c) | 1,036 | 1,036 |
Long-term debt | $6,134 | $3,509 |
6_LONGTERM_DEBT_Details1
6. LONG-TERM DEBT (Details1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Disclosure [Abstract] | ' | ' |
2015 | $6,134,000 | ' |
Long-term debt | $6,134,000 | $3,509,000 |
8_INCOME_TAXES_Details
8. INCOME TAXES (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Expected income tax benefit at statutory rate (34%) | ($1,090) | ($64) |
State taxes, net of federal tax benefit. | -192 | -10 |
Effect of change in valuation allowance | -9,876 | -9,848 |
Non-deductible expenses | 4 | 6 |
Expiration of net operating loss deductions | 11,154 | 9,916 |
Total | $0 | $0 |
8_INCOME_TAXES_Details_1
8. INCOME TAXES (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Accrued expenses, non-tax deductible | $99 | $5 |
Deferred revenue | 553 | 556 |
Contingent payments | -831 | -831 |
Noncurrent assets: | ' | ' |
Stock compensation expense | 580 | 543 |
Loss carryforwards | 61,942 | 71,122 |
Depreciation and amortization | 1,105 | 1,929 |
Gross Deferred Tax | 63,448 | 73,324 |
Less: valuation allowance | -63,448 | -73,324 |
Net Deferred tax Assets | $0 | $0 |
8_INCOME_TAXES_Details_Narrati
8. INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Net operating loss carryforwards | $154,858,000 |
Net operating loss carryforwards expiration years | 'Expire at various times between 2014 and 2033 |
Tax benefit reflected in additional paid-in capital | $21,177,000 |
9_STOCKHOLDERS_EQUITY_Details
9. STOCKHOLDER'S EQUITY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Options | ' | ' |
Beginning Balance | 3,921,493 | 4,296,193 |
Granted | 25,000 | 70,000 |
Forfeited | -544,733 | -440,000 |
Expired | -5,550 | -4,700 |
Ending Balance | 3,396,210 | 3,921,493 |
Weighted Average Exercise Price | ' | ' |
Beginning Balance | $0.36 | $0.39 |
Granted | $0.05 | $0.14 |
Forfeited | $0.44 | $0.35 |
Expired | $25.57 | $36.39 |
Ending Balance | $0.31 | $0.36 |
Minimum [Member] | ' | ' |
Option Price Per Share | ' | ' |
Beginning Balance | $0.06 | $0.06 |
Granted | $0.05 | $0.05 |
Forfeited | $0.06 | $0.06 |
Expired | $22 | $34 |
Ending Balance | $0.05 | $0.06 |
Maximum [Member] | ' | ' |
Option Price Per Share | ' | ' |
Beginning Balance | $46 | $39 |
Granted | $0.05 | $0.19 |
Forfeited | $46 | $31 |
Expired | $26 | $39 |
Ending Balance | $46 | $46 |
9_STOCKHOLDERS_EQUITY_Details_
9. STOCKHOLDER'S EQUITY (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Unvested Number of Options | ' | ' |
Beginning Balance | 141,667 | 952,414 |
Granted | 25,000 | 70,000 |
Vested | -33,334 | -805,747 |
Forfeited | -8,333 | -75,000 |
Ending Balance | 125,000 | 141,667 |
Weighted Average Exercise Price | ' | ' |
Beginning Balance | $0.10 | $0.08 |
Granted | $0.05 | $0.14 |
Vested | $0.12 | $0.08 |
Forfeited | $0.16 | $0.08 |
Ending Balance | $0.08 | $0.10 |
Minimum [Member] | ' | ' |
Unvested Option Price Per Share | ' | ' |
Beginning Balance | $0.05 | $0.06 |
Granted | $0.05 | $0.05 |
Vested | $0.05 | $0.05 |
Forfeited | $0.16 | $0.08 |
Ending Balance | $0.05 | $0.05 |
Maximum [Member] | ' | ' |
Unvested Option Price Per Share | ' | ' |
Beginning Balance | $0.19 | $0.10 |
Granted | $0.19 | $0.19 |
Vested | $0.19 | $0.09 |
Forfeited | $0.16 | $0.09 |
Ending Balance | $0.19 | $0.19 |
9_STOCKHOLDERS_EQUITY_Details_1
9. STOCKHOLDER'S EQUITY (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
NUMBER OUTSTANDING | 3,396,210 | 3,921,493 | 4,296,193 |
REMAINING CONTRACTUAL LIFE FOR OPTIONS OUTSTANDING | '5 years 7 months 6 days | ' | ' |
NUMBER EXERCISABLE | 3,271,210 | ' | ' |
WEIGHTED AVERAGE EXERCISE PRICE | $0.32 | ' | ' |
Exercise Price 0.05-0.08 [Member] | ' | ' | ' |
NUMBER OUTSTANDING | 725,000 | ' | ' |
REMAINING CONTRACTUAL LIFE FOR OPTIONS OUTSTANDING | '7 years 8 months 12 days | ' | ' |
NUMBER EXERCISABLE | 608,333 | ' | ' |
WEIGHTED AVERAGE EXERCISE PRICE | $0.07 | ' | ' |
Exercise Price 0.09 [Member] | ' | ' | ' |
NUMBER OUTSTANDING | 997,750 | ' | ' |
REMAINING CONTRACTUAL LIFE FOR OPTIONS OUTSTANDING | '6 years 7 months 6 days | ' | ' |
NUMBER EXERCISABLE | 997,750 | ' | ' |
WEIGHTED AVERAGE EXERCISE PRICE | $0.09 | ' | ' |
Exercise Price 0.10-0.37 [Member] | ' | ' | ' |
NUMBER OUTSTANDING | 370,000 | ' | ' |
REMAINING CONTRACTUAL LIFE FOR OPTIONS OUTSTANDING | '5 years 4 months 24 days | ' | ' |
NUMBER EXERCISABLE | 361,667 | ' | ' |
WEIGHTED AVERAGE EXERCISE PRICE | $0.15 | ' | ' |
Exercise Price 0.38-46.00 [Member] | ' | ' | ' |
NUMBER OUTSTANDING | 1,303,460 | ' | ' |
REMAINING CONTRACTUAL LIFE FOR OPTIONS OUTSTANDING | '3 years 7 months 6 days | ' | ' |
NUMBER EXERCISABLE | 1,303,460 | ' | ' |
WEIGHTED AVERAGE EXERCISE PRICE | $0.65 | ' | ' |
9_STOCKHOLDERS_EQUITY_Details_2
9. STOCKHOLDER'S EQUITY (Details 3) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders Equity Details 3 | ' |
Warrants Beginning | 5,928,285 |
Issued | 353,048 |
Ending Balance | 6,281,333 |
Warrants Price Per Share | ' |
Issued | '$0.10-$0.20 |
Ending Balance | '$0.10-$0.25 |
Weighted Average Exercise Price | ' |
Beginning Balance | $0.22 |
Issued | $0.19 |
Ending Balance | $0.22 |
13_COMMITMENTS_AND_EMPLOYMENT_2
13. COMMITMENTS AND EMPLOYMENT AGREEMENTS (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 | $59 |
Total | $59 |