Cicero (CICN) 10-K 27 Mar 20 2019 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Mar. 22, 2020	Jun. 30, 2019
Document And Entity Information
Entity Registrant Name	CICERO INC
Entity Central Index Key	0000945384
Document Type	10-K
Document Period End Date	Dec. 31, 2019
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	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Public Float			$ 1,289,719
Entity Common Stock, Shares Outstanding		208,019,141
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	DE
Entity File Number	000-26392

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
ASSETS
Cash	$ 17	$ 97
Trade accounts receivable	63	11
Prepaid expenses and other current assets	211	142
Total current assets	291	250
Property and equipment, net	69	6
Total assets	360	256
Current liabilities:
Short-term debt (Note 6)	1,927	411
Accounts payable	922	982
Accrued expenses:
Salaries, wages, and related items	1,271	1,363
Interest payable	263	456
Other	80	36
Deferred revenue	217	460
Total current liabilities	4,680	3,708
Long-term debt	464	3,976
Total liabilities	5,144	7,684
Commitments and contingencies (Notes 12 and 13)
Stockholders deficit:
Convertible preferred stock, $0.001 par value, 10,000,000 shares authorized 5,083 Series A shares issued and outstanding at December 31, 2018 and December 31, 2017. $500 per share liquidation preference	0	0
Common stock, $0.001 par value, 600,000,000 shares authorized at December 31, 2019 and December 31, 2018; 208,019,141 issued and outstanding at December 31, 2019 and 207,913,541issued and outstanding at December 31, 2018 (Note 8)	208	208
Additional paid-in capital	257,946	253,693
Accumulated deficit	(262,938)	(261,329)
Total stockholders deficit	(4,784)	(7,428)
Total liabilities and stockholders deficit	$ 360	$ 256

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Stockholders deficit:
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock Series A, issued	9,333	5,083
Preferred stock Series A, outstanding	9,333	5,083
Preferred stock Series A, liquidation preference	$ 500	$ 500
Common stock, par value	$ 0.001	$ 0.001
Common stock shares authorized	600,000,000	600,000,000
Common stock shares issued	208,019,141	207,913,541
Common stock shares outstanding	208,019,141	207,913,541

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue:
Software	$ 801	$ 66
Maintenance	488	488
Services	247	291
Total operating revenue	1,536	845
Cost of revenue
Software	5	1
Maintenance	156	157
Services	436	408
Total cost of revenue	597	566
Gross margin	939	279
Operating expenses:
Sales and marketing	412	431
Research and product development	1,147	991
General and administrative	729	720
Total operating expenses	2,288	2,142
Loss from operations before other income (charges)	(1,349)	(1,863)
Other income (charges):
Interest expense	(260)	(330)
Other (Note 1)	0	128
Total other income/(expense)	(260)	(202)
Net loss	$ (1,609)	$ (2,065)
Loss per share applicable to common stockholders - basic and diluted	$ (0.01)	$ (0.01)
Weighted average shares outstanding - basic and diluted	207,976	207,914

Consolidated Statements of Stoc

Consolidated Statements of Stockholders Deficit - USD ($) $ in Thousands	Common Stock	Preferred Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2017	207,913,541	5
Beginning Balance, Amount at Dec. 31, 2017	$ 208	$ 0	$ 253,691	$ (259,711)	$ (5,812)
Restricted stock issued as compensation			2		2
Reversal of Series B Dividends				447	447
Net loss				(2,065)	(2,065)
Ending Balance, Shares at Dec. 31, 2018	207,913,541	5
Ending Balance, Amount at Dec. 31, 2018	$ 208	$ 0	253,693	(261,329)	(7,428)
Restricted stock issued as compensation			2		2
Common stock issued for accounts payable, shares	105,600
Common stock issued for accounts payable, amount	$ 0		1		1
Series A preferred stock issued for conversion of debt/interest, shares		4,250
Series A preferred stock issued for conversion of debt/interest, amount		$ 0	4,250		4,250
Net loss				(1,609)	(1,609)
Ending Balance, Shares at Dec. 31, 2019	208,019,141	9,333
Ending Balance, Amount at Dec. 31, 2019	$ 141	$ 0	$ 257,946	$ (262,938)	$ (4,784)

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (1,609)	$ (2,065)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	4	3
Stock compensation expense	2	2
Write off of bad debt	0	2
Gain on write down of liabilities	0	(125)
Changes in assets and liabilities:
Trade accounts receivable	(52)	210
Prepaid expenses and other assets	(69)	(89)
Accounts payable and accrued expenses	(5)	(178)
Deferred revenue	(243)	6
Net cash used in operating activities	(1,972)	(2,234)
Cash flows from investing activities:
Purchases of property and equipment	(4)	(2)
Net cash used in investing activities	(4)	(2)
Cash flows from financing activities:
Borrowings under short and long-term debt	1,955	2,402
Repayments of short and long-term debt	(59)	(125)
Net cash provided by financing activities	1,896	2,277
Net increase/(decrease) in cash	(80)	41
Cash at beginning of year	97	56
Cash at end of year	17	97
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Income taxes	5	5
Interest	$ 92	$ 90

1. SUMMARY OF OPERATIONS, SIGNI

1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS	12 Months Ended
	Dec. 31, 2019
Accounting Policies [Abstract]
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 consolidated 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 $1,609,000 for the year ended December 31, 2019, and has a history of operating losses. Management believes that its product’s functionality resonates in the marketplace as both “analytics” and “automation” are topics often discussed and written about. Further, the Company believes that its repositioned strategy of leading with a no cost, short, “proof of concept” evaluation of the software’s capabilities will shorten the sales cycle and allow for value based selling to our customers and prospects. The Company anticipates success in this regard based upon current discussions and active “proof of concepts” with active partners, customers and prospects. 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 within one year after the date that the financial statements are issued. The consolidated 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 consolidated 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 consolidated 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, stock based compensation, revenue recognition, 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. 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, 2019, 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 consolidated 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. 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 comprised of right of use lease liability, accrued legal, consulting and other. Cost of Revenue: 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 $96,000 and $125,000 for the years ended December 31, 2019 and 2018, respectively. Research and Product Development: Research and product development costs are expensed as incurred unless such costs meet the software capitalization criteria. Research and development expenses were approximately $1,147,000 and $991,000 for the years ended December 31, 2019 and 2018, respectively. Other Income/(Charges): Other income/(charges) in fiscal year 2018 consists primarily of a write off of certain liabilities deemed no longer payable in the amount of $125,000. These liabilities were deemed no longer payable as the statute of limitations obligated by the Company for these liabilities had lapsed. No such write off occurred in fiscal year 2019. 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 consolidated 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 7.) 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 2019 and 2018, 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: 2019 2018 Stock options 681,211 706,211 Warrants 37,334,407 20,333,620 Preferred stock 186,672,036 101,668,101 224,687,654 122,707,932 Stock-Based Compensation: The Company accounts for stock-based compensation to employees under 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 did not grant any options in fiscal year 2019 and 2018. The Company granted 500,000 restricted stock units to certain employees in fiscal 2018. The Company recognized approximately $1,000 and $2,000 of stock-based compensation in fiscal year 2019 and 2018, respectively. Recent Accounting Pronouncements: In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective for us on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We adopted the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected all of the new standard’s available transition practical expedients. This standard did not have a material effect on our financial statements. We believe the most significant future effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating lease and (2) providing significant new disclosures about our leasing activities. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for our real estate lease that is currently on a month to month lease. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. As of December 31, 2019, the Company reevaluated the lease under the guidance of Topic 842 and estimated an expected term of one year for analysis under Topic 842. Under the new standard, the Company’s lease liability is based on the present value of such payments and the related right-of-use asset will generally be based on the lease liability. The Company recognized on ROU asset and liability of approximately $63,000 as of December 31, 2019. (See Note 4)

2. REVENUE

2. REVENUE	12 Months Ended
	Dec. 31, 2019
Revenue:
REVENUE	On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers and all the related amendments (“the new revenue standard”) and applied it to all contracts using the modified retrospective method. We completed our review of contracts with our customers and did not need to record a cumulative effect adjustment to accumulated deficit upon adoption of the new revenue standard as of January 1, 2018. Under ASC 606, revenue is recognized when a company transfers the promised goods or services to a customer in an amount that reflects consideration that is expected to be received for those goods and services. Adoption of the standard did not have a material impact on the Company’s financial position, results of operations, cash flow, accounting policies, business processes, internal controls or disclosures. Contract Balances Timing differences among revenue recognition may result in contract assets or liabilities. Contract liabilities (deferred revenue) totaled $217,000 and $460,000 as of December 31, 2019, and December 31, 2018, respectively. Revenue recognized from the contract liabilities for the 12 months ended December 31, 2019 was $380,000. The contract liability balances reflect the unrecognized transaction price. Our net trade accounts receivables were $63,000 and $11,000 as of December 31, 2019, and December 31, 2018, respectively. 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 consolidated financial statements. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under the new revenue recognition standard. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Most of our contracts have multiple performance obligations, which include software, maintenance and professional services. Revenue Recognition Cicero utilizes point in time method for revenue recognition for its software license revenue. Our software licenses are distinct and have standalone functionality as it is fully functional without any services purchased. Cicero utilizes the output method over time for revenue recognition as maintenance contracts are invoiced annually prior to the start of the maintenance period and then recognized monthly over the length of the maintenance contract. Cicero utilizes the output method over time for revenue recognition for its services revenue as service hours/days are logged and billed subsequently. Cicero has no upfront fees that are billable to customers. Cicero established a standalone selling price for its lines of revenue based on price list and historical sales. Practical Expedients and Exemptions There are several practical expedients and exemptions allowed under ASC 606 that impact timing of revenue recognition and our disclosures. Below is a list of practical expedients we applied in the adoption and application of ASC 606: Application ● The Company is making the election not to disclose variable consideration allocated to performance obligations related to either: (1) sales- or usage-based royalties on licenses of intellectual property or (2) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when certain criteria are met. ● The Company is making an election to treat sales tax on a net basis, which would not include it in the transaction price to allocate across performance obligations. ● The Company elects to treat similar contracts among the business units as part of a portfolio of contracts, primarily software license and maintenance contracts. These contracts have the same provision terms, and management has the expectation the result will not be materially different from the consideration of each individual contract. ● The Company does not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer of the promised items to the customer. ● The Company generally expenses sales commissions when incurred when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

3. ACCOUNTS RECEIVABLE

3. ACCOUNTS RECEIVABLE	12 Months Ended
	Dec. 31, 2019
Receivables [Abstract]
ACCOUNTS RECEIVABLE	Trade accounts receivable was composed of the following at December 31 (in thousands): 2019 2018 Current trade accounts receivable $ 63 $ 11

4. LEASES

4. LEASES	12 Months Ended
	Dec. 31, 2019
Leases [Abstract]
LEASES	On January 1, 2019, the Company adopted Topic 842, which is intended to improve financial reporting about leasing transactions. Under the standard, organizations that lease assets, referred to as “Lessees” shall recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In addition, the standard requires disclosures including financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The Company elected to use the practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classifications. The Company made an accounting policy election to account for leases with an initial term of 12 months or less similar to existing guidance for operating leases today. The Company recognized those lease payments in the Consolidated Statement of Operations on a straight-line basis over the lease term. In June 2014, the Company entered into an amendment with its landlord and renewed its lease through 2018. In October 2016, the Company entered into an amendment reducing the square footage being leased for the remaining term of the lease. The lease expired in October 2018 and the Company is currently on a month to month lease with the landlord as it negotiates a new long term lease and as such the Company has accounted for it as a practical expedient in fiscal and accounted for it as an operating lease. As of December 31, 2019, the Company reevaluated the lease under the guidance of Topic 842 and estimated an expected term of one year for analysis under Topic 842. Under the new standard, the Company’s lease liability is based on the present value of such payments and the related right-of-use asset will generally be based on the lease liability. The impact of the adoption of Topic 842 on the accompanying consolidated balance sheet as of December 31, 2019, is as follows (in thousands): December 31, 2019 Adjustments Due to the Adoption of Topic 842 December 31, 2019 Right-of-use asset Lease liability Property and equipment, net $ 6 $ 63 -- $ 69 Current liabilities $ 17 -- $ 63 $ 80 December 31, 2019 Lease term and discount rate Weighted-average remaining lease term operating lease 1.0 year Weighted-average discount rate operating lease 10.0 % Components of lease assets and liabilities December 31, 2019 Assets Property and equipment, net operating lease-right of use asset $ 63 Liabilities Current liabilities operating lease-current liability $ 63

5. PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Property and equipment was composed of the following at December 31 (in thousands): 2019 2018 Computer equipment $ 142 $ 138 Furniture and fixtures 19 19 Office equipment 35 35 Right of Use - Lease 63 -- 259 192 Less: accumulated depreciation (190 ) (186 ) $ 9 $ 6 Depreciation expense of property and equipment was $4,000 and $3,000 for the years ended December 31, 2019 and 2018, respectively. Rent expense was $66,000 for each years ended December 31, 2019 and 2018, respectively. The Company is currently on a month to month lease with the landlord as it negotiates a new long term lease.

6. DEBT

6. DEBT	12 Months Ended
	Dec. 31, 2019
Debt Disclosure [Abstract]
DEBT	Debt and notes payable to related parties consists of the following (in thousands): December 31, 2019 December 31, 2018 Note payable – asset purchase agreement (a) $ 301 $ 361 Note payable – related parties (b) 1,575 3,512 Notes payable (c) 515 514 Total debt 2,391 4,387 Less current portion 1,927 411 Total long term debt $ 464 $ 3,976 (a) As part of a prior acquisition, the Company was subject to certain earn-out obligation 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. The earn-out was payable fifty percent in cash and fifty percent in common stock of the Company at the rate of one share for every $0.15 earn-out payable. The Company had recorded $842,606 in its accounts payable as of December 31, 2014 due to a portion of earn-out obligations being met. In June 2015, the Company entered into a promissory note with SOAdesk for fifty percent of the earn-out payable ($421,303) to SOAdesk. The maturity date of the note was December 31, 2015 with an annual interest rate of 10%. Through a series of amendments, the maturity date was extended to January 31, 2020 and two milestone payments of $62,500, to be applied to outstanding interest and then principal, payable on June 1, 2018 and December 1, 2018, respectively, were added. At December 31, 2018, the Company was indebted to SOAdesk for $360,580 in principal and approximately $17,000 in interest. At December 31, 2019, the Company was indebted to SOAdesk for $301,282 in principal and approximately $11,000 in interest. (b) From time to time during 2017 through 2019, the Company entered into several short term notes payable with John Steffens, the Company’s Chairman of the Board, for various working capital needs. The notes bear an interest rate of 10% with a maturity date of December 31, 2018. In December 2018, all outstanding notes were amended to a new maturity date of June 30, 2020 and as such were reclassed to long term debt. The Company is obligated to repay the notes with the collection of any accounts receivable. At December 31, 2018, the Company was indebted to Mr. Steffens in the approximate amount of $3,511,500 of principal and $299,000 of interest. In March 2019, the Company issued 4,250 shares of its Series A preferred stock and warrants to purchase up to 17,007,787 shares of the Company’s common stock at an excise price of $0.05 per share to convert the total obligation of $3,891,500 of principal and $358,697 of interest. At December 31, 2019, the Company was indebted to Mr. Steffens in the approximate amount of $1,575,000 of principal and $97,000 of interest. (c) The Company has issued a series of short-term unsecured promissory notes with private lenders, which provide for short term borrowings. The notes, in the aggregate amount of $50,000 of principal and $88,000 of interest and $50,000 of principal and $99,000 of interest, as of December 31, 2018 and December 31, 2019, respectively, bear interest between 10% and 36% per annum. In March 2012 the Company entered into an unsecured promissory note with a private lender for $336,000 at an interest rate of 12% and a maturity date of March 31, 2013. Through a series of amendments, the note was amended to extend the maturity date to January 31, 2021 and a new principal balance of $498,500. Simultaneously a $30,000 principal payment was made to the lender. A new repayment schedule of quarterly principal and interest payments was added beginning in January 31, 2018 with a payment of $30,000. $25,000 quarterly principal and interest payments are required to be made beginning on April 30, 2018 through January 31, 2019. $40,000 principal and interest payments are required to be made on beginning on April 30, 2019 through October 31, 2020. Final payment of remaining principal and interest is due on January 31, 2021. The lender agreed to waive certain quarterly payments in fiscal 2018 as business conditions so warrant without triggering any default and that any deferred payments would be added to the next quarterly payment. At December 31, 2018, the Company was indebted to this private lender in the amount of $464,350 in principal and $51,000 in interest and has been reclassified as long term debt due to its maturity date of January 31, 2021. At December 31, 2019, the Company was indebted to this private lender in the amount of $464,350 in principal and $55,000 in interest.

7. INCOME TAXES

7. INCOME TAXES	12 Months Ended
	Dec. 31, 2019
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 consolidated 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 consolidated financial statements. The evaluation was performed for the tax years 2016 through 2019, and may be subject to audits for amounts related to net operating loss carryforwards generated in periods prior to December 31, 2015. 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 2019 and 2018. 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): 2019 2018 Expected income tax benefit at statutory rate (34%) $ (338 ) $ (434 ) State taxes, net of federal tax benefit (80 ) (101 ) Effect of change in valuation allowance (2,110 ) (1,256 ) Non-deductible expenses 1 1 Expired net operating loss carryforwards 2,527 1,386 Expired employee stock options -- 404 Impact of tax rate change -- -- Total $ -- $ -- Significant components of the net deferred tax asset at December 31 were as follows: 2019 2018 Accrued expenses, non-tax deductible $ 1 $ 5 Deferred revenue 56 119 Contingent payments (538 ) (538 ) Stock compensation expense -- -- Loss carryforwards 35,125 37,125 Depreciation and amortization 846 889 35,490 37,600 Less: valuation allowance (35,490 ) (37,600 ) $ -- $ -- As of December 31, 2019, we had federal and state net operating loss carryforwards of approximately $135,587,000. The associated deferred tax asset related to these federal and state net operating loss carryforwards was $35,125,000. The net operating loss carryforwards expire between 2020 and 2037. The value of these carryforwards depends on our ability to generate taxable income. As of December 31, 2019 and 2018, we had deferred tax assets of $35,490,000 and $37,600,000 upon which we had a full valuation allowance. A valuation allowance for deferred tax assets, including NOL carryforwards, is recognized when it is more-likely- than-not that all or some portion of the benefit from the deferred tax asset will not be realized. To assess that likelihood, we use estimates and judgment regarding our future taxable income, and we consider the tax consequences in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies, as well as the current and forecasted business economics of our industry. Management assesses all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets. A significant piece of objectively verifiable negative evidence is the cumulative loss incurred over the three-year period ending December 31, 2017. Such objective negative evidence limits our ability to consider various forms of subjective positive evidence, such as our projections for future income. Accordingly, management has not changed its judgement with respect to the need for a valuation allowance against substantially all of our net deferred tax asset position. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective positive evidence such as future expected growth. The Company provided a full valuation allowance on the total amount of its deferred tax assets at December 31, 2019 and 2018 since management does not believe that it is more likely than not that these assets will be realized.

8. STOCKHOLDER'S EQUITY

8. STOCKHOLDER'S EQUITY	12 Months Ended
	Dec. 31, 2019
Equity [Abstract]
STOCKHOLDER'S EQUITY	Stock Grants None. Restricted Stock Units: The Company issued 500,000 restricted stock units to certain employees in fiscal 2018. 250,000 units were forfeited in 2019 due to the termination of an employee. The Company is accounting for the stock compensation for the restricted shares using ASC 718 Compensation-Stock Compensation. The restricted stock vests on the two-year anniversary of the date of grant and the employee needs to still be employed at the time of vesting to receive the grant. The Company uses the Black Scholes calculation to determine the expense and records the expense over the life of the vesting period of each grant. The Company recorded approximately $1,000 and $2,000 in stock compensation expense in fiscal 2019 and 2018, respectively, in relation to these grants. The Company entered into an employment agreement with its Chief Revenue Officer, Mr. Todd Sherin, that included the granting of 5,000,000 restricted shares that vest over a three-year period and included meeting certain performance obligations. The Company is accounting for the stock compensation for the restricted shares using ASC 718 Compensation-Stock Compensation, specifically ASC 718-10-30-28, 718-10-55-10, and 718-10-55-61. Pursuant to these guidelines the Company is not obligated to record compensation expense until the point in time at which it is probable that Mr. Sherin would meet the performance obligation set forth in the agreement. At such time, the Company would record compensation expense by multiplying the amount of shares vesting at that point by the stock price on the effective date of the agreement. As of December 31, 2019, the Company determined that the probability of meeting these obligations was minimal and as such has not recorded any stock compensation expense for this restricted stock 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 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. The plan expired in fiscal 2017 and as such no further options are available to grant. Activity for stock options issued under these plans for the years ending December 31, 2019 and 2018 was as follows: Number of Options Option Price Per Share Weighted Average Exercise Price Aggregate Intrinsic Value Balance at December 31, 2017 1,577,750 0.05-0.51 $ 0.08 Granted -- -- -- Forfeited (796,539 ) 0.05-0.09 $ 0.07 Expired (75,000 ) 0.23 $ 0.23 Balance at December 31, 2018 706,211 0.05-0.11 $ 0.08 Granted -- -- -- Forfeited -- -- -- Expired (25,000 ) 0.11 $ 0.11 Balance at December 31, 2019 681,211 0.05-0.11 $ 0.08 $ 0.00 There was no activity for non-vested stock options under these plans for the fiscal year ending December 31, 2019 and 2018. There were no options granted in 2019 and 2018. At December 31, 2019, there was no unrecognized compensation cost related to stock options. At December 31, 2019 and 2018, options to purchase 681,211 and 706,211 shares of common stock were exercisable, respectively, pursuant to the plans at prices ranging from $0.05 to $0.11 . The following table summarizes information about stock options outstanding at December 31, 2019: Exercise Price Number Outstanding Remaining Contractual Life for Options Outstanding Number Exercisable Weighted Average Exercise Price $ 0.05-0.06 203,461 2.7 203,641 $ 0.06 0.07-0.09 452,750 0.6 452,750 0.09 0.10-0.11 25,000 1.4 25,000 0.10 681,211 1.3 681,211 $ 0.08 Preferred Stock On March 26, 2019, the Company entered into agreement with John L. Steffens, the Chairman of the Board of Directors, to convert $3,891,500 of principal amount of debt and $358,697 of interest into 4,250 shares of the Company’s Series A Preferred Stock. Per the Certificate of Designation, the initial conversion of preferred stock to common equaled 85,003,934 shares of common stock of the Company at a price of $0.05 per share, subject to adjustment for stock dividends, stock splits and similar events. Additionally, Mr. Steffens was granted a warrant for 17,000,787 of the Company’s common shares at a price of $0.05 per share. The Company accounted for the transaction pursuant to Topic ASC 470-50, Modification and Extinguishment of Debt. Due to the fact that the transaction was with Mr. Steffens, the Company’s Chairman of the Board, the Company determined that this was not an arm’s length agreement and as such has recorded the entire transaction through additional paid in capital. Series A The Series A Preferred Stock ranks senior in preference and priority to the Company’s common stock with respect to dividend and liquidation rights and, except as provided in the Certificate of Designation or otherwise required by law, will vote with the common stock on an as converted basis on all matters presented for a vote of the holders of common stock, including directors. The Series A Preferred Stock is convertible at any time at the option of the holder at an initial conversion ratio of 20,000 shares of Common Stock for each share of Series A Preferred Stock. The initial conversion ratio shall be adjusted in the event of any stock splits, stock dividends and other recapitalizations. The holders of the Series A Preferred Stock are entitled to a liquidation preference of $1,000 per share of Series A Preferred Stock plus any declared but unpaid dividends upon the liquidation of the Company. The Series A Preferred Stock may be redeemed by the Company at any time and must be redeemed by the Company, upon the written request of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, after the occurrence of one of the following events: (x) the Company’s trailing 12 month EBITDA exceeds $5,000,000, (y) the sale of all, or substantially all of the assets of the Company, or (z) the sale of all or substantially all the intellectual property of the Company, which in the case of “y” or “z” result in net proceeds to the Company in excess of $6,000,000, at a redemption price equal to $1,000 plus all declared but unpaid dividends, which amount will be paid in three annual installments. The approval of at least two thirds of the holders of Series A Preferred Stock, voting together as a separate class, is required for: (i) the merger, sale of all, or substantially all of the assets or intellectual property, recapitalization, or reorganization of the Company, unless such action (x) results in net proceeds to the stockholders of the Company in excess of $5,000,000, and (y) has received the prior approval of the Board of Directors. (ii) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A Preferred Stock. (iii) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the redemption of the Series A Preferred Stock) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A Preferred Stock). (iv) any amendment or repeal of any provision of the Company’s Certificate of Incorporation or Bylaws that would adversely affect the rights, preferences, or privileges of the Series A Preferred Stock. and (v) the liquidation, dissolution or winding up of the business and affairs of the Company, the effectuation of any Liquidation Event (as defined in Certificate of Designation), or the consent to any of the foregoing, unless such action (x) results in net proceeds to the stockholders of the Company in excess of $5,000,000, and (y) has received the prior approval of the Board of Directors. 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 and the private investment in the Company’s shares. At December 31, 2019, there were 37,334,407 exercisable warrants outstanding at an exercise price of $0.05 and $0.07 per share. Number of Warrants Warrant Price Per Share Weighted Average Exercise Price Balance at December 31, 2017 228,004,448 $ 0.04-$0.20 $ 0.05 Issued -- -- -- Exercised -- -- -- Forfeited (207,670,828 ) $ 0.04-$0.20 $ 0.05 Balance at December 31, 2018 20,333,620 $ 0.07 $ 0.07 Issued 17,000,787 $ 0.05 $ 0.05 Exercised -- -- -- Forfeited -- -- -- Balance at December 31, 2019 37,334,407 $ 0.05-$0.07 $ 0.06 Accrued Dividends: The Company reversed approximately $447,000 of accrued dividends associated with previously issued Series B preferred stock in fiscal 2018. The dividends were only payable to current shareholders of Series B if there was a liquidation of the Company or if approved by the Board of Directors. As an automatic conversion of all outstanding Series B preferred stock was approved by the Board of Directors in September 2015, the Company is no longer under any obligation to pay dividends to the former holders of the Series B preferred stock.

9. EMPLOYEE BENEFIT PLANS

9. EMPLOYEE BENEFIT PLANS	12 Months Ended
	Dec. 31, 2019
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [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 2019 and 2018.

10. SIGNIFICANT CUSTOMERS AND C

10. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK	12 Months Ended
	Dec. 31, 2019
Risks and Uncertainties [Abstract]
SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK	In 2019, two customers accounted for 77% of operating revenues and one customer accounted for 100% of accounts receivable at December 31, 2019. In 2018, one customer accounted for 48% of operating revenues and one customer accounted for 100% of accounts receivable at December 31, 2018. In 2019, one vendor accounted for 73% of accounts payable at December 31, 2019. In 2018, one vendor accounted for 68% of accounts payable at December 31, 2018.

11. RELATED PARTY INFORMATION

11. RELATED PARTY INFORMATION	12 Months Ended
	Dec. 31, 2019
Related Party Transactions [Abstract]
RELATED PARTY INFORMATION	From time to time during 2017 through 2019, the Company entered into several short term notes payable with John Steffens, the Company’s Chairman of the Board, for various working capital needs. The notes bear an interest rate of 10% with a maturity date of December 31, 2018. In December 2018, all outstanding notes were amended to a new maturity date of June 30, 2020 and as such were reclassed to long term debt. The Company is obligated to repay the notes with the collection of any accounts receivable. At December 31, 2018, the Company was indebted to Mr. Steffens in the approximate amount of $3,511,500 of principal and $299,000 of interest. In March 2019, the Company issued 4,250 shares of its Series A preferred stock and warrants to purchase up to 17,007,787 shares of the Company’s common stock at an excise price of $0.05 per share to convert the total obligation of $3,891,500 of principal and $358,697 of interest. At December 31, 2019, the Company was indebted to Mr. Steffens in the approximate amount of $1,575,000 of principal and $97,000 of interest.

12. COMMITMENTS AND EMPLOYMENT

12. COMMITMENTS AND EMPLOYMENT AGREEMENTS	12 Months Ended
	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND EMPLOYMENT AGREEMENTS	Under the employment agreement between the Company and Mr. Broderick effective January 1, 2019, 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 Board of Directors, at 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 a substantial change in Mr. Broderick’s job duties occurs, 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. Sherin effective July 17, 2017, we agreed to pay Mr. Sherin an annual base salary of $150,000 and a commission of 15% on incremental operating revenue of new clients as designated in an exhibit in his agreement. If the Company terminates Mr. Sherin’s employment without cause, we agreed to pay Mr. Sherin an amount equivalent to three (3) months of Mr. Sherin’s then current base salary in equal semi-monthly installments over that three (3) month period following termination. If Mr. Sherin’s employment is terminated for any reason, Mr. Sherin has agreed that, for eighteen (18) months after such termination, he will not directly or indirectly solicit or divert business from us, assist any business in attempting to solicit or divert business from us, solicit or hire any person who was our employee during the employment agreement term, or assist any business in attempting to solicit or hire any person who was our employee during the employment agreement term.

13. CONTINGENCIES

13. CONTINGENCIES	12 Months Ended
	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
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. 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, 2019 and 2018.

14. SUBSEQUENT EVENTS

14. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	In the first quarter of 2020, the Company entered into notes payable totaling $355,000 with Mr. Steffens. The note bears interest at 10% per annum. The notes are unsecured and mature on June 30, 2020. The Company is obligated to repay the notes with the collection of any accounts receivables.

1. SUMMARY OF OPERATIONS, SIG_2

1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	12 Months Ended
	Dec. 31, 2019
Accounting Policies [Abstract]
Going Concern and Management Plans	The accompanying consolidated 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 $1,609,000 for the year ended December 31, 2019, and has a history of operating losses. Management believes that its product’s functionality resonates in the marketplace as both “analytics” and “automation” are topics often discussed and written about. Further, the Company believes that its repositioned strategy of leading with a no cost, short, “proof of concept” evaluation of the software’s capabilities will shorten the sales cycle and allow for value based selling to our customers and prospects. The Company anticipates success in this regard based upon current discussions and active “proof of concepts” with active partners, customers and prospects. 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 within one year after the date that the financial statements are issued. The consolidated 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 consolidated 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 consolidated 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, stock based compensation, revenue recognition, 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.
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, 2019, 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 consolidated 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.
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 comprised of right of use lease liability, accrued legal, consulting and other.
Cost of Revenue	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 $96,000 and $125,000 for the years ended December 31, 2019 and 2018, respectively.
Research and Product Development	Research and product development costs are expensed as incurred unless such costs meet the software capitalization criteria. Research and development expenses were approximately $1,147,000 and $991,000 for the years ended December 31, 2019 and 2018, respectively.
Other Income/(Charges)	Other income/(charges) in fiscal year 2018 consists primarily of a write off of certain liabilities deemed no longer payable in the amount of $125,000. These liabilities were deemed no longer payable as the statute of limitations obligated by the Company for these liabilities had lapsed. No such write off occurred in fiscal year 2019.
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 consolidated 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 7.)
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 2019 and 2018, 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: 2019 2018 Stock options 681,211 706,211 Warrants 37,334,407 20,333,620 Preferred stock 186,672,036 101,668,101 224,687,654 122,707,932
Stock-Based Compensation	The Company accounts for stock-based compensation to employees under 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 did not grant any options in fiscal year 2019 and 2018. The Company granted 500,000 restricted stock units to certain employees in fiscal 2018. The Company recognized approximately $1,000 and $2,000 of stock-based compensation in fiscal year 2019 and 2018, respectively.
Recent Accounting Pronouncements	In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective for us on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We adopted the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected all of the new standard’s available transition practical expedients. This standard did not have a material effect on our financial statements. We believe the most significant future effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating lease and (2) providing significant new disclosures about our leasing activities. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for our real estate lease that is currently on a month to month lease. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. As of December 31, 2019, the Company reevaluated the lease under the guidance of Topic 842 and estimated an expected term of one year for analysis under Topic 842. Under the new standard, the Company’s lease liability is based on the present value of such payments and the related right-of-use asset will generally be based on the lease liability. The Company recognized on ROU asset and liability of approximately $63,000 as of December 31, 2019. (See Note 4)

1. SUMMARY OF OPERATIONS, SIG_3

1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
Accounting Policies [Abstract]
Loss per share	2019 2018 Stock options 681,211 706,211 Warrants 37,334,407 20,333,620 Preferred stock 186,672,036 101,668,101 224,687,654 122,707,932

3. ACCOUNTS RECEIVABLE (Tables)

3. ACCOUNTS RECEIVABLE (Tables)	12 Months Ended
	Dec. 31, 2019
Receivables [Abstract]
Trade accounts receivable	2019 2018 Current trade accounts receivable $ 63 $ 11

4. LEASES (Tables)

4. LEASES (Tables)	12 Months Ended
	Dec. 31, 2019
Leases [Abstract]
Adoption of Topic 842	December 31, 2019 Adjustments Due to the Adoption of Topic 842 December 31, 2019 Right-of-use asset Lease liability Property and equipment, net $ 6 $ 63 -- $ 69 Current liabilities $ 17 -- $ 63 $ 80
Lease term and discount rate	December 31, 2019 Lease term and discount rate Weighted-average remaining lease term operating lease 1.0 year Weighted-average discount rate operating lease 10.0 %
Components of lease assets and liabilities	December 31, 2019 Assets Property and equipment, net operating lease-right of use asset $ 63 Liabilities Current liabilities operating lease-current liability $ 63

5. PROPERTY AND EQUIPMENT (Tabl

5. PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Property and equipment	2019 2018 Computer equipment $ 142 $ 138 Furniture and fixtures 19 19 Office equipment 35 35 Right of Use - Lease 63 -- 259 192 Less: accumulated depreciation (190 ) (186 ) $ 9 $ 6

6. DEBT (Tables)

6. DEBT (Tables)	12 Months Ended
	Dec. 31, 2019
Debt Disclosure [Abstract]
Debt and notes payable to related party	December 31, 2019 December 31, 2018 Note payable – asset purchase agreement (a) $ 301 $ 361 Note payable – related parties (b) 1,575 3,512 Notes payable (c) 515 514 Total debt 2,391 4,387 Less current portion 1,927 411 Total long term debt $ 464 $ 3,976

7. INCOME TAXES (Tables)

7. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Reconciliation of expected income tax at the statutory federal rate with the actual income tax provision	2019 2018 Expected income tax benefit at statutory rate (34%) $ (338 ) $ (434 ) State taxes, net of federal tax benefit (80 ) (101 ) Effect of change in valuation allowance (2,110 ) (1,256 ) Non-deductible expenses 1 1 Expired net operating loss carryforwards 2,527 1,386 Expired employee stock options -- 404 Impact of tax rate change -- -- Total $ -- $ --
Net deferred tax asset (liability)	2019 2018 Accrued expenses, non-tax deductible $ 1 $ 5 Deferred revenue 56 119 Contingent payments (538 ) (538 ) Stock compensation expense -- -- Loss carryforwards 35,125 37,125 Depreciation and amortization 846 889 35,490 37,600 Less: valuation allowance (35,490 ) (37,600 ) $ -- $ --

8. STOCKHOLDER'S EQUITY (Tables

8. STOCKHOLDER'S EQUITY (Tables)	12 Months Ended
	Dec. 31, 2019
Equity [Abstract]
Activity for stock options issued	Number of Options Option Price Per Share Weighted Average Exercise Price Aggregate Intrinsic Value Balance at December 31, 2017 1,577,750 0.05-0.51 $ 0.08 Granted -- -- -- Forfeited (796,539 ) 0.05-0.09 $ 0.07 Expired (75,000 ) 0.23 $ 0.23 Balance at December 31, 2018 706,211 0.05-0.11 $ 0.08 Granted -- -- -- Forfeited -- -- -- Expired (25,000 ) 0.11 $ 0.11 Balance at December 31, 2019 681,211 0.05-0.11 $ 0.08 $ 0.00
Stock options outstanding	Exercise Price Number Outstanding Remaining Contractual Life for Options Outstanding Number Exercisable Weighted Average Exercise Price $ 0.05-0.06 203,461 2.7 203,641 $ 0.06 0.07-0.09 452,750 0.6 452,750 0.09 0.10-0.11 25,000 1.4 25,000 0.10 681,211 1.3 681,211 $ 0.08
Stock warrant activity	Number of Warrants Warrant Price Per Share Weighted Average Exercise Price Balance at December 31, 2017 228,004,448 $ 0.04-$0.20 $ 0.05 Issued -- -- -- Exercised -- -- -- Forfeited (207,670,828 ) $ 0.04-$0.20 $ 0.05 Balance at December 31, 2018 20,333,620 $ 0.07 $ 0.07 Issued 17,000,787 $ 0.05 $ 0.05 Exercised -- -- -- Forfeited -- -- -- Balance at December 31, 2019 37,334,407 $ 0.05-$0.07 $ 0.06

1. SUMMARY OF OPERATIONS, SIG_4

1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Total	224,687,654	122,707,932
Stock Options
Total	681,211	706,211
Warrant
Total	37,334,407	20,333,620
Preferred Stock
Total	186,672,036	101,668,101

1. SUMMARY OF OPERATIONS, SIG_5

1. SUMMARY OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Accrued dividends	$ 0	$ 0
Advertising expenses	96	125
Research and development expenses	1,147	991
Stock compensation expense	$ 2	$ 2

3. ACCOUNTS RECEIVABLE (Details

3. ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Current trade accounts receivable	$ 63	$ 11

4. LEASES (Details)

4. LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, net	$ 69	$ 6
Current liabilities	80
Prior to Adjustment
Property and equipment, net	6
Current liabilities	17
Adjustments | Right of Use Asset
Property and equipment, net	63
Current liabilities	0
Adjustments | Lease Liabilities
Property and equipment, net	0
Current liabilities	$ 63

4. LEASES (Details 1)

4. LEASES (Details 1) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Weighted-average remaining lease term - operating lease	1 year
Weighted-average discount rate - operating lease	10.00%
Assets
Property and equipment, net operating lease -right of use asset	$ 63	$ 0
Liabilities
Current liabilities operating lease-current liability	$ 63

5. PROPERTY AND EQUIPMENT (Deta

5. PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Computer equipment	$ 142	$ 138
Furniture and fixtures	19	19
Office equipment	35	35
Right of Use - Lease	63	0
Property and equipment, gross	259	192
Less: accumulated depreciation and amortization	(190)	(186)
Property and equipment, net	$ 69	$ 6

5. PROPERTY AND EQUIPMENT (De_2

5. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Depreciation	$ 4	$ 3

6. DEBT (Details)

6. DEBT (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Note payable asset purchase agreement (a)	$ 301	$ 361
Note payable - related parties (b)	1,575	3,512
Note payable (c)	515	514
Total debt	2,391	4,387
Less current portion	1,927	411
Total long term debt	$ 464	$ 3,976

7. INCOME TAXES (Details)

7. INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Expected income tax benefit at statutory rate (34%)	$ (338)	$ (434)
State taxes, net of federal tax benefit.	(80)	(101)
Effect of change in valuation allowance	(2,110)	(1,256)
Non-deductible expenses	1	1
Expired net operating loss carryforwards	2,527	1,386
Expired employee stock options	0	404
Impact of tax rate change	0	0
Total	$ 0	$ 0

7. INCOME TAXES (Details 1)

7. INCOME TAXES (Details 1) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Accrued expenses, non-tax deductible	$ 1	$ 5
Deferred revenue	56	119
Contingent payments	(538)	(538)
Stock compensation expense	0	0
Loss carryforwards	35,125	37,125
Depreciation and amortization	846	889
Gross Deferred Tax	35,490	37,600
Less: valuation allowance	(35,490)	(37,600)
Net Deferred tax Assets	$ 0	$ 0

8. STOCKHOLDER'S EQUITY (Detail

8. STOCKHOLDER'S EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Number of Options
Beginning Balance	706,211	1,577,750
Granted	0	0
Forfeited	0	(796,539)
Expired	(25,000)	(75,000)
Ending Balance	681,211	706,211
Option Price Per Share
Granted	$ .00	$ 0
Forfeited	.00
Expired	.11	0.23
Weighted Average Exercise Price
Beginning Balance	.08	0.08
Granted	.00	0
Forfeited	.00	0.07
Expired	.11	0.23
Ending Balance	$ .08	$ 0.08
Aggregate Intrinsic Value
Aggregate Intrinsic Value	$ 0	$ 0
Minimum
Option Price Per Share
Beginning Balance	$ .05	$ 0.05
Forfeited		0.05
Ending Balance	.05	0.05
Maximum
Option Price Per Share
Beginning Balance	.11	0.51
Forfeited		0.09
Ending Balance	$ .11	$ 0.11

8. STOCKHOLDER'S EQUITY (Deta_2

8. STOCKHOLDER'S EQUITY (Details 1) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number outstanding	681,211	706,211	1,577,750
Remaining contractual life for options outstanding	1 year 3 months 18 days
Number exercisable	681,211
Weighted average exercise price	$ .08
Exercise Price 0.05-0.06
Number outstanding	203,461
Remaining contractual life for options outstanding	2 years 8 months 12 days
Number exercisable	203,641
Weighted average exercise price	$ .06
Exercise Price 0.07 to 0.09
Number outstanding	452,750
Remaining contractual life for options outstanding	7 months 6 days
Number exercisable	452,750
Weighted average exercise price	$ .09
Exercise Price 0.10-0.11
Number outstanding	25,000
Remaining contractual life for options outstanding	1 year 4 months 24 days
Number exercisable	25,000
Weighted average exercise price	$ .10

8. STOCKHOLDER'S EQUITY (Deta_3

8. STOCKHOLDER'S EQUITY (Details 2) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Warrants Beginning	20,333,620	228,004,448
Issued	17,000,787	0
Exercised	0	0
Forfeited	0	(207,670,828)
Ending Balance	37,334,307	20,333,620
Warrants Price Per Share
Beginning Balance	.07
Issued	.05	0.00
Exercised	.00	0.00
Forfeited	.00
Ending Balance		0.07
Weighted Average Exercise Price
Beginning Balance	$ 0.07	$ 0.05
Issued	.05	0
Exercised	$ .00	$ 0
Forfeited	.00	0.05
Ending Balance	$ .06	$ 0.07
Minimum
Warrants Price Per Share
Beginning Balance		0.04
Forfeited		0.04
Ending Balance	.05
Maximum
Warrants Price Per Share
Beginning Balance		0.20
Forfeited		0.20
Ending Balance	.07