PCTEL Secure

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

PCTEL Secure

7. PCTEL Secure

PCTEL Secure designed Android-based, secure communication products. The Company learned through its marketing efforts for PCTEL Secure’s baseline product that its distribution channels had limited access to the target software markets, primarily U.S. government agencies. In January 2013 the Company engaged Wunderlich Securities, Inc. to evaluate strategic alternatives for PCTEL Secure, including a further search for a distribution entity that could take its baseline product to market.

On April 30, 2013, the Company divested all material assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying intellectual property, and complete development responsibility for the related products. At the closing of the divestiture, the Company received no upfront cash payment, but the Company has the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software, if any. Under the agreement, royalties are capped at $10 million in the aggregate.

The consolidated financial statements separately reflect the PCTEL Secure operations as discontinued operations for all periods presented. Summary results of operations for the discontinued operations included in the condensed consolidated statement of operations are as follows:

	Nine Months Ended September 30,
	2013
Loss from discontinued operations, before income taxes	($	191	)
Benefit for income tax		(82	)
Loss from discontinued operations, net of tax	($	109	)
Loss from discontinued operations per common share:
Basic	($	0.01	)
Diluted	($	0.01	)
Weighted average shares:
Basic		17,766
Diluted		18,093