Note 2 – Supplemental Balance Sheet Information

Receivables

Contract and other receivables consisted of the following (in ‘000’s):

	June 30,
	2017		December 31, 2016
Contract and other receivables	$	1,201	$	2,393
Allowance for doubtful accounts		(6)		(4)
	$	1,195	$	2,389

Inventory

We state inventories at the lower of cost or market, using the first-in-first-out-method (in ‘000’s):

	June 30,
	2017		December 31, 2016
Raw materials	$	124	$	61
less: Reserve		(2)		(2)
Inventories, net	$	122	$	59

Goodwill and Intangible Assets

Goodwill and Intangible Assets consisted of the following (in ‘000’s):

	June 30, 2017				December 31, 2016
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Intangible assets not subject to amortization:
Goodwill	$	1,907		-	$	1,907		-
Intangible assets subject to amortization:
Customer relationships	$	906	$	(372)	$	906	$	(327)
Acquired software	$	234	$	(192)	$	234	$	(169)
Trade name	$	60	$	(3)	$	60		-

We recognized amortization expense related to intangibles of approximately $36,000 and $35,000 for the three-month periods ended June 30, 2017 and 2016, respectively. We recognized amortization expense related to intangibles of approximately $71,000 and $69,000 for the six-month periods ended June 30, 2017 and 2016, respectively.

We have elected to use December 31 as our annual date to test goodwill and intangibles for impairment. As circumstances change that could affect the recoverability of the carrying amount of the assets during an interim period, the Company will evaluate its indefinite lived intangible assets for impairment. We performed a quantitative analysis of our goodwill and intangibles at December 31, 2016 as part of our annual testing for impairment. We used a combination of valuation methodologies including income and market-based valuation methods, with increased weighting on the income-based approaches and subject company stock-price methods as we felt these options more accurately captured the operations of our reporting units. Although there were events and circumstances in existence at December 31, 2016 that suggest substantial doubt about our ability to continue as a going concern, the valuation results indicated that the fair value of our reporting units was greater than the carrying value, including goodwill, for each of our reporting units. Thus, we concluded that there was no impairment at December 31, 2016 for our goodwill and other long-lived intangible assets. There were no identified triggering events or circumstances that occurred during the three or six-month periods ended June 30, 2017 that would have required an interim impairment analysis of our goodwill and other long-lived intangible assets.

Property and Equipment

Property and equipment consisted of the following (in $’000):

	Estimated Useful	June 30,		December 31,
	Lives	2017		2016
Vehicles	5 years	$	32	$	32
Trade equipment	5 years		162		162
Leasehold improvements	2 – 5 years		307		292
Furniture and fixtures	7 years		18		16
Computer equipment and software	3 years		1,387		1,324
			1,906		1,826
Less accumulated depreciation			(1,470)		(1,282)
Property and equipment, net		$	436	$	544

Depreciation of property and equipment and amortization of leasehold improvements and software totaled $87,000 and $109,000 the three-month periods ended June 30, 2017 and 2016, respectively , and $189,000 and $215,000 for the six-month periods ended June 30, 2017 and 2016, respectively.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following (in $’000):

	June 30,
	2017		December 31, 2016
Accounts payable	$	1,874	$	3,652
Accrued expenses		599		1,053
Compensation, benefits & related taxes		448		576
Other accrued expenses		19		38
Total accounts payable and accrued expenses	$	2,940	$	5,319