Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Virginia
|
|
54-1167364
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
Employer Identification No.)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated
filer
|
☐ (Do not check if a smaller reporting
company)
|
Smaller reporting company
|
☑
|
|
|
Emerging
growth company
|
☐
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
PART I. FINANCIAL
INFORMATION
|
Page Number
|
|
|
Item 1. Financial Statements (unaudited except for the
balance sheet as of December 31, 2017)
|
3
|
|
|
Balance Sheets as of June 30, 2018 and
December 31, 2017
|
3
|
|
|
Statements of Operations for the three
months ended June 30, 2018 and 2017
|
4
|
|
|
Statements of Operations for the six
months ended June 30, 2018 and 2017
|
5
|
|
|
Statements of Cash Flows for the six
months ended June 30, 2018 and 2017
|
6
|
|
|
Notes to Financial
Statements
|
7
|
|
|
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
|
15
|
|
|
Item 4. Controls and Procedures
|
19
|
|
|
PART II. OTHER
INFORMATION
|
|
|
|
Item 1. Legal
Proceedings
|
20
|
|
|
Item 1A. Risk
Factors
|
20
|
|
|
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
20
|
|
|
Item 3. Defaults Upon Senior
Securities
|
20
|
|
|
Item 4. Mine
Safety Disclosures
|
20
|
|
|
Item 5. Other
Information
|
20
|
|
|
Item 6. Exhibits
|
20
|
|
|
SIGNATURES
|
21
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
June 30,
2018
|
December
31, 2017
|
|
(Unaudited)
|
(Audited)
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash
and cash equivalents
|
$2,092,445
|
$2,731,510
|
Accounts
receivable, net
|
774,666
|
610,182
|
Prepaid
expenses and other current assets
|
68,189
|
368,626
|
Contract
assets
|
17,068
|
5,532
|
Notes
receivable
|
-
|
1,719
|
Total
current assets
|
2,952,368
|
3,717,569
|
|
|
|
Property
and equipment, net of accumulated depreciation
|
|
|
and
amortization of $290,235 and $284,667
|
8,466
|
11,133
|
Other
assets
|
6,281
|
6,281
|
Total
assets
|
$2,967,115
|
$3,734,983
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities
|
|
|
Accounts
payable
|
$32,234
|
$47,658
|
Commissions
payable
|
618,450
|
712,829
|
Accrued
payroll and related liabilities
|
257,831
|
275,582
|
Contract
liabilities
|
133,475
|
387,002
|
Other
accrued liabilities
|
54,602
|
411,487
|
Franchise
taxes payable
|
-
|
6,400
|
Total
liabilities
|
1,096,592
|
1,840,958
|
|
|
|
Stockholders'
equity
|
|
|
Common
stock, $0.01 par value, 30,000,000 shares
|
|
|
authorized, 12,844,376 shares issued, 11,201,760
shares
|
|
|
outstanding as of June 30, 2018, and December 31, 2017
|
128,443
|
128,443
|
Additional
paid-in capital
|
14,662,062
|
14,646,406
|
Accumulated
deficit
|
(11,989,771)
|
(11,950,613)
|
Treasury
stock, 1,642,616 shares at cost
|
|
|
at June 30, 2018 and December 31, 2017
|
(930,211)
|
(930,211)
|
Total
stockholders' equity
|
1,870,523
|
1,894,025
|
|
|
|
Total
liabilities and stockholders' equity
|
$2,967,115
|
$3,734,983
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
For the three months ended June 30,
|
|
|
2018
|
2017
|
Revenues
|
|
|
Professional
fees
|
$1,104,148
|
$1,271,440
|
Software
sales
|
2,603,671
|
2,784,676
|
Total
revenues
|
3,707,819
|
4,056,116
|
|
|
|
Cost
of revenues
|
|
|
Cost
of professional fees
|
580,761
|
679,233
|
Cost
of software sales
|
2,571,704
|
2,739,543
|
Total
cost of revenues
|
3,152,465
|
3,418,776
|
|
|
|
Gross
profit
|
555,354
|
637,340
|
|
|
|
Selling,
general and administrative expenses
|
439,535
|
426,148
|
Commissions
expense
|
124,686
|
124,671
|
|
|
|
(Loss)
income from operations
|
(8,867)
|
86,521
|
|
|
|
Other
income
|
2,985
|
2,197
|
|
|
|
(Loss)
income before provision for income taxes
|
(5,882)
|
88,718
|
|
|
|
Provision
for income taxes
|
-
|
-
|
|
|
|
Net
(loss) income
|
$(5,882)
|
$88,718
|
|
|
|
|
|
|
|
|
|
Net
(loss) income per common share - basic
|
$-
|
$0.01
|
|
|
|
Net
(loss) income per common share - diluted
|
$-
|
$0.01
|
|
|
|
Weighted
average common shares outstanding
|
|
|
Basic
|
11,201,760
|
11,201,760
|
Diluted
|
11,201,760
|
11,544,756
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
For the six months ended June 30,
|
|
|
2018
|
2017
|
Revenues
|
|
|
Professional
fees
|
$2,317,795
|
$2,291,473
|
Software
sales
|
2,784,500
|
3,246,291
|
Total
revenues
|
5,102,295
|
5,537,764
|
|
|
|
Cost
of revenues
|
|
|
Cost
of professional fees
|
1,253,342
|
1,213,979
|
Cost
of software sales
|
2,743,178
|
3,186,600
|
Total
cost of revenues
|
3,996,520
|
4,400,579
|
|
|
|
Gross
profit
|
1,105,775
|
1,137,185
|
|
|
|
Selling,
general and administrative expenses
|
910,029
|
844,934
|
Commissions
expense
|
240,560
|
239,304
|
|
|
|
(Loss)
income from operations
|
(44,814)
|
52,947
|
|
|
|
Other
income
|
5,656
|
4,155
|
|
|
|
(Loss)
income before provision for income taxes
|
(39,158)
|
57,102
|
|
|
|
Provision
for income taxes
|
-
|
-
|
|
|
|
Net
(loss) income
|
$(39,158)
|
$57,102
|
|
|
|
|
|
|
|
|
|
Net
(loss) income per common share - basic
|
$-
|
$0.01
|
|
|
|
Net
(loss) income per common share - diluted
|
$-
|
$-
|
|
|
|
Weighted
average common shares outstanding
|
|
|
Basic
|
11,201,760
|
11,201,760
|
Diluted
|
11,201,760
|
11,508,431
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
For the six months ended June 30,
|
|
|
2018
|
2017
|
Cash
flows from operating activities:
|
|
|
Net
(loss) income
|
$(39,158)
|
$57,102
|
Adjustments
to reconcile net (loss) income to net cash
|
|
|
used
in operating activities:
|
|
|
Depreciation
and amortization
|
5,569
|
10,159
|
Stock
option compensation
|
15,656
|
(290)
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable and contract assets
|
(176,020)
|
421,629
|
Prepaid
expenses and other current assets
|
300,437
|
436,005
|
Accounts
payable
|
(15,424)
|
24,140
|
Accrued
payroll and related liabilities and
|
|
|
other
accrued liabilities
|
(381,036)
|
(298,049)
|
Contract
liabilities
|
(253,527)
|
(507,219)
|
Commissions
payable
|
(94,379)
|
(70,695)
|
Net
cash (used in) provided by operating activities
|
(637,882)
|
72,782
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
Acquisition
of property and equipment
|
(2,902)
|
-
|
Payments
received on notes receivable
|
1,719
|
1,904
|
Increase
in notes receivable
|
-
|
(2,500)
|
Net
cash used in investing activities
|
(1,183)
|
(596)
|
|
|
|
Net
(decrease) increase in cash and cash equivalents
|
(639,065)
|
72,186
|
|
|
|
Cash
and cash equivalents, beginning of the period
|
2,731,510
|
1,895,372
|
|
|
|
Cash
and cash equivalents, end of the period
|
$2,092,445
|
$1,967,558
|
|
|
|
Supplemental
cash flow Information
|
|
|
Interest
paid
|
$-
|
$-
|
|
|
|
Income
taxes paid
|
$-
|
$-
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Contract
|
Three months ended 6/30/2018
|
Three months ended 6/30/2017
|
||
Type
|
Amount
|
Percentage
|
Amount
|
Percentage
|
|
|
|
|
|
Professional
Services
|
$1,104,148
|
29.8%
|
$1,271,440
|
31.3%
|
|
|
|
|
|
Third-Party
Software
|
2,455,719
|
66.2%
|
833,414
|
20.6%
|
|
|
|
|
|
Support
& Maintenance
|
145,053
|
3.9%
|
1,944,007
|
47.9%
|
|
|
|
|
|
Incentive
Payments
|
2,899
|
0.1%
|
7,255
|
0.2%
|
|
|
|
|
|
Total
Revenue
|
$3,707,819
|
|
$4,056,116
|
|
Contract
|
Six months ended 6/30/2018
|
Six months ended 6/30/2017
|
||
Type
|
Amount
|
Percentage
|
Amount
|
Percentage
|
|
|
|
|
|
Professional
Services
|
$2,317,795
|
45.4%
|
$2,291,473
|
41.4%
|
|
|
|
|
|
Third-Party
Software
|
2,483,133
|
48.7%
|
1,033,356
|
18.7%
|
|
|
|
|
|
Support
& Maintenance
|
294,013
|
5.8%
|
2,200,820
|
39.7%
|
|
|
|
|
|
Incentive
Payments
|
7,354
|
0.1%
|
12,115
|
0.2%
|
|
|
|
|
|
Total
Revenue
|
$5,102,295
|
|
$5,537,764
|
|
|
|
|
|
|
Revenue
|
Three months ended 6/30/2018
|
Three months ended 6/30/2017
|
||
Recognition Type
|
Amount
|
Percentage
|
Amount
|
Percentage
|
|
|
|
|
|
Time
& Materials
|
$728,940
|
19.7%
|
$859,539
|
21.2%
|
|
|
|
|
|
Fixed-Price
Ratably over Time
|
1,081,512
|
29.2%
|
2,880,324
|
71.0%
|
|
|
|
|
|
Fixed-Price
per Unit
|
1,855,415
|
50.0%
|
240,642
|
5.9%
|
|
|
|
|
|
Mixed
|
39,053
|
1.0%
|
68,356
|
1.7%
|
|
|
|
|
|
Incentive
Payments
|
2,899
|
0.1%
|
7,255
|
0.2%
|
|
|
|
|
|
Total
Revenue
|
$3,707,819
|
|
$4,056,116
|
|
Revenue
|
Six months ended 6/30/2018
|
Six months ended 6/30/2017
|
||
Recognition Type
|
Amount
|
Percentage
|
Amount
|
Percentage
|
|
|
|
|
|
Time
& Materials
|
$1,526,136
|
29.9%
|
$1,458,698
|
26.3%
|
|
|
|
|
|
Fixed-Price
Ratably over Time
|
1,560,331
|
30.6%
|
3,468,013
|
62.6%
|
|
|
|
|
|
Fixed-Price
per Unit
|
1,886,329
|
37.0%
|
446,785
|
8.1%
|
|
|
|
|
|
Mixed
|
122,145
|
2.4%
|
152,153
|
2.8%
|
|
|
|
|
|
Incentive
Payments
|
7,354
|
0.1%
|
12,115
|
0.2%
|
|
|
|
|
|
Total
Revenue
|
$5,102,295
|
|
$5,537,764
|
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30, 2018
|
|
June 30, 2018
|
|
Risk-free interest rate
|
|
2.71% - 2.92%
|
|
2.65% - 2.92%
|
|
Dividend yield
|
|
0%
|
|
0%
|
|
Expected term
|
|
5 years
|
|
5 years
|
|
Expected volatility
|
|
49.5% - 51.3%
|
|
49.0%-51.3%
|
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Options outstanding
|
|||
|
|
Weighted average
|
Weighted average
|
|
|
exercise price
|
remaining
|
Incentive Options
|
Shares
|
per share
|
contractual term
|
Outstanding
at January 1, 2018
|
1,288,000
|
$0.21
|
|
Options
granted
|
160,000
|
0.45
|
|
Options
exercised
|
-
|
-
|
|
Options
expired
|
(52,500)
|
0.34
|
|
Options
forfeited
|
-
|
-
|
|
Outstanding
at June 30, 2018
|
1,395,500
|
$0.23
|
5
years, 4 months
|
Exercisable
at June 30, 2018
|
1,129,500
|
$0.19
|
4
years, 9 months
|
|
Nonvested
|
|
|
|
Weighted average
|
|
|
grant date
|
|
Shares
|
fair value
|
Nonvested
at January 1, 2018
|
232,000
|
$0.10
|
Granted
|
160,000
|
0.20
|
Vested
|
(126,000)
|
0.10
|
Forfeited
|
-
|
-
|
Nonvested
at June 30, 2018
|
266,000
|
$0.16
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
Net
(loss)
|
|
Per share
|
|
income
|
Shares
|
amount
|
Basic
net loss per common share for the
|
|
|
|
three
months ended June 30, 2018:
|
|
|
|
Loss
available to common shareholders
|
$(5,882)
|
11,201,760
|
$-
|
Effect
of dilutive stock options
|
-
|
-
|
-
|
Diluted
net loss per common share for the
|
|
|
|
three
months ended June 30, 2018
|
$(5,882)
|
11,201,760
|
$-
|
|
|
|
|
Basic
net income per common share for the
|
|
|
|
three
months ended June 30, 2017:
|
|
|
|
Income
available to common shareholders
|
$88,718
|
11,201,760
|
$0.01
|
Effect
of dilutive stock options
|
-
|
342,996
|
-
|
Diluted
net income per common share for the
|
|
|
|
three
months ended June 30, 2017
|
$88,718
|
11,544,756
|
$0.01
|
|
|
|
|
Basic
net loss per common share for the
|
|
|
|
six
months ended June 30, 2018:
|
|
|
|
Loss
available to common shareholders
|
$(39,158)
|
11,201,760
|
$-
|
Effect
of dilutive stock options
|
-
|
-
|
-
|
Diluted
net loss per common share for the
|
|
|
|
six
months ended June 30, 2018
|
$(39,158)
|
11,201,760
|
$-
|
|
|
|
|
Basic
net income per common share for the
|
|
|
|
six
months ended June 30, 2017:
|
|
|
|
Income
available to common shareholders
|
$57,102
|
11,201,760
|
$0.01
|
Effect
of dilutive stock options
|
-
|
306,671
|
-
|
Diluted
net income per common share for the
|
|
|
|
six
months ended June 30, 2017
|
$57,102
|
11,508,431
|
$-
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
Information Analysis Incorporated
|
Form
10-Q Second Quarter 2018
|
|
Information Analysis Incorporated
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: August 13,
2018
|
By:
|
/s/Sandor
Rosenberg
|
|
|
|
Sandor
Rosenberg,
Chairman of
the Board,
Chief Executive
Officer, and
President
|
|
|
|
|
|
|
|
|
|
Date:
August
13, 2018
|
By:
|
/s/
Richard
S. DeRose
|
|
|
|
Richard S.
DeRose,
Executive
Vice President,
Treasurer,
and Chief
Financial
Officer
|
|
|
|
|
Date: August 13,
2018
|
By:
|
/s/Sandor
Rosenberg
|
|
|
|
Sandor
Rosenberg,
Chairman of
the Board,
Chief Executive
Officer, and
President
|
|
|
|
|
|
Date:
August
13, 2018
|
By:
|
/s/
Richard
S. DeRose
|
|
|
|
Richard S.
DeRose,
Executive
Vice President,
Treasurer,
and Chief
Financial
Officer
|
|
|
|
|
Date: August 13,
2018
|
By:
|
/s/Sandor
Rosenberg
|
|
|
|
Sandor
Rosenberg,
Chairman of
the Board,
Chief Executive
Officer, and
President
|
|
|
|
|
|
Date:
August
13, 2018
|
By:
|
/s/
Richard
S. DeRose
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Richard S.
DeRose,
Executive
Vice President,
Treasurer,
and Chief
Financial
Officer
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Document and Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2018 |
Aug. 10, 2018 |
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Document And Entity Information | ||
Entity Registrant Name | INFORMATION ANALYSIS INC | |
Entity Central Index Key | 0000803578 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
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 Common Stock, Shares Outstanding | 11,201,760 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2018 |
BALANCE SHEETS (Parenthetical) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation and amortization | $ 290,235 | $ 284,667 |
Stockholders Equity | ||
Common Stock shares par value | $ 0.01 | $ 0.01 |
Common Stock shares Authorized | 30,000,000 | 30,000,000 |
Common Stock shares Issued | 12,844,376 | 12,844,376 |
Common Stock shares Outstanding | 11,201,760 | 11,201,760 |
Treasury Stock | 1,642,616 | 1,642,616 |
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Revenues | ||||
Professional fees | $ 1,104,148 | $ 1,271,440 | $ 2,317,795 | $ 2,291,473 |
Software sales | 2,603,671 | 2,784,676 | 2,784,500 | 3,246,291 |
Total revenues | 3,707,819 | 4,056,116 | 5,102,295 | 5,537,764 |
Cost of revenues | ||||
Cost of professional fees | 580,761 | 679,233 | 1,253,342 | 1,213,979 |
Cost of software sales | 2,571,704 | 2,739,543 | 2,743,178 | 3,186,600 |
Total cost of revenues | 3,152,465 | 3,418,776 | 3,996,520 | 4,400,579 |
Gross profit | 555,354 | 637,340 | 1,105,775 | 1,137,185 |
Selling, general and administrative expenses | 439,535 | 426,148 | 910,029 | 844,934 |
Commissions expense | 124,686 | 124,671 | 240,560 | 239,304 |
(Loss) income from operations | (8,867) | 86,521 | (44,814) | 52,947 |
Other income | 2,985 | 2,197 | 5,656 | 4,155 |
(Loss) income before provision for income taxes | (5,882) | 88,718 | (39,158) | 57,102 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net (loss) income | $ (5,882) | $ 88,718 | $ (39,158) | $ 57,102 |
Net (loss) income per common share: | ||||
Basic | $ .00 | $ 0.01 | $ .00 | $ 0.01 |
Diluted | $ .00 | $ .01 | $ .00 | $ .00 |
Weighted average common shares outstanding | ||||
Basic | 11,201,760 | 11,201,760 | 11,201,760 | 11,201,760 |
Diluted | 11,201,760 | 11,544,756 | 11,201,760 | 11,508,431 |
1. Basis of Presentation |
6 Months Ended |
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Jun. 30, 2018 | |
Basis Of Presentation | |
1. Basis of Presentation | Organization and Business
Founded in 1979, Information Analysis Incorporated (the “Company”, “we”), to which we sometimes refer as IAI, is in the business of developing and maintaining information technology (IT) systems, modernizing client information systems, and performing professional services to government and commercial organizations. We presently concentrate our technology, services and experience to developing web-based and mobile device solutions (including electronic forms conversions), data analytics, cyber security applications, and legacy software migration and modernization for various agencies of the federal government. We provide software and services to government and commercial customers throughout the United States, with a concentration in the Washington, D.C. metropolitan area.
Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited financial statements include all adjustments necessary (which are of a normal and recurring nature) for the fair and not misleading presentation of the results of the interim periods presented. These unaudited financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2017 included in the Annual Report on Form 10-K filed by the Company with the SEC on April 2, 2018 (the “Annual Report”). The accompanying December 31, 2017 balance sheet was derived from our audited financial statements included in the Annual Report, adjusted for the effect of newly-implemented revenue recognition policies described in Note 2. The results of operations for any interim periods are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.
There have been no changes in the Company’s significant accounting policies as of June 30, 2018 as compared to the significant accounting policies disclosed in Note 1, "Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, that was filed with the SEC on April 2, 2018, except as described in Note 2 herein.
Use of Estimates and Assumptions
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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 revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates.
Income Taxes
As of June 30, 2018, there have been no material changes to the Company’s uncertain tax position disclosures as provided in Note 7 of the Annual Report. Through the filing of its 2016 federal income tax return, the Company has net operating loss carryforwards in the amount of $15,007,467, of which $7,798,231 will expire, if unused, on December 31, 2018.
ASC 606 Impact to Previously Reported Results
On January 1, 2018, we adopted the FASB-issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606") by applying the modified retrospective transition method to all of our contracts. Comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented. Based on the results of our evaluation, the adoption of ASC 606 did not have a material impact on our revenue recognition policies. In addition, the adoption of ASC 606 did not have a material impact on our financial statements for the six months ended June 30, 2018 and 2017. Additionally, the cumulative effect to the opening balance sheet on January 1, 2018, from the adoption of ASC 606 was not material.
Reclassification of Financial Statement Line Items
Certain financial statement line items presented in prior periods have been reclassified for consistency between the periods presented. Contract assets in the form of unbilled receivables has been disaggregated from accounts receivable, net, and deferred revenue has been reclassified as contract liabilities. |
2. Revenue from Contracts with Customers |
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2. Revenue from Contracts with Customers | Revenue is recognized when all of the following steps have been taken and criteria met for each contract:
Nature of products and services
We generate revenue from the sales of information technology professional services, sales of third-party software licenses and implementation and training services, sales of third-party support and maintenance contracts based on those software products, and incentive payments received from third-party software suppliers for facilitating sales directly between that supplier and a customer introduced by us. We sell through our direct relationships with end customers and under subcontractor arrangements. We account for our performance obligations in accordance with ASC 606, and all related interpretations.
Professional services are offered through several arrangements – through time and materials arrangements, fixed-price-per-unit arrangements, fixed-price arrangements, or combinations of these arrangements within individual contracts. Revenue under time and materials arrangements is recognized over time in the period the hours are worked or the expenses are incurred, as control of the benefits of the work is deemed to have passed to the customer as the work is performed. Revenue under fixed-price-per-unit arrangements is recognized at a point in time when delivery of units have occurred and units are accepted by the customer or are reasonably expected to be accepted. Generally revenue under fixed-price arrangements and mixed arrangements is recognized either over time or at a point in time based on the allocation of transaction pricing to each identified performance obligation as control of each is transferred to the customer. For fixed-price arrangements for which we are paid a fixed fee to make ourselves available to support a customer, with no predetermined deliverables to which transaction prices can be estimated or allocated, revenue is recognized ratably over time.
Third-party software licenses are classified as enterprise server-based software licenses or desktop software licenses, and desktop licenses are further classified by the type of customer and whether the licenses are bulk licenses or individual licenses. Our obligations as the seller for each class differ based on our reseller agreements and whether our customers are government or non-government customers. Revenue from enterprise server-based sales to either government or non-government customers is usually recognized in full at a point in time based on when the customer gains use of the full benefit of the licenses, after the licenses are implemented. If the transaction prices of the performance obligations related to implementation and customer support for the individual contract is material, these obligations are recognized separately over time, as performed. Revenue for desktop software licenses for government customers is usually recognized in full at a point in time, based on when the customer’s administrative contact gains training in and beneficial use of the administrative portal. If the transaction prices of the performance obligations related to implementing the government administrator’s use of the administrative portal and administrator support for the individual contract are material (rare), these obligations are recognized separately over time, as performed. Revenue for bulk desktop software licenses for non-government customers is usually recognized in full at a point in time, based on when the customer’s administrative contact gains training in and beneficial use of the administrative portal. For desktop software licenses sold on an individual license basis to non-government customers, where we have no obligation to the customer after the third-party makes delivery of the licenses, we have determined we are acting as an agent, and we recognize revenue upon delivery of the licenses only for the net of the selling price and our contract costs.
Third-party support and maintenance contracts for enterprise server-based software include a performance obligation under our reseller agreements for us to be the first line of support (direct support) and second line of support (intermediary between customer and manufacturer) to the customer. Because of the support performance obligations, and because the amount of support is not estimable, we recognize revenue ratably over time as we make ourselves available to provide the support.
Incentive payments are received under reseller agreements with software manufacturers and suppliers where we introduce and court a customer, but the sale occurs directly between the customer and the supplier or between the customer and the manufacturer. Since the transfer of control of the licenses cannot be measured from outside of these transactions, revenue is recognized when payment from the manufacturer or supplier is received.
Disaggregation of Revenue from Contracts with Customers
Contract Balances
Accounts Receivable
Trade accounts receivable are recorded at the billable amount where we have the unconditional right to bill, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. Management regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice, each customer's expected ability to pay and collection history, when applicable, to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified.
Contract Assets
Contract assets consist of assets typically resulting when revenue recognized exceeds the amount billed or billable to the customer due to allocation of transaction price. Contract assets balances were $17,068 and $5,532 as of June 30, 2018, and December 31, 2017, respectively. The increase in contract assets from December 31, 2017, to June 30, 2018, is due primarily to one contract for which the invoice is a fixed monthly amount but for which the quantity of performance obligations satisfied varies each month.
Contract Liabilities
Contract liabilities, to which we formerly referred as deferred revenue, consist of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue because the related goods or services have not been transferred. Contract liabilities balances were $133,475 and $387,002 at June 30, 2018, and December 31, 2017, respectively. The decrease in contract liabilities from December 31, 2017, to June 30, 2018, is due primarily to the recognition of revenue over time from third-party support and maintenance contracts for enterprise server-based software sales.
Costs to Obtain or Fulfill a Contract
When applicable, we recognize an asset related to the costs incurred to obtain a contract only if we expect to recover those costs and we would not have incurred those costs if the contract had not been obtained. We recognize an asset from the costs incurred to fulfill a contract if the costs (i) are specifically identifiable to a contract, (ii) enhance resources that will be used in satisfying performance obligations in future and (iii) are expected to be recovered. There were no such assets at June 30, 2018 and December 31, 2017.
Financing Components
In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a software support and maintenance term with revenue recognized ratably over the contract period.
Deferred Costs of Revenue
Deferred costs of revenue consist of the costs of third-party support and maintenance contracts for enterprise server-based software. These costs are reported under the prepaid expenses caption on our balance sheet. We recognize these direct costs ratably over time as we make ourselves available to provide our performance obligation for software support, commensurate with our recognition of revenue. Deferred costs of revenue balances included in prepaid expenses were $18,257 and $300,558 at June 30, 2018, and December 31, 2017, respectively.
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3. Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
3. Recent Accounting Pronouncements | From time to time, new accounting pronouncements are issued by the FASB, or other standard setting bodies, that the Company adopts as of the specified effective date.
In February 2016, the FASB issued ASU 2016-02, “Leases: Topic 842,” and followed it up with ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842: Targeted Improvements” (collectively “Topic 842”), which provided updated guidance on lease accounting. Topic 842 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that annual period, with early adoption permitted. The Company does not expect the adoption of this new standard will have a material impact on its financial statements. When adopted, the Company’s operating lease for office space will be presented as a right-of-use asset and as an offsetting liability for the present value of the contractual cash flows. The Company does not currently have any other material lease obligations. |
4. Stock-Based Compensation |
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4. Stock-Based Compensation | The Company has two shareholder–approved stock-based compensation plans. The 2006 Stock Incentive Plan was adopted in 2006 (“2006 Plan”) and had options granted under it through April 12, 2016. On June 1, 2016, the shareholders ratified the IAI 2016 Stock Incentive Plan (“2016 Plan”), which had been approved by the Board of Directors on April 4, 2016.
The Company recognizes compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the awards. Generally such options vest over periods of six months to two years. There were no options granted during the three months and six months ended June 30, 2017. The fair values of option awards granted in the three months and six months ended June 30, 2018, were estimated using the Black-Sholes option pricing model under the following assumptions:
2016 Stock Incentive Plan
The 2016 Plan became effective June 1, 2016, and expires April 4, 2026. The 2016 Plan provides for the granting of equity awards to key employees, including officers and directors. The maximum number of shares for which equity awards may be granted under the 2016 Plan is 1,000,000. Options under the 2016 Plan expire no later than ten years from the date of grant or when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. The minimum exercise price of each option is the quoted market price of the Company’s stock on the date of grant. At June 30, 2018, there were unexpired options for 382,000 shares issued under the 2016 Plan, of which 116,000 were exercisable.
2006 Stock Incentive Plan
The 2006 Plan became effective May 18, 2006, and expired April 12, 2016. The 2006 Plan provides for the granting of equity awards to key employees, including officers and directors. Options under the 2006 Plan were generally granted at-the-money or above, expire no later than ten years from the date of grant or within three months of when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. The number of shares subject to options available for issuance under the 2006 Plan could not exceed 1,950,000. There were 1,013,500 unexpired options remaining from the 2006 Plan at June 30, 2018, of which 1,013,500 were exercisable.
The status of the options issued under the foregoing option plans as of June 30, 2018, and changes during the six months ended June 30, 2018, were as follows:
No options were granted during the six months ended June 30, 2017. There were no options exercised during the six months ended June 30, 2018 and 2017. As of June 30, 2018, there was $23,847 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the stock incentive plans; that cost is expected to be recognized over a weighted-average period of six months.
Total compensation expense related to these plans was $9,368 and $63 for the three months ended June 30, 2018 and 2017, respectively, of which $218 and $0 related to options awarded to non-employees, respectively. Total compensation expense related to these plans was $15,656 and $322 for the six months ended June 30, 2018 and 2017, respectively, of which $218 and $0 related to options awarded to non-employees, respectively. Compensation expense relating to prior periods in the amount of $612 was reversed in the six months ended June 30, 2017, from options that were forfeited prior to vesting.
Nonvested option awards as of June 30, 2018 and changes during the six months ended June 30, 2018 were as follows:
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5. Revolving Line of Credit |
6 Months Ended |
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Jun. 30, 2018 | |
Revolving Line Of Credit | |
5. Revolving Line of Credit | The Company has a revolving line of credit with a bank providing for demand or short-term borrowings of up to $1,000,000. The line expires on May 31, 2020. As of June 30, 2018, no amounts were outstanding under this line of credit. The Company did not borrow against this line of credit in the last twelve months. |
6. (Loss) Earnings Per Share |
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Net (loss) income per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6. (Loss) Earnings Per Share | Basic (loss) earnings per share excludes dilution and is computed by dividing loss available to common shareholders by the weighted-average number of shares outstanding for the period. Diluted (loss) earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, except for periods when the Company reports a net loss because the inclusion of such items would be antidilutive. The antidilutive effect of 540,462 shares and 559,498 shares from stock options were excluded from diluted shares for the three months and six months ended June 30, 2018, respectively.
The following is a reconciliation of the amounts used in calculating basic and diluted net loss per common share:
|
1. Basis of Presentation (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Notes to Financial Statements | |
Organization and Business | Founded in 1979, Information Analysis Incorporated (the “Company”, “we”), to which we sometimes refer as IAI, is in the business of developing and maintaining information technology (IT) systems, modernizing client information systems, and performing professional services to government and commercial organizations. We presently concentrate our technology, services and experience to developing web-based and mobile device solutions (including electronic forms conversions), data analytics, cyber security applications, and legacy software migration and modernization for various agencies of the federal government. We provide software and services to government and commercial customers throughout the United States, with a concentration in the Washington, D.C. metropolitan area.
|
Unaudited Interim Financial Statements | The accompanying unaudited financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited financial statements include all adjustments necessary (which are of a normal and recurring nature) for the fair and not misleading presentation of the results of the interim periods presented. These unaudited financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2017 included in the Annual Report on Form 10-K filed by the Company with the SEC on April 2, 2018 (the “Annual Report”). The accompanying December 31, 2017 balance sheet was derived from our audited financial statements included in the Annual Report, adjusted for the effect of newly-implemented revenue recognition policies described in Note 2. The results of operations for any interim periods are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.
There have been no changes in the Company’s significant accounting policies as of June 30, 2018 as compared to the significant accounting policies disclosed in Note 1, "Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, that was filed with the SEC on April 2, 2018, except as described in Note 2 herein.
|
Use of Estimates and Assumptions | The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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 revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates.
|
Income Taxes | As of June 30, 2018, there have been no material changes to the Company’s uncertain tax position disclosures as provided in Note 7 of the Annual Report. Through the filing of its 2016 federal income tax return, the Company has net operating loss carryforwards in the amount of $15,007,467, of which $7,798,231 will expire, if unused, on December 31, 2018.
|
ASC 606 Impact to Previously Reported Results | On January 1, 2018, we adopted the FASB-issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606") by applying the modified retrospective transition method to all of our contracts. Comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented. Based on the results of our evaluation, the adoption of ASC 606 did not have a material impact on our revenue recognition policies. In addition, the adoption of ASC 606 did not have a material impact on our financial statements for the six months ended June 30, 2018 and 2017. Additionally, the cumulative effect to the opening balance sheet on January 1, 2018, from the adoption of ASC 606 was not material.
|
Reclassification of Financial Statement Line Items | Certain financial statement line items presented in prior periods have been reclassified for consistency between the periods presented. Contract assets in the form of unbilled receivables has been disaggregated from accounts receivable, net, and deferred revenue has been reclassified as contract liabilities. |
2. Revenue from Contracts with Customers (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue From Contracts With Customers Tables Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue from contracts with customers |
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4. Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Black-Scholes option pricing model assumptions |
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Options outstanding |
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Nonvested stock awards |
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6. (Loss) Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of (loss) earnings per share |
|
2. Revenue from Contracts with Customers (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenue | $ 3,707,819 | $ 4,056,116 | $ 5,102,295 | $ 5,537,764 |
Time & Materials | ||||
Revenue | $ 728,940 | $ 859,539 | $ 1,526,136 | $ 1,458,698 |
Revenue percentage | 19.70% | 21.20% | 29.90% | 26.30% |
Fixed-Price Ratably over Time | ||||
Revenue | $ 1,081,512 | $ 2,880,324 | $ 1,560,331 | $ 3,468,013 |
Revenue percentage | 29.20% | 71.00% | 30.60% | 62.60% |
Fixed-Price per Unit | ||||
Revenue | $ 1,855,415 | $ 240,642 | $ 1,886,329 | $ 446,785 |
Revenue percentage | 50.00% | 5.90% | 37.00% | 8.10% |
Mixed | ||||
Revenue | $ 39,053 | $ 68,356 | $ 122,145 | $ 152,153 |
Revenue percentage | 1.00% | 1.70% | 2.40% | 2.80% |
Professional Services | ||||
Revenue | $ 1,104,148 | $ 1,271,440 | $ 2,317,795 | $ 2,291,473 |
Revenue percentage | 29.80% | 31.30% | 45.40% | 41.40% |
Third-Party Software | ||||
Revenue | $ 2,455,719 | $ 833,414 | $ 2,483,133 | $ 1,033,356 |
Revenue percentage | 66.20% | 20.60% | 48.70% | 18.70% |
Support & Maintenance | ||||
Revenue | $ 145,053 | $ 1,944,007 | $ 294,013 | $ 2,200,820 |
Revenue percentage | 3.90% | 47.90% | 5.80% | 39.70% |
Incentive Payments | ||||
Revenue | $ 2,899 | $ 7,255 | $ 7,354 | $ 12,115 |
Revenue percentage | 0.10% | 0.20% | 0.10% | 0.20% |
4. Stock-Based Compensation (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Stock-based Compensation | ||
Risk free interest rate, minimum | 2.71% | 2.65% |
Risk free interest rate, maximum | 2.92% | 2.92% |
Dividend yield | 0.00% | 0.00% |
Expected term | 5 years | 5 years |
Expected volatility, minimum | 49.50% | 49.00% |
Expected volatility, maximum | 51.30% | 51.30% |
4. Stock-Based Compensation (Details 1) |
6 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Stock Options Abstract | |
Beginning Balance | shares | 1,288,000 |
Options granted | shares | 160,000 |
Options exercised | shares | 0 |
Options expired | shares | (52,500) |
Options forfeited | shares | 0 |
Ending Balance | shares | 1,395,500 |
Ending Balance, exercisable | shares | 1,129,500 |
Weighted average price per share, beginning balance | $ / shares | $ .21 |
Weighted average price per share, granted | $ / shares | .45 |
Weighted average price per share, exercised | $ / shares | .00 |
Weighted average exercise price per share, expired | $ / shares | .34 |
Weighted average exercise price per share, forfeited | $ / shares | .00 |
Weighted average exercise price , ending balance, outstanding | $ / shares | .23 |
Weighted average exercise price, ending balance, exercisable | $ / shares | $ .19 |
Weighted average remaing contractual life in years | 5 years 4 months |
Weighted average remaining contractual life, exercisable | 4 years 9 months |
4. Stock-Based Compensation (Details 2) |
6 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Number of Shares | |
Nonvested Stock Awards Beginning Balance | shares | 232,000 |
Granted | shares | 160,000 |
Vested | shares | (126,000) |
Forfeited | shares | 0 |
Nonvested Stock Awards Ending Balance | shares | 266,000 |
Weighted Average Grant Date Fair Value | |
Nonvested Stock Awards Beginning Balance | $ / shares | $ .10 |
Granted | $ / shares | .20 |
Vested | $ / shares | .10 |
Forfeitures | $ / shares | .00 |
Nonvested Stock Awards Ending Balance | $ / shares | $ .16 |
4. Stock-Based Compensation (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Summary Of Significant Accounting Policies Details Narrative 1Abstract | ||||
Unrecognized compensation cost associated with non-vested share-based compensation | $ 23,847 | $ 23,847 | ||
Total compensation expense for stock options | $ 9,368 | $ 63 | $ 15,656 | $ 322 |
6. (Loss) Earnings Per Share (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Loss Earnings Per Share | ||||
Basic net income (loss) | $ (5,882) | $ 88,718 | $ (39,158) | $ 57,102 |
Basic shares | 11,201,760 | 11,201,760 | 11,201,760 | 11,201,760 |
Basic net income (loss) per common share | $ .00 | $ 0.01 | $ .00 | $ 0.01 |
Effect of dilutive stock options | 0 | 342,996 | 0 | 306,671 |
Diluted net income (loss) | $ (5,882) | $ 88,718 | $ (39,158) | $ 57,102 |
Diluted shares | 11,201,760 | 11,544,756 | 11,201,760 | 11,508,431 |
Diluted earnings per share | $ .00 | $ .01 | $ .00 | $ .00 |
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