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Document and Entity Information
9 Months Ended
Sep. 30, 2012
Oct. 31, 2012
Document and Entity Information
Entity Registrant Name INTRUSION INC
Entity Central Index Key 0000736012
Document Type 10-Q
Document Period End Date Sep 30, 2012
Amendment Flag false
Current Fiscal Year End Date --12-31
Entity Current Reporting Status Yes
Entity Filer Category Smaller Reporting Company
Entity Common Stock, Shares Outstanding 12,072,017
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q3
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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
Sep. 30, 2012
Dec. 31, 2011
Current Assets:
Cash and cash equivalents $ 475,000 $ 308,000
Accounts receivable 601,000 480,000
Inventories, net 5,000 5,000
Prepaid expenses 45,000 90,000
Total current assets 1,126,000 883,000
Property and equipment, net 269,000 207,000
Other assets 45,000 40,000
TOTAL ASSETS 1,440,000 1,130,000
Current Liabilities:
Accounts payable and accrued expenses 790,000 632,000
Dividends payable 239,000 123,000
Line of credit payable 43,000 80,000
Obligations under capital lease, current portion 99,000 74,000
Deferred revenue 63,000 97,000
Loan payable to officer 1,530,000
Total current liabilities 2,764,000 1,006,000
Loan payable to officer 1,530,000
Obligations under capital lease, noncurrent portion 112,000 53,000
Commitments and contingencies      
Stockholders' deficit:
Common stock, $0.01 par value: Authorized shares - 80,000 Issued shares - 12,082 as of September 30, 2012 and 11,952 as of December 31, 2011 Outstanding shares - 12,072 as of September 30, 2012 and 11,942 as of Dec 31, 2011 121,000 119,000
Common stock held in treasury, at cost - 10 shares (362,000) (362,000)
Additional paid-in capital 55,799,000 55,686,000
Accumulated deficit (58,893,000) (58,801,000)
Accumulated other comprehensive loss (107,000) (107,000)
Total stockholders' deficit (1,436,000) (1,459,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 1,440,000 1,130,000
Series 1
Stockholders' deficit:
Preferred stock 778,000 778,000
Series 2
Stockholders' deficit:
Preferred stock 724,000 724,000
Series 3
Stockholders' deficit:
Preferred stock $ 504,000 $ 504,000
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, Authorized shares 5,000 5,000
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, Authorized shares 80,000 80,000
Common stock, Issued shares 12,082 11,952
Common stock, Outstanding shares 12,072 11,942
Common stock held in treasury, shares 10 10
Series 1
Preferred stock, shares issued 220
Preferred stock, shares outstanding 220
Preferred stock, Liquidation preference (in dollars per share) $ 1,183
Series 2
Preferred stock, shares issued 460
Preferred stock, shares outstanding 460
Preferred stock, Liquidation preference (in dollars per share) $ 1,241
Series 3
Preferred stock, shares issued 354
Preferred stock, shares outstanding 354
Preferred stock, Liquidation preference (in dollars per share) $ 833
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Net product revenue $ 1,823 $ 1,759 $ 5,102 $ 3,782
Net customer support and maintenance revenue 32 33 100 120
Total revenue 1,855 1,792 5,202 3,902
Cost of product revenue 769 695 2,161 1,490
Cost of customer support and maintenance revenue 5 6 16 16
Total cost of revenue 774 701 2,177 1,506
Gross profit 1,081 1,091 3,025 2,396
Operating expenses:
Sales and marketing 317 365 1,016 1,092
Research and development 414 313 1,125 1,149
General and administrative 270 268 891 869
Operating income (loss) 80 145 (7) (714)
Interest expense, net (32) (24) (85) (41)
Income (loss) before income tax provision 48 121 (92) (755)
Net income (loss) 48 121 (92) (755)
Preferred stock dividends accrued (39) (38) (116) (113)
Net income (loss) attributable to common stockholders $ 9 $ 83 $ (208) $ (868)
Net income (loss) per share attributable to common stockholders:
Basic (in dollars per share) $ 0 $ 0.01 $ (0.02) $ (0.07)
Diluted (in dollars per share) $ 0 $ 0.01 $ (0.02) $ (0.07)
Weighted average common shares outstanding:
Basic (in shares) 12,072 11,902 12,011 11,855
Diluted (in shares) 13,922 13,608 12,011 11,855
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Operating Activities:
Net loss $ (92) $ (755)
Adjustments to reconcile net loss to net cash provided by (used) in operating activities:
Depreciation and amortization 113 74
Stock-based compensation 165 168
Changes in operating assets and liabilities:
Accounts receivable (121) (261)
Inventories 25
Prepaid expenses and other assets 40 (11)
Accounts payable and accrued expenses 158 217
Deferred revenue (34) (921)
Net cash provided by (used in) operating activities 229 (1,464)
Investing Activities:
Purchases of property and equipment (21) (29)
Financing Activities:
Borrowings on loan from officer 1,300
Dividends paid on preferred stock (51)
Proceeds from line of credit 720
Payments on line of credit (757)
Penalties and waived penalties on dividends 14 1
Proceeds from stock options exercised 8 20
Proceeds from warrants exercised 44 26
Principal payments on capital leases (70) (21)
Net cash provided by (used in) financing activities (41) 1,275
Net increase (decrease) in cash and cash equivalents 167 (218)
Cash and cash equivalents at beginning of period 308 540
Cash and cash equivalents at end of period 475 322
Cash paid during the year for interest 13
SUPPLEMENTAL DISCLOSURE OF NON CASH FINANCING ACTIVITIES:
Preferred stock dividends accrued 116 113
Purchase of leased equipment under capital lease $ 153 $ 114
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Description of Business
9 Months Ended
Sep. 30, 2012
Description of Business
Description of Business

1.     Description of Business

 

We develop, market and support a family of entity identification, high speed data mining, regulated information compliance, data privacy protection and network intrusion prevention/detection products.  Our product families include:

 

·             TraceCop™ for identity discovery and disclosure,

·             Savant™ for network data mining,

·             Compliance Commander™ for regulated information and data privacy protection, and

·             SecureNet™ for network intrusion prevention and detection.

 

We market and distribute our products through a direct sales force to:

 

·             end-users,

·             value-added resellers,

·             system integrators,

·             managed service providers, and

·             distributors.

 

Our end-user customers include:

 

·             U.S. federal government entities,

·             foreign government entities,

·             local government entities,

·             banks,

·             credit unions,

·             other financial institutions,

·             hospitals and other healthcare providers, and

·             other customers.

 

We were organized in Texas in September 1983 and reincorporated in Delaware in October 1995. For more than 15 years, we provided local area networking equipment and were known as Optical Data Systems or ODS Networks. On April 17, 2000, we announced plans to sell, or otherwise dispose of, our networking divisions, which included our Essential Communications division and our local area networking assets. On June 1, 2000, we changed our name from ODS Networks, Inc. to Intrusion.com, Inc., and our ticker symbol from ODSI to INTZ to reflect our focus on intrusion prevention and detection solutions, along with information compliance and data privacy protection products. On November 1, 2001, we changed our name from Intrusion.com, Inc. to Intrusion Inc.

 

Our principal executive offices are located at 1101 East Arapaho Road, Suite 200, Richardson, Texas 75081, and our telephone number is (972) 234-6400.  Our website URL is www.intrusion.com.  References to “we”, “us”, “our” or “Intrusion Inc.” refer to Intrusion Inc. and its subsidiaries.  Compliance Commander™, SecureNet™ and TraceCop™ are trademarks of Intrusion Inc.

 

As of September 30, 2012, we had cash and cash equivalents of approximately $475,000, up from approximately $308,000 as of December 31, 2011.  We generated net income of $48,000 for the three months ended September 30, 2012 compared to a net income of $121,000 for the three months ended September 30, 2011.  As of September 30, 2012, in addition to cash and cash equivalents of $475,000, we had $159,000 in funding available under our $0.625 million line of credit at Silicon Valley Bank (“SVB”) and $0.67 million funding available from a promissory note to borrow up to $2.2 million from G. Ward Paxton, the Company’s Chief Executive Officer.  We are obligated to make payments of accrued dividends on all our outstanding shares of preferred stock that will reduce our available cash resources.  Based on projections of growth in revenue and net income in the coming quarters, and the borrowings available previously mentioned, we believe that we will have sufficient cash resources to finance our operations and expected capital expenditures for the next twelve months.  We expect to fund our operations through Company profits, our line of credit, borrowings from the Company’s CEO, and possibly additional investments of private equity and debt, which, if we are able to obtain, will have the effect of diluting our existing common stockholders, perhaps significantly.  Any equity or debt financings, if available at all, may be on terms which are not favorable to us and, in the case of equity financings, may result in dilution to our stockholders. If our operations do not generate positive cash flow in the upcoming year, or if we are not able to obtain additional debt or equity financing on terms and conditions acceptable to us, if at all, we may be unable to implement our business plan, fund our liquidity needs or even continue our operations.

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Basis of Presentation
9 Months Ended
Sep. 30, 2012
Basis of Presentation
Basis of Presentation

2.     Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Item 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.  The December 31, 2011 balance sheet was derived from audited financial statements, but does not include all the disclosures required by accounting principles generally accepted in the United States.  However, we believe that the disclosures are adequate to make the information presented not misleading.  In our opinion, all the adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included.  The results of operations for the nine month period ended September 30, 2012 are not necessarily indicative of the results that may be achieved for the full fiscal year or for any future period.  The unaudited condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2011, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 30, 2012.

 

The Company calculates the fair value of its assets and liabilities which qualify as financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different from the carrying value of these financial instruments. The estimated fair value of accounts receivable, accounts payable and accrued expenses, and dividends payable approximate their carrying amounts due to the relatively short maturity of these instruments.  Loans payable to officer are with a related party and as a result do not bear market rates of interest.  Management believes based on its current financial position that it could not obtain comparable amounts of third party financing, and as such cannot estimate the fair value of the loans payable to officer.  None of these instruments are held for trading purposes.

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Inventories
9 Months Ended
Sep. 30, 2012
Inventories
Inventories

3.     Inventories (In thousands)

 

 

 

September 30,
2012

 

December 31,
2011

 

 

 

 

 

 

 

Inventories consist of:

 

 

 

 

 

Finished goods

 

$

61

 

$

61

 

Less: Reserve for finished goods

 

(61

)

(61

)

Demo evaluation inventory

 

5

 

5

 

Net inventory

 

$

5

 

5

 

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Loan Payable to Officer
9 Months Ended
Sep. 30, 2012
Loan Payable to Officer
Loan Payable to Officer

4.     Loan Payable to Officer

 

On February 9, 2012, the Company entered into an unsecured revolving promissory note to borrow up to $2,200,000 from G. Ward Paxton, the Company’s Chief Executive Officer.  Under the terms of the note, the Company may borrow, repay and reborrow on the loan as needed up to an outstanding principal balance due of $2,200,000 at any given time through March 2013.

 

Amounts borrowed from this officer accrue interest at a floating rate per annum equal to SVB’s prime rate plus 1% (5% at September 30, 2012).  All outstanding borrowings and accrued but unpaid interest is due on March 31, 2013.  As of September 30, 2012, the borrowings outstanding totaled $1,530,000 and accrued interest totaled $111,000.

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Line of Credit
9 Months Ended
Sep. 30, 2012
Line of Credit
Line of Credit

5.     Line of Credit

 

On March 29, 2006, we entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”) to establish a $1.0 million line of credit (the “2006 Credit Line”).  On June 30, 2008, we entered into an Amended and Restated Loan and Security Agreement with SVB to, among other things, replace the 2006 Credit Line with a $2.5 million line of credit (the “2008 Credit Line”).  On June 25, 2012, we entered into the Fourth Amendment to the Amended and Restated Loan and Security Agreement (as amended, the “Loan Agreement”) with SVB to replace our expiring line with a $0.625 million line of credit (the “Current Line of Credit”).  Our obligations under the Loan Agreement are secured by substantially all of our assets, including all of our intellectual property.  In addition, G. Ward Paxton, the Company’s Chairman, President and Chief Executive Officer, has established a Guaranty Agreement with SVB securing all outstanding balances under the Current Line of Credit.  Borrowings under the Current Line of Credit are based on advances (each an “Advance”) against certain of our accounts receivable that are approved by SVB (each an “Eligible Account”).  SVB may make an Advance of up to eighty percent (80%) of each Eligible Account, or such other percentage SVB may determine in its sole discretion.  Each Advance is subject to a finance charge calculated as a daily rate that is based on a 360-day annual rate of the greater of the prime rate plus 2.0% or 7.0%.  Finance charges are payable at the same time its related Advance is due.  Each Advance is also subject to a monthly collateral handling fee of 0.5% of all outstanding Advances, depending on certain qualifying financial factors specified in the Loan Agreement.  The collateral handling fee is payable at the same time its related Advance is due.  Each Advance must be repaid at the earliest of (a) the date that the Eligible Account related to the Advance is paid, (b) the date the Eligible Account is no longer eligible under the Loan Agreement, or (c) the date on which any “Adjustment” (as defined in the Loan Agreement) is asserted to the Eligible Account.  On June 24, 2013, the Loan Agreement terminates and all outstanding Advances, accrued but unpaid finance charges, outstanding collateral handing fees, and other amounts become due under the Loan Agreement and related documents.  We have certain non-financial and financial covenants, including a liquidity coverage ratio and a rolling EBITDA computation, as defined in the Loan Agreement.

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Accounting for Stock-Based Compensation
9 Months Ended
Sep. 30, 2012
Accounting for Stock-Based Compensation
Accounting for Stock-Based Compensation

6.     Accounting for Stock-Based Compensation

 

During the three month periods ended September 30, 2012 and 2011, the Company granted 3,000 and 6,000 stock options, respectively, to employees.  The Company recognized $47,000 and $60,000, respectively, stock-based compensation expense for the three month periods ended September 30, 2012 and 2011.  During the nine month periods ended September 30, 2012 and 2011, the Company granted 328,000 and 423,000, respectively, stock options to employees and directors.  The Company recognized $165,000 and $168,000, respectively, stock-based compensation expense for the nine month period ended September 30, 2012 and 2011.

 

During the three month period ended September 30, 2012 and 2011, none and 60,000 options were exercised under the 2005 Plan, respectively.  During the nine month periods ended September 30, 2012 and 2011, 130,000 and 60,000 options were exercised under the 2005 Plan, respectively.

 

Valuation Assumptions

 

The fair values of employee and director option awards were estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

 

 

 

For Three Months
Ended
September 30, 2012

 

For Three Months
Ended
September 30, 2011

 

For Nine
Months Ended
 September 30,
2012

 

For Nine
Months Ended
September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Weighted average grant date fair value

 

$

0.56

 

$

0.39

 

$

0.63

 

$

0.67

 

Weighted average assumptions used:

 

 

 

 

 

 

 

 

 

Expected dividend yield

 

0.0

%

0.0

%

0.0

%

0.0

%

Risk-free interest rate

 

0.75

%

1.1

%

0.84

%

2.1

%

Expected volatility

 

216.0

%

207.0

%

213.2

%

202.0

%

Expected life (in years)

 

5.0

 

5.0

 

4.9

 

4.9

 

 

Expected volatility is based on historical volatility and in part on implied volatility.  The expected term considers the contractual term of the option as well as historical exercise and forfeiture behavior.  The risk-free interest rate is based on the rates in effect on the grant date for U.S. Treasury instruments with maturities matching the relevant expected term of the award. Options granted to non-employees are valued using the fair market value on each measurement date of the option.

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Net Income (Loss) Per Share
9 Months Ended
Sep. 30, 2012
Net Income (Loss) Per Share
Net Income (Loss) Per Share

7.     Net Income (Loss) Per Share

 

Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding for the period.  Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares and dilutive common stock equivalents outstanding for the period.  Our common stock equivalents include all common stock issuable upon conversion of preferred stock and the exercise of outstanding options and warrants.  The aggregate number of common stock equivalents excluded from the diluted income (loss) per share calculation for the three and nine month periods ending September 30, 2012 and 2011 are 1,158,881 and 1,332,823 and 4,054,528 and 3,888,467, respectively as they are antidilutive.

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Concentrations
9 Months Ended
Sep. 30, 2012
Concentrations
Concentrations

8.     Concentrations

 

Our operations are concentrated in one area—security software/entity identification.  Sales to the U.S. Government through direct and indirect channels totaled 34.3% of total revenues for the third quarter of 2012 compared to 38.0% of total revenues for the third quarter of 2011, and 35.2% of total revenues for the nine months ended September 30, 2012 compared to 32.9% of total revenues for the nine months ended September 30, 2011.  During the third quarter of 2012, approximately 26.1% of total revenues were attributable to two government customers compared to approximately 33.5% of total revenues attributable to two government customers in the third quarter of 2011.  There was one individual commercial customer in the third quarter of 2012 attributable for 64.0% of total revenue compared 59.4% of total revenue to one individual commercial customer for the same period in 2011 that exceeded 10% of total revenues for that quarter.  Our similar product and service offerings are not viewed as individual segments, as our management analyzes the business as a whole and expenses are not allocated to each product offering.

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Commitments and Contingencies
9 Months Ended
Sep. 30, 2012
Commitments and Contingencies
Commitments and Contingencies

9.     Commitments and Contingencies

 

We are subject from time to time to various legal proceedings and claims that arise during the ordinary course of our business.  We do not believe that the outcome of those “routine” legal matters should have a material adverse affect on our consolidated financial position, operating results or cash flows; however, we can provide no assurances that legal claims that may arise will not have such a material impact in the future.

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Dividends Payable
9 Months Ended
Sep. 30, 2012
Dividends Payable
Dividends Payable

10.  Dividends Payable

 

During the quarter ended September 30, 2012, we accrued $13,900 in dividends payable to the holders of our 5% Preferred Stock, $14,800 in dividends payable to the holders of our Series 2 5% Preferred Stock and $10,600 in dividends payable to the holders of our Series 3 5% Preferred Stock.  As of September 30, 2012, we have $239,000 in accrued and unpaid dividends included in current liabilities.

 

Delaware law provides that we may only pay dividends out of our capital surplus or, if no surplus is available, out of our net profits for the fiscal year the dividend is declared and/or the preceding fiscal year.  These dividends continue to accrue on all our outstanding shares of preferred stock, regardless of whether we are legally able to pay them.  If we are unable to pay dividends on our preferred stock, we will be required to accrue an additional late fee penalty of 18% per annum on the unpaid dividends for the Series 2 Preferred Stock and Series 3 Preferred Stock.  Our CEO, CFO and one outside board member who are holders of our Series 2 and Series 3 Preferred Stock have waived any possible late fee penalties.  In addition to this late penalty, the holders of our Series 2 Preferred Stock and Series 3 Preferred Stock could elect to present us with written notice of our failure to pay dividends as scheduled, in which case we would have 45 days to cure such a breach.  In the event that we failed to cure the breach, the holders of these shares of preferred stock would then have the right to require us to redeem their shares of preferred stock for a cash amount calculated in accordance with their respective certificates of designation.  If we were required to redeem all shares of Series 2 Preferred Stock and Series 3 Preferred Stock as of October 31, 2012, the aggregate redemption price we would owe would be $2.0 million.

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Inventories (Tables)
9 Months Ended
Sep. 30, 2012
Inventories
Schedule of inventories

 

 

 

 

September 30,
2012

 

December 31,
2011

 

 

 

 

 

 

 

Inventories consist of:

 

 

 

 

 

Finished goods

 

$

61

 

$

61

 

Less: Reserve for finished goods

 

(61

)

(61

)

Demo evaluation inventory

 

5

 

5

 

Net inventory

 

$

5

 

5

 

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Accounting for Stock-Based Compensation (Tables)
9 Months Ended
Sep. 30, 2012
Accounting for Stock-Based Compensation
Schedule of assumptions used to estimate the fair values of options awards at the date of grant using a Black-Scholes option-pricing model

 

 

 

 

For Three Months
Ended
September 30, 2012

 

For Three Months
Ended
September 30, 2011

 

For Nine
Months Ended
 September 30,
2012

 

For Nine
Months Ended
September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Weighted average grant date fair value

 

$

0.56

 

$

0.39

 

$

0.63

 

$

0.67

 

Weighted average assumptions used:

 

 

 

 

 

 

 

 

 

Expected dividend yield

 

0.0

%

0.0

%

0.0

%

0.0

%

Risk-free interest rate

 

0.75

%

1.1

%

0.84

%

2.1

%

Expected volatility

 

216.0

%

207.0

%

213.2

%

202.0

%

Expected life (in years)

 

5.0

 

5.0

 

4.9

 

4.9

 

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Description of Business (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Dec. 31, 2010
Description of Business
Cash and cash equivalents $ 475,000 $ 322,000 $ 475,000 $ 322,000 $ 308,000 $ 540,000
Net income (loss) 48,000 121,000 (92,000) (755,000)
Period during which the entity expects to have sufficient cash resources to finance its operations and capital expenditures 12 months
Current Line of Credit
Description of Business
Funding available 159,000 159,000
Maximum borrowing capacity 625,000 625,000
Promissory note | G. Ward Paxton, chief executive officer
Description of Business
Funding available 670,000 670,000
Maximum borrowing capacity $ 2,200,000 $ 2,200,000
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Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Inventories consist of:
Finished goods $ 61 $ 61
Less: Reserve for finished goods (61) (61)
Demo evaluation inventory 5 5
Net inventory $ 5 $ 5
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Loan Payable to Officer (Details) (USD $)
9 Months Ended
Sep. 30, 2012
Loan Payable to Officer
Loan payable to officer $ 1,530,000
G. Ward Paxton, chief executive officer | Revolving promissory note
Loan Payable to Officer
Maximum borrowing capacity 2,200,000
Floating rate base prime rate
Percentage points added in interest rate 1.00%
Interest rate (as a percent) 5.00%
Loan payable to officer 1,530,000
Accrued interest $ 111,000
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Line of Credit (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 29, 2006
2006 Credit Line
Jun. 30, 2008
2008 Credit Line
Sep. 30, 2012
Current Line of Credit
Sep. 30, 2012
Current Line of Credit
Maximum
Line of Credit
Maximum borrowing capacity $ 1,000 $ 2,500 $ 625
Contingent advances as a percentage of each Eligible Account 80.00%
Period of annual rate for calculating daily rate of finance charge on each advance 360 days
Finance charge basis prime rate
Percentage points added in daily rate of finance charge 2.00%
Minimum interest rate 7.00%
Monthly collateral handling fee (as a percent) 0.50%
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Accounting for Stock-Based Compensation (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Accounting for Stock-Based Compensation
Stock-based compensation expense $ 47,000 $ 60,000 $ 165,000 $ 168,000
Options exercised (in shares) 60,000 130,000 60,000
Valuation Assumptions
Weighted average grant date fair value (in dollars per share) $ 0.56 $ 0.39 $ 0.63 $ 0.67
Weighted average assumptions used:
Expected dividend yield (as a percent) 0.00% 0.00% 0.00% 0.00%
Risk-free interest rate (as a percent) 0.75% 1.10% 0.84% 2.10%
Expected volatility (as a percent) 216.00% 207.00% 213.20% 202.00%
Expected life 5 years 5 years 4 years 10 months 24 days 4 years 10 months 24 days
Employees
Accounting for Stock-Based Compensation
Stock options granted (in shares) 3,000 6,000
Employees and directors
Accounting for Stock-Based Compensation
Stock options granted (in shares) 328,000 423,000
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Net Income (Loss) Per Share (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Net Income (Loss) Per Share
Number of antidilutive common stock equivalents excluded from the diluted income (loss) per share calculation (in shares) 1,158,881 1,332,823 4,054,528 3,888,467
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Concentrations (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Concentrations
Number of areas in which operations are concentrated 1
Two government customers
Concentrations
Number of customers 2 2
One individual commercial customer
Concentrations
Number of customers 1 1
Total revenues | Customer | U.S. Government
Concentrations
Percentage of revenue 34.30% 38.00% 35.20% 32.90%
Total revenues | Customer | Two government customers
Concentrations
Percentage of revenue 26.10% 33.50%
Total revenues | Customer | One individual commercial customer
Concentrations
Percentage of revenue 64.00% 59.40%
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Dividends Payable (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Sep. 30, 2012
5% preferred stock
Sep. 30, 2012
Series 2 preferred stock and series 3 preferred stock
item
Oct. 31, 2012
Series 2 preferred stock and series 3 preferred stock
Sep. 30, 2012
Series 2 preferred Stock
Sep. 30, 2012
Series 3 preferred Stock
Dividends Payable
Preferred stock dividends accrued during the period $ 39,000 $ 38,000 $ 116,000 $ 113,000 $ 13,900 $ 14,800 $ 10,600
Accrued and unpaid dividends 239,000 239,000 123,000
Dividend rate (as a percent) 5.00% 5.00% 5.00%
Percentage of additional late fee penalty payable on unpaid dividends 18.00%
Number of outside board members invested in preferred stock 1
Period within which entity must cure breach 45 days
Redemption price $ 2,000,000
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