10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2017

☐   Transition Report Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934

for the transition period from                 to                

Commission File No. 000-19301

iSign Solutions Inc.

(Exact name of registrant as specified in its charter)

Delaware	94-2790442
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2025 Gateway Place, Suite 485, San Jose, California	95110
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 650-802-7888

Securities registered under Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference into Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐    (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐  No ☒

The aggregate market value of the voting stock (Common Stock) held by non-affiliates of the registrant as of June 30, 2017 was approximately $2,012,144 based on the closing sale price of $0.50 on such date, as reported by OTC Markets Group Inc. The number of shares of Common Stock outstanding as of the close of business on April 2, 2018 was 5,761,980.

DOCUMENTS INCORPORATED BY REFFERENCE

iSign SOLUTIONS INC

TABLE OF CONTENTS

		Page
PART I		1
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	5
Item 2.	Properties	5
Item 3.	Legal Proceedings	5
Item 4.	Mine Safety Disclosures	5
PART II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 8.	Financial Statements and Supplementary Data	14
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	14
Item 9A.	Controls and Procedures	14
Item 9B.	Other Information	15
PART III		16
Item 10.	Directors, Executive Officers and Corporate Governance	16
Item 11.	Executive Compensation	18
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	20
Item 13.	Certain Relationships and Related Transactions and Director Independence	22
Item 14.	Principal Accountant Fees and Services	24
PART IV		25
Item 15.	Exhibits, Financial Statement Schedules	25

iSign’s logo, iSign^®, InkTools^® SIGVIEW^®, Sign-it^®, INKshrINK^®, SignatureOne^®, Ceremony^®, Signed, Sealed, Delivered^® and The Power To Sign Online^® are registered trademarks of the Company. The Company intends to register its trademarks generally in those jurisdictions where significant marketing of its products will be undertaken in the foreseeable future.

Note Regarding Forward Looking Statements

Certain statements contained in this Annual Report on Form 10-K, including without limitation, statements containing the words “believes”, “anticipates”, “hopes”, “intends”, “expects”, and other words of similar import, constitute “forward looking” statements within the meaning of the Private Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from expectations. Such factors include the following: (1) technological, engineering, quality control or other circumstances which could delay the sale or shipment of products; (2) economic, business, market and competitive conditions in the software industry and technological innovations which could affect the Company’s business; (3) the Company’s ability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others or prevent others from infringing on the proprietary rights of the Company; and (4) general economic and business conditions and the availability of sufficient financing.

PART I

Item 1. Business

General

iSign Solutions Inc. (the “Company” or “iSign”), was incorporated in Delaware in October 1986. iSign is a leading supplier of digital transaction management (DTM) software enabling the paperless, secure and cost-effective management and authentication of document-based transactions. iSign’s solutions encompass a wide array of functionality and services, including electronic signatures, simple-to-complex workflow management and various options for biometric authentication. These solutions are available across virtually all enterprise, desktop and mobile environments as a seamlessly integrated platform for both ad-hoc and fully automated transactions. iSign’s platform can be deployed both on premise and as a cloud-based (“SaaS”) service, with the ability to easily transition between deployment models. The Company is headquartered in San Jose, California.

For the year ended December 31, 2017, total revenue was $1,013, a decrease of $52, or 5%, compared to total revenue of $1,065 in the prior year. For the year ended December 31, 2017, software product revenue was $322, a decrease of $3, or 1%, compared to product revenue of $325 in the prior year. Maintenance revenue for the year ended December 31, 2017, was $691, a decrease of $49, or 7%, compared to maintenance revenue of $740 in the prior year. The decreases are primarily attributable to the Company’s efforts to restructure its operations in favor of partner-generated recurring revenue.

For the year ended December 31, 2017, the net loss attributable to common stockholders was $1,947, a decrease of $3,110, or 61%, compared to $5,057 in the prior year. For the year ended December 31, 2017, non-cash charges attributable to the write-off of the interest in the Chinese joint venture, interest expense, financing and loan discount amortization and the accretion of the beneficial conversion feature were $759, a decrease of $94, or 11%, compared to $853 in the prior year. There was no gain on derivative liability for the year ended December 31, 2017, compared to a gain of $330 in the prior year. For the year ended December 31, 2017, operating expenses were $2,571, a decrease of $1,703, or 40%, compared to operating expenses of $4,274 for the prior year. The decrease in operating expense resulted from reductions in full time employees and expenses associated with the Company’s efforts to restructure its operations in favor of a partner-generated recurring revenue model.

Core Technologies

The Company’s core technologies can be referred to as “transaction-enabling” and “business process work flow” technologies. These technologies include various forms of electronic signature methods, such as handwritten, biometric, click-to-sign and others, as well as technologies related to signature verification, authentication, cryptography and the logging of audit trails to prove signers’ intent. These technologies enable the appending of secure, legal and regulatory compliant electronic signatures coupled with an enhanced user experience, all at a fraction of the time and cost required by traditional, paper-based processes for signature capture.

Products

The Company’s enterprise-class SignatureOne^® and iSign^® suite of electronic signature solutions enable businesses to implement truly paperless, electronic signature-driven business processes. The aggregate of the software functionality enabling the digitization of end-to-end work flow processes is sometimes referred to as “digital transaction management” (DTM). Many applications provide electronic forms and allow users to fill-in information, but most of these applications still require users to print out a paper copy for a handwritten, ink signature. Solutions powered by iSign products allow legally binding electronic signatures to be added to digital documents, eliminating the need for paper to memorialize the completion, approval or authentication of the transaction. This allows users to reduce transaction times and processing costs.

1

The SignatureOne^® and iSign^® suite of products includes the following:

SignatureOne® Ceremony® Server	The SignatureOne® Ceremony® Server (“Ceremony Server”) provides a highly secure, scalable, patent-protected and streamlined electronic signature solution. Its flexible, easy-to-configure and agile workflow can be rapidly integrated via standard Web services to become an ultimate and cost efficient endpoint in true straight-through processing (the complete removal of paper from business processes) and to facilitate end-to-end management of multi-party approvals for PDF and XHTML documents. The Ceremony Server contains iSign’s core e-signature engine and signature ceremony management tools, and can be seamlessly integrated with numerous ancillary products. Its key features include:
	●	Consent/disclosure management – integral part of audit record; easily reproducible in the event of a dispute;
	●	Configurable document presentment – signatory receipt, access and viewing of document tracked in audit trail;
	●	Multi-party ceremonies – complex processes, simplified; allows for dynamic, multi-channel workflow changes, including remote, face-to-face and mobile scenarios;
	●	Supports complex business rules and dynamic user behaviors;
	●	Configurable branding and workflow;
	●	Flexible tracking and reporting – includes event notification service
	●	Extensive audit trail – embedded in individual document in a tamper evident digital seal; and
	●	Support for multiple signature methods – click-to-sign; biometric; and others.
iSign® Console™	The iSign® Console™ (“Console”) leverages the Ceremony Server’s core signature engine and is ideal for organizations looking for a standalone electronic signature solution. Through its intuitive graphical interface, the Console allows users to upload documents for signature, select signers and signature methods, and manage and enforce document workflow for routing, reviewing, signing and notifications. The Console offers a secure and intuitive solution that requires no integration and is available on-premise or in the cloud.
iSign® Enterprise	iSign® Enterprise incorporates the features and function of the Ceremony Server and the Console.
iSign® Family	The growing suite of iSign® products and service includes iSign® Mobile (for signing on iOS and Android mobile devices), iSign® Forms (for integrated use of templates and forms), and iSign® Live (iSign’s patent-pending co-browsing solution for simultaneous browsing signature ceremonies).
Sign-it®	Sign-it® is a family of desktop software products that enable the real-time capture of electronic and digital signatures, as well as their verification and binding within a standard set of applications, including Adobe Acrobat and Microsoft Word, web-based applications using HTML, XML and XHTML, and custom applications for .NET, C# and similar development environments for the enterprise market. The Sign-it® family of products combines the strengths of biometrics, and other forms of electronic signatures, with cryptography in a patented process that insures the creation of documents containing legally compliant electronic signatures. These signatures have the same legal standing as a traditional so-called wet signature on paper and are created pursuant to the Electronic Signature in National and Global Commerce Act, as well as other related legislation and regulations. With Sign-it® products, organizations wishing to process electronic forms, requiring varying levels of security, can reduce the cost and other inefficiencies inherent with paper documents by adding electronic signature technologies to their workflow solutions.
iSign® Toolkits	The iSign® suite of application development tools for electronic signature capture, encryption and verification in custom applications and web-based processes captures and analyzes the image, speed, stroke sequence and acceleration of a person’s handwritten electronic signature. This capability offers an effective and inexpensive solution for immediate authentication of handwritten signatures. iSign® toolkits also store certain forensic elements of an electronic signature for use in determining whether a person’s electronic signature is legally valid. They also include software libraries for industry standard encryption and hashing to protect a user’s signature, as well as the data captured in the Ceremony® process.

2

Products and upgrades that were introduced and first deployed in 2017 include the following:

iSign Enterprise	v5.4.22
iSign Enterprise	v5.4.8.2
iSign Enterprise	v5.4.8.3
iSign Enterprise	v6.2.2
iSign Enterprise	v6.2.3
iSign Enterprise	v6.3
iSign Enterprise	v6.4
iSign Enterprise	v6.4.1
iSign Enterprise	v6.4.2
iSign Enterprise	Database Migration from v5.4 to v6.5
iSign Enterprise	v6.5
iSign Enterprise	v6.5.1
iSign Enterprise	v6.5.2
iSign Enterprise	v6.6.3
iSign Enterprise	v6.6.4
iSign Enterprise	v6.6.5
iSign Enterprise	v6.6
iSign Enterprise	v6.6.6
iSign Enterprise	v6.7
iSign Enterprise	v6.6.7
iSign Enterprise	v6.6.8
Sign-it for Acrobat	v9.3.4
Sign-it for Acrobat	v9.4
Sign-it for Acrobat	v10.1
Sign-it for Acrobat	v10.2
Sign-it for Acrobat	v10.2.1
Sign-it for Acrobat	v10.3
iSign SDK Sources	iSign Windows SDK v4.8
iSign SDK Sources	iSign Java SDK v2.1

Intellectual Property

The Company relies on a combination of patent applications, trademarks, trade secrets and contractual provisions to protect its software offerings and technologies. The Company has a policy of requiring its employees and contractors to commit to the protection of proprietary information through written agreements. The Company also has a policy of requiring prospective business partners to enter into non-disclosure agreements before disclosure of any of its proprietary information.

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Over the years, the Company has developed and patented major elements of its software offerings and technologies. The Company currently has the following applications pending:

Patent App. No.	Filing Date
14/650,271	June 5, 2015
14/455,425	August 8, 2014

The Company’s technologies go beyond simple electronic signature and include biometric signatures, verification solutions, authentication and validation methods, that result in signed documents that are secure, legal and tamper-resistant.

The Company has over 20 registered and unregistered trademarks in the United States and other countries. The Company intends to register its trademarks in those jurisdictions where significant marketing of its products will be undertaken in the foreseeable future.

Research and Development

Our research and development effort is focused on the development, advancement and refinement of our core products and the development of new products. In addition, our research and development team is responsible for the continuous quality measurement and assurance of both existing and new products. We conduct research on software technology, related computer hardware, competitive offerings and alternative solution approaches to develop appropriate product and service offerings for our target markets. Our research and development efforts are often aimed at assisting clients and licensees in further streamlining new and existing workflow processes that our software solutions support and at ensuring that we meet or exceed industry standards and competitive offerings. We provide certain customization and integration services to our clients, including software integration partners and enterprise customers. These efforts are conducted by our team in San Jose, California, supported by contracted staff, including offshore engineers.

We believe that our software technologies, platforms and products are now competitive and, while research and development activities will remain at the core of our operations, we intend, going forward, to invest an increasing amount of our resources in sales and marketing activities.

Our research and development expense was $1,135 for the year ended December 30, 2017 and $1,322 for the year ended December 31, 2016.

Material Customers

Historically, the Company’s revenue has been derived from hundreds of customers, but a significant percentage of the revenue has been attributable to a limited number of customers. Three customers, as described in Note 2 to the Consolidated Financial statements, accounted for 13%, 14% and 30%, respectively, of total revenue for the year ended December 31, 2017.

Seasonality of Business

The Company believes that the sale of its products is not subject to seasonal fluctuations.

Backlog

Backlog was approximately $485 and $573 at December 31, 2017 and 2016, respectively, representing advanced payments on product and service maintenance agreements. In 2014, the Company negotiated a long term maintenance agreement, the balance of which is $175 at December 31, 2017, which will be recognized over four years. The remaining backlog is expected to be recognized over the next twelve months.

4

Competition

We believe that our primary competitive advantages include the following:

● Customer options and platform flexibility: Unlike most of our competitors, we offer many flexible configuration options for enterprise clients to address many variants of complex business work flows without the need for costly and time-consuming customization. These solution configurations can be rapidly and seamlessly integrated into a variety of enterprise technology environments.

● Software deployment options: Unlike most of our competitors, our software solutions are available as an on demand, private cloud-based software as a service, and on the customer’s premises, which is an important feature for most of our large enterprise clients for compliance, security and control reasons.

● Lower cost structure: Through our technology, sales and marketing partners, including Cegedim SA, we believe we offer a lower relative cost structure and higher operating margin than most of our larger competitors.

Currently, our primary competition for basic click-to-sign electronic signatures includes Adobe EchoSign, DocuSign and VASCO Data Security International Inc. We view the balance of the U.S. market as fragmented with a variety of smaller competitors focused on the consumer and small business markets rather than enterprise organizations.

Employees

As of December 31, 2017, the Company employed eight full-time employees and eight independent contractors. The Company has established longstanding strategic relationships that allow it to rapidly access product development and deployment capabilities that could be required to address most customer requirements. None of the Company’s employees are party to any collective bargaining agreements. We believe our employee relations are good.

Geographic Areas

For the years ended December 31, 2017 and 2016, sales in the United States as a percentage of total sales was 88%, respectively. At December 31, 2017 and 2016, long-lived assets located in the United States were $30 and $306, respectively. There were no long-lived assets located elsewhere as of December 31, 2017 and 2016.

Segments

The Company reports its financial results in one segment.

Available Information

Our web site is located at www.isignnow.com. The information on or accessible through our web site is not part of this Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to such reports are available, free of charge, on our web site as soon as reasonably practicable after we electronically file with or furnish such material to the Securities and Exchange Commission (“SEC”). Furthermore, a copy of this Annual Report on Form 10-K and other reports filed by iSign with the SEC may be read and copied by the public at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549 on official business days during the hours of 10 a.m. and 3 p.m. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers, including iSign, that file electronically with the SEC at www.sec.gov.

Item 1A. Risk Factors

Not applicable.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company leases its principal facilities, consisting of approximately 2,400 square feet, in San Jose California, pursuant to a lease that expires in 2019.

Item 3. Legal Proceedings

None.

Item 4. Mine Safety Disclosures

None.

5

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

The Company’s common stock (“Common Stock”) is quoted on OTC Markets Group Inc.’s OTC Pink quotation system under the trading symbol ISGN. Trading activity for the Company’s Common Stock can be viewed at www.otcmarkets.com. The following table sets forth the high and low sale prices of the Common Stock for the periods noted.

		Sale Price Per Share
Year	Period	High		Low
2016	First Quarter	$	15.00	$	2.81
	Second Quarter	$	3.55	$	0.98
	Third Quarter	$	2.00	$	1.01
	Fourth Quarter	$	1.25	$	0.56
2017	First Quarter	$	0.85	$	0.21
	Second Quarter	$	0.50	$	0.35
	Third Quarter	$	0.50	$	0.31
	Fourth Quarter	$	0.40	$	0.20

Holders

As of March 20, 2018, there were approximately 146 holders of record of our Common Stock.

Dividends

To date, the Company has not paid any dividends on its Common Stock and does not anticipate paying any such dividends in the foreseeable future. The declaration and payment of dividends on the Common Stock is at the discretion of the Board of Directors and will depend on, among other things, the Company’s operating results, financial condition, capital requirements, contractual restrictions or such other factors as the Board of Directors may deem relevant.

6

Recent Sales of Unregistered Securities

None

Issuer Purchases of Equity Securities

None.

Item 6. Selected Financial Data

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our financial statements and related notes appearing elsewhere in this Form 10-K. The following discussion relating to projected growth and future results and events constitutes forward-looking statements. Actual results in future periods may differ materially from the forward-looking statements due to a number of risks and uncertainties. We cannot guarantee future results, levels of activity, performance or achievements. Except as otherwise required under applicable law, we disclaim any obligation to revise or update forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Unless otherwise stated herein, all figures in this Item 7, other than price per share data, are stated in thousands (“000s”).

Overview and Recent Developments

The Company is a leading supplier of DTM software enabling the paperless, secure and cost-effective management and authentication of document-based transactions. iSign’s solutions encompass a wide array of functionality and services, including electronic signatures, simple-to-complex workflow management and various options for biometric authentication. These solutions are available across virtually all enterprise, desktop and mobile environments as a seamlessly integrated platform for both ad-hoc and fully automated transactions. The Company’s products and services result in legally binding transactions that are compliant with applicable laws and regulations and that can provide a higher level of security than paper-based processes. The Company has been a leading supplier of enterprise software solutions within the financial services and insurance industries and has made available to its customers significant expense reduction by enabling a completely electronic document and workflow process, as well as the resulting reduction in mailing, scanning, filing and other costs related to the use of paper.

The Company was incorporated in Delaware in October 1986. Except for the year ended December 31, 2004, in each year since its inception the Company has incurred losses. For the two-year period ended December 31, 2017, net losses attributable to common stockholders aggregated approximately $7,004, and at December 31, 2017, the Company's accumulated deficit was approximately $132,562.

For the year ended December 31, 2017, total revenue was $1,013, a decrease of $52, or 5%, compared to total revenue of $1,065 in the prior year. The decrease in revenue is primarily attributable to the Company’s efforts to restructure its operations in favor of partner-generated recurring revenue.

For the year ended December 31, 2017, operating expenses were $2,571, a decrease of $1,703, or 40%, compared to operating expenses of $4,274 in the prior year. The decrease in operating expenses resulted from the reduction of 3 full time employees and changes to its operating expense structure, which changes were made in connection with the Company’s efforts to tailor its operations in favor of partner-generated recurring revenue. For the year ended December 31, 2017, the loss from operations was $1,558, a decrease of $1,651, or 51%, compared to a loss from operations of $3,209 in the prior year.

In February 2017, the Company received, from investors and affiliates of the Company, advances aggregating $120 in cash against certain accounts receivable of the Company. Upon collection of the receivable, the Company would repay the advance to the lenders on a pro rata basis together with a 5% advance fee. The receivables were collected and the advances were repaid in March 2017, along with $6 in advance fees per the agreement. The advance fees were recorded as interest expense in the quarter ended March 31, 2017.

7

In May 2017, the Company issued secured convertible promissory notes to investors and affiliates of the Company aggregating $505 in cash. In addition, certain investors and affiliates of the Company that had taken part in the November 2016 financing, and that also participated in the May 2017 financing, exchanged $450 of unsecured convertible promissory notes received in the November 2016 financing for $250 secured notes with the same terms as the notes issued in the May 2017 financing and $200 in unsecured notes with the same terms as the November 2016 financing. The secured notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share or the price per share of Common Stock upon closing a new financing of at least $1,000 in aggregate proceeds. The secured notes bear interest at the rate of 10% per annum, are due December 31, 2018 and are secured by an interest in all the Company’s rights, title and interest in, to and under its intellectual property. Should the secured notes remain outstanding following the maturity date an additional 30% of the note’s principal amount shall become due and payable.

In December 2017, the Company issued additional secured convertible promissory notes to investors and affiliates of the Company aggregating $150 in cash. The secured notes have substantially the same terms as the secured notes issued in the May 2017 financing.

The Company used the funds received from the above financing for working capital and general corporate purposes.

The Company recorded $97 in debt discount amortization for the twelve months ended December 31, 2017 related to the above debt financings.

New Accounting Pronouncements

See Note 1, Notes to Consolidated Financial Statements included under Part IV, Item 15 of this report on Form 10-K.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the Company’s consolidated financial statements and the accompanying notes. The amounts of assets and liabilities reported in its balance sheets and the amounts of revenue and expenses reported for each period presented are affected by these estimates and assumptions that are used for, but not limited to, revenue recognition, allowance for doubtful accounts, intangible asset impairments, fair value of financial instruments, stock based compensation and valuation allowances on deferred tax assets. Actual results may differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used by the Company’s management in the preparation of the consolidated financial statements.

Stock based Compensation: Stock-based compensation expense is based on the estimated grant date fair value of the portion of stock-based payment awards that are ultimately expected to vest during the period. The grant date fair value of stock-based awards to employees and directors is calculated using the Black-Scholes-Merton option pricing model. Forfeitures of share-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of stock-based compensation awards to employees is amortized on an accrual basis over the vesting period of the options.

Valuation of equity warrants: The Company values warrants issued using the Black-Scholes-Merton pricing model.

Derivatives: The Company follows the relevant accounting guidance and records derivative instruments (including certain derivative instruments embedded in other contracts) in the consolidated balance sheet as either an asset or a liability measured at their fair value, with changes in the derivative’s fair value recognized currently in earnings. The Company values these derivative securities under the fair value method at the end of each reporting period (quarter), and their value is marked-to-market at the end of each reporting period with the gain or loss recorded in earnings. The Company continues to revalue these instruments each quarter to reflect their current value in light of the current market price of our Common Stock. The Company used a simulated probability valuation model to value warrants containing embedded derivative instruments. Determining the appropriate fair-value model and calculating the fair value of such warrants requires considerable judgment. Any change in the estimates (specifically, probabilities) used may cause the value to be higher or lower than that reported. The assumptions used in the model require significant judgment by management and include the following: volatility, expected term, risk-free interest rate, dividends, and warrant holders’ expected rate of return, reset provisions based on expected future financings, projected stock prices, and probability of exercise.

8

The conversion option included within the unsecured convertible promissory notes is accounted for as a derivative liability at its estimated fair value. The derivative is subject to re-measurement at the end of each reporting period, with changes in fair value recognized as a component of interest and other income, in the consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the conversion or maturity of the unsecured convertible promissory note purchase agreements.

Revenue: Revenue is recognized when earned in accordance with the applicable accounting guidance. The Company recognizes revenue from sales of software products upon shipment, provided that persuasive evidence of an arrangement exists, collection is determined to be probable, all non-recurring engineering work necessary to enable the Company’s product to function within the customer’s application has been completed and the Company’s product has been delivered according to specifications. Revenue from service subscriptions is recognized as costs are incurred or over the service period, whichever is longer.

Software license agreements may contain multiple elements, including upgrades and enhancements, products deliverable on a when and if available basis and post-contract support. Revenue from software license agreements is recognized upon delivery of the software, provided that persuasive evidence of an arrangement exists, collection is determined to be probable, all nonrecurring engineering work necessary to enable the Company’s products to function within the customer’s application has been completed and the Company’s product has been delivered according to specifications.

For arrangements with multiple deliverables, the Company allocates consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices, which are determined using vendor-specific objective evidence.

Maintenance revenue is recorded for post-contract support and upgrades or enhancements, which is paid for in addition to license fees, and is recognized as costs are incurred or over the support period, whichever is longer. For undelivered elements where vendor specific objective evidence of fair value does not exist, revenue is deferred and subsequently recognized when delivery has occurred and when vendor specific evidence has been determined.

Allowance for Doubtful Accounts: The allowance for doubtful accounts is based on the Company’s assessment of the collectability of specific customer accounts and an assessment of international, political and economic risk as well as the aging of the accounts receivable. If there is a change in actual defaults from the Company’s historical experience, the Company’s estimates of recoverability of amounts due could be affected and the Company would adjust the allowance accordingly.

Long-lived assets: The Company evaluates the recoverability of its long-lived assets, including intangible assets at least annually or whenever circumstances or events indicate such assets might be impaired. The Company would recognize an impairment charge in the event the net book value of such assets exceeded the future undiscounted cash flows attributable to such assets. Estimation of future cash flows from the products considers the following additional factors:

● legal, regulatory or contractual provisions known to the Company that limit the useful life of any product technology to less than the assigned useful life;

● whether the Company needs to incur material costs or make modifications in order for it to continue to be able to realize the benefits afforded by the product technologies;

9

● effects of obsolescence or significant competitive pressure on the Company’s current or future products are expected to reduce the anticipated cash flow from the products;

● demand for products utilizing the technology will diminish, remain stable or increase; and

● whether the current markets for the products based on the technology will remain constant or will change over the useful lives assigned to the technologies.

Customer Base: To date, the Company’s electronic signature revenue has been derived primarily from financial service industry end-users and from resellers and channel partners serving the financial service industry primarily in North America, the ASEAN Region and Europe. The Company performs periodic credit evaluations of its customers and does not require collateral. The Company maintains reserves for potential credit losses. Historically, such losses have been within the range of management’s expectations.

Cost of sales: Cost of sales includes direct engineering labor and overhead for specific revenue based projects initiated by customers and maintenance projects specific to customer needs, along with third party services related to the Company’s transactional based revenues.

Research and Development Costs: Research and development costs are charged as expense as incurred.

Net Operating Loss Carry-forwards: Utilization of the Company's net operating losses may be subject to an annual limitation due to the ownership change limitations under Section 382 of the Internal Revenue Code and similar state provisions. As a result, a portion of the Company's net operating loss carry-forwards may not be available to offset future taxable income. The Company has provided a full valuation allowance for deferred tax assets at December 31, 2017, of approximately $18,095 based upon the Company's history of losses.

Segments: The Company reports its financial results in one segment.

Results of Operations – Years Ended December 31, 2017 and December 31, 2016

Revenue

For the year ended December 31, 2017, total revenue was $1,013, a decrease of $52, or 5%, compared to total revenue of $1,065 in the prior year. For the year ended December 31, 2017, software product revenue was $322, a decrease of $3, or 1%, compared to product revenue of $325 in the prior year. Maintenance revenue for the year ended December 31, 2017, was $691, a decrease of $49, or 7%, compared to maintenance revenue of $740 in the prior year. The decrease in revenue is primarily attributable to the Company’s efforts to restructure its operations in favor of partner-generated recurring revenue.

Cost of Sales

For the year ended December 31, 2017, cost of sales was $126, a decrease of $260, or 67%, compared to cost of sales of $386 in the prior year. The decrease was primarily due to lower direct engineering costs associated with both software product and maintenance revenue during the year ended December 31, 2017 compared to the prior year.

Operating Expenses

Research and Development Expenses

For the year ended December 31, 2017, research and development expenses were $1,135, a decrease of $187, or 14%, compared to research and development expenses of $1,322 in the prior year. Research and development expenses consist primarily of salaries and related costs, outside contract engineering, maintenance items, and allocated facility expenses. The most significant factors contributing to the decrease in research and development expenses was a decrease in the number of engineering personnel by 2, and the reduction in allocated facilities expenses due to the move to smaller facilities. These reductions were partially offset by reduced direct labor transfers to cost of sales due to the decreases in non-recurring engineering orders and maintenance. For the year ended December 31, 2017, total research and development expenses before IT and cost of sales allocations were $1,312, a decrease of $444, or 25%, compared to $1,756 of total research and development expenses before allocations in the prior year.

10

Sales and Marketing Expenses

For the year ended December 31, 2017, sales and marketing expenses were $188, a decrease of $218, or 54%, compared to sales and marketing expenses of $406 in the prior year. The decrease was primarily attributable to a decrease in salaries and wages in connection with the Company’s efforts to restructure its operations in favor of partner-generated recurring revenue.

General and Administrative Expenses

For the year ended December 31, 2017, general and administrative expenses were $1,122, a decrease of $1,038, or 48%, from general and administrative expenses of $2,160 in the prior year. The decrease was attributable to across the board decreases in salary and related expense, professional fees and services, investor relations, allocated facilities cots and other general overhead expenses. The expense reductions were primarily the result of the cash constraints experienced by the Company over the current period ended December 31, 2017.

Other Income (Expense), Net

Other income (expense), net, was income of $67, an increase of $79, or 658%, compared to an expense of $12 in the prior year. The increase is due primarily to the abatement of an accrual for a late filing fee from the Internal Revenue Service of $30 and the collection of accounts receivable reserved for in the prior year of $44.

For the year ended December 31, 2017, the Company recorded a non-cash charge of $550 related to the deconsolidation of the Chinese joint venture due to the lack of any operations over the last two years.

For the year ended December 31, 2017, the Company recorded a gain on sale of the source code and rights to one of the Company’s older toolkit software products, net of related costs, of $239. The purchaser granted the Company a fully-paid, royalty-free, worldwide, irrevocable license to use the software to support current and existing customers and partners of the Company. The Company did not retain the right to distribute the software either as a source code or as an object code. However, the Company retained the right to create new non-toolkit software from the original source code and to market, sell and distribute the new non-toolkit software in the ordinary course of business to its customers and partners. In addition, the Company sold one of is retired domain names for $64 cash.

Interest Expense

For the year ended December 31, 2017, related party interest expense was $26, a decrease of $77, or 75%, compared to related party interest expense of $103 in the prior year. For the year ended December 31, 2017, other interest expense was $86, a decrease of $29, or 25%, compared to other interest expense of $115 in the prior year. The decrease in interest expense is primarily due to a decrease in the amount of borrowings compared to the prior year.

For the year ended December 31, 2017, the Company recorded $97 in debt discount amortization associated with its long-term and short-term borrowings, $27 of which is attributable to related parties and $70 of which is attributable to other investors, compared to $390 in the prior year, $87 of which is attributable to related parties and $303 of which is attributable to other investors. The decrease in debt discount amortization was primarily due to the conversion of the convertible notes in May of 2016 and the subsequent write off of the remaining unamortized loan discount.

The change in fair value of derivative liabilities resulted in a non-cash gain of $330 in the prior year. No such gain was recorded for the twelve months ended December 31, 2017.

There was no accretion of beneficial conversion feature on Preferred Stock for the year ended December 31, 2017 due to the conversion of the outstanding Preferred Stock in May of 2016. For the year ended December 31, 2016, accretion of the beneficial conversion feature on Preferred Stock with an exercise price less than the closing market price on May 19, 2016 (for the Series C Preferred Stock and Series D-1 Preferred Stock) was $245.

Due to the conversion of the Company’s Preferred Stock discussed above, no dividends were paid in kind in 2017. The Company recorded $1,313 in dividends in kind on shares of its Convertible Preferred Stock for the year ended December 31, 2016, of which $646 was to related parties and $667 was to other investors.

11

Liquidity and Capital Resources

Cash and cash equivalents totaled $285 at December 31, 2017, compared to $389 at December 31, 2016.

The cash used in operations was primarily attributable to the net loss of $1,947. This amount was partially offset by the write-off of the interest in the Chinese joint venture of $550, non-cash depreciation and amortization charges of $277, amortization of debt discount of $97 and stock-based employee compensation of $143.

Cash out flows for the acquisition of property and equipment was $3 offset by cash inflows of $303 related to the sale of intangible assets.

Proceeds from financing activities was $655 from the issuance of debt.

Accounts receivable were $45 at December 31, 2017, a decrease of $92, or 67%, compared to accounts receivable of $137 at December 31, 2016. Accounts receivable at December 31, 2017 and 2016, are net of $1 and $63, respectively, of allowances provided for potentially uncollectible accounts. The decrease is primarily attributable to higher collections in the quarter ended December 31, 2017.

Prepaid expenses and other current assets were $28 at December 31, 2017, a decrease of $28, or 50%, compared to prepaid expenses and other current assets of $56 at December 31, 2016. The decrease is primarily due to lower prepaid insurance premiums compared to the prior year.

Short-term debt was $1,458 net of $97 in discounts at December 31, 2017. The Company reclassified its existing long-term debt to short term and issued new debt in the amount of $655 during the twelve months ended December 31, 2017.

Accounts payable were $1,289 at December 31, 2017, a decrease of $79, or 6%, compared to $1,368 at December 31, 2016. The decrease is due cost cutting efforts by the Company during the current period.

Other current liabilities, which include accrued compensation were $941 at December 31, 2017, compared to $762 at December 31, 2016, an increase of $179, or 23%. The increase is primarily attributable to the accrual of certain franchise taxes and professional service fees partially offset by reductions in headcount during the current period.

Deferred revenue, including the long-term portion, was $485 at December 31, 2017, a decrease of $88, or 15%, compared to deferred revenue of $573 at December 31, 2016. The decrease is primarily due to the recognition of revenue from a five-year maintenance contract with one of the Company’s customers that was renewed in December of 2015.

Financing Transactions

Advances:

In February 2017, the Company received, from investors and affiliates of the Company, advances aggregating $120 in cash against certain accounts receivable of the Company. Upon collection of an invoice, the Company would repay the advance to the lenders on a pro rata basis together with a 5% advance fee. The receivables were collected and the advances were repaid in March 2017, along with $6 in advance fees per the agreement. The advance fees were recorded as interest expense in the quarter ended March 31, 2017.

Notes payable:

In November 2016, the Company issued long-term unsecured convertible promissory notes to investors and affiliates of the Company aggregating $700 in cash. The Company also issued the same long-term notes to affiliates in exchange for an aggregate of $200 in demand notes that had been issued earlier in September and October of 2016. The long-term notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share (initially, $1.30 per share and subsequently reduced as part of the May 2017 financing described below) or the price per share of Common Stock, upon closing a new debt and or equity financing of at least $1,000 in aggregate proceeds. The notes bear interest at the rate of 6% per annum and are due December 31, 2018. The Company issued warrants to purchase 277 shares of Common Stock in connection with these long-term notes. The Company ascribed a value of $204 to the 277 warrants and recorded a discount to the long-term notes and a corresponding amount to additional paid-in capital. The discount is being amortized using the effective interest method over the term of the notes.

12

In May 2017, the Company issued secured convertible promissory notes to investors and affiliates of the Company aggregating $505 in cash. In addition, certain investors and affiliates of the Company that had taken part in the November 2016 financing discussed above, and that also participated in the May 2017 financing, exchanged $450 of unsecured convertible promissory notes received in the November 2016 financing for $250 secured notes with the same terms as the notes issued in the May 2017 financing and $200 in unsecured notes with the same terms as the November 2016 financing discussed above. The secured notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share or the price per share of Common Stock, upon closing a new financing of at least $1,000 in aggregate proceeds. The secured notes bear interest at the rate of 10% per annum, are due December 31, 2018 and are secured by an interest in all the Company’s rights, title and interest in, to and under its intellectual property. Should the secured notes remain outstanding following the maturity date an additional 30% of the note’s principal amount shall become due and payable.

In December 2017, the Company issued additional secured convertible promissory notes to investors and affiliates of the Company aggregating $150 in cash. The secured notes have substantially the same terms as the secured notes issued in the May 2017 financing.

The Company used the funds received from the above financings for working capital and general corporate purposes.

The Company sold for $303 in cash the source code and rights to one of its older toolkit software products and one of is retired domain names.

During the twelve months ended December 31, 2017, the Company accrued $112 of interest expense, $100 associated with the notes, of which $26 was to related parties and $74 was to other investors.

The Company recorded $97 in debt discount amortization for the twelve months ended December 31, 2017 related to the above debt financings.

Contractual Obligations

The Company had the following material commitments as of December 31, 2017:

Contractual obligations	Total		2018		2019		Thereafter
Operating lease commitments	$	189	$	102	$	87	$	–
Capital lease commitments		14		6		6		2
Total	$	203	$	108	$	93	$	2

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk. Any investments in fixed income securities are subject to interest rate risk and will fall in value if the market interest rates increase. The Company attempts to limit this exposure by investing primarily in short-term securities.

Foreign Currency Risk. The Company operates a joint venture in China and from time-to-time could make certain capital equipment or other purchases denominated in foreign currencies. As a result, the Company’s cash flows and earnings could be exposed to fluctuations in interest rates and foreign currency exchange rates. The Company would attempt to limit any such exposure through operational strategies and generally has not hedged currency exposure.

13

Future Results and Stock Price Risk. The Company’s stock price may be subject to significant volatility. The public stock markets have experienced significant volatility in stock prices in recent years. The stock prices of technology companies have experienced particularly high volatility, including, at times, severe price changes that are unrelated or disproportionate to the operating performance of such companies. The trading price of the Company’s Common Stock could be subject to wide fluctuations in response to, among other factors, quarter-to-quarter variations in operating results, announcements of technological innovations or new products by the Company or its competitors, competitor consolidation in the industry, announcements of new strategic relationships by the Company or its competitors, general conditions in the computer software industry or the global economy generally, or market volatility unrelated to the Company’s business and operating results. The impact and severity of the above factors could be exacerbated by the Company’s small size, public float and a lack of market liquidity for its Common Stock.

Item 8. Financial Statements and Supplementary Data

The Company’s audited consolidated financial statements for the years ended December 31, 2017 and 2016, and for each of the years in the two-year period ended December 31, 2017, begin on page F-1 of this Annual Report on Form 10-K, and are incorporated into this item by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

The Company carried out an evaluation as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to paragraph (b) of Rule 13a-15 and 15d-15 under the Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation the Chief Executive Officer and the Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that the information required to be disclosed in reports we file or submit under the Exchange Act (1) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The Company does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedures are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The Company considered these limitations during the development of its disclosure controls and procedures, and will continually reevaluate them to ensure they provide reasonable assurance that such controls and procedures are effective.

Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

14

Management has assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria established in “Internal Control, Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In performing this assessment, management identified the following material weaknesses:

As a small company with limited resources that are mainly focused on the development and sales of software products and services, iSign does not employ a sufficient number of staff in its finance department to possess an optimal segregation of duties or to provide optimal levels of oversight. This has resulted in certain audit adjustments and management believes that there may be a possibility for a material misstatement to occur in future periods while it employs the current number of personnel in its finance department.

Based on its assessment, our management concluded that, as of December 31, 2017, our internal control over financial reporting was not effective. Management believes that the identified weaknesses have not affected our ability to present GAAP-compliant financial statements in this Form 10-K. During the year-end financial statement close the Company was able to adjust its financial records to properly present its financial statements and we were therefore able to present GAAP-compliant financial statements. Management does not believe that its weakness with respect to its procedures and controls have had a pervasive effect upon our financial reporting due to our ability to make the necessary reconciling adjustments to our financial statements.

Management’s Remediation Initiatives

Management conducts a number of activities to address the material weaknesses noted above, including but not limited to the following:

● Key managers and accounting personnel work closely with our independent audit firm in evaluating our progress in remediating our material weaknesses with oversight by the audit committee;

● Evaluate control procedures on an ongoing basis, and, where possible, modify those control procedures to improve oversight;

● Evaluate, and, where possible, employ additional third party resources that can provide oversight support within the Company’s budget constraints; and

● As the Company grows its business and the cash flow necessary to hire additional accounting personnel, management expects to pursue and implement such additional hires.

Elements of our remediation plan can only be accomplished over time and we can offer no assurances that those initiatives will ultimately have the intended effects. Ultimately, revenue growth and performance improvements are the most likely avenue to greater resources that will improve the Company’s internal controls.

Management will continue the process of reviewing existing controls, procedures and responsibilities to more closely identify financial reporting risks and the required controls to address them. Key control and compensating control procedures will be developed to ensure that material weaknesses are properly addressed and related financial reporting risks are mitigated. Periodic control validation and testing will also be implemented to ensure that controls continue to operate consistently and as designed.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2017 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

15

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The following table sets forth certain information concerning the Company’s directors and executive officers:

Name	Age	Positions with the Company
Philip S. Sassower	77	Co-Chairman and Chief Executive Officer
Michael Engmann	69	Co-Chairman and Chief Operating Officer
Andrea Goren	50	Director and Chief Financial Officer
Francis J. Elenio	51	Director
Stanley Gilbert	78	Director
Jeffrey Holtmeier	59	Director
David E. Welch	70	Director

The business experience of each of the directors and executive officers for at least the past five years includes the following:

Philip S. Sassower has served as the Company’s Chairman and Chief Executive Officer since August 2010, and Co-Chairman since October 2015. Mr. Sassower is a Managing Director of SG Phoenix LLC, a private equity firm, and has served in that capacity since May 2003. Mr. Sassower has also been Chief Executive Officer of Phoenix Enterprises LLC, a private equity firm, and has served in that capacity since 1996. In addition and until his retirement in October 2017, Mr. Sassower served as Chief Executive Officer of Xplore Technologies Corp. (NASDAQ:XPLR) from February 2006 and as a director of Xplore Technologies Corp. and served as Chairman of its board of directors since December 2004. On May 13, 2008, Mr. Sassower was named Chairman of the Board of The Fairchild Corporation (NYSE: FA), a motorcycle accessories and aerospace parts and services company. On March 18, 2009, The Fairchild Corporation and 61 subsidiaries filed a petition for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, District of Delaware. On January 7, 2010, The Fairchild Corporation’s plan of liquidation was declared effective and the company’s board of directors was relieved of its duties. Mr. Sassower also served as Chairman of the Board of the Company from 1998 to 2002 and as Co-Chief Executive Officer of the Company from 1997 to 1998. Mr. Sassower is co-manager of the managing member of Phoenix Venture Fund LLC. Mr. Sassower’s qualifications to serve on the Board of Directors include more than 40 years of business and investment experience. Mr. Sassower has developed extensive experience working with management teams and boards of directors, and in acquiring, investing in and building companies and implementing changes.

Michael Engmann has served as the Company’s Co-Chairman since October 2015, and as the Company’s Chief Operating Officer since May 2017. Mr. Engmann is Chairman of Engmann Options, a family trading and investment holding company and has served in that capacity since 1978. Mr. Engmann has approximately 40 years of experience in building successful financial service companies. He began his career as a trader and was one of the early market-makers in the Pacific Stock Exchange’s options program. He (i) founded, in 1980, Sage Clearing Corporation, a stock and options clearing company for professional traders, which was sold to ABN Amro Inc. in 1988, (ii) founded, in 1982, Preferred Trade, Inc., a broker-dealer providing research and trade execution services, which was sold to Fimat in May 2005, and (iii) acquired in 2001 Revere Data LLC, a global financial and market data company, which was sold to Factset in 2013. Mr. Engmann’s qualifications to serve on the Board of Directors include more than 40 years of business and investment experience.

Andrea Goren has served as a director since August 2010. Mr. Goren was appointed the Company’s Chief Financial Officer in December 2010. Mr. Goren is a Managing Director of SG Phoenix LLC, a private equity firm, and has served in that capacity since May 2003. Mr. Goren is co-manager of the managing member of Phoenix Venture Fund LLC, the Company’s largest shareholder. Prior to that, Mr. Goren served as Vice President of Shamrock International, Ltd., a private equity firm. Mr. Goren has been a director of Xplore Technologies Corp. (NASDAQ:XPLR) since December 2004, and a director of The Fairchild Corporation (NYSE: FA) from May 2008 to January 2010. Mr. Goren’s qualifications to serve on the Board of Directors include his experience and knowledge acquired in approximately 18 years of private equity investing and his extensive experience working with management teams and boards of directors.

Francis J. Elenio has served as a director since November 2015, after having served as a director of the Company from August 2010 to October 2011. Since November 2005, Mr. Elenio has served as Managing Director of Reeff Consulting LLC, a financial and business advisory firm providing outsourced accounting and consulting services for start-up to midsized companies. Mr. Elenio also served as Chief Financial Officer of Signal Point Communications Corp. from February 2011 to October 2013. Mr. Elenio has over 25 years of experience working with corporations as a strategic, solution-driven professional focused on finance and accounting, operations and turn-around management. Mr. Elenio has served at the CFO level at numerous public and private companies, including Wilshire Enterprises, Inc., a real estate investment and management company, WebCollage, Inc., an internet content integrator for manufacturers, GoAmerica, Inc., a wireless internet service provider and Roomlinx, Inc., a provider of wireless high speed internet access to hotels and conference centers. Mr. Elenio is a CPA and received an MBA. Since September 2007, Mr. Elenio has also been an Adjunct Professor of Finance at Seton Hall University. Mr. Elenio serves on the Company’s audit committee. Mr. Elenio’s qualifications to serve on the Board of Directors and Audit Committee include his experience as a CFO working with technology companies like iSign.

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Stanley L. Gilbert has served as a director since October 2011. Mr. Gilbert has more than 45 years of experience as a lawyer with primary specialties in wills, trusts, estate planning and administration, as well as tax planning. Mr. Gilbert is Founder, and, has been President of Stanley L. Gilbert PC since 1982. Mr. Gilbert has also been a partner of a number of law firms, including Nager Korobow, Bell Kallnick Klee and Green, and Migdal Pollack Rosenkrantz and Sherman. Mr. Gilbert has served as a Director of Planned Giving at Columbia University Medical Center’s Nathaniel Wharton Fund, which supports a broad variety of projects in basic research, clinical care and teaching since 2001. Mr. Gilbert was elected by a majority of iSign’s Series B Preferred Stock and Series C Preferred stockholders voting together as a separate class on an as converted to Common Stock basis, and serves on iSign’s audit and compensation committees. Mr. Gilbert’s qualifications to serve on the Board of Directors include his significant tax and accounting expertise acquired through his years of practicing law.

Jeffrey Holtmeier has served as a director since August 2011. Mr. Holtmeier has more than 25 years of successful entrepreneurship in the technology and communications fields. As CEO of GENext from 2001 to present, and through its subsidiary China US Business Development, LLC, Mr. Holtmeier has assisted many US companies in establishing relationships in China, where he also co-founded Koncept International, Inc., a Chinese-based VoIP and digital media technology company. Prior to his involvement in the Chinese market, Mr. Holtmeier founded, built over seventeen years and successfully sold InfiNET in 2001 to Teligent, a NASDAQ listed company. Mr. Holtmeier was a recipient of the prestigious Ernst & Young, NASDAQ/USA Today “Entrepreneur of the Year” award in 1999, and has served on the boards of numerous corporations and non-profit organizations. He serves on iSign’s audit and compensation committees. Mr. Holtmeier’s qualifications to serve on the Board of Directors include his experience as a successful entrepreneur and his experience in establishing business relationships in China.

David E. Welch has served as a director since March 2004. From July 2002 to present Mr. Welch has been the principal of David E. Welch Consulting, a financial consulting firm. Mr. Welch has also been Vice President of Operations at Vertex Innovations, Inc., from June 2015 to April 2017. Mr. Welch was Vice President and Chief Financial Officer of American Millennium Corporation, Inc., a provider of satellite-based asset tracking and reporting equipment, from April 2004 to September 2014. Mr. Welch was Vice President and Chief Financial Officer of Active Link Communications, a manufacturer of telecommunications equipment, from 1999 to 2002. Mr. Welch has held positions as Director of Management Information Systems and Chief Information Officer with Micromedex, Inc. and Language Management International from 1995 through 1998. Mr. Welch other directorships have been with AspenBio Pharma, Inc., from 2004 to 2017, PepperBall Technologies, Inc. from January 2007 to January 2009 and Advanced Nutraceuticals, Inc., from 2003 to 2006. Mr. Welch is a Certified Public Accountant licensed in the state of Colorado. He serves on iSign’s audit and compensation committees. Mr. Welch’s qualifications to serve on the Board of Directors include his significant accounting and financial expertise.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s officers, directors and persons who own more than ten percent of a registered class of the Company’s equity securities to file certain reports with the SEC regarding ownership of, and transactions in, the Company’s securities. These officers, directors and stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) reports that are filed with the SEC. The following Section 16 filings were not timely filed for the year ended December 31, 2017: the Form 4 for Andrea Goren, and Stanley Gilbert dated May 23, 2017 and the Form 4 for Andrea Goren, and Philip Sassower dated December 15, 2017.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics, referred to as our Code of Business Conduct and Ethics, which applies to all of our directors, officers, and employees, including our principal executive officer, our principal financial and accounting officer, and our Chief Technology officer. A copy of the Code of Business Conduct and Ethics is posted on the Company’s web site, at www.isignnow.com.

Audit Committee Financial Expert

Mr. Welch serves as the Audit Committee’s financial expert. Each member of the Audit Committee is independent as defined under the applicable rules and regulations of the SEC and the director independence standards of the NASDAQ Stock Market, as currently in effect.

17

Item 11. Executive Compensation

Summary Compensation Table (in dollars)

Name and Principal Position

Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($) (4)

Non-Equity Incentive Plan Compensation ($)

Change in Pension Value And Nonqualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Total ($)

Philip S Sassower,

2017

─

(1)

─

─

─

─

─

─

─

Co-Chairman and CEO

2016

─

(1)

─

─

─

─

─

─

─

Michael Engmann, President and COO

2017

─

(2)

─

─

─

─

─

─

─

Andrea Goren,

2017

─

(3)

─

─

─

─

─

─

─

CFO

2016

─

(3)

─

─

─

─

─

─

─

1. Mr. Sassower was appointed Chairman of the Board and Chief Executive Officer on August 5, 2010, and Co-Chairman since October 2015. Mr. Sassower receives no compensation.

2. Mr. Engmann was appointed President and Chief Operating Officer on May 15, 2017. Mr. Engmann receives no salary compensation from the Company.

3. Mr. Goren was appointed Chief Financial Officer on December 7, 2010. Mr. Goren receives no compensation from the Company.

4. The amounts, if any, provided in this column represent the aggregate grant date fair value of option awards granted to our officers, as calculated in accordance with FASB ASC Topic 718, Stock Compensation. In accordance with applicable regulations, the value of such options does not reflect an estimate for features related to service-based vesting used by the Company for financial statement purposes. Mr. Sassower’s, Mr. Engmann’s and Mr. Goren’ previously issued stock options were canceled on November 15, 2017. See footnote 8 in the Notes to Consolidated Financial Statements included with this report on Form 10-K.

Mr. Engmann is retained by the Company without an agreement. Mr. Engmann’s service as Chief Operating Officer is month to month. Mr. Engmann is currently entitled to receive a cash sum payment of $5,000 per month. The Company has agreed to pay Mr. Engmann for reasonable and documented out of pocket expenses incurred for Services rendered by him, as long as he obtains written approval of the Company prior to incurring any significant expense.

Mr. Goren is retained by the Company through an Advisory Services Agreement (the “SGP Agreement”) with SG Phoenix LLC (“SGP”). Mr. Goren and Mr. Sassower are managing members of SGP. The initial term of the SGP Agreement was two years and it automatically renews for additional one year periods upon the same terms and conditions unless either party notifies the other in writing of its intent to terminate at least 90 days prior to the then-current term. SGP currently is entitled to receive a cash sum payment of $7,500 (“SGP Fee”) per month. In addition, SGP is eligible for, but not entitled to receive, an annual cash performance fee of up to thirty-five percent (35%) of the SGP Fee during a given year or prorated portion thereof. Such performance fee, if any, would be awarded based upon the sole discretion of the Company’s Board of Directors. No performance fee was paid to SGP in 2017. Under the SGP Agreement, SGP furnishes, at its own expense, all materials and equipment necessary to carry out the terms of the SGP Agreement. The Company has agreed to pay SGP for reasonable and documented out of pocket expenses incurred for services rendered by SGP during the term of the SGP Agreement, as long as SGP obtains written approval of the Company prior to incurring any significant expense.

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Outstanding Equity Awards at December 31, 2017

The following table summarizes the outstanding equity award holdings held by our named executive officers. The amounts are not stated in thousands.

Name and Principal Position	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date
Philip S. Sassower, Co-Chairman and CEO	(1)	─	─	─
Michael Engmann, President and COO	(2)	─	─	─
Andrea Goren, Chief Financial Officer	(3)	─	─	─

1.	Mr. Sassower’s 73,399 options were canceled on November 15, 2017.
2.	Mr. Engmann’s 65,800 options were canceled on November15, 2017.
3.	Mr. Goren’s 88,079 options were canceled on November 15, 2017.

Option Exercises and Stock Vested

There were no stock options exercised during the twelve months ended December 31, 2017 and 2016.

Director Compensation

The following table provides information regarding the compensation of the Company’s non-employee directors for the year ended December 31, 2017:

Name	Fees Earned or Paid in Cash		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Non-qualified Deferred Compensation Earnings		All Other Compensation		Total
Current Directors
Francis J. Elenio	$	─	$	─	$	5,460	$	─	$	─	$	─	$	5,460
Stanley Gilbert	$	─	$	─	$	5,460	$	─	$	─	$	─	$	5,460
Jeffrey Holtmeier	$	─	$	─	$	5,460	$	─	$	─	$	─	$	5,460
David Welch	$	─	$	─	$	5,460	$	─	$	─	$	─	$	5,460

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of March 20, 2018, with respect to the beneficial ownership of (i) any person known to be the beneficial owner of more than 5% of any class of voting securities of the Company, (ii) each director and director nominee of the Company, (iii) each of the current executive officers of the Company named in the Summary Compensation Table under the heading “Executive Compensation” and (iv) all directors and executive officers of the Company as a group. Except as indicated in the footnotes to this table (i) each person has sole voting and investment power with respect to all shares attributable to such person and (ii) each person’s address is c/o iSign Solutions, Inc., 2025 Gateway Place, Suite 485, San Jose California 95110-1413. The amounts are not stated in thousands.

	Common Stock
Name of Beneficial Owner	Number of Shares (1)		Percent Of Class (1)
Philip S. Sassower (2)		1,356,752		22.4	%
Andrea Goren (3)		1,406,496		23.2	%
Stanley Gilbert (4)		128,865		2.2	%
Jeffrey Holtmeier (5)		10,666		*
David E. Welch (6)		7,020		*
Michael W. Engmann (7)		838,000		13.8	%
Francis Elenio (8)		5,670		*
All directors and executive officers as a group (8 persons) (9)		2,380,081		37.2	%
5% Shareholders
Phoenix Venture Fund LLC (10)		1,354,708		22.4	%

* Less than 1%.

1. Shares of Common Stock beneficially owned and the respective percentages of beneficial ownership of Common Stock assumes the exercise or conversion of all options, warrants and other securities convertible into Common Stock, beneficially owned by such person or entity currently exercisable or exercisable within 60 days of March 20, 2018. Shares issuable pursuant to the exercise of stock options and warrants exercisable within 60 days of March 20, 2018 or securities convertible into Common Stock within 60 days of March 20, 2018 are deemed outstanding and held by the holder of such shares of Common Stock, options and warrants for purposes of computing the percentage of outstanding Common Stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding Common Stock beneficially owned by any other person. The percentage of beneficial ownership of Common Stock beneficially owned is based on shares of Common Stock. The shares of Common Stock beneficially owned and the respective percentages of beneficial ownership of Common Stock stated in these columns assume conversion of all outstanding options and warrants into shares of Common Stock.

2. Represents (a) 1,071,057 shares of Common Stock, and (b) 285,695 shares of Common Stock issuable upon the exercise of warrants (see table below for details), including securities beneficially owned by Phoenix, SG Phoenix Ventures LLC, SG Phoenix LLC, Phoenix Banner Holdings LLC and Phoenix Enterprises Family Fund. Please see footnote 11 below for information concerning shares of Common Stock beneficially owned by Phoenix. Along with Mr. Goren, Mr. Sassower is the co-manager of SG Phoenix Ventures LLC, which has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and Phoenix Banner Holdings LLC, and, accordingly, Mr. Sassower may be deemed to be the beneficial owner of the shares owned by Phoenix and Phoenix Banner Holdings LLC. SG Phoenix Ventures LLC, Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by Phoenix and Phoenix Banner Holdings LLC, except to the extent of their respective pecuniary interests therein. Mr. Sassower’s address is 70 East 55^th Street, 10^th Floor, New York, NY 10022.

	Philip Sassower		SG Phoenix Ventures LLC		SG Phoenix LLC		Phoenix Venture Fund		Total
Common shares		2,044		─		2,234		1,066,779		1,071,057
Warrants		─		285,695		─		─		285,695
Total		2,044		285,695		2,234		1,066,779		1,356,752

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3. Represents (a) 1,098,853 shares of Common Stock, and (b) 307,643 shares of Common Stock issuable upon the exercise of warrants exercisable within 60 days of March 20, 2018 (see table below for details), including securities beneficially owned by Phoenix, SG Phoenix Ventures LLC, SG Phoenix LLC, Phoenix Banner Holdings LLC, Andax LLC and Mr. Goren. Please see footnote 11 below for information concerning Phoenix’s beneficial ownership. Mr. Goren is managing member Andax LLC and disclaims beneficial ownership of the shares except to the extent of his pecuniary interest therein. Along with Mr. Sassower, Mr. Goren is the co-manager of SG Phoenix Ventures LLC, which has the power to vote and dispose of the shares held by Phoenix and by Phoenix Banner Holdings LLC, and accordingly, Mr. Goren may be deemed to be the beneficial owner of the shares owned by Phoenix and Phoenix Banner Holdings LLC. SG Phoenix Ventures LLC, Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by Phoenix and Phoenix Banner Holdings LLC, except to the extent of their respective pecuniary interests therein. Mr. Goren’s address is 70 East 55^th Street, 10^th Floor, New York, NY 10022.

	Andrea Goren		Andax, LLC		SG Phoenix LLC		Phoenix Venture Fund		Total
Common shares		15		29,825		2,234		1,066,779		1,098,853
Warrants		─		21,948		285,695		─		307,643
Total		15		51,773		287,929		1,066,779		1,406,496

4. Represents (a) 114,169 shares of Common Stock, (b) 7,004 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 20, 2018, and (c) 7,692 shares of Common Stock issuable upon the exercise of warrants, exercisable within 60 days of March 20, 2018 (see table below for details). As manager of Galaxy LLC, Mr. Gilbert has the power to vote and dispose of the shares of Common Stock held by Galaxy LLC, and, accordingly, Mr. Gilbert may be deemed to be the beneficial owner of the shares owned by Galaxy LLC.

	Stanley Gilbert		Stanley Gilbert PC		Galaxy LLC		Mrs. Gilbert		Total
Common shares		111,002		23		1,426		1,718		114,169
Stock options		7,004		─		─		─		7,004
Warrants		7,692		─		─		─		7,692
Total		125,698		23		1,426		1,718		128,865

5. Represents (a) 3,662 shares of Common Stock and (b) 7,004 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 20, 2018. As manager of Genext, Mr. Holtmeier has the power to vote and dispose of the shares of Common Stock held by Genext, and, accordingly, Mr. Holtmeier may be deemed to be the beneficial owner of the shares owned by CUBD and Genext.

6. Represents 7,020 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 20, 2018.

7. Represents (a) 535,659 shares of Common Stock beneficially owned by Mr. Engmann and (b) an aggregate of 302,341 shares of Common Stock issuable upon exercise of warrants exercisable within 60 days of March 20, 2018 beneficially owned by Mr. Engmann. See the following table for more detail. Mr. Engmann’s address is 220 Bush Street, No. 660, San Francisco, CA 94104.

	Michael Engmann		MDNH Partners, LP		KENDU Partners Company		Total
Common shares		430,749		103,915		995		535,659
Warrants		283,880		18,461		─		302,341
Total		714,629		122,376		995		838,000

8. Represents 5,670 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of March 20, 2018.

9. Includes 1,069,013 shares of Common Stock beneficially owned by Phoenix. Please see footnote 10 below for information concerning shares of Common Stock beneficially owned by Phoenix. Mr. Sassower and Mr. Goren are the co-managers of SG Phoenix Ventures LLC, which has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and, accordingly, Mr. Sassower and Mr. Goren may be deemed to be the beneficial owner of the shares owned by Phoenix. SG Phoenix Ventures LLC, Mr. Sassower and Mr. Goren each disclaim beneficial ownership of the shares owned by Phoenix, except to the extent of their respective pecuniary interests therein. The amount stated above includes an aggregate of 26,698 shares issuable upon the exercise of options within 60 days of March 20, 2018.

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10. SG Phoenix Ventures LLC is the Managing Member of Phoenix, with the power to vote and dispose of the shares of Common Stock held by Phoenix. Accordingly, SG Phoenix Ventures LLC may be deemed to be the beneficial owner of such shares. Andrea Goren is the co-manager of SG Phoenix Ventures LLC, has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and, as such, may be deemed to be the beneficial owner of the common shares owned by Phoenix and by SG Phoenix LLC, of which he is a member. Philip Sassower is the co-manager of SG Phoenix Ventures LLC, has the shared power to vote and dispose of the shares of Common Stock held by Phoenix and, as such, may be deemed to be the beneficial owner of the common shares owned by Phoenix and by SG Phoenix LLC, of which he is a member. SG Phoenix Ventures LLC, Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by Phoenix, and Mr. Goren and Mr. Sassower each disclaim beneficial ownership of the shares owned by SG Phoenix LLC, except to the extent of their respective pecuniary interests therein. The address of these stockholders is 70 East 55^th Street, 10^th Floor, New York, NY 10022.

	Phoenix Venture Fund LLC		SG Phoenix Ventures LLC		Total
Common shares		1,066,779		2,234		1,069,013
Warrants		─		285,695		285,695
Total		1,066,779		287,929		1,354,708

Equity Compensation Plan Information

The following table provides information as of December 31, 2017, regarding our compensation plans (including individual compensation arrangements) under which equity securities are authorized for issuance:

	Number of Securities To Be Issued Upon Exercise of Outstanding Options and Rights		Weighted-Average Exercise Price Of Outstanding Options and Rights		Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans
Equity Compensation Plans Approved by Security Holders
2011 Stock Compensation Plan		736	$	3.65		14

Item 13. Certain Relationships and Related Transactions, and Director Independence

Procedures for Approval of Related Person Transactions

In accordance with our Code of Business Conduct and Ethics, we submit all proposed transactions involving our officers and directors and related parties, and other transactions involving conflicts of interest, to the Board of Directors or the Audit Committee for approval. Each of the related party transactions listed below that were submitted to our board were approved by a disinterested majority of our Board of Directors after full disclosure of the interest of the related party in the transaction.

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Director Independence

The Board of Directors has determined that Messrs. Gilbert, Holtmeier, Elenio and Welch are “independent,” as defined under the rules of the NASDAQ Stock Market relating to director independence, and Messrs. Sassower, Engmann and Goren are not independent under such rules. Messrs. Welch, Gilbert, and Holtmeier serve on the Compensation Committee of the Board of Directors. Each of the members of the Compensation Committee is independent under the rules of the NASDAQ Stock Market relating to director independence. Messrs. Welch, Elenio and Holtmeier serve on the Audit Committee of the Board of Directors. Under the applicable rules of the NASDAQ Stock Market and the SEC relating to independence of Audit Committee members, the Board of Directors has determined that Messrs. Welch, Holtmeier and Elenio are independent.

Related Party Transactions

Phoenix is the beneficial owner of approximately 22.4% of the Common Stock of the Company when calculated in accordance with Rule 13d-3.

The table below reflects the May 23, 2017 related party transactions in which the Company issued $100 in convertible secured promissory notes to affiliates for cash, and replaced the unsecured convertible promissory notes issued in November 2016 with a combination of secured and unsecured notes. The new notes are mandatorily convertible into Common Stock at a conversion rate of $0.50 per share or the price per share of Common Stock upon closing of a new debt and or equity financing of at least $1,000 in aggregate proceeds. The secured convertible promissory notes bear interest at the rate of 10% per annum and the unsecured notes bear interest at the rate of 6% per annum. The notes are due December 31, 2018. Should the convertible secured promissory notes remain outstanding following the maturity date an additional 30% of the note’s principal amount shall become due and payable.

Affiliate	Secured Note 5/23/2017		Canceled Unsecured Note 11/3/2016			Replacement Note Secured 5/23/2017		Replacement Note Unsecured 5/23/2017
Andax LLC	$	18	$	(25	)	$	17	$	8
Michael Engmann		36		(140	)		36		104
MDNH Partners LLP		34		(60	)		34		26
Stanley L. Gilbert		12		(25	)		13		12
Total	$	100	$	(250	)	$	100	$	150

The table below reflects the November 15, 2017 cancelation of outstanding stock options by the named affiliates of the Company. The stock options were canceled to increase the pool of available stock options for grants to employees of the Company.

	Stock Options Canceled
Affiliate	Total		Vested		Unvested		Range of Exercise Prices
Michael Engmann		66		11		55	$0.50 ─ $10.00
Andrea Goren		88		23		65	$0.50 ─ $81.13
Philip Sassower		73		19		54	$0.50 ─ $81.13

In December 2017, the Company issued secured promissory notes in the amount of $25 to Michael Engmann and his affiliate, and $5 to Andax LLC. The notes have substantially the same terms as the secured notes issued in the May 2017 financing.

Debt discount amortization associated with the Company’s indebtedness for the years ended December 31, 2017 and 2016, was $97 and $390, respectively, of which $27 and $87, respectively, was related party expense.

Interest expense associated with the Company’s indebtedness for the years ended December 31, 2017 and 2016, was $112 and $218, respectively, of which $26 and $103, respectively, was related party expense.

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Item 14. Principal Accounting Fees and Services

Audit and other Fees. Armanino LLP has been the Company’s auditors since August 2014. During fiscal years 2017 and 2016, the fees for audit and other services performed by Armanino LLP for the Company were as follows:

Nature of Service	Armanino
	2017				2016
Audit Fees	$	42,222.50	50	%	$	69,179.30	53	%
Audit-Related Fees		30,603.75	36	%	$	35,926.59	27	%
Tax Fees		6,837.50	8	%	$	11,263.37	9	%
All Other Fees		4,190.18	5	%	$	14,005.00	11	%
Total	$	83,853.93	100	%	$	130,374.26	100	%

Pre-Approval Policies.

It is the policy of the Company not to enter into any agreement with its auditors to provide any non-audit services unless (a) the agreement is approved in advance by the Audit Committee or (b) (i) the aggregate amount of all such non-audit services constitutes no more than 5% of the total amount the Company pays to the auditors during the fiscal year in which such services are rendered, (ii) such services were not recognized by the Company as constituting non-audit services at the time of the engagement of the non-audit services and (iii) such services are promptly brought to the attention of the Audit Committee and prior to the completion of the audit are approved by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee. The Audit Committee will not approve any agreement in advance for non-audit services unless (x) the procedures and policies are detailed in advance as to such services, (y) the Audit Committee is informed of such services prior to commencement and (z) such policies and procedures do not constitute delegation of the Audit Committee’s responsibilities to management under the Exchange Act.

The Audit Committee has considered whether the provision of non-audit services has impaired the independence of Armanino LLP and has concluded that Armanino LLP is independent under applicable SEC and NASDAQ rules and regulations.

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PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1) Financial Statements

Index to Financial Statements

		Page
(a)(1)	Financial Statements
	Report of Independent Registered Public Accounting Firm	F-1
	Consolidated Balance Sheets at December 31, 2017 and 2016	F-2
	Consolidated Statements of Operations for the years ended December 31, 2017 and 2016	F-3
	Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017 and 2016	F-4
	Consolidated Statements of Changes in Deficit for the years ended December 31, 2017 and 2016	F-5
	Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016	F-6
	Notes to Consolidated Financial Statements	F-8

(2) Financial Statement Schedules

All schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.

(3) Exhibits

The exhibits required by Item 601 of Regulation S-K are listed in paragraph (b) below.

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(b) Exhibits.

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC as indicated below:

Exhibit Number	Document
3.1	Certificate of Incorporation of the Company, as amended, incorporated herein by reference to Exhibits 3.1, 3.2, 3.3 and 3.4 to the Company’s Registration Statement on Form 10 (File No. 000-19301).
3.2	Certificate of Amendment to the Company’s Certificate of Incorporation (authorizing the reclassification of the Class A Common Stock and Class B Common Stock into one class of Common Stock) filed with the Delaware Secretary of State on November 1, 1991, incorporated herein by reference to Exhibit 3 to Amendment 1 on Form 8 to the Company’s Form 8-A (File No. 000-19301).
3.3	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State June 12, 1998, incorporated herein by reference to Exhibit 10.24 to the Company’s 1998 Form 10-K filed on April 6, 1999.
3.4	By-laws of the Company adopted on October 6, 1986, incorporated herein by reference to Exhibit 3.5 to the Company’s Registration Statement on Form 10 (File No. 000-19301).
3.5	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State January 24, 2001, incorporated herein by reference to Exhibit 3.5 to the Company’s Registration Statement on Form S/1 filed on December 28, 2007.
3.6	Certificate of Elimination of the Company’s Certificate of Designation of the Series A Preferred Stock filed with the Delaware Secretary of State August 17, 2001, incorporated herein by reference to Exhibit 3.6 to the Company’s Registration Statement on Form S/1 filed on December 28, 2007.
3.7	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State August 17, 2007, incorporated herein by reference to Exhibit 3.7 to the Company’s Registration Statement on Form S/1 filed on December 28, 2007.
3.8	Amended and Restated Certificate of Incorporation of the Company filed with the Delaware Secretary of State on May 18, 1995, incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
3.9	Certificate of Designations, Powers, Preferences and Rights of the Series A Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on June 4, 2008, incorporated herein by reference to Exhibit 4.23 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
3.10	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on June 30, 2008, incorporated herein by reference to Exhibit 3.7 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
3.11	Certificate of Designations, Powers, Preferences and Rights of the Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on October 30, 2008, incorporated herein by reference to Exhibit 3.11 to the Company’s Annual Report on Form 10-K filed on March 12, 2009.
3.12	Certificate of Elimination of the Company’s Series A Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on December 30, 2008, incorporated herein by reference to Exhibit 3.12 to the Company’s Annual Report on Form 10-K filed on March 12, 2009.

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Exhibit Number	Document
3.13	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on June 30, 2009, incorporated herein by reference to Exhibit 3.13 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
3.14	Amendment No. 1 to By-laws dated June 17, 2010, incorporated herein by reference to Exhibit 3.14 to the Company’s Quarterly Report on Form 10-Q filed on August 16, 2010.
3.15	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on August 4, 2010, incorporated herein by reference to Exhibit 3.15 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.
3.16	Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on August 4, 2010, incorporated herein by reference to Exhibit 3.16 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.
3.17	Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on August 4, 2010, incorporated herein by reference to Exhibit 3.17 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.
3.18	Certificate of Amendment to Amended And Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.18 to the Company’s Annual Report on Form 10-K filed on March 30, 2011.
3.19	Second Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.19 to the Company’s Annual Report on Form 10-K filed on March 30, 2011.
3.20	Amended and Restated Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.20 to the Company’s Annual Report on Form 10-K filed on March 30, 2011.
3.21	Certificate of Designation of Series C Participating Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2010, incorporated herein by reference to Exhibit 3.21 to the Company’s Annual Report on Form 10-K filed on March 30, 2011.
3.22	Amendment to the Amended And Restated Certificate of Designation of the Series B Participating Convertible Preferred Stock, incorporated herein by reference to Exhibit 10.59 to the Company’s Current Report on Form 8-K filed March 31, 2011.
3.23	Amendment to the Amended And Restated Certificate of Designation of the Series C Participating Convertible Preferred Stock, incorporated herein by reference to Exhibit 10.60 to the Company’s Current Report on Form 8-K filed March 31, 2011.
3.24	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement filed on Schedule 14A on October 22, 2012.
3.25	Third Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Exhibit 3.25 to the Company’s Form 10-K filed March 31, 2014.
3.26	Second Amended and Restated Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Exhibit 3.26 to the Company’s Form 10-K filed March 31, 2014.
3.27	Amended and Restated Certificate of Designation of Series C Participating Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, incorporated herein by reference to Exhibit 3.27 to the Company’s Form 10-K filed March 31, 2014.
3.28	Certificate of Designation of Series D Convertible Preferred Stock filed with the Delaware Secretary of State on November 13, 2012, incorporated herein by reference to Exhibit 3.28 to the Company’s Form 10-K filed March 31, 2014.
3.29	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 10, 2013, incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement filed on Schedule 14A on November 1, 2013.

27

Exhibit Number	Document
3.30	Certificate of Amendment to Certificate of Designation of Series D Convertible Preferred Stock filed with the Delaware Secretary of State on December 31, 2013, incorporated herein by reference to Exhibit 3.30 to the Company’s Form 10-K filed March 31, 2014.
3.31	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 16, 2014, incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement filed on Schedule 14A on October 17, 2014.
3.32	Certificate of Amendment to Certificate of Designation of Series D Convertible Preferred Stock filed with the Delaware Secretary of State on March 24, 2015, incorporated herein by reference to Exhibit 3.32 to the Company’s Quarterly Report on Form 10-Q filed May 15, 2015.
3.33	Certificate of Amendment to the Company’s Third Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with Secretary of State of the State of Delaware on May 18, 2016, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 16, 2016.
3.34	Certificate of Amendment to the Company’s Second Amended and Restated Certificate of Designation of Series B Participating Convertible Preferred Stock filed with Secretary of State of the State of Delaware on May 18, 2016, incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed May 16, 2016.
3.35	Certificate of Amendment to the Company’s Amended and Restated Certificate of Designation of Series C Participating Convertible Preferred Stock filed with Secretary of State of the State of Delaware on May 18, 2016, incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed May 16, 2016.
3.36	Certificate of Amendment to the Company’s Certificate of Designation of Series D Convertible Preferred Stock filed with Secretary of State of the State of Delaware on May 18, 2016, incorporated herein by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed May 16, 2016.
3.37	Certificate of Amendment to the Company’s Certificate of Designation of Series D Convertible Preferred Stock filed with Secretary of State of the State of Delaware on May 18, 2016, incorporated herein by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K filed May 16, 2016.
†4.10	1999 Stock Option Plan, as amended, incorporated herein by reference to Exhibit 4.2 to the Company’s Form S-8 filed on September 19, 2008.
4.11	Form of Convertible Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed on November 3, 2004.
4.12	Form of Warrant issued by the Company, incorporated herein by reference to Exhibit 10.4 to the Company’s Form 8-K filed on November 3, 2004.
4.13	Form of Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.36 to the Company’s Form 8-K filed on August 12, 2006.
4.14	Form of Warrant issued by the Company, incorporated herein by reference to Exhibit 10.37 to the Company’s Form 8-K filed on August 12, 2006.
4.15	Form of Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.36 to the Company’s Form 8-K filed on February 9, 2007.
4.16	Form of Warrant issued by the Company, incorporated herein by reference to Exhibit 10.37 to the Company’s Form 8-K filed on February 9, 2007.
4.17	Form of Promissory Note issued by the Company, incorporated herein by reference to Exhibit 10.36 to the Company’s Form 8-K filed on June 20, 2007.
4.18	Form of Warrant issued the Company, incorporated herein by reference to Exhibit 10.37 to the Company’s Form 8-K filed on June 20, 2007.
4.19	Form of Common Stock Purchase Warrant issued by the Company, incorporated herein by reference to Exhibit 4.19 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.

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Exhibit Number	Document
4.20	Form of Additional Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.20 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
4.21	Form of Secured Promissory Note issued by the Company dated June 5, 2008, incorporated herein by reference to Exhibit 4.21 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
4.22	Form of Additional Secured Promissory Note, incorporated herein by reference to Exhibit 4.22 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
4.23	Certificate of Designations, Powers, Preferences and Rights of the Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on October 30, 2008, incorporated herein by reference to Exhibit 4.23 to the Company’s Annual Report on Form 10-K filed on March 12, 2009.
4.24	Form of Secured Promissory Note issued by the Company dated May 28, 2009, incorporated herein by reference to Exhibit 4.24 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
4.25	Form of Additional Secured Promissory Note, incorporated herein by reference to Exhibit 4.25 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
4.26	Form of Common Stock Purchase Warrant issued by the Company, incorporated herein by reference to Exhibit 4.26 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
4.27	Form of Additional Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.27 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
10.24	Form of Note and Warrant Purchase Agreement dated October 28, 2004, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 3, 2004.
10.25	Form of Registration Rights Agreement dated October 28, 2004, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on November 3, 2004.
10.26	Form of Note and Warrant Purchase Agreement dated August 10, 2006, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company’s Form 8-K filed on August 12, 2006.
10.27	Form of Registration Rights Agreement dated August 10, 2006, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.35 to the Company’s Form 8-K filed on August 12, 2006.
†††10.28	Amendment dated May 31, 2005 to the License agreement dated December 22, 2000 between the Company and eCom Asia Pacific, Ltd., incorporated by reference to Exhibit 10.26 of the Company’s Form 10-K/A filed on September 15, 2005.

29

Exhibit Number	Document
10.36	Form of Note and Warrant Purchase Agreement dated February 5, 2007, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company’s Form 8-K filed on February 5, 2007.
10.37	Form of Registration Rights Agreement dated February 5, 2007, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.35 to the Company’s Form 8-K filed on February 5, 2007.
10.38	Amendment to the Note and Warrant Purchase Agreement dated February 5, 2007, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 99.1 to the Company’s Form 8-K filed on March 15, 2007.
10.39	Form of Note and Warrant Purchase Agreement dated June 15, 2007, by and among the Company and the Purchasers identified therein, incorporated herein by reference to Exhibit 10.34 to the Company’s Form 8-K filed on June 15, 2007.
10.40	Form of Registration Rights Agreement dated June 15, 2007, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.35 to the Company’s Form 8-K filed on June 15, 2007.
10.41	Form of Securities Purchase and Registration Rights Agreement dated August 24, 2007, by and among the Company and Phoenix Venture Fund LLC, incorporated herein by reference to Exhibit 10.36 to the Company’s Form 8-K filed on August 27, 2007.
†10.42	Consulting Agreement dated January 9, 2008 between the Company and GS Meyer & Associates LLC - Incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K filed on March 12, 2007.
10.43	Credit Agreement dated June 5, 2008, by and among the Company and the Lenders Party Hereto and SG Phoenix as Collateral Agent, incorporated herein by reference to Exhibit 10.41 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
10.44	Pledge and Security Agreement dated June 5, 2008, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.42 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
10.44	Securities Purchase Agreement dated June 5, 2008, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.43 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
10.45	Registration Rights Agreement dated June 5, 2008, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.44 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.
10.46	Amendment No. 1 to Credit Agreement dated May 28, 2009, by and among the Company, the Lenders and Additional Lenders Parties Hereto and SG Phoenix as Collateral Agent, incorporated herein by reference to Exhibit 10.46 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
10.47	Amendment No. 1 to Registration Rights Agreement dated May 28, 2009, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.47 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
10.48	Salary Reduction Plan for Executive Officers of Communication Intelligence Corporation under Amendment No. 1 to Credit Agreement dated May 28, 2009, incorporated herein by reference to Exhibit 10.48 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.
10.53	Amendment No. 3 to Credit Agreement dated July 22, 2010, by and among the Company, the Lenders and Additional Lenders Parties Hereto and SG Phoenix as Collateral Agent, incorporated herein by reference to Exhibit 10.53 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.
10.54	Amendment No. 3 to Registration Rights Agreement dated July 22, 2010, by and among the Company and the parties identified therein, incorporated herein by reference to Exhibit 10.54 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.

30

Exhibit Number	Document
10.55	Registration Rights Agreement dated August 5, 2010, by and among the Company and the Persons Executing the Agreement as Investors, incorporated herein by reference to Exhibit 10.55 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.
10.56	Investor Rights Agreement dated August 5, 2010, by and among the Company and Phoenix Venture Fund LLC, SG Phoenix LLC, Michael Engmann, Ronald Goodman, Kendu Partners Company and MDNH Partners L.P., incorporated herein by reference to Exhibit 10.56 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2010.
10.57	Securities Purchase Agreement dated December 9, 2010, by and among the Company, Phoenix Venture Fund LLC, and the Investors signatory thereto, incorporated herein by reference to Exhibit 10.57 to the Company’s Current Report on Form 8-K filed on December 9, 2010.
10.58	Registration Rights Agreement dated December 31, 2010, by and among the Company and the Persons Executing the Agreement as Investors, incorporated herein by reference to Exhibit 10.58 to the Company’s Current Report on Form 8-K filed on January 6, 2011.
10.59	Form of Subscription Agreement dated March 31, 2011, by and among the Company and the Person Executing the Agreement as Subscribers, incorporated herein by reference to Exhibit 10.61 to the Company’s Current Report on Form 8-K filed on April 4, 2011.
10.60	Amendment No. 1 to Registration Rights Agreement dated March 31, 2011, by and among the Company and the Persons Executing the Agreement as Required Holders, incorporated herein by reference to Exhibit 10.62 to the Company’s Current Report on Form 8-K filed on April 4, 2011.
10.61	Note and Warrant Purchase Agreement dated September 20, 2011, incorporated herein by reference to Exhibit 10.61 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2011.
10.62	Note and Warrant Purchase Agreement dated December 2, 2011, incorporated herein by reference to Exhibit 10.62 to the Company’s Annual Report on Form 10-K filed on March 30, 2012.
10.63	Note and Warrant Purchase Agreement dated April 23, 2012, incorporated herein by reference to Exhibit 10.63 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2012.
10.64	Form of Subscription Agreement dated September 14, 2012, incorporated herein by reference to Exhibit 10.64 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2012.
10.65	Form of Unsecured Convertible Promissory Note dated September 14, 2012, incorporated herein by reference to Exhibit 10.65 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2012.
10.66	Form of Subscription Agreement dated May 17, 2013, incorporated herein by reference to Exhibit 10.66 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2013.
10.67	Form of Subscription Agreement dated December 31, 2013, incorporated herein by reference to Exhibit 10.67 to the Company’s Form 10-K filed March 31, 2014.
10.68	Credit Agreement with Venture Champion Asia Limited dated May 6, 2014, incorporated herein by reference to Exhibit 10.68 to the Company’s Form 10-Q filed August 15, 2014.
10.69	Form of Subscription Agreement dated August 5, 2014, incorporated herein by reference to Exhibit 10.69 to the Company’s Form 10-K filed March 31, 2015.
10.70	Form of Subscription Agreement dated March 24, 2015, incorporated herein by reference to Exhibit 10.70 to the Company’s Quarterly Report on Form 10-Q filed May 15, 2015.
10.71	Form of Subscription Agreement dated July 23, 2015, incorporated herein by reference to Exhibit 10.71 to the Company’s Quarterly Report on Form 10-Q filed November 16, 2015.
10.72	Note and Warrant Purchase Agreement dated November 3, 2016, incorporated herein by reference to Exhibit 10.72 to the Company’s Quarterly Report on Form 10-Q filed August 14, 2017.
10.73	Form of Unsecured Convertible Promissory Note dated November 3, 2016, incorporated herein by reference to Exhibit 10.73 to the Company’s Quarterly Report on Form 10-Q filed August 14, 2017.
10.74	Note Purchase Agreement dated May 23, 2017, incorporated herein by reference to Exhibit 10.74 to the Company’s Quarterly Report on Form 10-Q filed August 14, 2017.
10.75	Form of Secured Convertible Promissory Note dated May 23, 2017, incorporated herein by reference to Exhibit 10.75 to the Company’s Quarterly Report on Form 10-Q filed August 14, 2017.
14.1	Code of Ethics, incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K filed on March 30, 2004.

31

Exhibit Number	Document
*21.1	Schedule of Subsidiaries.
*23.2	Consent of Armanino LLP, Independent Registered Public Accounting Firm.
*31.1	Certification of Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certificate of Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification of Chief Executive Officer pursuant to 18 USC Section 1750, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	Certification of Chief Financial Officer pursuant to 18 USC Section 1750, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101.INS	XBRL Instance Document
*101.SCH	XBRL Taxonomy Extension Schema Document
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB	XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

† Indicates management contract or compensatory plan, contract or arrangement.

†† Confidential treatment of certain portions of this exhibit have been requested from the SEC pursuant to a request for confidentiality dated March 30, 1999, filed pursuant to the Exchange Act.

†††	Confidential treatment of certain portions of this exhibit have been requested from the SEC pursuant to a request for confidentiality dated March 30, 2006 filed pursuant to the Exchange Act.
	The exhibits listed above are filed as part of this Form 10-K other than Exhibits 32.1 and 32.2, which shall be deemed furnished.

(c) Financial Statement Schedules

All financial statement schedules are omitted because the information is inapplicable or presented in the notes to the financial statements.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized, in the City of Redwood Shores, State of California.

iSign Solutions Inc.
By:	/s/ Andrea Goren
	Andrea Goren
	(Principal Financial Officer and Officer Duly Authorized to Sign on Behalf of the Registrant)
	Date: April 2, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities indicated on April 2, 2018.

Date	Signature	Title
April 2, 2018	/s/ Philip S. Sassower	Co-Chairman and Chief Executive Officer
	Philip S. Sassower	(Principal Executive Officer)
April 2, 2018	/s/ Michael Engmann	Co-Chairman and Chief Operating Officer
	Michael Engmann
April 2, 2018	/s/ Andrea Goren	Director, Chief Financial Officer
	Andrea Goren	(Principal Financial and Accounting Officer)
April 2, 2018	/s/ Francis J. Elenio	Director
	Francis J. Elenio
April 2, 2018	/s/ Stanly Gilbert	Director
	Stanley Gilbert
April 2, 2018	/s/ Jeffrey Holtmeier	Director
	Jeffrey Holtmeier
April 2, 2018	/s/ David Welch	Director
	David Welch

33

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of

iSign Solutions Inc.

San Jose, California

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of iSign Solutions Inc. and subsidiary (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, changes in deficit, and cash flows for each of the two years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s significant recurring losses and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

ArmaninoLLP

We have served as the Company’s auditor since 2014.

San Ramon, California

April 2, 2018

F-1

iSign Solutions Inc.

Consolidated Balance Sheets

(In thousands, except par value amounts)

	December 31,
	2017			2016
Assets
Current assets:
Cash and cash equivalents	$	285		$	389
Accounts receivable, net of allowance of $1 and $63 at December 31, 2017 and 2016, respectively		45			137
Prepaid expenses and other current assets		28			56
Total current assets		358			582
Property and equipment, net		13			20
Intangible assets, net		–			269
Other assets		17			17
Total assets	$	388		$	888
Liabilities and Deficit
Current liabilities:
Accounts payable		1,289			1,368
Short–term debt, net		1,458			─
Accrued compensation		201			257
Other accrued liabilities		740			505
Deferred revenue		310			258
Short-term capital lease		4			4
Total current liabilities		4,002			2,392
Long–term debt, net		–			707
Deferred revenue long-term		175			315
Long–term capital lease		6			9
Other long-term liabilities		7			13
Total liabilities		4,190			3,436
Commitments and contingencies (Note 8)
Equity (deficit):
Common stock, $0.01 par value; 2,000,000 shares authorized; 5,760 and 5,760 shares issued and outstanding at December 31, 2017 and 2016, respectively		58			58
Treasury shares, 5 at December 31, 2017 and December 31, 2016, respectively		(325	)		(325	)
Additional paid-in-capital		129,027			128,884
Accumulated deficit		(132,562	)		(130,615	)
Accumulated other comprehensive loss		–			(14	)
Total iSign stockholders’ deficit		3,802			(2,012	)
Non-controlling interest		–			(536	)
Total deficit		(3,802	)		(2,548	)
Total liabilities and deficit	$	388		$	888

See accompanying notes to these Consolidated Financial Statements

F-2

 iSign Solutions Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

	Years Ended December 31,
	2017			2016
Revenue:
Product	$	322		$	325
Maintenance		691			740
		1,013			1,065
Operating costs and expenses:
Cost of sales:
Product		13			78
Maintenance		113			308
Research and development		1,135			1,322
Sales and marketing		188			406
General and administrative		1,122			2,160
		2,571			4,274
Loss from operations		(1,558	)		(3,209	)
Other income (expense), net		67			(12	)
Gain on sale of intangible assets		303			–
Write-off of interest in Chinese joint venture		(550	)		–
Interest expense:
Related party		(26	)		(103	)
Other		(86	)		(115	)
Amortization of debt discount:
Related party		(27	)		(87	)
Other		(70	)		(303	)
Gain on derivative liability		–			330
Net loss		(1,947	)		(3,499	)
Preferred stock:
Accretion of beneficial conversion feature:
Related party		–			(115	)
Other		–			(130	)
Preferred stock dividends:
Related party		–			(646	)
Other		–			(667	)
Income tax expense		–			–
Net loss before non-controlling interest		(1,947	)		(5,057	)
Net loss attributable to non-controlling interest		–			–
Net loss attributable to common stockholders	$	(1,947	)	$	(5,057	)
Basic and diluted loss per common share	$	(0.34	)	$	(1.91	)
Weighted average common shares outstanding, basic and diluted		5,760			2,644

See accompanying notes to these Consolidated Financial Statements

F-3

iSign Solutions Inc.

Consolidated Statements of Comprehensive Loss

(In thousands)

	Years Ended December 31,
	2017			2016
Net loss:	$	(1,947	)	$	(3,499	)
Other comprehensive income, net of tax		–			–
Foreign currency translation adjustment, net		–			–
Total comprehensive loss	$	(1,947	)	$	(3,499	)

See accompanying notes to these Consolidated Financial Statements

F-4

iSign Solutions Inc.

Consolidated Statement of Changes in Deficit

Year Ended December 31, 2017

(In thousands)

	Series A-1 Preferred			Series A-1 Preferred			Series B Preferred			Series B Preferred			Series C Preferred			Series C Preferred			Series D-1 Preferred			Series D-1 Preferred			Series D-2 Preferred			Series D-2 Preferred			Common		Common					Additional						Non-			Accumulated Other
	Shares			Shares			Shares			Shares			Shares			Shares			Shares			Shares			Shares			Shares			Shares		Stock		Treasury			Paid-In			Accumulated			Controlling			Comprehensive
	Outstanding			Amount			Outstanding			Amount			Outstanding			Amount			Outstanding			Amount			Outstanding			Amount			Outstanding		Amount		Stock			Capital			Deficit			Interest			Income (Loss)			Total
Balance as of December 31, 2015		947		$	947			13,523		$	11,653			5,491		$	6,069			8,077		$	6,866			6,321		$	5,272			187	$	2	$	(325	)	$	95,312		$	(127,116	)	$	(536	)	$	(14	)	$	(1,870	)
Stock-based employee compensation																																							164												164
Preferred share dividends, paid in kind		29			29			519			519			211			211			309			309			245			245										(1,313	)											–
Beneficial conversion feature on preferred  shares dividends issued in kind					(3	)					(73	)					(39	)					(78	)					(52	)									245												–
Accretion of beneficial conversion feature on preferred shares dividends issued in kind					3						73						39						78						52										(245	)											–
Common shares and warrants issued in a private placement, net of $780 offering costs																																690		7					417												424
Common shares issued on exchange of unsecured debt																																683		7					1,181												1,188
Common shares issued on exchange of deferred compensation																																286		3					495												498
Conversion of Preferred Shares into Common Stock		(976	)		(976	)		(14,042	)		(12,172	)		(5,702	)		(6,280	)		(8,386	)		(7,175	)		(6,566	)		(5,517	)		3,650		36					32,084												–
Conversion of convertible notes into Common Stock																																264		3					237												240
Proceeds allocated to warrants issued in connection with convertible notes																																							204												204
Beneficial Conversion Feature on convertible notes																																							103												103
Net loss																																										(3,499	)								(3,499	)
Balance as of December 31, 2016		–			–			–			–			–			–			–			–			–			–			5,760		58		(325	)		128,884			(130,615	)		(536	)		(14	)		(2,548	)
Stock-based employee compensation																																							143												143
Write-off of interest in Chinese joint venture																																													536			14			550
Net loss																																										(1,947	)								(1,947	)
Balance as of December 31, 2017		–		$	–			–		$	–			–		$	–			–		$	–			–		$	–			5,760	$	58	$	(325	)	$	129,027		$	(132,562	)	$	–		$	–		$	(3,802	)

See accompanying notes to these Consolidated Financial Statements

F-5

iSign Solutions Inc.

Consolidated Statements of Cash Flows

(In thousands)

	December 31,
	2017			2016
Cash flows from operating activities:
Net loss	$	(1,947	)	$	(3,499	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		277			362
Amortization of debt discount		97			390
Stock-based employee compensation		143			164
Gain on derivative liability		–			(330	)
Gain on sale of intangible assets		(303	)		–
Write-off of interest in Chinese joint venture		550			–
Changes in operating assets and liabilities:
Accounts receivable, net		92			(43	)
Prepaid expenses and other current assets		28			316
Accounts payable		(79	)		581
Accrued compensation		(56	)		(6	)
Other accrued liabilities		227			510
Deferred revenue		(88	)		(266	)
Net cash used in operating  activities		(1,059	)		(1,821	)
Cash flows from investing activities:
Acquisition of property and equipment		(3	)		─
Proceeds from the sale of intangible assets		303			─
Net cash provided by investing activities		300			─
Cash flows from financing activities:
Proceeds from advances on accounts receivable		120			–
Proceeds from issuance of short-term debt		–			440
Proceeds from issuance of long-term debt		655			700
Proceeds from issuance of common stock and warrants, net of issuance costs of $780		–			424
Payment of short-term debt		–			(200	)
Payment of advances from accounts receivable		(120	)		–
Net cash provided by financing activities		655			1,364
Net decrease in cash and cash equivalents		(104	)		(457	)
Cash and cash equivalents at beginning of period		389			846
Cash and cash equivalents at end of period	$	285		$	389

See accompanying notes to these Consolidated Financial Statements

F-6

iSign Solutions Inc.

Consolidated Statements of Cash Flows (continued)

(In thousands)

Supplemental disclosure of cash flow information:

	December 31,
	2017		2016
Supplementary disclosure of cash flow information
Interest paid	$	9	$	62
Non-cash financing and investing transactions
Acquisition of property and equipment through capital lease	$	–	$	15
Conversion of convertible notes plus accrued interest into 947 shares of Common Stock	$	–	$	1,428
Conversion of deferred compensation plus accrued interest into 286 shares of Common Stock	$	–	$	498
Exchange of long-term unsecured convertible promissory notes for long-term unsecured promissory notes		200		–
Exchange of long-term unsecured convertible promissory notes for long-term secured promissory notes		250		–
Dividends on preferred shares	$	–	$	1,313
Conversion of preferred stock into Common Stock	$	–	$	32,119
Accretion of beneficial conversion feature on preferred share dividends	$	–	$	245
Beneficial conversion feature on convertible notes	$	–	$	103
Exchange of $200 of demand notes for long-term unsecured convertible notes	$	–	$	200
Warrants issued in connection with convertible notes	$	–	$	204

See accompanying notes to these Consolidated Financial Statements

F-7

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies:

The Company:

The Company is a leading supplier of digital transaction management (DTM) software enabling the paperless, secure and cost-effective management of document-based transactions. iSign’s solutions encompass a wide array of functionality and services, including electronic signatures, biometric authentication and simple-to-complex workflow management. These solutions are available across virtually all enterprise, desktop and mobile environments as a seamlessly integrated platform for both ad-hoc and fully automated transactions. The Company’s products and services result in legally binding transactions that are compliant with applicable laws and regulations and that can provide a higher level of security than paper-based processes. The Company has been a leading supplier of enterprise software solutions within the financial services and insurance industries and has delivered significant expense reduction by enabling complete document and workflow automation and the resulting reduction in mailing, scanning, filing and other costs related to the use of paper.

The Company’s research and development activities have given rise to numerous technologies and products. The Company’s core DTM technologies include various forms of electronic signatures, such as handwritten biometric, click-to-sign and others, as well as signature verification, cryptography and the logging of audit trails to show signers’ intent. These technologies can enable secure, legal and regulatory compliant electronic transactions that can enhance customer experience at a fraction of the time and cost required by traditional, paper-based processes. The Company’s products include SignatureOne^® Ceremony^™ Server, Sign-it^® and the iSign^® family of products and services.

Going concern and management plans:

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Except for 2004, the Company has incurred significant losses since its inception and, at December 31, 2017, the Company’s accumulated deficit was $132,562. The Company has primarily met its working capital needs through the sale of debt and equity securities. As of December 31, 2017, the Company’s cash balance was $285. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that the Company will be successful in securing adequate capital resources to fund planned operations or that any additional funds will be available to the Company when needed, or if available, will be available on favorable terms or in amounts required by the Company. If the Company is unable to obtain adequate capital resources to fund operations, it may be required to delay, scale back or eliminate some or all of its operations, which may have a material adverse effect on the Company’s business, results of operations and ability to operate as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of consolidation:

The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, and include the accounts of iSign Solutions Inc. and its 90%-owned Joint Venture in the People’s Republic of China. All inter-company accounts and transactions have been eliminated. All amounts shown in the accompanying consolidated financial statements are in thousands of dollars except per share amounts.

F-8

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (continued):

Use of estimates:

The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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, as well as the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Fair value measures:

Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s assets and liabilities measured at fair value, whether recurring or non-recurring, at December 31, 2017 and December 31, 2016, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

Fair Value of Financial Instruments:

The Company carries financial instruments on the consolidated balance sheet at the fair value of the instruments as of the consolidated balance sheet date. At the end of each period, management assesses the fair value of each instrument and adjusts the carrying value to reflect its assessment. At December 31, 2017 and December 31, 2016, the carrying values of accounts receivable and accounts payable approximated their fair values.

Treasury Stock:

Shares of Common Stock returned to, or repurchased by, the Company are recorded at cost and are included as a separate component of stockholders’ equity (deficit).

Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account titled treasury stock. The equity accounts that were credited for the original share issuance (Common Stock, additional paid-in capital, etc.) remain intact. When the treasury shares are reissued, proceeds in excess of cost are credited to additional paid-in capital. Any deficiency is charged to accumulated deficit (unless additional paid-in capital from previous treasury share transactions exists, in which case the deficiency is charged to that account, with any excess charged to accumulated deficit).

F-9

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (continued):

Derivatives:

The Company, from time to time, enters into transactions which contain conversion privileges, the settlement of which may entitle the holder or the Company to settle the obligation(s) by issuance of Company securities. The Company applies a two-step model in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the scope exception. The fair value of each derivative is estimated each reporting period.

The conversion option included within the unsecured convertible promissory notes is accounted for as a derivative liability at its estimated fair value. The derivative is subject to re-measurement at the end of each reporting period, with changes in fair value recognized as a component of interest and other income, in the consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the conversion or maturity of the unsecured convertible promissory note purchase agreements.

Cash and cash equivalents:

The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents.

The Company’s cash and cash equivalents, at December 31, consisted of the following:

	2017		2016
Cash in bank	$	285	$	389
Cash and cash equivalents	$	285	$	389

Concentrations of credit risk:

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company maintains its cash and cash equivalents with various financial institutions. This diversification of risk is consistent with Company policy to maintain liquidity, and mitigate risk of loss as to principal.

To date, accounts receivable have been derived principally from revenue earned from end users, manufacturers, and distributors of computer products in North America. The Company performs periodic credit evaluations of its customers, and does not require collateral. The Company maintains reserves for potential credit losses; historically, such losses have been within management’s expectations.

The allowance for doubtful accounts is based on the Company’s assessment of the collectability of specific customer accounts and an assessment of international, political and economic risk as well as the aging of the accounts receivable. If there is a change in actual defaults from the Company’s historical experience, the Company’s estimates of recoverability of amounts due could be affected and the Company will adjust the allowance accordingly.

Deferred financing costs:

Deferred financing costs include costs paid in cash, such as professional fees and commissions. The costs associated with equity financings, such as in the sale Common or Preferred Stock, are netted against the proceeds of the offering. In the case of note financings, costs are amortized to interest expense over the life of the notes or upon early payment using the effective interest method. There were no financing costs amortized to interest expense for the years ended December 31, 2017 and 2016, respectively.

F-10

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (continued):

Property and equipment, net:

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Leasehold improvements are amortized over their estimated useful lives, not to exceed the term of the related lease. The cost of additions and improvements is capitalized while maintenance and repairs are charged to expense as incurred. Depreciation expense was $8 and $40 for the years ended December 31, 2017 and 2016, respectively.

Intangible Assets:

Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated lives of the related assets, ranging from five to seventeen years. Amortization expense was $269 and $322 for the years ended December 31, 2017 and 2016, respectively. The intangible assets have been fully amortized as of December 31, 2017.

Long-lived assets:

The Company evaluates the recoverability of its long-lived assets, including intangible assets at least annually or whenever circumstances or events indicate such assets might be impaired. The Company would recognize an impairment charge in the event the net book value of such assets exceeded the future undiscounted cash flows attributable to such assets. No such impairment charge was recorded during the years ended December 31, 2017 and 2016, respectively.

Share-based payment:

Share-based compensation expense is based on the estimated grant date fair value of the portion of share-based payment awards that is ultimately expected to vest during the period. The grant date fair value of share-based awards to employees and directors is calculated using the Black-Scholes-Merton valuation model. Forfeitures of share-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and it is assumed no dividends will be declared. The estimated fair value of share-based compensation awards to employees is amortized over the vesting period of the options.

Revenue recognition:

The Company recognizes revenue from sales of software products upon shipment, provided that persuasive evidence of an arrangement exists, the fee is fixed and determinable, collection is determined to be probable, all non-recurring engineering work necessary to enable the Company’s product to function within the customer’s application has been completed and the Company’s product has been delivered according to specifications. Revenue from service subscriptions is recognized as costs are incurred or over the service period, whichever is longer. Software license agreements may contain multiple elements, including upgrades and enhancements, products deliverable on a when and if available basis and post- contract support. Revenue from software license agreements is recognized upon delivery of the software, provided that persuasive evidence of an arrangement exists, collection is determined to be probable, all nonrecurring engineering work necessary to enable the Company’s products to function within the customer’s application has been completed, and the Company has delivered its product according to specifications.

For arrangements with multiple deliverables, the Company allocates consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices which is determined using vendor specific objective evidence.

F-11

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (continued):

Revenue recognition (continued):

Maintenance revenue is recorded for post-contract support and upgrades or enhancements, which is paid for in addition to license fees, and is recognized as costs are incurred or over the support period whichever is longer. For undelivered elements where vendor specific objective evidence does not exist, revenue is deferred and subsequently recognized when delivery has occurred and when vendor specific evidence has been determined.

Research and development:

Research and development costs are charged to expense as incurred.

Marketing:

The Company expenses advertising (marketing) costs as incurred. These expenses are outbound marketing expenses associated with participation in industry events, related sales collateral and email campaigns aimed at generating customer participation in webinars. The expense for the years ended December 31, 2017 and 2016 was $0 and $1, respectively.

Net loss per share:

The Company calculates net loss per share under the provisions of the relevant accounting guidance. That guidance requires the disclosure of both basic net loss per share, which is based on the weighted average number of shares outstanding, and diluted loss per share, which is based on the weighted average number of shares and dilutive potential shares outstanding.

The number of shares of Common Stock subject to outstanding options and shares issuable upon exercise of warrants excluded from the calculation of loss per share as their inclusion would be anti-dilutive are as follows:

	December 31, 2017		December 31, 2016
Common Stock subject to outstanding options		736		71
Common Stock subject to outstanding warrants		1,878		1,882

The Company considers the functional currency of the Joint Venture, CICC, to be the local currency of China, which is the Renminbi (“RMB”) and, accordingly, gains and losses from the translation of the local foreign currency financial statements are included as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets. Foreign currency assets and liabilities are translated into U.S. dollars at the end-of-period exchange rates except for long-term assets and liabilities, which are translated at historical exchange rates. Revenue and expenses are translated at the average exchange rates in effect during each period except for those expenses related to consolidated balance sheet amounts which are translated at historical exchange rates.

Net foreign currency transaction gains and losses are included in interest and other income, net in the accompanying consolidated statements of operations. Foreign currency transaction gains and losses in 2017 and 2016 were insignificant.

Income taxes:

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.

F-12

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (continued):

Foreign currency translation:

There have been no unrecognized tax benefits and, accordingly, there has been no effect on the Company’s financial condition or results of operations.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years before 2008, and state tax examinations for years before 2007. Management is in the process of reviewing the effects on the Company’s unrecognized tax positions in response to the changes the federal tax rates adopted in December of 2017.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Recently issued accounting pronouncement:

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): “Recognition and Measurement of Financial Assets and Financial Liabilities.”  The new guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure.  The update to the standard is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted under limited circumstances.  The adoption of this guidance will not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02. “Leases.”  ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the effect the Standard will have on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the effect the Standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which makes a number of changes meant to simplify and improve accounting for share-based payments. The company has adopted ASU 2016-09 as of January 1, 2017. The adoption had no impact on the Company’s consolidated financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers.” ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued, the standard is effective beginning in the first quarter of fiscal year 2018. We adopted the new standard effective January 1, 2018 utilizing the modified retrospective method. We finalized our analysis and the adoption of this guidance will not have a material impact on our consolidated financial statements and our internal controls over financial reporting.

F-13

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

2. Concentrations:

The following table summarizes accounts receivable and revenue concentrations:

	Accounts Receivable As of December 31,						Total Revenue for the year ended December 31,
	2017			2016			2017			2016
Customer #1		–			–			13	%		13	%
Customer #2		–			–			14	%		13	%
Customer #3		–			55	%		30	%		23	%
Customer #4		44	%		11	%		–			–
Customer #5		54	%		25	%		–			–
Total concentration		98	%		91	%		57	%		49	%

The following table summarizes sales concentrations:

	December 31, 2017			December 31, 2016
Sales within the United States		88	%		88	%
Sales outside of the United States		12	%		12	%
Total		100	%		100	%

3. Property and equipment:

Property and equipment, net at December 31, consists of the following:

	2017			2016
Machinery and equipment	$	59		$	1,235
Office furniture and fixtures		25			435
Leasehold improvements		–			35
Purchased software		1			323
		85			2,028
Less accumulated depreciation and amortization		(72	)		(2,008	)
	$	13		$	20

4. Intangible assets:

Intangible assets, net consists of the following at December 31:

	Weighted Average Amortization Period (Years)		2017			2016
Technology		–	$	6,745		$	6,745
Less accumulated amortization				(6,745	)		(6,476	)
			$	–		$	269

F-14

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

4. Intangible assets (continued):

The nature of the underlying technology of our intangible assets can be referred to as ’‘transaction-enabling,’’ ’‘digital authentication’’ and ’‘business process work flow.’’ This technology includes various forms of electronic signature methods, such as handwritten, biometric, click-to-sign and others, as well as technologies related to signature verification, authentication, cryptography and the logging of audit trails to prove signers’ intent. Our technologies enable the appending of secure, legal and regulatory compliant electronic signatures coupled with an enhanced user experience at a fraction of the time and cost required by traditional, paper-based processes for signature capture. The Company does not foresee any effects of obsolescence or significant competitive pressure on its current or future products, anticipates increasing demand for products utilizing its technology, and believes that the current markets for its products based on technology will remain constant or will grow over the remaining useful lives assigned to its intangible assets because of business environments encouraging the use of electronic signatures.

5. Chinese Joint Venture (Non-Controlling Interest):

The Company currently owns 90% of a joint venture (the “Joint Venture”) with the Jiangsu Hongtu Electronics Group, a provincial agency of the People’s Republic of China. The Joint Venture’s business license expires October 18, 2043. There were no operations in 2017 or 2016. The Joint Venture had no revenue for the years ended December 31, 2017 and 2016, respectively. It had no long-lived assets as of December 31, 2017 and 2016. The Company recorded a non-cash charge to income of $550 related to the write-off of the interest in the joint venture.

6. Other accrued liabilities:

The Company records liabilities based on reasonable estimates for expenses, or payables that are known or estimated including deposits, taxes, rents and services. The estimates are for current liabilities that should be extinguished within one year.

The Company had the following other accrued liabilities at December 31:

	2017		2016
Accrued professional services	$	15	$	38
Rents		3		–
Management fees		440		316
Accrued interest		129		27
Delaware Franchise tax		129		77
Other		24		47
Total	$	740	$	505

7. Debt:

Advances:

In February 2017, the Company received, from investors and affiliates of the Company, advances aggregating $120 in cash against certain accounts receivable of the Company. Upon collection of an invoice, the Company would repay the advance to the lenders on a pro rata basis together with a 5% advance fee. The receivables were collected and the advances were repaid in March 2017, along with $6 in advance fees per the agreement. The advance fees were recorded as interest expense in the quarter ended March 31, 2017.

Notes payable:

In November 2016, the Company issued long-term unsecured convertible promissory notes to investors and affiliates of the Company aggregating $700 in cash. The Company also issued the same long-term notes to affiliates in exchange for an aggregate of $200 in demand notes that had been issued earlier in September and October of 2016. The long-term notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share (initially, $1.30 per share and subsequently reduced in connection with the May 2017 described below) or the price per share of Common Stock, upon closing a new debt and or equity financing of at least $1,000 in aggregate proceeds. The notes bear interest at the rate of 6% per annum and are due December 31, 2018. The Company issued warrants to purchase 277 shares of Common Stock in connection with these long-term notes. The Company ascribed a value of $204 to the 277 warrants and recorded a discount to the long-term notes and a corresponding amount to additional paid-in capital. The discount is being amortized using the effective interest method over the term of the notes.

F-15

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

7. Debt (continued):

Notes payable (continued):

In May 2017, the Company issued secured convertible promissory notes to investors and affiliates of the Company aggregating $505 in cash. In addition, certain investors and affiliates of the Company that had taken part in the November 2016 financing discussed above, and that also participated in the May 2017 financing, exchanged $450 of unsecured convertible promissory notes received in the November 2016 financing for $250 secured notes with the same terms as the notes issued in the May 2017 financing and $200 in unsecured notes with the same terms as the November 2016 financing discussed above. The secured notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share or the price per share of Common Stock, upon closing a new financing of at least $1,000 in aggregate proceeds. The secured notes bear interest at the rate of 10% per annum, are due December 31, 2018 and are secured by an interest in all the Company’s rights, title and interest in, to and under its intellectual property. Should the secured notes remain outstanding following the maturity date an additional 30% of the note’s principal amount shall become due and payable.

In December 2017, the Company issued additional secured convertible promissory notes to investors and affiliates of the Company aggregating $150 in cash. The secured notes have substantially the same terms as the secured notes issued in the May 2017 financing.

The Company used the funds received from the above financing for working capital and general corporate purposes.

During the twelve months ended December 31, 2017, the Company accrued $112 of interest expense, $100 associated with the notes, of which $26 was to related parties and $74 was to other investors.

The Company recorded $97 and $390 in debt discount amortization for the twelve months ended December 31, 2017 and 2016, respectively.

8. Stockholders’ equity (deficit):

Common stock options:

At December 31, 2017, the Company has two stock-based employee compensation plans, the 2009 Stock Compensation Plan, and the 2011 Stock Compensation Plan. The Company may also grant options to employees, directors and consultants outside of the 2009 and 2011 plans under individual plans.

Information with respect to the Stock Compensation Plans at December 31, 2017 is as follows:

	2009 Stock Compensation Plan	2011 Stock Compensation Plan
Shares authorized for issuance	7,000	750,000
Option vesting period	Quarterly over 3 years	Immediate/Quarterly over 3 years
Date adopted by shareholders	−	November 2011
Option term	7 Years	7 Years
Options outstanding	−	736
Options exercisable	−	95
Weighted average exercise price	$−	$3.65

F-16

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

8. Stockholders’ equity (deficit) (continued):

Common stock options (continued):

Valuation and Expense Information:

The weighted-average fair value of stock-based compensation is based on the Black Scholes Merton valuation model.

Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of stock-based compensation awards to employees is amortized over the vesting period of the options. There were no stock options granted during 2016. The fair value calculations are based on the following assumptions:

	Year Ended December 31, 2017	Year Ended December 31, 2016
Risk free interest rate	1.56% – 1.79%	N/A
Expected life (years)	5.30 – 6.80	N/A
Expected volatility	184.14% – 212.15%	N/A
Expected dividends	None	N/A
Estimated average forfeiture rate	5.87%	N/A

The following table summarizes the allocation of stock-based compensation expense for the years ended December 31, 2017 and 2016. There were no stock options exercised during the years ended December 31, 2017 and 2016.

	December 31, 2017		December 31, 2016
Research and development	$	60	$	56
Sales and marketing		–		15
General and administrative		51		71
Director options and consultants		32		22
Stock-based compensation expense included in operating expenses	$	143	$	164

As of December 31, 2017, there was $142 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.4 years.

The cash flows from tax benefits for deductions in excess of the compensation costs recognized for share-based payment awards would be classified as financing cash flows. Due to the Company’s loss position, there were no such tax benefits during the year ended December 31, 2017.

F-17

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

8. Stockholders’ equity (deficit) (continued):

Common stock options (continued):

The summary activity for the Company’s 2011 Stock Compensation Plans is as follows:

	December 31, 2017									December 31, 2016
	Shares			Weighted Average Exercise Price per share		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (in years)		Shares			Weighted Average Exercise Price per share		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding at beginning of period		71		$	45.21	$	–				82		$	45.35	$	–
Granted		899		$	0.50	$	–				–		$	–	$	–
Forfeited/ Cancelled		(234	)	$	4.24	$	–				(11	)	$	46.23	$	–
Outstanding at period end		736		$	3.65	$	–		6.34		71		$	45.21	$	–		3.07
Options vested and exercisable at period end		95		$	24.41	$	–		4.12		60		$	48.78	$	–		2.79
Weighted average grant-date fair value of options granted during the period	$	0.33								$	–

The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2017:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price per share		Number Outstanding		Weighted Average Exercise Price per share
$0.01 -$25.00		687		6.66	$	0.67		47	$	0.90
$25 – $625		49		2.01	$	46.62		48	$	47.19
		736		6.34	$	3.65		95	$	24.41

A summary of the status of the Company’s non-vested shares as of December 31, 2017 is as follows:

Non-vested Shares	Shares			Weighted Average Grant-Date Fair Value per share
Non-vested at January 1, 2017		11		$	23.01
Granted		899		$	0.50
Canceled/Forfeited		(234	)	$	4.24
Vested		(35	)	$	24.65
Non-vested at December 31, 2017		641		$	0.57

F-18

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

8. Stockholders’ equity (deficit) (continued):

Common stock options (continued):

An employee or consultant desiring to exercise or convert his or her stock options must provide a signed notice of exercise to the Chief Financial Officer. Once the exercise is approved an issue order is sent to the Company’s transfer agent and by certificate or through other means of conveyance, the shares are delivered to the employee or consultant, generally within three business days.

The Company expects to make additional option grants in future years. The options issued to employees and directors will be subject to the same provisions outlined above, which may have a material impact on the Company’s financial statements.

Preferred Stock:

All of the Company’s Preferred Stock was converted into shares of common stock on May 19, 2016. Information with respect to dividends issued on the Company’s Preferred stock for the year ended December 31, 2016 is as follows:

	Dividends Issued		Beneficial Conversion Feature
	2016		2016
Series A-1	$	29	$	3
Series B		519		73
Series C		211		39
Series D-1		309		78
Series D-2		245		52
Total	$	1,313	$	245

Treasury Stock:

In January 2012, the Company received 5 shares of Common Stock from Phoenix in settlement of a 16b claim brought by a Company stockholder against Phoenix, certain affiliates and the Company, as a nominal defendant. The Common Stock was valued at $325. In settlement of an indemnification claim brought by Phoenix in March 2012, resulting from the settlement of the 16b claim in January 2012, the Company issued to Phoenix 278 shares of Series C Preferred Stock valued at $417. The Company booked a $417 accretion amount for the beneficial conversion feature on the 278 shares of Series C Preferred Stock.

Warrants:

There were no warrants issued in 2017. There were no warrant exercises in 2017 and 2016. The summary of warrants issued in 2016 is as follows:

	December 31, 2016
	Related Party		Other		Total
Shares issuable under warrants issued in connection with the sale of Common Stock		─		345		345
Shares issuable under warrants issued upon conversion of convertible notes and deferred compensation		586		619		1,205
Shares issuable under warrants issued with unsecured convertible notes		77		200		277
Total		663		1,164		1,827

A summary of the outstanding warrants is as follows:

	December 31, 2017					December 31, 2016
	Shares			Weighted Average Exercise Price  per share		Shares			Weighted Average Exercise Price per share
Outstanding at beginning of period		1,882		$	2.52		206		$	33.00
Issued		–		$	–		1,827		$	2.18
Expired		(4	)	$	34.38		(151	)	$	33.31
Outstanding at end of period		1,878		$	2.46		1,882		$	2.52
Exercisable at end of period		1,878		$	2.46		1,882		$	2.52

F-19

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

8. Stockholders’ equity (deficit) (continued):

Warrants (continued)

A summary of the status of the warrants outstanding as of December 31, 2017 is as follows:

Number of Shares Outstanding and Exercisable	Weighted Average Remaining Life (in years)		Weighted Average Exercise Price per share
50		0.01	$	15.63
1,551		2.18	$	2.18
277		0.42	$	1.63
1,878		1.86	$	2.46

As of December 31, 2017, 2,614 shares of Common Stock were reserved for issuance upon exercise of outstanding options and warrants.

9. Commitments and Contingencies:

Lease commitments:

In November 2016, the Company moved its principal facilities to San Jose, California, pursuant to a lease that expires in 2019. In addition to monthly rent, the facilities are subject to additional rental payments for utilities and other costs above the base amount. Facilities rent expense was approximately $109 and $202 in 2017 and 2016, respectively.

Contractual obligations	Total		2018		2019		Thereafter
Operating lease commitments	$	189	$	102	$	87	$	–
Capital lease commitments		14		6		6		2
Total	$	203	$	108	$	93	$	2

10. Income taxes:

At December 31, 2017, the Company had net operating loss carryforwards of $70,731 for federal income tax purposes which will begin to expire in 2018 if unused. The Company had net operating loss carryforwards for state income tax purposes of approximately $35,982. These state net operating losses carryforwards will begin to expire in the year 2017 if unused.

Deferred tax assets and liabilities at December 31 consist of the following:

	2017			2016
Deferred tax assets:
Net operating loss carry-forwards	$	17,359		$	25,730
Accruals and reserves		51			141
Deferred revenue		143			228
Intangibles		490			821
Other, net		39			53
Fixed assets		13			22
Gross tax assets		18,095			26,995
Valuation allowance		(18,095	)		(26,995	)
Net deferred tax assets	$	–		$	–

F-20

iSign Solutions Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share amounts)

10. Income taxes (continued):

The Company’s provision for income taxes differs from the amount computed by applying the statutory U.S. federal income tax rate to loss before taxes as follows for the years ended December 31, 2017 and December 31, 2016:

	2017			2016
Income tax benefit at the federal statutory rate	$	(661	)	$	(1,183	)
State income tax benefit		(135	)		(203	)
NOL expiration		118			426
Prior year true-ups		15			–
Permanent items and other		354			(27	)
Tax cuts and Jobs Act Rate Changes		9,090			–
Change in valuation allowance		(8,781	)		987
Income tax expense	$	─		$	─

A full valuation allowance has been established for the Company’s net deferred tax assets since the realization of such assets through the generation of future taxable income is uncertain.

Current tax laws impose substantial restrictions on the utilization of net operating losses and credit carryforwards in the event of an “ownership change”, as defined by the Internal Revenue Code (IRC). If there should be an ownership change, the Company’s ability to utilize its carryforwards could be limited

On November 20, 2015, the FASB issued Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes. The ASU is part of the Board’s simplification initiative aimed at reducing complexity in accounting standards and requires companies to classify all deferred tax assets and liabilities, along with any related valuation allowance, as noncurrent on the balance sheet. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the company, most notably a reduction of the U.S. corporate income tax rate from 34 percent to 21 percent for tax years beginning after December 31, 2017. The company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34 percent to 21 percent, resulting in a $9.1 million decrease in net deferred tax assets for the year ended December 31, 2017 and a corresponding $9.1 million decrease in valuation allowance as of December 31, 2017.

F-21

EX-21.1

EXHIBIT 21.1

iSign Solutions, Inc.

Schedule of Subsidiaries

Communication Intelligence Computer Corporation, Ltd. (CICC)

CIC Acquisition Corp.

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements of iSign Solutions Inc. on Form S-1 (File No. 333-208601, effective May 11, 2016; File No. 333-153062, effective September 26, 2008; File No. 333-147436, effective December 20, 2007; File No. 333-121563, effective January 21, 2005) and Form S-8 (File No. 333-184581, effective October 24, 2012; File No. 333-171952, effective January 28, 2011; File No. 333-160403, effective July 1, 2009; File No. 333-153595, effective September 19, 2008; File No. 333-133001, effective April 5, 2006; File No. 333-70838, effective October 3, 2001; File No. 333-49396, effective November 6, 2000) of our report dated April 2, 2018, with respect to the consolidated balance sheets of iSign Solutions Inc. and subsidiary as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, changes in deficit, and cash flows for each of the fiscal years in the two-year period ended December 31, 2017, which report appears in the December 31, 2017 annual report on Form 10-K of iSign Solutions Inc.

/s/ Armanino^LLP

Armanino^LLP

San Ramon, California

April 2, 2018

 

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Philip S. Sassower, certify that:

1. I have reviewed this report on Form 10-K of iSign Solutions Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 2, 2018

/s/ Philip S. Sassower

Co-Chairman, Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrea Goren, certify that:

1. I have reviewed this report on Form 10-K of iSign Solutions Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 2, 2018

/s/ Andrea Goren

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Philip S. Sassower, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of iSign Solutions Inc. on Form 10-K for the year ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of iSign Solutions Inc.

Date: April 2, 2018
By:	/s/ Philip S. Sassower
	Co-Chairman and Chief Executive Officer
	(Principal Executive Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to iSign Solutions Inc. and will be retained by iSign Solutions Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by iSign Solutions Inc. for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that iSign Solutions Inc. specifically incorporates it by reference.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrea Goren, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of iSign Solutions Inc. on Form 10-K for the year ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of iSign Solutions Inc.

Date: April 2, 2018
By:	/s/ Andrea Goren
	Chief Financial Officer
	(Principal Financial Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to iSign Solutions Inc. and will be retained by iSign Solutions Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by iSign Solutions Inc. for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that iSign Solutions Inc. specifically incorporates it by reference.

XML

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Apr. 02, 2018	Jun. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	iSign Solutions Inc.
Entity Central Index Key	0000727634
Amendment Flag	false
Trading Symbol	ISGN
Current Fiscal Year End Date	--12-31
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 0
Entity Common Stock, Shares Outstanding		5,761,980

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 285	$ 389
Accounts receivable, net of allowance of $1 and $63 at December 31, 2017 and 2016, respectively	45	137
Prepaid expenses and other current assets	28	56
Total current assets	358	582
Property and equipment, net	13	20
Intangible assets, net		269
Other assets	17	17
Total assets	388	888
Current liabilities:
Accounts payable	1,289	1,368
Short-term debt, net	1,458
Accrued compensation	201	257
Other accrued liabilities	740	505
Deferred revenue	310	258
Short-term capital lease	4	4
Total current liabilities	4,002	2,392
Long-term debt, net		707
Deferred revenue long-term	175	315
Long-term capital lease	6	9
Other long-term liabilities	7	13
Total liabilities	4,190	3,436
Commitments and contingencies (Note 8)
Equity (deficit):
Common stock, $0.01 par value; 2,000,000 shares authorized; 5,760 and 5,760 shares issued and outstanding at December 31, 2017 and 2016, respectively	58	58
Treasury shares, 5 at December 31, 2017 and December 31, 2016, respectively	(325)	(325)
Additional paid-in-capital	129,027	128,884
Accumulated deficit	(132,562)	(130,615)
Accumulated other comprehensive loss		(14)
Total iSign stockholders' deficit	(3,802)	(2,012)
Non-controlling interest		(536)
Total deficit	(3,802)	(2,548)
Total liabilities and deficit	$ 388	$ 888

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, net of allowance	$ 1	$ 63
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	2,000,000	2,000,000
Common stock, shares issued	5,760	5,760
Common stock, shares outstanding	5,760	5,760
Treasury shares	5	5

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue:
Product	$ 322	$ 325
Maintenance	691	740
Total revenue	1,013	1,065
Cost of sales:
Product	13	78
Maintenance	113	308
Research and development	1,135	1,322
Sales and marketing	188	406
General and administrative	1,122	2,160
Total operating costs and expenses	2,571	4,274
Loss from operations	(1,558)	(3,209)
Other income (expense), net	67	(12)
Gain on sale of intangible assets	303
Write-off of interest in Chinese joint venture	(550)
Interest expense:
Related party	(26)	(103)
Other	(86)	(115)
Amortization of debt discount:
Related party	(27)	(87)
Other	(70)	(303)
Gain on derivative liability		330
Net loss	(1,947)	(3,499)
Accretion of beneficial conversion feature:
Related party		(115)
Other		(130)
Preferred stock dividends:
Related party		(646)
Other		(667)
Income tax expense
Net loss before non-controlling interest	(1,947)	(5,057)
Net loss attributable to non-controlling interest
Net loss attributable to common stockholders	$ (1,947)	$ (5,057)
Basic and diluted loss per common share	$ (0.34)	$ (1.91)
Weighted average common shares outstanding, basic and diluted	5,760	2,644

XML

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Comprehensive Loss [Abstract]
Net loss:	$ (1,947)	$ (3,499)
Other comprehensive income, net of tax
Foreign currency translation adjustment, net
Total comprehensive loss	$ (1,947)	$ (3,499)

XML

Consolidated Statement of Changes in Equity Deficit - USD ($) shares in Thousands, $ in Thousands	Total	Series A-1 Preferred Shares	Series B Preferred Shares	Series C Preferred Shares	Series D-1 Preferred Shares	Series D-2 Preferred Shares	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Non-Controlling Interest	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2015	$ (1,870)	$ 947	$ 11,653	$ 6,069	$ 6,866	$ 5,272	$ 2	$ (325)	$ 95,312	$ (127,116)	$ (536)	$ (14)
Beginning balance, shares at Dec. 31, 2015		947	13,523	5,491	8,077	6,321	187
Stock-based employee compensation	164								164
Preferred share dividends, paid in kind		$ 29	$ 519	$ 211	$ 309	$ 245			(1,313)
Preferred share dividends, paid in kind, shares		29	519	211	309	245
Beneficial conversion feature on preferred shares dividends issued in kind		$ (3)	$ (73)	$ (39)	$ (78)	$ (52)			245
Accretion of beneficial conversion feature on preferred shares dividends issued in kind		3	73	39	78	52			(245)
Common shares and warrants issued in a private placement, net of $780 offering costs	424						$ 7		417
Common shares and warrants issued in a private placement, net of $780 offering costs, shares							690
Common shares issued on exchange of unsecured debt	1,181						$ 7		1,181
Common shares issued on exchange of unsecured debt, shares							683
Common shares issued on exchange of deferred compensation	498						$ 3		495
Common shares issued on exchange of deferred compensation, shares							286
Conversion of Preferred Shares into Common Stock		$ (976)	(12,172)	(6,280)	(7,175)	$ (5,517)	$ 36		32,084
Conversion of Preferred Shares into Common Stock, shares		(976)					3,650
Conversion of convertible notes into Common Stock	240						$ 3		237
Conversion of convertible notes into Common Stock, shares							264
Proceeds allocated to warrants issued in connection with convertible notes	204								204
Beneficial Conversion Feature on convertible notes	103								103
Net loss	(3,499)									(3,499)
Ending balance at Dec. 31, 2016	(2,548)						$ 58	(325)	128,884	(130,615)	(536)	(14)
Ending balance, shares at Dec. 31, 2016							5,760
Stock-based employee compensation	143								143
Write-off of interest in Chinese joint venture	550										536	14
Net loss	(1,947)									(1,947)
Ending balance at Dec. 31, 2017	$ (3,802)						$ 58	$ (325)	$ 129,027	$ (132,562)
Ending balance, shares at Dec. 31, 2017							5,760

XML

Consolidated Statement of Changes in Equity Deficit (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Statement of Stockholders' Equity [Abstract]
Net of offering costs	$ 780

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net loss	$ (1,947)	$ (3,499)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	277	362
Amortization of debt discount	97	390
Stock-based employee compensation	143	164
Gain on derivative liability		(330)
Gain on sale of intangible assets	(303)
Write-off of interest in Chinese joint venture	550
Changes in operating assets and liabilities:
Accounts receivable, net	92	(43)
Prepaid expenses and other current assets	28	316
Accounts payable	(79)	581
Accrued compensation	(56)	(6)
Other accrued liabilities	227	510
Deferred revenue	(88)	(266)
Net cash used in operating activities	(1,059)	(1,821)
Cash flows from investing activities:
Acquisition of property and equipment	(3)
Proceeds from the sale of intangible assets	303
Net cash provided by investing activities	300
Cash flows from financing activities:
Proceeds from advances on accounts receivable	120
Proceeds from issuance of short-term debt		440
Proceeds from issuance of long-term debt	655	700
Proceeds from issuance of common stock and warrants, net of issuance costs of $780		424
Payment of short-term debt		(200)
Payment of advances from accounts receivable	(120)
Net cash provided by financing activities	655	1,364
Net decrease in cash and cash equivalents	(104)	(457)
Cash and cash equivalents at beginning of period	389	846
Cash and cash equivalents at end of period	285	389
Supplementary disclosure of cash flow information
Interest paid	9	62
Non-cash financing and investing transactions
Acquisition of property and equipment through capital lease		15
Conversion of convertible notes plus accrued interest into 947 shares of Common Stock		1,428
Conversion of deferred compensation plus accrued interest into 286 shares of Common Stock		498
Exchange of long-term unsecured convertible promissory notes for long-term unsecured promissory notes	200
Exchange of long-term unsecured convertible promissory notes for long-term secured promissory notes	250
Dividends on preferred shares		1,313
Conversion of preferred stock into Common Stock		32,119
Accretion of beneficial conversion feature on preferred share dividends		245
Beneficial conversion feature on convertible notes		103
Exchange of $200 of demand notes for long-term unsecured convertible notes		200
Warrants issued in connection with convertible notes		$ 204

XML

Consolidated Statements of Cash Flows (Parenthetical) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) shares
Issuance of common stock and warrants, net of issuance costs | $	$ 780
Conversion of convertible notes plus accrued interest in common stock, shares | shares	947
Conversion of deferred compensation plus accrued interest in common stock, shares | shares	286
Exchange amount of demand notes for long-term unsecured convertible notes | $	$ 200

XML

Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies

1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies:

The Company:

The Company is a leading supplier of digital transaction management (DTM) software enabling the paperless, secure and cost-effective management of document-based transactions. iSign’s solutions encompass a wide array of functionality and services, including electronic signatures, biometric authentication and simple-to-complex workflow management. These solutions are available across virtually all enterprise, desktop and mobile environments as a seamlessly integrated platform for both ad-hoc and fully automated transactions. The Company’s products and services result in legally binding transactions that are compliant with applicable laws and regulations and that can provide a higher level of security than paper-based processes. The Company has been a leading supplier of enterprise software solutions within the financial services and insurance industries and has delivered significant expense reduction by enabling complete document and workflow automation and the resulting reduction in mailing, scanning, filing and other costs related to the use of paper.

The Company’s research and development activities have given rise to numerous technologies and products. The Company’s core DTM technologies include various forms of electronic signatures, such as handwritten biometric, click-to-sign and others, as well as signature verification, cryptography and the logging of audit trails to show signers’ intent. These technologies can enable secure, legal and regulatory compliant electronic transactions that can enhance customer experience at a fraction of the time and cost required by traditional, paper-based processes. The Company’s products include SignatureOne^® Ceremony^™ Server, Sign-it^® and the iSign^® family of products and services.

Going concern and management plans:

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Except for 2004, the Company has incurred significant losses since its inception and, at December 31, 2017, the Company’s accumulated deficit was $132,562. The Company has primarily met its working capital needs through the sale of debt and equity securities. As of December 31, 2017, the Company’s cash balance was $285. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that the Company will be successful in securing adequate capital resources to fund planned operations or that any additional funds will be available to the Company when needed, or if available, will be available on favorable terms or in amounts required by the Company. If the Company is unable to obtain adequate capital resources to fund operations, it may be required to delay, scale back or eliminate some or all of its operations, which may have a material adverse effect on the Company’s business, results of operations and ability to operate as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of consolidation:

The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, and include the accounts of iSign Solutions Inc. and its 90%-owned Joint Venture in the People’s Republic of China. All inter-company accounts and transactions have been eliminated. All amounts shown in the accompanying consolidated financial statements are in thousands of dollars except per share amounts.

Use of estimates:

The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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, as well as the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Fair value measures:

Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s assets and liabilities measured at fair value, whether recurring or non-recurring, at December 31, 2017 and December 31, 2016, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

Fair Value of Financial Instruments:

The Company carries financial instruments on the consolidated balance sheet at the fair value of the instruments as of the consolidated balance sheet date. At the end of each period, management assesses the fair value of each instrument and adjusts the carrying value to reflect its assessment. At December 31, 2017 and December 31, 2016, the carrying values of accounts receivable and accounts payable approximated their fair values.

Treasury Stock:

Shares of Common Stock returned to, or repurchased by, the Company are recorded at cost and are included as a separate component of stockholders’ equity (deficit).

Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account titled treasury stock. The equity accounts that were credited for the original share issuance (Common Stock, additional paid-in capital, etc.) remain intact. When the treasury shares are reissued, proceeds in excess of cost are credited to additional paid-in capital. Any deficiency is charged to accumulated deficit (unless additional paid-in capital from previous treasury share transactions exists, in which case the deficiency is charged to that account, with any excess charged to accumulated deficit).

Derivatives:

The Company, from time to time, enters into transactions which contain conversion privileges, the settlement of which may entitle the holder or the Company to settle the obligation(s) by issuance of Company securities. The Company applies a two-step model in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the scope exception. The fair value of each derivative is estimated each reporting period.

The conversion option included within the unsecured convertible promissory notes is accounted for as a derivative liability at its estimated fair value. The derivative is subject to re-measurement at the end of each reporting period, with changes in fair value recognized as a component of interest and other income, in the consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the conversion or maturity of the unsecured convertible promissory note purchase agreements.

Cash and cash equivalents:

The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents.

The Company’s cash and cash equivalents, at December 31, consisted of the following:

	2017		2016
Cash in bank	$	285	$	389
Cash and cash equivalents	$	285	$	389

Concentrations of credit risk:

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company maintains its cash and cash equivalents with various financial institutions. This diversification of risk is consistent with Company policy to maintain liquidity, and mitigate risk of loss as to principal.

To date, accounts receivable have been derived principally from revenue earned from end users, manufacturers, and distributors of computer products in North America. The Company performs periodic credit evaluations of its customers, and does not require collateral. The Company maintains reserves for potential credit losses; historically, such losses have been within management’s expectations.

The allowance for doubtful accounts is based on the Company’s assessment of the collectability of specific customer accounts and an assessment of international, political and economic risk as well as the aging of the accounts receivable. If there is a change in actual defaults from the Company’s historical experience, the Company’s estimates of recoverability of amounts due could be affected and the Company will adjust the allowance accordingly.

Deferred financing costs:

Deferred financing costs include costs paid in cash, such as professional fees and commissions. The costs associated with equity financings, such as in the sale Common or Preferred Stock, are netted against the proceeds of the offering. In the case of note financings, costs are amortized to interest expense over the life of the notes or upon early payment using the effective interest method. There were no financing costs amortized to interest expense for the years ended December 31, 2017 and 2016, respectively.

Property and equipment, net:

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Leasehold improvements are amortized over their estimated useful lives, not to exceed the term of the related lease. The cost of additions and improvements is capitalized while maintenance and repairs are charged to expense as incurred. Depreciation expense was $8 and $40 for the years ended December 31, 2017 and 2016, respectively.

Intangible Assets:

Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated lives of the related assets, ranging from five to seventeen years. Amortization expense was $269 and $322 for the years ended December 31, 2017 and 2016, respectively. The intangible assets have been fully amortized as of December 31, 2017.

Long-lived assets:

The Company evaluates the recoverability of its long-lived assets, including intangible assets at least annually or whenever circumstances or events indicate such assets might be impaired. The Company would recognize an impairment charge in the event the net book value of such assets exceeded the future undiscounted cash flows attributable to such assets. No such impairment charge was recorded during the years ended December 31, 2017 and 2016, respectively.

Share-based payment:

Share-based compensation expense is based on the estimated grant date fair value of the portion of share-based payment awards that is ultimately expected to vest during the period. The grant date fair value of share-based awards to employees and directors is calculated using the Black-Scholes-Merton valuation model. Forfeitures of share-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and it is assumed no dividends will be declared. The estimated fair value of share-based compensation awards to employees is amortized over the vesting period of the options.

Revenue recognition:

The Company recognizes revenue from sales of software products upon shipment, provided that persuasive evidence of an arrangement exists, the fee is fixed and determinable, collection is determined to be probable, all non-recurring engineering work necessary to enable the Company’s product to function within the customer’s application has been completed and the Company’s product has been delivered according to specifications. Revenue from service subscriptions is recognized as costs are incurred or over the service period, whichever is longer. Software license agreements may contain multiple elements, including upgrades and enhancements, products deliverable on a when and if available basis and post- contract support. Revenue from software license agreements is recognized upon delivery of the software, provided that persuasive evidence of an arrangement exists, collection is determined to be probable, all nonrecurring engineering work necessary to enable the Company’s products to function within the customer’s application has been completed, and the Company has delivered its product according to specifications.

For arrangements with multiple deliverables, the Company allocates consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices which is determined using vendor specific objective evidence.

Maintenance revenue is recorded for post-contract support and upgrades or enhancements, which is paid for in addition to license fees, and is recognized as costs are incurred or over the support period whichever is longer. For undelivered elements where vendor specific objective evidence does not exist, revenue is deferred and subsequently recognized when delivery has occurred and when vendor specific evidence has been determined.

Research and development:

Research and development costs are charged to expense as incurred.

Marketing:

The Company expenses advertising (marketing) costs as incurred. These expenses are outbound marketing expenses associated with participation in industry events, related sales collateral and email campaigns aimed at generating customer participation in webinars. The expense for the years ended December 31, 2017 and 2016 was $0 and $1, respectively.

Net loss per share:

The Company calculates net loss per share under the provisions of the relevant accounting guidance. That guidance requires the disclosure of both basic net loss per share, which is based on the weighted average number of shares outstanding, and diluted loss per share, which is based on the weighted average number of shares and dilutive potential shares outstanding.

The number of shares of Common Stock subject to outstanding options and shares issuable upon exercise of warrants excluded from the calculation of loss per share as their inclusion would be anti-dilutive are as follows:

	December 31, 2017		December 31, 2016
Common Stock subject to outstanding options		736		71
Common Stock subject to outstanding warrants		1,878		1,882

The Company considers the functional currency of the Joint Venture, CICC, to be the local currency of China, which is the Renminbi (“RMB”) and, accordingly, gains and losses from the translation of the local foreign currency financial statements are included as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets. Foreign currency assets and liabilities are translated into U.S. dollars at the end-of-period exchange rates except for long-term assets and liabilities, which are translated at historical exchange rates. Revenue and expenses are translated at the average exchange rates in effect during each period except for those expenses related to consolidated balance sheet amounts which are translated at historical exchange rates.

Net foreign currency transaction gains and losses are included in interest and other income, net in the accompanying consolidated statements of operations. Foreign currency transaction gains and losses in 2017 and 2016 were insignificant.

Income taxes:

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.

Foreign currency translation:

There have been no unrecognized tax benefits and, accordingly, there has been no effect on the Company’s financial condition or results of operations.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years before 2008, and state tax examinations for years before 2007. Management is in the process of reviewing the effects on the Company’s unrecognized tax positions in response to the changes the federal tax rates adopted in December of 2017.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Recently issued accounting pronouncement:

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): “Recognition and Measurement of Financial Assets and Financial Liabilities.”  The new guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure.  The update to the standard is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted under limited circumstances.  The adoption of this guidance will not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02. “Leases.”  ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the effect the Standard will have on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the effect the Standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which makes a number of changes meant to simplify and improve accounting for share-based payments. The company has adopted ASU 2016-09 as of January 1, 2017. The adoption had no impact on the Company’s consolidated financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers.” ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued, the standard is effective beginning in the first quarter of fiscal year 2018. We adopted the new standard effective January 1, 2018 utilizing the modified retrospective method. We finalized our analysis and the adoption of this guidance will not have a material impact on our consolidated financial statements and our internal controls over financial reporting.

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Concentrations

12 Months Ended

Dec. 31, 2017

Concentrations [Abstract]

Concentrations

2. Concentrations:

The following table summarizes accounts receivable and revenue concentrations:

	Accounts Receivable As of December 31,						Total Revenue for the year ended December 31,
	2017			2016			2017			2016
Customer #1		–			–			13	%		13	%
Customer #2		–			–			14	%		13	%
Customer #3		–			55	%		30	%		23	%
Customer #4		44	%		11	%		–			–
Customer #5		54	%		25	%		–			–
Total concentration		98	%		91	%		57	%		49	%

The following table summarizes sales concentrations:

	December 31,  2017			December 31,  2016
Sales within the United States		88	%		88	%
Sales outside of the United States		12	%		12	%
Total		100	%		100	%

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Property and Equipment

12 Months Ended

Dec. 31, 2017

Property and Equipment [Abstract]

Property and equipment

3. Property and equipment:

Property and equipment, net at December 31, consists of the following:

	2017			2016
Machinery and equipment	$	59		$	1,235
Office furniture and fixtures		25			435
Leasehold improvements		–			35
Purchased software		1			323
		85			2,028
Less accumulated depreciation and amortization		(72	)		(2,008	)
	$	13		$	20

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Intangible Assets

12 Months Ended

Dec. 31, 2017

Intangible Assets [Abstract]

Intangible assets

4. Intangible assets:

Intangible assets, net consists of the following at December 31:

	Weighted  Average  Amortization  Period  (Years)		2017			2016
Technology		–	$	6,745		$	6,745
Less accumulated amortization				(6,745	)		(6,476	)
			$	–		$	269

The nature of the underlying technology of our intangible assets can be referred to as ’‘transaction-enabling,’’ ’‘digital authentication’’ and ’‘business process work flow.’’ This technology includes various forms of electronic signature methods, such as handwritten, biometric, click-to-sign and others, as well as technologies related to signature verification, authentication, cryptography and the logging of audit trails to prove signers’ intent. Our technologies enable the appending of secure, legal and regulatory compliant electronic signatures coupled with an enhanced user experience at a fraction of the time and cost required by traditional, paper-based processes for signature capture. The Company does not foresee any effects of obsolescence or significant competitive pressure on its current or future products, anticipates increasing demand for products utilizing its technology, and believes that the current markets for its products based on technology will remain constant or will grow over the remaining useful lives assigned to its intangible assets because of business environments encouraging the use of electronic signatures.

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Chinese Joint Venture (Non-Controlling Interest)

12 Months Ended

Dec. 31, 2017

Chinese Joint Venture (Non-Controlling Interest) [Abstract]

Chinese Joint Venture (Non-Controlling Interest)

5. Chinese Joint Venture (Non-Controlling Interest):

The Company currently owns 90% of a joint venture (the “Joint Venture”) with the Jiangsu Hongtu Electronics Group, a provincial agency of the People’s Republic of China. The Joint Venture’s business license expires October 18, 2043. There were no operations in 2017 or 2016. The Joint Venture had no revenue for the years ended December 31, 2017 and 2016, respectively. It had no long-lived assets as of December 31, 2017 and 2016. The Company recorded a non-cash charge to income of $550 related to the write-off of the interest in the joint venture.

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Other Accrued Liabilities

12 Months Ended

Dec. 31, 2017

Other Accrued Liabilities [Abstract]

Other accrued liabilities

6. Other accrued liabilities:

The Company records liabilities based on reasonable estimates for expenses, or payables that are known or estimated including deposits, taxes, rents and services. The estimates are for current liabilities that should be extinguished within one year.

The Company had the following other accrued liabilities at December 31:

	2017		2016
Accrued professional services	$	15	$	38
Rents		3		–
Management fees		440		316
Accrued interest		129		27
Delaware Franchise tax		129		77
Other		24		47
Total	$	740	$	505

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Debt

12 Months Ended

Dec. 31, 2017

Debt [Abstract]

Debt

7. Debt:

Advances:

In February 2017, the Company received, from investors and affiliates of the Company, advances aggregating $120 in cash against certain accounts receivable of the Company. Upon collection of an invoice, the Company would repay the advance to the lenders on a pro rata basis together with a 5% advance fee. The receivables were collected and the advances were repaid in March 2017, along with $6 in advance fees per the agreement. The advance fees were recorded as interest expense in the quarter ended March 31, 2017.

Notes payable:

In November 2016, the Company issued long-term unsecured convertible promissory notes to investors and affiliates of the Company aggregating $700 in cash. The Company also issued the same long-term notes to affiliates in exchange for an aggregate of $200 in demand notes that had been issued earlier in September and October of 2016. The long-term notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share (initially, $1.30 per share and subsequently reduced in connection with the May 2017 described below) or the price per share of Common Stock, upon closing a new debt and or equity financing of at least $1,000 in aggregate proceeds. The notes bear interest at the rate of 6% per annum and are due December 31, 2018. The Company issued warrants to purchase 277 shares of Common Stock in connection with these long-term notes. The Company ascribed a value of $204 to the 277 warrants and recorded a discount to the long-term notes and a corresponding amount to additional paid-in capital. The discount is being amortized using the effective interest method over the term of the notes.

Notes payable:

In May 2017, the Company issued secured convertible promissory notes to investors and affiliates of the Company aggregating $505 in cash. In addition, certain investors and affiliates of the Company that had taken part in the November 2016 financing discussed above, and that also participated in the May 2017 financing, exchanged $450 of unsecured convertible promissory notes received in the November 2016 financing for $250 secured notes with the same terms as the notes issued in the May 2017 financing and $200 in unsecured notes with the same terms as the November 2016 financing discussed above. The secured notes are mandatorily convertible into Common Stock at a conversion rate of the lesser of $0.50 per share or the price per share of Common Stock, upon closing a new financing of at least $1,000 in aggregate proceeds. The secured notes bear interest at the rate of 10% per annum, are due December 31, 2018 and are secured by an interest in all the Company’s rights, title and interest in, to and under its intellectual property. Should the secured notes remain outstanding following the maturity date an additional 30% of the note’s principal amount shall become due and payable.

In December 2017, the Company issued additional secured convertible promissory notes to investors and affiliates of the Company aggregating $150 in cash. The secured notes have substantially the same terms as the secured notes issued in the May 2017 financing.

The Company used the funds received from the above financing for working capital and general corporate purposes.

During the twelve months ended December 31, 2017, the Company accrued $112 of interest expense, $100 associated with the notes, of which $26 was to related parties and $74 was to other investors.

The Company recorded $97 and $390 in debt discount amortization for the twelve months ended December 31, 2017 and 2016, respectively.

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Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2017

Stockholders' Equity (Deficit) [Abstract]

Stockholders' equity (deficit)

8. Stockholders’ equity (deficit):

Common stock options:

At December 31, 2017, the Company has two stock-based employee compensation plans, the 2009 Stock Compensation Plan, and the 2011 Stock Compensation Plan. The Company may also grant options to employees, directors and consultants outside of the 2009 and 2011 plans under individual plans.

Information with respect to the Stock Compensation Plans at December 31, 2017 is as follows:

	2009 Stock Compensation Plan	2011 Stock Compensation Plan
Shares authorized for issuance	7,000	750,000
Option vesting period	Quarterly over 3 years	Immediate/Quarterly over 3 years
Date adopted by shareholders	−	November 2011
Option term	7 Years	7 Years
Options outstanding	−	736
Options exercisable	−	95
Weighted average exercise price	$−	$3.65

Valuation and Expense Information:

The weighted-average fair value of stock-based compensation is based on the Black Scholes Merton valuation model.

Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of stock-based compensation awards to employees is amortized over the vesting period of the options. There were no stock options granted during 2016. The fair value calculations are based on the following assumptions:

	Year Ended December 31, 2017	Year Ended December 31, 2016
Risk free interest rate	1.56% – 1.79%	N/A
Expected life (years)	5.30 – 6.80	N/A
Expected volatility	184.14% – 212.15%	N/A
Expected dividends	None	N/A
Estimated average forfeiture rate	5.87%	N/A

The following table summarizes the allocation of stock-based compensation expense for the years ended December 31, 2017 and 2016. There were no stock options exercised during the years ended December 31, 2017 and 2016.

	December 31, 2017		December 31, 2016
Research and development	$	60	$	56
Sales and marketing		–		15
General and administrative		51		71
Director options and consultants		32		22
Stock-based compensation expense included in operating expenses	$	143	$	164

As of December 31, 2017, there was $142 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.4 years.

The cash flows from tax benefits for deductions in excess of the compensation costs recognized for share-based payment awards would be classified as financing cash flows. Due to the Company’s loss position, there were no such tax benefits during the year ended December 31, 2017.

The summary activity for the Company’s 2011 Stock Compensation Plans is as follows:

	December 31, 2017									December 31, 2016
	Shares			Weighted Average Exercise  Price per  share		Aggregate Intrinsic  Value		Weighted Average  Remaining  Contractual  Life (in  years)		Shares			Weighted Average Exercise  Price per  share		Aggregate  Intrinsic  Value		Weighted  Average  Remaining  Contractual  Life (in  years)
Outstanding at beginning of period		71		$	45.21	$	–				82		$	45.35	$	–
Granted		899		$	0.50	$	–				–		$	–	$	–
Forfeited/ Cancelled		(234	)	$	4.24	$	–				(11	)	$	46.23	$	–
Outstanding at period end		736		$	3.65	$	–		6.34		71		$	45.21	$	–		3.07
Options vested and exercisable at period end		95		$	24.41	$	–		4.12		60		$	48.78	$	–		2.79
Weighted average grant-date fair value of options granted during the period	$	0.33								$	–

The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2017:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted  Average  Remaining  Contractual Life  (in years)		Weighted  Average  Exercise  Price per  share		Number  Outstanding		Weighted  Average  Exercise  Price per  share
$0.01 -$25.00		687		6.66	$	0.67		47	$	0.90
$25 – $625		49		2.01	$	46.62		48	$	47.19
		736		6.34	$	3.65		95	$	24.41

A summary of the status of the Company’s non-vested shares as of December 31, 2017 is as follows:

Non-vested Shares	Shares			Weighted Average Grant-Date Fair Value per share
Non-vested at January 1, 2017		11		$	23.01
Granted		899		$	0.50
Canceled/Forfeited		(234	)	$	4.24
Vested		(35	)	$	24.65
Non-vested at December 31, 2017		641		$	0.57

An employee or consultant desiring to exercise or convert his or her stock options must provide a signed notice of exercise to the Chief Financial Officer. Once the exercise is approved an issue order is sent to the Company’s transfer agent and by certificate or through other means of conveyance, the shares are delivered to the employee or consultant, generally within three business days.

The Company expects to make additional option grants in future years. The options issued to employees and directors will be subject to the same provisions outlined above, which may have a material impact on the Company’s financial statements.

Preferred Stock:

All of the Company’s Preferred Stock was converted into shares of common stock on May 19, 2016. Information with respect to dividends issued on the Company’s Preferred stock for the year ended December 31, 2016 is as follows:

	Dividends  Issued		Beneficial  Conversion  Feature
	2016		2016
Series A-1	$	29	$	3
Series B		519		73
Series C		211		39
Series D-1		309		78
Series D-2		245		52
Total	$	1,313	$	245

Treasury Stock:

In January 2012, the Company received 5 shares of Common Stock from Phoenix in settlement of a 16b claim brought by a Company stockholder against Phoenix, certain affiliates and the Company, as a nominal defendant. The Common Stock was valued at $325. In settlement of an indemnification claim brought by Phoenix in March 2012, resulting from the settlement of the 16b claim in January 2012, the Company issued to Phoenix 278 shares of Series C Preferred Stock valued at $417. The Company booked a $417 accretion amount for the beneficial conversion feature on the 278 shares of Series C Preferred Stock.

Warrants:

There were no warrants issued in 2017. There were no warrant exercises in 2017 and 2016. The summary of warrants issued in 2016 is as follows:

	December 31, 2016
	Related Party		Other		Total
Shares issuable under warrants issued in connection with the sale of Common Stock		─		345		345
Shares issuable under warrants issued upon conversion of convertible notes and deferred compensation		586		619		1,205
Shares issuable under warrants issued with unsecured convertible notes		77		200		277
Total		663		1,164		1,827

A summary of the outstanding warrants is as follows:

	December 31, 2017					December 31, 2016
	Shares			Weighted  Average  Exercise Price  per share		Shares			Weighted  Average  Exercise Price  per share
Outstanding at beginning of period		1,882		$	2.52		206		$	33.00
Issued		–		$	–		1,827		$	2.18
Expired		(4	)	$	34.38		(151	)	$	33.31
Outstanding at end of period		1,878		$	2.46		1,882		$	2.52
Exercisable at end of period		1,878		$	2.46		1,882		$	2.52

A summary of the status of the warrants outstanding as of December 31, 2017 is as follows:

Number of Shares Outstanding and Exercisable	Weighted Average  Remaining Life (in  years)		Weighted Average Exercise  Price per share
50		0.01	$	15.63
1,551		2.18	$	2.18
277		0.42	$	1.63
1,878		1.86	$	2.46

As of December 31, 2017, 2,614 shares of Common Stock were reserved for issuance upon exercise of outstanding options and warrants.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies:

Lease commitments:

In November 2016, the Company moved its principal facilities to San Jose, California, pursuant to a lease that expires in 2019. In addition to monthly rent, the facilities are subject to additional rental payments for utilities and other costs above the base amount. Facilities rent expense was approximately $109 and $202 in 2017 and 2016, respectively.

Contractual obligations	Total		2018		2019		Thereafter
Operating lease commitments	$	189	$	102	$	87	$	–
Capital lease commitments		14		6		6		2
Total	$	203	$	108	$	93	$	2

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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes [Abstract]

Income taxes

10. Income taxes:

At December 31, 2017, the Company had net operating loss carryforwards of $70,731 for federal income tax purposes which will begin to expire in 2018 if unused. The Company had net operating loss carryforwards for state income tax purposes of approximately $35,982. These state net operating losses carryforwards will begin to expire in the year 2017 if unused.

Deferred tax assets and liabilities at December 31 consist of the following:

	2017			2016
Deferred tax assets:
Net operating loss carry-forwards	$	17,359		$	25,730
Accruals and reserves		51			141
Deferred revenue		143			228
Intangibles		490			821
Other, net		39			53
Fixed assets		13			22
Gross tax assets		18,095			26,995
Valuation allowance		(18,095	)		(26,995	)
Net deferred tax assets	$	–		$	–

The Company’s provision for income taxes differs from the amount computed by applying the statutory U.S. federal income tax rate to loss before taxes as follows for the years ended December 31, 2017 and December 31, 2016:

	2017			2016
Income tax benefit at the federal statutory rate	$	(661	)	$	(1,183	)
State income tax benefit		(135	)		(203	)
NOL expiration		118			426
Prior year true-ups		15			–
Permanent items and other		354			(27	)
Tax cuts and Jobs Act Rate Changes		9,090			–
Change in valuation allowance		(8,781	)		987
Income tax expense	$	─		$	─

A full valuation allowance has been established for the Company’s net deferred tax assets since the realization of such assets through the generation of future taxable income is uncertain.

Current tax laws impose substantial restrictions on the utilization of net operating losses and credit carryforwards in the event of an “ownership change”, as defined by the Internal Revenue Code (IRC). If there should be an ownership change, the Company’s ability to utilize its carryforwards could be limited

On November 20, 2015, the FASB issued Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes. The ASU is part of the Board’s simplification initiative aimed at reducing complexity in accounting standards and requires companies to classify all deferred tax assets and liabilities, along with any related valuation allowance, as noncurrent on the balance sheet. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the company, most notably a reduction of the U.S. corporate income tax rate from 34 percent to 21 percent for tax years beginning after December 31, 2017. The company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34 percent to 21 percent, resulting in a $9.1 million decrease in net deferred tax assets for the year ended December 31, 2017 and a corresponding $9.1 million decrease in valuation allowance as of December 31, 2017.

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Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Going concern and management plans

Going concern and management plans:

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Except for 2004, the Company has incurred significant losses since its inception and, at December 31, 2017, the Company’s accumulated deficit was $132,562. The Company has primarily met its working capital needs through the sale of debt and equity securities. As of December 31, 2017, the Company’s cash balance was $285. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that the Company will be successful in securing adequate capital resources to fund planned operations or that any additional funds will be available to the Company when needed, or if available, will be available on favorable terms or in amounts required by the Company. If the Company is unable to obtain adequate capital resources to fund operations, it may be required to delay, scale back or eliminate some or all of its operations, which may have a material adverse effect on the Company’s business, results of operations and ability to operate as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of consolidation

Basis of consolidation:

The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, and include the accounts of iSign Solutions Inc. and its 90%-owned Joint Venture in the People’s Republic of China. All inter-company accounts and transactions have been eliminated. All amounts shown in the accompanying consolidated financial statements are in thousands of dollars except per share amounts.

Use of estimates

Use of estimates:

The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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, as well as the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Fair value measures

Fair value measures:

Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s assets and liabilities measured at fair value, whether recurring or non-recurring, at December 31, 2017 and December 31, 2016, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

Fair Value of Financial Instruments

Fair Value of Financial Instruments:

The Company carries financial instruments on the consolidated balance sheet at the fair value of the instruments as of the consolidated balance sheet date. At the end of each period, management assesses the fair value of each instrument and adjusts the carrying value to reflect its assessment. At December 31, 2017 and December 31, 2016, the carrying values of accounts receivable and accounts payable approximated their fair values.

Treasury Stock

Treasury Stock:

Shares of Common Stock returned to, or repurchased by, the Company are recorded at cost and are included as a separate component of stockholders’ equity (deficit).

Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account titled treasury stock. The equity accounts that were credited for the original share issuance (Common Stock, additional paid-in capital, etc.) remain intact. When the treasury shares are reissued, proceeds in excess of cost are credited to additional paid-in capital. Any deficiency is charged to accumulated deficit (unless additional paid-in capital from previous treasury share transactions exists, in which case the deficiency is charged to that account, with any excess charged to accumulated deficit).

Derivatives

Derivatives:

The Company, from time to time, enters into transactions which contain conversion privileges, the settlement of which may entitle the holder or the Company to settle the obligation(s) by issuance of Company securities. The Company applies a two-step model in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the scope exception. The fair value of each derivative is estimated each reporting period.

The conversion option included within the unsecured convertible promissory notes is accounted for as a derivative liability at its estimated fair value. The derivative is subject to re-measurement at the end of each reporting period, with changes in fair value recognized as a component of interest and other income, in the consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the conversion or maturity of the unsecured convertible promissory note purchase agreements.

Cash and cash equivalents

Cash and cash equivalents:

The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents.

The Company’s cash and cash equivalents, at December 31, consisted of the following:

	2017		2016
Cash in bank	$	285	$	389
Cash and cash equivalents	$	285	$	389

Concentrations of credit risk

Concentrations of credit risk:

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company maintains its cash and cash equivalents with various financial institutions. This diversification of risk is consistent with Company policy to maintain liquidity, and mitigate risk of loss as to principal.

To date, accounts receivable have been derived principally from revenue earned from end users, manufacturers, and distributors of computer products in North America. The Company performs periodic credit evaluations of its customers, and does not require collateral. The Company maintains reserves for potential credit losses; historically, such losses have been within management’s expectations.

The allowance for doubtful accounts is based on the Company’s assessment of the collectability of specific customer accounts and an assessment of international, political and economic risk as well as the aging of the accounts receivable. If there is a change in actual defaults from the Company’s historical experience, the Company’s estimates of recoverability of amounts due could be affected and the Company will adjust the allowance accordingly.

Deferred financing costs

Deferred financing costs:

Deferred financing costs include costs paid in cash, such as professional fees and commissions. The costs associated with equity financings, such as in the sale Common or Preferred Stock, are netted against the proceeds of the offering. In the case of note financings, costs are amortized to interest expense over the life of the notes or upon early payment using the effective interest method. There were no financing costs amortized to interest expense for the years ended December 31, 2017 and 2016, respectively.

Property and equipment, net

Property and equipment, net:

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Leasehold improvements are amortized over their estimated useful lives, not to exceed the term of the related lease. The cost of additions and improvements is capitalized while maintenance and repairs are charged to expense as incurred. Depreciation expense was $8 and $40 for the years ended December 31, 2017 and 2016, respectively.

Intangible Assets

Intangible Assets:

Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated lives of the related assets, ranging from five to seventeen years. Amortization expense was $269 and $322 for the years ended December 31, 2017 and 2016, respectively. The intangible assets have been fully amortized as of December 31, 2017.

Long-lived assets

Long-lived assets:

The Company evaluates the recoverability of its long-lived assets, including intangible assets at least annually or whenever circumstances or events indicate such assets might be impaired. The Company would recognize an impairment charge in the event the net book value of such assets exceeded the future undiscounted cash flows attributable to such assets. No such impairment charge was recorded during the years ended December 31, 2017 and 2016, respectively.

Share-based payment

Share-based payment:

Share-based compensation expense is based on the estimated grant date fair value of the portion of share-based payment awards that is ultimately expected to vest during the period. The grant date fair value of share-based awards to employees and directors is calculated using the Black-Scholes-Merton valuation model. Forfeitures of share-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and it is assumed no dividends will be declared. The estimated fair value of share-based compensation awards to employees is amortized over the vesting period of the options.

Revenue recognition

Revenue recognition:

The Company recognizes revenue from sales of software products upon shipment, provided that persuasive evidence of an arrangement exists, the fee is fixed and determinable, collection is determined to be probable, all non-recurring engineering work necessary to enable the Company’s product to function within the customer’s application has been completed and the Company’s product has been delivered according to specifications. Revenue from service subscriptions is recognized as costs are incurred or over the service period, whichever is longer. Software license agreements may contain multiple elements, including upgrades and enhancements, products deliverable on a when and if available basis and post- contract support. Revenue from software license agreements is recognized upon delivery of the software, provided that persuasive evidence of an arrangement exists, collection is determined to be probable, all nonrecurring engineering work necessary to enable the Company’s products to function within the customer’s application has been completed, and the Company has delivered its product according to specifications.

For arrangements with multiple deliverables, the Company allocates consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices which is determined using vendor specific objective evidence.

Maintenance revenue is recorded for post-contract support and upgrades or enhancements, which is paid for in addition to license fees, and is recognized as costs are incurred or over the support period whichever is longer. For undelivered elements where vendor specific objective evidence does not exist, revenue is deferred and subsequently recognized when delivery has occurred and when vendor specific evidence has been determined.

Research and development

Research and development:

Research and development costs are charged to expense as incurred.

Marketing

Marketing:

The Company expenses advertising (marketing) costs as incurred. These expenses are outbound marketing expenses associated with participation in industry events, related sales collateral and email campaigns aimed at generating customer participation in webinars. The expense for the years ended December 31, 2017 and 2016 was $0 and $1, respectively.

Net loss per share

Net loss per share:

The Company calculates net loss per share under the provisions of the relevant accounting guidance. That guidance requires the disclosure of both basic net loss per share, which is based on the weighted average number of shares outstanding, and diluted loss per share, which is based on the weighted average number of shares and dilutive potential shares outstanding.

The number of shares of Common Stock subject to outstanding options and shares issuable upon exercise of warrants excluded from the calculation of loss per share as their inclusion would be anti-dilutive are as follows:

	December 31, 2017		December 31, 2016
Common Stock subject to outstanding options		736		71
Common Stock subject to outstanding warrants		1,878		1,882

The Company considers the functional currency of the Joint Venture, CICC, to be the local currency of China, which is the Renminbi (“RMB”) and, accordingly, gains and losses from the translation of the local foreign currency financial statements are included as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets. Foreign currency assets and liabilities are translated into U.S. dollars at the end-of-period exchange rates except for long-term assets and liabilities, which are translated at historical exchange rates. Revenue and expenses are translated at the average exchange rates in effect during each period except for those expenses related to consolidated balance sheet amounts which are translated at historical exchange rates.

Net foreign currency transaction gains and losses are included in interest and other income, net in the accompanying consolidated statements of operations. Foreign currency transaction gains and losses in 2017 and 2016 were insignificant.

Income taxes

Income taxes:

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.

Foreign currency translation

Foreign currency translation:

There have been no unrecognized tax benefits and, accordingly, there has been no effect on the Company’s financial condition or results of operations.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years before 2008, and state tax examinations for years before 2007. Management is in the process of reviewing the effects on the Company’s unrecognized tax positions in response to the changes the federal tax rates adopted in December of 2017.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Recently issued accounting pronouncement

Recently issued accounting pronouncement:

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): “Recognition and Measurement of Financial Assets and Financial Liabilities.”  The new guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure.  The update to the standard is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted under limited circumstances.  The adoption of this guidance will not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02. “Leases.”  ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the effect the Standard will have on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the effect the Standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which makes a number of changes meant to simplify and improve accounting for share-based payments. The company has adopted ASU 2016-09 as of January 1, 2017. The adoption had no impact on the Company’s consolidated financial statements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers.” ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued, the standard is effective beginning in the first quarter of fiscal year 2018. We adopted the new standard effective January 1, 2018 utilizing the modified retrospective method. We finalized our analysis and the adoption of this guidance will not have a material impact on our consolidated financial statements and our internal controls over financial reporting.

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Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Schedule of cash and cash equivalents

	2017		2016
Cash in bank	$	285	$	389
Cash and cash equivalents	$	285	$	389

Schedule of antidilutive securities excluded from calculation of earnings per share

	December 31, 2017		December 31, 2016
Common Stock subject to outstanding options		736		71
Common Stock subject to outstanding warrants		1,878		1,882

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Concentrations (Tables)

12 Months Ended

Dec. 31, 2017

Concentrations [Abstract]

Summary of accounts receivable and revenue concentrations

	Accounts Receivable As of December 31,						Total Revenue for the year ended December 31,
	2017			2016			2017			2016
Customer #1		–			–			13	%		13	%
Customer #2		–			–			14	%		13	%
Customer #3		–			55	%		30	%		23	%
Customer #4		44	%		11	%		–			–
Customer #5		54	%		25	%		–			–
Total concentration		98	%		91	%		57	%		49	%

Schedule of sales concentrations by geographical areas

	December 31, 2017			December 31, 2016
Sales within the United States		88	%		88	%
Sales outside of the United States		12	%		12	%
Total		100	%		100	%

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property and Equipment [Abstract]

Schedule of property and equipment, net

	2017			2016
Machinery and equipment	$	59		$	1,235
Office furniture and fixtures		25			435
Leasehold improvements		–			35
Purchased software		1			323
		85			2,028
Less accumulated depreciation and amortization		(72	)		(2,008	)
	$	13		$	20

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Intangible Assets [Abstract]

Summary of intangible assets

	Weighted  Average  Amortization  Period  (Years)		2017			2016
Technology		–	$	6,745		$	6,745
Less accumulated amortization				(6,745	)		(6,476	)
			$	–		$	269

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Other Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Other Accrued Liabilities [Abstract]

Schedule of other accrued liabilities

	2017		2016
Accrued professional services	$	15	$	38
Rents		3		–
Management fees		440		316
Accrued interest		129		27
Delaware Franchise tax		129		77
Other		24		47
Total	$	740	$	505

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Stockholders' Equity (Deficit) (Tables)

12 Months Ended

Dec. 31, 2017

Stockholders' Equity (Deficit) [Abstract]

Summary of stock compensation plans

	2009 Stock Compensation Plan	2011 Stock Compensation Plan
Shares authorized for issuance	7,000	750,000
Option vesting period	Quarterly over 3 years	Immediate/Quarterly over 3 years
Date adopted by shareholders	−	November 2011
Option term	7 Years	7 Years
Options outstanding	−	736
Options exercisable	−	95
Weighted average exercise price	$−	$3.65

Schedule of fair value of stock-based compensation based on black scholes merton valuation model

	Year Ended December 31, 2017	Year Ended December 31, 2016
Risk free interest rate	1.56% – 1.79%	N/A
Expected life (years)	5.30 – 6.80	N/A
Expected volatility	184.14% – 212.15%	N/A
Expected dividends	None	N/A
Estimated average forfeiture rate	5.87%	N/A

Summary of stock-based compensation expense

	December 31, 2017		December 31, 2016
Research and development	$	60	$	56
Sales and marketing		–		15
General and administrative		51		71
Director options and consultants		32		22
Stock-based compensation expense included in operating expenses	$	143	$	164

Summary of option activity

	December 31, 2017									December 31, 2016
	Shares			Weighted Average Exercise  Price per  share		Aggregate Intrinsic  Value		Weighted Average  Remaining  Contractual  Life (in  years)		Shares			Weighted Average Exercise  Price per  share		Aggregate  Intrinsic  Value		Weighted  Average  Remaining  Contractual  Life (in  years)
Outstanding at beginning of period		71		$	45.21	$	–				82		$	45.35	$	–
Granted		899		$	0.50	$	–				–		$	–	$	–
Forfeited/ Cancelled		(234	)	$	4.24	$	–				(11	)	$	46.23	$	–
Outstanding at period end		736		$	3.65	$	–		6.34		71		$	45.21	$	–		3.07
Options vested and exercisable at period end		95		$	24.41	$	–		4.12		60		$	48.78	$	–		2.79
Weighted average grant-date fair value of options granted during the period	$	0.33								$	–

Summary of significant ranges of outstanding and exercisable options

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted  Average  Remaining  Contractual Life  (in years)		Weighted  Average  Exercise  Price per  share		Number  Outstanding		Weighted  Average  Exercise  Price per  share
$0.01 -$25.00		687		6.66	$	0.67		47	$	0.90
$25 – $625		49		2.01	$	46.62		48	$	47.19
		736		6.34	$	3.65		95	$	24.41

Summary of status of the Company's non-vested shares

Non-vested Shares	Shares			Weighted Average Grant-Date Fair Value per share
Non-vested at January 1, 2017		11		$	23.01
Granted		899		$	0.50
Canceled/Forfeited		(234	)	$	4.24
Vested		(35	)	$	24.65
Non-vested at December 31, 2017		641		$	0.57

Summary of Information with respect to dividends issued on the company's preferred stock

	Dividends  Issued		Beneficial  Conversion  Feature
	2016		2016
Series A-1	$	29	$	3
Series B		519		73
Series C		211		39
Series D-1		309		78
Series D-2		245		52
Total	$	1,313	$	245

Summary of warrants issued

	December 31, 2016
	Related Party		Other		Total
Shares issuable under warrants issued in connection with the sale of Common Stock		─		345		345
Shares issuable under warrants issued upon conversion of convertible notes and deferred compensation		586		619		1,205
Shares issuable under warrants issued with unsecured convertible notes		77		200		277
Total		663		1,164		1,827

Schedule of warrants outstanding

	December 31, 2017					December 31, 2016
	Shares			Weighted  Average  Exercise Price  per share		Shares			Weighted  Average  Exercise Price  per share
Outstanding at beginning of period		1,882		$	2.52		206		$	33.00
Issued		–		$	–		1,827		$	2.18
Expired		(4	)	$	34.38		(151	)	$	33.31
Outstanding at end of period		1,878		$	2.46		1,882		$	2.52
Exercisable at end of period		1,878		$	2.46		1,882		$	2.52

Summary of information warrants outstanding and exercisable

Number of Shares Outstanding and Exercisable	Weighted Average  Remaining Life (in  years)		Weighted Average Exercise  Price per share
50		0.01	$	15.63
1,551		2.18	$	2.18
277		0.42	$	1.63
1,878		1.86	$	2.46

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies [Abstract]

Schedule of contractual obligations

Contractual obligations	Total		2018		2019		Thereafter
Operating lease commitments	$	189	$	102	$	87	$	─
Capital lease commitments		14		6		6		2
Total	$	203	$	108	$	93	$	2

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes [Abstract]

Schedule of deferred tax assets and liabilities

	2017			2016
Deferred tax assets:
Net operating loss carry-forwards	$	17,359		$	25,730
Accruals and reserves		51			141
Deferred revenue		143			228
Intangibles		490			821
Other, net		39			53
Fixed assets		13			22
Gross tax assets		18,095			26,995
Valuation allowance		(18,095	)		(26,995	)
Net deferred tax assets	$	–		$	–

Schedule of statutory U.S. federal income tax rate to loss before taxes

	2017			2016
Income tax benefit at the federal statutory rate	$	(661	)	$	(1,183	)
State income tax benefit		(135	)		(203	)
NOL expiration		118			426
Prior year true-ups		15			–
Permanent items and other		354			(27	)
Tax cuts and Jobs Act Rate Changes		9,090			–
Change in valuation allowance		(8,781	)		987
Income tax expense	$	─		$	─

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Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract]
Cash in bank	$ 285	$ 389
Cash and cash equivalents	$ 285	$ 389	$ 846

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Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details 1) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-diluted earnings per share of options and warrants shares	1,878	1,756
Common Stock subject to outstanding options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-diluted earnings per share of options and warrants shares	736	71
Common Stock subject to outstanding warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-diluted earnings per share of options and warrants shares	1,878	1,882

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Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Textual)
Accumulated deficit	$ (132,562)	$ (130,615)
Cash balance	$ 285	389	$ 846
Ownership percentage	90.00%
Depreciation expense	$ 8	40
Amortization expense	269	322
Marketing expenses	$ 0	$ 1

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Concentrations (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Accounts Receivable [Member]
Concentration Risk [Line Items]
Total concentration	98.00%	91.00%
Accounts Receivable [Member] | Customer #1 [Member]
Concentration Risk [Line Items]
Total concentration
Accounts Receivable [Member] | Customer #2 [Member]
Concentration Risk [Line Items]
Total concentration
Accounts Receivable [Member] | Customer #3 [Member]
Concentration Risk [Line Items]
Total concentration		55.00%
Accounts Receivable [Member] | Customer #4 [Member]
Concentration Risk [Line Items]
Total concentration	44.00%	11.00%
Accounts Receivable [Member] | Customer #5 [Member]
Concentration Risk [Line Items]
Total concentration	54.00%	25.00%
Total Revenue [Member]
Concentration Risk [Line Items]
Total concentration	57.00%	49.00%
Total Revenue [Member] | Customer #1 [Member]
Concentration Risk [Line Items]
Total concentration	13.00%	13.00%
Total Revenue [Member] | Customer #2 [Member]
Concentration Risk [Line Items]
Total concentration	14.00%	13.00%
Total Revenue [Member] | Customer #3 [Member]
Concentration Risk [Line Items]
Total concentration	30.00%	23.00%
Total Revenue [Member] | Customer #4 [Member]
Concentration Risk [Line Items]
Total concentration
Total Revenue [Member] | Customer #5 [Member]
Concentration Risk [Line Items]
Total concentration

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Concentrations (Details 1)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Concentration Risk [Line Items]
Concentration risk, percentage of total sales	100.00%	100.00%
Sales within the United States [Member] | United States [Member]
Concentration Risk [Line Items]
Concentration risk, percentage of total sales	88.00%	88.00%
Sales outside of the United States [Member] | United States [Member]
Concentration Risk [Line Items]
Concentration risk, percentage of total sales	12.00%	12.00%

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Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	$ 85	$ 2,028
Less accumulated depreciation and amortization	(72)	(2,008)
Property and equipment, Net	13	20
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	59	1,235
Office furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	25	435
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Gross		35
Purchased software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	$ 1	$ 323

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Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Technology	$ 6,745	$ 6,745
Less accumulated amortization	(6,745)	(6,476)
Intangible assets, net		$ 269
Weighted Average Amortization Period	0 years	0 years

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Chinese Joint Venture (Non-Controlling Interest) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Chinese Joint Venture (Non-Controlling Interest) (Textual)
Joint venture ownership percentage	90.00%
Joint venture license expire date, description	The Joint Venture's business license expires October 18, 2043.
Write-off of interest in joint venture	$ 550

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Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Other Accrued Liabilities [Abstract]
Accrued professional services	$ 15	$ 38
Rents	3
Management fees	440	316
Accrued interest	129	27
Delaware Franchise tax	129	77
Other	24	47
Total	$ 740	$ 505

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Debt (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended					12 Months Ended
	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Oct. 31, 2016	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Debt (Textual)
Debt discount amortization						$ 97	$ 390
Warrants and recorded a discount to the long-term notes							240
Proceeds from issuance of long-term notes						655	700
Exchange of demand notes for long-term unsecured convertible notes							103
Aggregate cash						285	$ 389
Accrued interest expense						112
Notes issued						100
Due from related parties						26
Debt [Member]
Debt (Textual)
Aggregating amount of debt		$ 120
Advance fees						6
Description of advance fee		The Company would repay the advance to the lenders on a pro rata basis together with a 5% advance fee.
Investors and Affiliates [Member]
Debt (Textual)
Aggregate cash						150
Due from related parties						$ 74
Unsecured convertible promissory notes [Member] | Investors and Affiliates [Member]
Debt (Textual)
Warrants issued to purchase of common stock			277
Proceeds from issuance of long-term notes	$ 505		$ 700
Description of replacement notes	Should the secured notes remain outstanding following the maturity date an additional 30% of the note's principal amount shall become due and payable.
Unsecured convertible promissory notes received	$ 450
Demand promissory notes [Member] | Investors and Affiliates [Member]
Debt (Textual)
Exchange of demand notes for long-term unsecured convertible notes				$ 200	$ 200
Notes Payable [Member]
Debt (Textual)
Conversion price	$ 1.30		$ 0.50
Proceeds of equity financing	$ 1,000		$ 1,000
Interest rate	10.00%		6.00%
Due date	Dec. 31, 2018		Dec. 31, 2018
Unsecured convertible promissory notes received	$ 250
Notes Payable [Member] | Minimum [Member]
Debt (Textual)
Warrants and recorded a discount to the long-term notes			$ 204
Notes Payable [Member] | Maximum [Member]
Debt (Textual)
Warrants and recorded a discount to the long-term notes			$ 277

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Stockholders' Equity (Deficit) (Details)	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Information with respect to the Stock Compensation Plans
Option term	6 years 4 months 2 days
2009 Stock Compensation Plan [Member]
Information with respect to the Stock Compensation Plans
Shares authorized for issuance	7,000,000
Option vesting period	Quarterly over 3 years
Option term	7 years
Options outstanding
Options exercisable
Weighted average exercise price | $ / shares
2011 Stock Compensation Plan [Member]
Information with respect to the Stock Compensation Plans
Shares authorized for issuance	750,000,000
Option vesting period	Immediate/Quarterly over 3 years
Date adopted by shareholders	November 2011
Option term	7 years
Options outstanding	736
Options exercisable	95,000
Weighted average exercise price | $ / shares	$ 3.65

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Stockholders' Equity (Deficit) (Details 1)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Schedule of stock options granted based on fair value assumptions
Expected dividends
Estimated average forfeiture rate	5.87%
Minimum [Member]
Schedule of stock options granted based on fair value assumptions
Risk free interest rate	1.56%
Expected life (years)	5 years 3 months 19 days
Expected volatility	184.14%
Maximum [Member]
Schedule of stock options granted based on fair value assumptions
Risk free interest rate	1.79%
Expected life (years)	6 years 9 months 18 days
Expected volatility	212.15%

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Stockholders' Equity (Deficit) (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in operating expenses	$ 143	$ 164
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in operating expenses	60	56
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in operating expenses		15
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in operating expenses	51	71
Director options and consultants [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in operating expenses	$ 32	$ 22

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Stockholders' Equity (Deficit) (Details 3) - 2011 Stock Compensation Plans [Member] - USD ($) shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Shares, Outstanding, Beginning balance	71	82
Options Shares, Granted	899
Options Shares, Forfeited/ Cancelled	(234)	(11)
Options Shares, Outstanding, Ending balance	736	71
Options vested and exercisable at period end	95	60
Weighted average grant-date fair value of options granted during the period	$ 0.33
Weighted Average Exercise Price Per Share, Outstanding, Beginning balance	45.21	45.35
Weighted Average Exercise Price Per Share, Granted	0.50
Weighted Average Exercise Price Per Share, Forfeited or expired	4.24	46.23
Weighted Average Exercise Price Per Share, Outstanding, Ending balance	3.65	45.21
Weighted Average Exercise Price, Options vested and exercisable	$ 24.41	$ 48.78
Aggregate Intrinsic Value, Outstanding, Beginning balance
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Forfeited/ Cancelled
Aggregate Intrinsic Value, Outstanding, Ending balance
Aggregate Intrinsic Value, Options vested and exercisable
Weighted Average Remaining Contractual Life, Outstanding	6 years 4 months 2 days	3 years 26 days
Weighted Average Remaining Contractual Life, Options vested and exercisable	4 years 1 month 13 days	2 years 9 months 14 days

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Stockholders' Equity (Deficit) (Details 4) shares in Thousands	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number Outstanding | shares	736
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	6 years 4 months 2 days
Options Outstanding, Weighted Average Exercise Price	$ 3.65
Options Exercisable, Number Outstanding | shares	95
Options Exercisable, Weighted Average Exercise Price Per Share	$ 24.41
$0.01 - $25.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range Limit	0.01
Range of Exercise Prices, Upper Range Limit	$ 25.00
Options Outstanding, Number Outstanding | shares	687
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	6 years 7 months 28 days
Options Outstanding, Weighted Average Exercise Price	$ 0.67
Options Exercisable, Number Outstanding | shares	47
Options Exercisable, Weighted Average Exercise Price Per Share	$ 0.90
$25 - 625 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Range Limit	25
Range of Exercise Prices, Upper Range Limit	$ 625
Options Outstanding, Number Outstanding | shares	49
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	2 years 4 days
Options Outstanding, Weighted Average Exercise Price	$ 46.62
Options Exercisable, Number Outstanding | shares	48
Options Exercisable, Weighted Average Exercise Price Per Share	$ 47.19

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Stockholders' Equity (Deficit) (Details 5) shares in Thousands	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Non-vested Shares
Non-vested, Beginning balance | shares	11
Granted | shares	899
Canceled/Forfeited | shares	(234)
Vested | shares	(35)
Non-vested, Shares, Ending balance | shares	641
Weighted Average Grant-Date Fair Value per share
Non-vested, Beginning balance | $ / shares	$ 23.01
Granted | $ / shares	0.50
Canceled/Forfeited | $ / shares	4.24
Vested | $ / shares	24.65
Non-vested, Ending balance | $ / shares	$ 0.57

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Stockholders' Equity (Deficit) (Details 6) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Dividends Issued	$ 1,313
Beneficial Conversion Feature	245
Series A-1 [Member]
Dividends Issued	29
Beneficial Conversion Feature	3
Series B [Member]
Dividends Issued	519
Beneficial Conversion Feature	73
Series C [Member]
Dividends Issued	211
Beneficial Conversion Feature	39
Series D-1 [Member]
Dividends Issued	309
Beneficial Conversion Feature	78
Series D-2 [Member]
Dividends Issued	245
Beneficial Conversion Feature	$ 52

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Stockholders' Equity (Deficit) (Details 7) shares in Thousands	12 Months Ended
	Dec. 31, 2016 shares
Class of Warrant or Right [Line Items]
Shares issuable under warrants issued in connection with the sale of Common Stock	345
Shares issuable under warrants issued upon conversion of convertible notes and deferred compensation	1,205
Shares issuable under warrants issued with unsecured convertible notes	277
Total	1,827
Related Party [Member]
Class of Warrant or Right [Line Items]
Shares issuable under warrants issued in connection with the sale of Common Stock
Shares issuable under warrants issued upon conversion of convertible notes and deferred compensation	586
Shares issuable under warrants issued with unsecured convertible notes	77
Total	663
Other [Member]
Class of Warrant or Right [Line Items]
Shares issuable under warrants issued in connection with the sale of Common Stock	345
Shares issuable under warrants issued upon conversion of convertible notes and deferred compensation	619
Shares issuable under warrants issued with unsecured convertible notes	200
Total	1,164

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Stockholders' Equity (Deficit) (Details 8) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of Shares, Issued		1,827
Warrants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of Shares, Outstanding at beginning of period	1,882	206
Number of Shares, Issued		1,827
Number of Shares, Expired	(4)	(151)
Number of Shares, Outstanding at end of period	1,878	1,882
Number of Shares, Exercisable at end of period	1,878	1,882
Weighted Average Exercise Price per share, Outstanding at beginning of period	$ 2.52	$ 33.00
Weighted Average Exercise Price per share, Issued		2.18
Weighted Average Exercise Price per share, Expired	34.38	33.31
Weighted Average Exercise Price per share, Outstanding at end of period	2.46	2.52
Weighted Average Exercise Price per share, Exercisable at end of period	$ 2.46	$ 2.52

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Stockholders' Equity (Deficit) (Details 9) - Warrants [Member] shares in Thousands	12 Months Ended
	Dec. 31, 2017 $ / shares shares
50 [Member]
Class of Warrant or Right [Line Items]
Number of Shares Outstanding and Exercisable | shares	50
Weighted Average Remaining Life (in years)	4 days
Weighted Average Exercise Price per share | $ / shares	$ 15.63
1,551 [Member]
Class of Warrant or Right [Line Items]
Number of Shares Outstanding and Exercisable | shares	1,551
Weighted Average Remaining Life (in years)	2 years 2 months 5 days
Weighted Average Exercise Price per share | $ / shares	$ 2.18
277 [Member]
Class of Warrant or Right [Line Items]
Number of Shares Outstanding and Exercisable | shares	277
Weighted Average Remaining Life (in years)	5 months 1 day
Weighted Average Exercise Price per share | $ / shares	$ 1.63
1,878 [Member]
Class of Warrant or Right [Line Items]
Number of Shares Outstanding and Exercisable | shares	1,878
Weighted Average Remaining Life (in years)	1 year 10 months 10 days
Weighted Average Exercise Price per share | $ / shares	$ 2.46

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Stockholders' Equity (Deficit) (Details Textual) - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	12 Months Ended
	Jan. 31, 2012	Dec. 31, 2017
Stockholders' Equity (Deficit) (Textual )
Unrecognized compensation cost		$ 142
Unrecognized compensation cost, weighted average period		1 year 4 months 24 days
Common stock issuance		2,614
Series C Preferred Stock [Member]
Stockholders' Equity (Deficit) (Textual )
Accretion amount	$ 417
Beneficial conversion feature	278
Phoenix [Member]
Stockholders' Equity (Deficit) (Textual )
Received shares value of common stock	$ 325
Received shares of common stock	5
Phoenix [Member] | Series C Preferred Stock [Member]
Stockholders' Equity (Deficit) (Textual )
Received shares value of common stock	$ 417
Received shares of common stock	278

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Commitments and Contingencies (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Operating lease commitments
2018	$ 102
2019	87
Thereafter
Total	189
Capital lease commitments
2018	6
2019	6
Thereafter	2
Total	14
Total
2018	108
2019	93
Thereafter	2
Total	$ 203

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Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Nov. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies [Abstract]
Lease, description	Expires in 2019.
Rent expense		$ 109	$ 202

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Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Net operating loss carry-forwards	$ 17,359	$ 25,730
Accruals and reserves	51	141
Deferred revenue	143	228
Intangibles	490	821
Other, net	39	53
Fixed assets	13	22
Gross tax assets	18,095	26,995
Valuation allowance	(18,095)	(26,995)
Net deferred tax assets

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Income Taxes (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Abstract]
Income tax benefit at the federal statutory rate	$ (661)	$ (1,183)
State income tax benefit	(135)	(203)
NOL expiration	118	426
Prior year true-ups	15
Permanent items and other	354	(27)
Tax cuts and Jobs Act Rate Changes	9,090
Change in valuation allowance	(8,781)	987
Income tax expense

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Income Taxes (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Income Taxes (Textual)
Federal net operating loss carry-forward	$ 70,731
State net operating loss carry-forward	$ 35,982
Income tax, description	The Tax Cuts and Jobs Act (the "2017 Tax Act") was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the company, most notably a reduction of the U.S. corporate income tax rate from 34 percent to 21 percent for tax years beginning after December 31, 2017. The company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the company's deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34 percent to 21 percent, resulting in a $9.1 million decrease in net deferred tax assets for the year ended December 31, 2017 and a corresponding $9.1 million decrease in valuation allowance as of December 31, 2017.