SELECT BALANCE SHEET DETAILS

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

SELECT BALANCE SHEET DETAILS

Inventory

Inventories of $53,000 as of June 30, 2017 were comprised of work in process of $47,000 representing direct labor costs on in-process projects and finished goods of $6,000 net of reserves for obsolete and slow-moving items of $3,000.

Inventories of $23,000 as of December 31, 2016 were comprised of work in process of $19,000 representing direct labor costs on in-process projects and finished goods of $4,000 net of reserves for obsolete and slow-moving items of $3,000.

Intangible Assets

The carrying amounts of the Company’s patent intangible assets were $100,000 and $106,000 as of June 30, 2017 and December 31, 2016, respectively, which includes accumulated amortization of $560,000 and $554,000 as of June 30, 2017 and December 31, 2016, respectively.  Amortization expense for patent intangible assets was $3,000 and $6,000 for the three and six months ended June 30, 2017 and 2016, respectively. Patent intangible assets are being amortized on a straight-line basis over their remaining life of approximately 9.0 years.

The estimated acquired intangible amortization expense for the next five fiscal years is as follows:

Fiscal Year Ended December 31,	Estimated Amortization Expense ($ in thousands)
2017 (six months)	$	6
2018		12
2019		12
2020		12
2021		12
Thereafter		46
Totals	$	100

Goodwill

The Company annually, or more frequently if events or circumstances indicate a need, tests the carrying amount of goodwill for impairment.  A two-step impairment test is used to first identify potential goodwill impairment and then measure the amount of goodwill impairment loss, if any. The first step was conducted by determining and comparing the fair value, employing the market approach, of the Company’s reporting unit to the carrying value of the reporting unit. The Company continues to have only one reporting unit, Identity Management. Based on the results of this impairment test, the Company determined that its goodwill was not impaired as of June 30, 2017 and December 31, 2016.