Document and Entity Information

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Nov. 01, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019
Entity Registrant Name	COMMUNICATIONS SYSTEMS INC
Entity Central Index Key	0000022701
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value , $.05 per share
Trading Symbol	JCS
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		9,281,023

Condensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 14,621,921	$ 11,056,426
Restricted cash	677,269
Investments	5,502,752
Trade accounts receivable, less allowance for doubtful accounts of $178,000 and $136,000, respectively	12,950,442	13,401,042
Inventories	12,586,500	16,175,616
Prepaid income taxes	82,275	148,036
Other current assets	1,568,326	1,553,972
TOTAL CURRENT ASSETS	47,989,485	42,335,092
PROPERTY, PLANT AND EQUIPMENT, net	9,303,323	10,962,239
OTHER ASSETS:
Deferred income taxes	19,068	19,068
Operating lease right of use asset	395,574
Other assets, net		4,765
TOTAL OTHER ASSETS	414,642	23,833
TOTAL ASSETS	57,707,450	53,321,164
CURRENT LIABILITIES:
Accounts payable	4,510,344	5,394,981
Accrued compensation and benefits	2,934,110	2,892,199
Operating lease liability	109,354
Other accrued liabilities	3,344,177	3,168,049
Dividends payable	197,220	184,541
TOTAL CURRENT LIABILITIES	11,095,205	11,639,770
LONG TERM LIABILITIES:
Long-term compensation plans	90,642
Uncertain tax positions		28,267
Operating lease liability	265,192
TOTAL LONG-TERM LIABILITIES	355,834	28,267
COMMITMENTS AND CONTINGENCIES (Footnote 9)
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00 per share; 3,000,000 shares authorized; none issued
Common stock, par value $.05 per share; 30,000,000 shares authorized; 9,308,820 and 9,158,438 shares issued and outstanding, respectively	465,441	457,922
Additional paid-in capital	43,189,025	42,680,499
Retained earnings (accumulated deficit)	3,435,845	(734,001)
Accumulated other comprehensive loss	(833,900)	(751,293)
TOTAL STOCKHOLDERS' EQUITY	46,256,411	41,653,127
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 57,707,450	$ 53,321,164

Condensed Consolidated Balance Sheets (Parenthetical)

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Condensed Consolidated Balance Sheets [Abstract]
Trade accounts receivable, allowance for doubtful accounts	$ 178	$ 136
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.05	$ 0.05
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	9,308,820	9,158,438
Common stock, shares outstanding	9,308,820	9,158,438

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) [Abstract]
Sales	$ 18,222,980	$ 15,291,993	$ 50,346,350	$ 47,103,837
Cost of sales	10,485,429	10,051,419	30,473,832	32,699,559
Gross profit	7,737,551	5,240,574	19,872,518	14,404,278
Operating expenses:
Selling, general and administrative expenses	6,108,756	6,842,348	18,327,186	20,702,476
Total operating expenses	6,108,756	6,842,348	18,327,186	20,702,476
Operating profit (loss)	1,628,795	(1,601,774)	1,545,332	(6,298,198)
Other income (expenses):
Investment and other income	108,349	70,638	229,981	263,890
(Loss) gain on sale of assets	(6,717)	(6,147)	2,008	10,904
Gain on sale of FutureLink Fiber business line			2,966,906
Interest and other expense	(9,696)	(9,586)	(28,734)	(28,774)
Other income, net	91,936	54,905	3,170,161	246,020
Income (Loss) from operations before income taxes	1,720,731	(1,546,869)	4,715,493	(6,052,178)
Income tax expense (benefit)	(17,128)	(2,137)	(35,657)	(6,092)
Net income (loss)	1,737,859	(1,544,732)	4,751,150	(6,046,086)
Other comprehensive (loss) income, net of tax:
Unrealized loss (gain) on available-for-sale securities	(925)	2,403	(522)	405
Foreign currency translation adjustment	(63,037)	(15,357)	(82,085)	(86,262)
Total other comprehensive loss	(63,962)	(12,954)	(82,607)	(85,857)
Comprehensive income (loss)	$ 1,673,897	$ (1,557,686)	$ 4,668,543	$ (6,131,943)
Basic net income (loss) per share:	$ 0.19	$ (0.17)	$ 0.51	$ (0.66)
Diluted net income (loss) per share:	$ 0.19	$ (0.17)	$ 0.51	$ (0.66)
Weighted Average Basic Shares Outstanding	9,317,129	9,146,184	9,270,125	9,093,609
Weighted Average Dilutive Shares Outstanding	9,368,171	9,146,184	9,278,803	9,093,609
Dividends declared per share	$ 0.02	$ 0.04	$ 0.06	$ 0.12

Condensed Consolidated Statements of Changes in Stockholders' Equity

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Total
BALANCE at Dec. 31, 2017	$ 448,685	$ 42,006,750	$ 7,328,671	$ (613,379)	$ 49,170,727
BALANCE, Shares at Dec. 31, 2017	8,973,708
Net income (loss)			(6,046,086)		(6,046,086)
Issuance of common stock under Employee Stock Purchase Plan	$ 1,053	76,964			78,017
Issuance of common stock under Employee Stock Purchase Plan, Shares	21,053
Issuance of common stock to Employee Stock Ownership Plan	$ 5,982	419,908			425,890
Issuance of common stock to Employee Stock Ownership Plan, Shares	119,632
Issuance of common stock under Executive Stock Plan	$ 2,175				2,175
Issuance of common stock under Executive Stock Plan, Shares	43,501
Share based compensation		156,214			156,214
Other share retirements	$ (401)	(37,387)	9,325		(28,463)
Other share retirements, Shares	(8,017)
Shareholder dividends			(1,098,502)		(1,098,502)
Other comprehensive loss				(85,857)	(85,857)
BALANCE at Sep. 30, 2018	$ 457,494	42,622,449	193,408	(699,236)	42,574,115
BALANCE, Shares at Sep. 30, 2018	9,149,877
BALANCE at Jun. 30, 2018	$ 457,132	42,548,812	2,104,414	(686,282)	44,424,076
BALANCE, Shares at Jun. 30, 2018	9,142,649
Net income (loss)			(1,544,732)		(1,544,732)
Issuance of common stock under Employee Stock Purchase Plan	$ 362	27,206			27,568
Issuance of common stock under Employee Stock Purchase Plan, Shares	7,228
Share based compensation		46,431			46,431
Shareholder dividends			(366,274)		(366,274)
Other comprehensive loss				(12,954)	(12,954)
BALANCE at Sep. 30, 2018	$ 457,494	42,622,449	193,408	(699,236)	42,574,115
BALANCE, Shares at Sep. 30, 2018	9,149,877
BALANCE at Dec. 31, 2018	$ 457,922	42,680,499	(734,001)	(751,293)	41,653,127
BALANCE, Shares at Dec. 31, 2018	9,158,438
Net income (loss)			4,751,150		4,751,150
Issuance of common stock under Employee Stock Purchase Plan	$ 1,484	71,818			73,302
Issuance of common stock under Employee Stock Purchase Plan, Shares	29,686
Issuance of common stock to Employee Stock Ownership Plan	$ 6,641	262,995			269,636
Issuance of common stock to Employee Stock Ownership Plan, Shares	132,826
Issuance of common stock under Executive Stock Plan	$ 1,354	80,100			81,454
Issuance of common stock under Executive Stock Plan, Shares	27,075
Share based compensation		276,236			276,236
Other share retirements	$ (1,960)	(182,623)	(11,659)		(196,242)
Other share retirements, Shares	(39,205)
Shareholder dividends			(569,645)		(569,645)
Other comprehensive loss				(82,607)	(82,607)
BALANCE at Sep. 30, 2019	$ 465,441	43,189,025	3,435,845	(833,900)	46,256,411
BALANCE, Shares at Sep. 30, 2019	9,308,820
BALANCE at Jun. 30, 2019	$ 465,829	43,176,179	1,901,373	(769,938)	44,773,443
BALANCE, Shares at Jun. 30, 2019	9,316,576
Net income (loss)			1,737,859		1,737,859
Issuance of common stock under Employee Stock Purchase Plan	$ 410	24,298			24,708
Issuance of common stock under Employee Stock Purchase Plan, Shares	8,209
Issuance of common stock under Executive Stock Plan	$ 1,125	80,100			81,225
Issuance of common stock under Executive Stock Plan, Shares	22,500
Share based compensation		87,649			87,649
Other share retirements	$ (1,923)	(179,201)	(13,153)		(194,277)
Other share retirements, Shares	(38,465)
Shareholder dividends			(190,234)		(190,234)
Other comprehensive loss				(63,962)	(63,962)
BALANCE at Sep. 30, 2019	$ 465,441	$ 43,189,025	$ 3,435,845	$ (833,900)	$ 46,256,411
BALANCE, Shares at Sep. 30, 2019	9,308,820

Condensed Consolidated Statements of Changes In Stockholders' Equity (Parenthetical)

Condensed Consolidated Statements of Changes In Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Condensed Consolidated Statements of Changes in Stockholders' Equity [Abstract]
Shareholder dividends per share	$ 0.02	$ 0.04	$ 0.06	$ 0.12

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 4,751,150	$ (6,046,086)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,088,684	1,695,451
Share based compensation	276,236	156,214
Gain on sale of FutureLink Fiber business line	(2,966,906)
Gain on sale of assets	(2,008)	(10,904)
Changes in assets and liabilities:
Trade accounts receivable	434,618	704,698
Inventories	2,509,977	(2,181,679)
Prepaid income taxes	65,772	29,375
Other assets, net	(24,152)	(559,003)
Accounts payable	(872,027)	(893,578)
Accrued compensation and benefits	404,422	702,267
Other accrued liabilities	171,215	1,441,020
Income taxes payable	(28,267)	(4,065)
Net cash provided by (used in) operating activities	5,808,714	(4,966,290)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(342,788)	(699,818)
Purchases of investments	(8,593,711)	(6,580,917)
Proceeds from the sale of FutureLink Fiber business line	4,857,214
Proceeds from the sale of property, plant and equipment	63,139	33,763
Proceeds from the sale of investments	3,090,437	9,503,744
Net cash (used in) provided by investing activities	(925,709)	2,256,772
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid	(556,966)	(1,126,870)
Proceeds from issuance of common stock, net of shares withheld	(41,486)	51,729
Net cash used in financing activities	(598,452)	(1,075,141)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH	(41,789)	(36,210)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	4,242,764	(3,820,869)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	11,056,426	12,453,663
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	15,299,190	8,632,794
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes refunded	(73,151)	(31,402)
Interest paid	28,508	18,969
Dividends declared not paid	197,220	368,783
Capital expenditures in accounts payable		$ 33,934
Operating right of use assets obtained in exchange for lease obligations	$ 449,995

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Communications Systems, Inc. (herein collectively referred to as “CSI,” “our,” “we” or the “Company”) is a Minnesota corporation organized in 1969 that operates directly and through its subsidiaries located in the United States (U.S.) and the United Kingdom (U.K.). CSI is principally engaged through its Transition Networks, Inc. (“Transition Networks” or “Transition”) subsidiary and business unit in the manufacture and sale of core media conversion products, Ethernet switches, and other connectivity and data transmission products, and through its Suttle, Inc. (“Suttle”) subsidiary and business unit in the manufacture and sale of connectivity infrastructure products for broadband and voice communications. Through its JDL Technologies, Inc. (“JDL Technologies” or “JDL”) business unit, CSI provides technology solutions including virtualization, managed services, wired and wireless network design and implementation, and hybrid cloud infrastructure and deployment. Through its Net2Edge Limited (“Net2Edge”) U.K.-based business unit, the Company develops, manufactures and sells Ethernet-based edge network access products to telecommunications carriers.

The Company classifies its businesses into four segments corresponding to the Transition Networks, Suttle, JDL Technologies, and Net2Edge business units. Non-allocated general and administrative expenses are separately accounted for as “Other” in the Company’s segment reporting. Intersegment revenues are eliminated upon consolidation.

Financial Statement Presentation

The condensed consolidated balance sheets and condensed consolidated statement of changes in stockholders’ equity as of September 30, 2019 and the related condensed consolidated statements of income (loss) and comprehensive income (loss), and the condensed consolidated statements of cash flows for the periods ended September 30, 2019 and 2018 have been prepared by Company management. In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2019 and 2018 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. We recommend these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2018 Annual Report to Shareholders on Form 10-K. The results of operations for the period ended September 30, 2019 are not necessarily indicative of operating results for the entire year.

The presentation of 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 balance sheet date, and the reported amounts of revenues and expenses during the reporting period. The estimates and assumptions used in the accompanying condensed consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the time of the financial statements. Actual results could differ from those estimates.

Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, appropriately represent, in all material respects, the current status of accounting policies, and are incorporated herein by reference.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, are as follows:




	Foreign Currency Translation		Unrealized gain on securities		Accumulated Other Comprehensive Loss
December 31, 2018	$	(764,000)	$	13,000	$	(751,000)

Net current period change		(83,000)		0		(83,000)

September 30, 2019	$	(847,000)	$	13,000	$	(834,000)

Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Description of Business

Financial Statement Presentation

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, are as follows:




	Foreign Currency Translation		Unrealized gain on securities		Accumulated Other Comprehensive Loss
December 31, 2018	$	(764,000)	$	13,000	$	(751,000)

Net current period change		(83,000)		0		(83,000)

September 30, 2019	$	(847,000)	$	13,000	$	(834,000)

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Components of Accumulated Other Comprehensive Loss




	Foreign Currency Translation		Unrealized gain on securities		Accumulated Other Comprehensive Loss
December 31, 2018	$	(764,000)	$	13,000	$	(751,000)

Net current period change		(83,000)		0		(83,000)

September 30, 2019	$	(847,000)	$	13,000	$	(834,000)

Summary of Significant Accounting Policies (Narrative) (Details)

Summary of Significant Accounting Policies (Narrative) (Details)	9 Months Ended
	Sep. 30, 2019 segment
Summary of Significant Accounting Policies [Abstract]
Number of segments	4

Summary of Significant Accounting Policies (Components of Accumulated Other Comprehensive Loss) (Details)

Summary of Significant Accounting Policies (Components of Accumulated Other Comprehensive Loss) (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	$ 41,653,127
BALANCE	46,256,411
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	(764,000)
Net current period change	(83,000)
BALANCE	(847,000)
Unrealized gain on securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	13,000
Net current period change	0
BALANCE	13,000
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	(751,293)
Net current period change	(83,000)
BALANCE	$ (833,900)

Revenue Recognition

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 2 – REVENUE RECOGNITION

Transition Networks & Suttle, Inc.

The Company has determined that the revenue recognition for its Suttle and Transition Networks divisions occurs upon delivery of the Company’s connectivity infrastructure and data transmission products. To determine when revenue should be recognized, it is important to determine when the transfer of control has occurred. The Company has determined that control transfers for these products upon shipment or delivery to the customer, in accordance with the agreed upon shipping terms. As such, the timing of revenue recognition occurs at a specific point in time.

JDL Technologies, Inc.

The Company has determined that the following performance obligations identified in its JDL Technologies, Inc. division are transferred over time: managed services and professional services (time and materials (“T&M”) and fixed price). JDL’s managed services performance obligation is a bundled solution consisting of a series of distinct services that are substantially the same and that have the same pattern of transfer to the customer and are therefore recognized evenly over the term of the contract. T&M professional services arrangements are measured over time with an input method based on hours expended towards satisfying the performance obligation. Fixed price professional service arrangements under a relatively longer-term service will also be measured over time with an input method based on hours expended.

The Company has also identified the following performance obligations within its JDL Technologies division that are recognized at a point in time which include resale of third-party hardware and software, installation, arranging for another party to transfer services to the customer, and certain professional services. The resale of third-party hardware and software is recognized at a point in time, when the goods are shipped or delivered to the customer’s location, in accordance with the shipping terms. Installation services are recognized at a point in time when the services are completed. The service the Company provides to arrange for another party to transfer services to the customer is satisfied at a point in time when the Company has transferred control upon the service first being made available to the customer by the third party vendor. The Company reports revenue from these third party services on a net basis in its financial statements. Depending on the nature of the service, certain professional services transfer control at a point in time. The Company evaluates these circumstances on a case by case basis to determine if revenue should be recognized over time or at a point in time.

Net2Edge Limited

The Company’s Net2Edge division manufactures and markets Ethernet based edge network access devices. The Company principally sells these products through approved partners and integrators outside the United States. The Company has determined that the performance obligation in the Net2Edge division occurs at a point in time, upon the delivery of its connectivity infrastructure and data transmission products.

Disaggregation of revenue

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that best reflects the consideration we expect to receive in exchange for those goods or services. In accordance with ASC 606-10-50-5, the following tables present how we disaggregate our revenues, which is different for each segment.

For Transition Networks, we analyze revenue by region and product group, which is as follows for the three and nine months ended September 30, 2019 and 2018:



	Transition Networks Sales by Region
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
North America	$	11,479,000	$	8,015,000	$	26,442,000	$	22,107,000
Rest of World		426,000		690,000		1,822,000		2,530,000
Europe, Middle East, Africa ("EMEA")		578,000		526,000		2,284,000		1,582,000
	$	12,483,000	$	9,231,000	$	30,548,000	$	26,219,000



	Transition Networks Sales by Product Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Media converters	$	5,031,000	$	5,059,000	$	15,092,000	$	14,735,000
Ethernet switches and adapters		5,957,000		2,563,000		10,788,000		6,650,000
Other products		1,495,000		1,609,000		4,668,000		4,834,000
	$	12,483,000	$	9,231,000	$	30,548,000	$	26,219,000

For Suttle, we analyze revenues by product and customer group, which is as follows for the three and nine months ended September 30, 2019 and 2018:



	Suttle Sales by Product Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Structured cabling and connecting system products	$	3,706,000	$	4,748,000	$	12,549,000	$	16,490,000
DSL and other products		945,000		261,000		2,369,000		1,365,000
	$	4,651,000	$	5,009,000	$	14,918,000	$	17,855,000



	Suttle Sales by Customer Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Communication service providers	$	3,506,000	$	4,258,000	$	11,463,000	$	14,705,000
International		137,000		350,000		645,000		1,696,000
Distributors		414,000		401,000		1,513,000		1,454,000
Other		594,000		-		1,297,000		-
	$	4,651,000	$	5,009,000	$	14,918,000	$	17,855,000

For JDL, we analyze revenue by customer group, which is as follows for the three and nine months ended September 30, 2019 and 2018:



	JDL Revenue by Customer Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Education	$	63,000	$	185,000	$	1,831,000	$	574,000
Healthcare and commercial clients		720,000		674,000		2,111,000		1,908,000
	$	783,000	$	859,000	$	3,942,000	$	2,482,000

The Company does not currently analyze revenue for Net2Edge on a disaggregated basis. Revenues from Net2Edge were $611,000 and $405,000 for the three months ended September 30, 2019 and 2018, respectively. Revenues were $1,856,000 and $1,251,000 for the nine months ended September 30, 2019 and 2018, respectively.

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Schedule of Disaggregation of Revenues

For Transition Networks, we analyze revenue by region and product group, which is as follows for the three and nine months ended September 30, 2019 and 2018:



	Transition Networks Sales by Region
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
North America	$	11,479,000	$	8,015,000	$	26,442,000	$	22,107,000
Rest of World		426,000		690,000		1,822,000		2,530,000
Europe, Middle East, Africa ("EMEA")		578,000		526,000		2,284,000		1,582,000
	$	12,483,000	$	9,231,000	$	30,548,000	$	26,219,000



	Transition Networks Sales by Product Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Media converters	$	5,031,000	$	5,059,000	$	15,092,000	$	14,735,000
Ethernet switches and adapters		5,957,000		2,563,000		10,788,000		6,650,000
Other products		1,495,000		1,609,000		4,668,000		4,834,000
	$	12,483,000	$	9,231,000	$	30,548,000	$	26,219,000

For Suttle, we analyze revenues by product and customer group, which is as follows for the three and nine months ended September 30, 2019 and 2018:



	Suttle Sales by Product Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Structured cabling and connecting system products	$	3,706,000	$	4,748,000	$	12,549,000	$	16,490,000
DSL and other products		945,000		261,000		2,369,000		1,365,000
	$	4,651,000	$	5,009,000	$	14,918,000	$	17,855,000



	Suttle Sales by Customer Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Communication service providers	$	3,506,000	$	4,258,000	$	11,463,000	$	14,705,000
International		137,000		350,000		645,000		1,696,000
Distributors		414,000		401,000		1,513,000		1,454,000
Other		594,000		-		1,297,000		-
	$	4,651,000	$	5,009,000	$	14,918,000	$	17,855,000

For JDL, we analyze revenue by customer group, which is as follows for the three and nine months ended September 30, 2019 and 2018:



	JDL Revenue by Customer Group
	Three Months Ended September 30				Nine Months Ended September 30
		2019		2018		2019		2018
Education	$	63,000	$	185,000	$	1,831,000	$	574,000
Healthcare and commercial clients		720,000		674,000		2,111,000		1,908,000
	$	783,000	$	859,000	$	3,942,000	$	2,482,000

Revenue Recognition (Narrative) (Details)

Revenue Recognition (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
Revenue Recognition (Narrative) (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Revenues	$ 18,222,980	$ 15,291,993	$ 50,346,350	$ 47,103,837
Net2Edge [Member]
Segment Reporting Information [Line Items]
Revenues	$ 611,000	$ 405,000	$ 1,856,000	$ 1,251,000

Revenue Recognition (Schedule of Disaggregation of Revenues) (Details)

Revenue Recognition (Schedule of Disaggregation of Revenues) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenues	$ 18,222,980	$ 15,291,993	$ 50,346,350	$ 47,103,837
Transition Networks [Member]
Disaggregation of Revenue [Line Items]
Revenues	12,483,000	9,231,000	30,548,000	26,219,000
Transition Networks [Member] \| North America [Member]
Disaggregation of Revenue [Line Items]
Revenues	11,479,000	8,015,000	26,442,000	22,107,000
Transition Networks [Member] \| Rest of World [Member]
Disaggregation of Revenue [Line Items]
Revenues	426,000	690,000	1,822,000	2,530,000
Transition Networks [Member] \| Europe, Middle East, Africa ("EMEA") [Member]
Disaggregation of Revenue [Line Items]
Revenues	578,000	526,000	2,284,000	1,582,000
Transition Networks [Member] \| Media Converters [Member]
Disaggregation of Revenue [Line Items]
Revenues	5,031,000	5,059,000	15,092,000	14,735,000
Transition Networks [Member] \| Ethernet Switches and Adapters [Member]
Disaggregation of Revenue [Line Items]
Revenues	5,957,000	2,563,000	10,788,000	6,650,000
Transition Networks [Member] \| Other Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	1,495,000	1,609,000	4,668,000	4,834,000
Suttle [Member]
Disaggregation of Revenue [Line Items]
Revenues	4,651,000	5,009,000	14,918,000	17,855,000
Suttle [Member] \| Communication Service Providers [Member]
Disaggregation of Revenue [Line Items]
Revenues	3,506,000	4,258,000	11,463,000	14,705,000
Suttle [Member] \| International [Member]
Disaggregation of Revenue [Line Items]
Revenues	137,000	350,000	645,000	1,696,000
Suttle [Member] \| Distributors [Member]
Disaggregation of Revenue [Line Items]
Revenues	414,000	401,000	1,513,000	1,454,000
Suttle [Member] \| Other Customer [Member]
Disaggregation of Revenue [Line Items]
Revenues	594,000		1,297,000
Suttle [Member] \| Structured Cabling and Connecting System Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	3,706,000	4,748,000	12,549,000	16,490,000
Suttle [Member] \| DSL and Other Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	945,000	261,000	2,369,000	1,365,000
JDL Technologies [Member]
Disaggregation of Revenue [Line Items]
Revenues	783,000	859,000	3,942,000	2,482,000
JDL Technologies [Member] \| Education [Member]
Disaggregation of Revenue [Line Items]
Revenues	63,000	185,000	1,831,000	574,000
JDL Technologies [Member] \| Healthcare and Commercial Clients [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 720,000	$ 674,000	$ 2,111,000	$ 1,908,000

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

NOTE 3 – LEASES

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (ASC Topic 842), which is intended to improve financial reporting of leasing transactions by requiring organizations that lease assets to recognize assets and liabilities for the rights and obligations created by leases that extend more than twelve months from the date of the balance sheet. This accounting update also requires additional disclosures surrounding the amount, timing, and uncertainty of cash flows arising from leases. This standard is effective for financial statements issued for annual and interim periods beginning after December 15, 2018 for public business entities.

The Company adopted this standard with a cumulative-effect adjustment as of January 1, 2019, the beginning of the period of adoption. The Company has elected the package of practical expedients permitted in ASC Topic 842. Adoption of the new standard resulted in the recording of right of use (“ROU”) assets and lease liabilities of approximately $280,000 and $259,000, respectively as of January 1, 2019. ROU assets represent our right to use an underlying asset for the lease term, while lease liabilities represent our obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date of a lease based on the present value of lease payments over the lease term. Because the rate implicit in each individual lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Adoption of the standard did not materially impact the Company’s condensed consolidated balance sheets, consolidated statement of income (loss) and comprehensive income (loss) or condensed consolidated statements of cash flows.

The Company has entered into operating leases for two office locations, including one in February 2019. These leases have remaining lease terms of 5 to 8 years. One of the leases includes two options to extend the lease for 5 years each, and the other lease includes an option to terminate the lease in 2022. One of the leases includes a 3% rent adjustment on each anniversary of the lease. As of September 30, 2019, total ROU assets and operating lease liabilities were $396,000 and $375,000, respectively. All operating lease expense is recognized on a straight-line basis over the lease term. In the three and nine months ended September 30, 2019, the Company recognized $31,000 and $92,000 in lease expense, respectively.

Information related to the Company’s ROU assets and related lease liabilities were as follows:



		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019

Cash paid for operating leases	$	30,000	$	80,000
Right-of-use assets obtained in exchange for new operating lease obligations (1)		-		450,000


				As of September 30, 2019
Weighted-average remaining lease term				3.5 years
Weighted-average discount rate				4.5%

(1)

Includes $262,000 for operating leases existing on January 1, 2019 and $188,000 for operating leases that commenced in the first quarter of 2019.

Maturities of lease liabilities as of September 30, 2019 were as follows:



Q4 2019	$	31,000
2020		121,000
2021		126,000
2022		87,000
2023		47,000
Thereafter		4,000
Total lease payments		416,000
Less imputed interest		(41,000)
Total operating lease liabilities	$	375,000

Future minimum lease commitments under operating leases based on accounting standards applicable as of December 31, 2018 were as follows:



Year Ending December 31:
2019	$	106,000
2020		86,000
2021		86,000
2022		50,000
	$	328,000

As of September 30, 2019, the Company does not have any additional future operating lease obligations that have not yet commenced.

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]



		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019

Cash paid for operating leases	$	30,000	$	80,000
Right-of-use assets obtained in exchange for new operating lease obligations (1)		-		450,000


				As of September 30, 2019
Weighted-average remaining lease term				3.5 years
Weighted-average discount rate				4.5%

(1)

Includes $262,000 for operating leases existing on January 1, 2019 and $188,000 for operating leases that commenced in the first quarter of 2019.

Maturities of Lease Liabilities



Q4 2019	$	31,000
2020		121,000
2021		126,000
2022		87,000
2023		47,000
Thereafter		4,000
Total lease payments		416,000
Less imputed interest		(41,000)
Total operating lease liabilities	$	375,000

Future Minimum Lease Commitments under Operating Leases based on ASC 840



Year Ending December 31:
2019	$	106,000
2020		86,000
2021		86,000
2022		50,000
	$	328,000

Leases (Narrative) (Details)

Leases (Narrative) (Details)	1 Months Ended	3 Months Ended	9 Months Ended
Leases (Narrative) (Details)	Feb. 28, 2019 item	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($) item	Jan. 01, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease right of use asset \| $		$ 395,574	$ 395,574	$ 280,000
Lease liability \| $		375,000	$ 375,000	$ 259,000
Number of locations \| item	1		2
Lease expense \| $		$ 31,000	$ 92,000
Additional future obligation, lease not yet commenced \| $			$ 0
Lease 1 [Member]
Lessee, Lease, Description [Line Items]
Number of leases with option to extend \| item			1
Number of options to extend \| item			2
Lease renewal term		5 years	5 years
Lease 2 [Member]
Lessee, Lease, Description [Line Items]
Date of option to terminate			2022
Number of leases with annual payment adjustment \| item			1
Percentage of annual rent adjustment			3.00%
Minimum [Member] \| Lease 1 [Member]
Lessee, Lease, Description [Line Items]
Lease term		5 years	5 years
Minimum [Member] \| Lease 2 [Member]
Lessee, Lease, Description [Line Items]
Lease term		5 years	5 years
Maximum [Member] \| Lease 1 [Member]
Lessee, Lease, Description [Line Items]
Lease term		8 years	8 years
Maximum [Member] \| Lease 2 [Member]
Lessee, Lease, Description [Line Items]
Lease term		8 years	8 years

Leases (Information Related to ROU Assets and Related Lease Liabilities) (Details)

Leases (Information Related to ROU Assets and Related Lease Liabilities) (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jan. 01, 2019
Cash paid for operating leases	$ 30,000	$ 80,000
Right-of-use assets obtained in exchange for new operating lease obligations		$ 449,995
Weighted-average remaining lease term	3 years 6 months	3 years 6 months
Weighted-average discount rate	4.50%	4.50%
Operating lease right of use asset	$ 395,574	$ 395,574	$ 280,000
Existing on January 1, 2019 [Member]
Operating lease right of use asset	262,000	262,000
Commenced First Quarter 2019 [Member]
Operating lease right of use asset	$ 188,000	$ 188,000

Leases (Maturities of Lease Liabilities) (Details)

Leases (Maturities of Lease Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
Leases [Abstract]
Q4 2019	$ 31
2020	121
2021	126
2022	87
2023	47
Thereafter	4
Total lease payments	416
Less imputed interest	(41)
Total operating lease liabilities	$ 375	$ 259

Leases (Future Minimum Lease Commitments under Operating Leases based on ASC 840) (Details)

Leases (Future Minimum Lease Commitments under Operating Leases based on ASC 840) (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 106
2020	86
2021	86
2022	50
Total minimum future lease commitments	$ 328

Cash Equivalents and Investments

9 Months Ended

Sep. 30, 2019

Cash Equivalents and Investments [Abstract]

Cash Equivalents and Investments

NOTE 4 – CASH EQUIVALENTS AND INVESTMENTS

The following tables show the Company’s cash equivalents and available –for-sale securities’ amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long term investments as of September 30, 2019 and December 31, 2018:



September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments

Cash equivalents:
Money Market funds		10,716,000		-		-		10,716,000		10,716,000		-		-
Subtotal		10,716,000		-		-		10,716,000		10,716,000		-		-

Investments:
Commercial Paper		4,491,000		-		-		4,491,000		-		4,491,000		-
Corporate Notes/Bonds		1,012,000		-		-		1,012,000		-		1,012,000		-
Subtotal		5,503,000		-		-		5,503,000		-		5,503,000		-


Total	$	16,219,000	$	-	$	-	$	16,219,000	$	10,716,000	$	5,503,000	$	-



December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments

Cash equivalents:
Money Market funds	$	8,428,000	$	-	$	-	$	8,428,000	$	8,428,000	$	-	$	-
Total	$	8,428,000	$	-	$	-	$	8,428,000	$	8,428,000	$	-	$	-

The Company tests for other than temporary losses on a quarterly basis. The Company intends to hold the investments until it can recover the full principal amount and has the ability to do so based on other sources of liquidity. The Company expects such recoveries to occur prior to the contractual maturities. The Company did not have any unrealized losses as of September 30, 2019.

The following table summarizes the estimated fair value of our investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of September 30, 2019:

The Company did not recognize any gross realized gains or losses during either of the nine-month periods ending September 30, 2019 and 2018, respectively. If the Company had realized gains or losses, they would be included within investment and other income in the accompanying condensed consolidated statement of income (loss) and comprehensive income (loss).

Cash Equivalents and Investments (Tables)

9 Months Ended

Sep. 30, 2019

Cash Equivalents and Investments [Abstract]

Schedule of Cash Equivalents and Available-for-Sale Securities



September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments

Cash equivalents:
Money Market funds		10,716,000		-		-		10,716,000		10,716,000		-		-
Subtotal		10,716,000		-		-		10,716,000		10,716,000		-		-

Investments:
Commercial Paper		4,491,000		-		-		4,491,000		-		4,491,000		-
Corporate Notes/Bonds		1,012,000		-		-		1,012,000		-		1,012,000		-
Subtotal		5,503,000		-		-		5,503,000		-		5,503,000		-


Total	$	16,219,000	$	-	$	-	$	16,219,000	$	10,716,000	$	5,503,000	$	-



December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments

Cash equivalents:
Money Market funds	$	8,428,000	$	-	$	-	$	8,428,000	$	8,428,000	$	-	$	-
Total	$	8,428,000	$	-	$	-	$	8,428,000	$	8,428,000	$	-	$	-

Schedule of Estimated Fair Value of Available-for-Sale Securities

Cash Equivalents and Investments (Narrative) (Details)

Cash Equivalents and Investments (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Cash Equivalents and Investments [Abstract]
Gross unrealized losses	$ 0
Gross realized gains (losses)	$ 0	$ 0

Cash Equivalents and Investments (Schedule of Cash Equivalents and Available-for-Sale Securities) (Details)

Cash Equivalents and Investments (Schedule of Cash Equivalents and Available-for-Sale Securities) (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 16,219,000	$ 8,428,000
Gross Unrealized Gains
Gross Unrealized Losses	0
Fair Value	16,219,000	8,428,000
Cash Equivalents	10,716,000	8,428,000
Short-Term Investments	5,502,752
Long-Term Investments
Cash Equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	10,716,000
Gross Unrealized Gains
Fair Value	10,716,000
Cash Equivalents	10,716,000
Short-Term Investments
Long-Term Investments
Cash Equivalents [Member] \| Money Market Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	10,716,000	8,428,000
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	10,716,000	8,428,000
Cash Equivalents	10,716,000	8,428,000
Short-Term Investments
Long-Term Investments
Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,503,000
Gross Unrealized Gains
Fair Value	5,503,000
Short-Term Investments	5,503,000
Long-Term Investments
Investments [Member] \| Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	4,491,000
Gross Unrealized Gains
Fair Value	4,491,000
Short-Term Investments	4,491,000
Long-Term Investments
Investments [Member] \| Corporate Notes/Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,012,000
Gross Unrealized Gains
Fair Value	1,012,000
Short-Term Investments	1,012,000
Long-Term Investments

Cash Equivalents and Investments (Schedule of Estimated Fair Value of Available-for-Sale Securities) (Details)

Cash Equivalents and Investments (Schedule of Estimated Fair Value of Available-for-Sale Securities) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Cash Equivalents and Investments [Abstract]
Amortized Cost, Due within one year	$ 5,503
Estimated Market Value, Due within one year	$ 5,503

Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 5 - STOCK-BASED COMPENSATION

Employee Stock Purchase Plan

Under the Company’s Employee Stock Purchase Plan (“ESPP”), employees are able to acquire shares of common stock at 85% of the price at the end of each current quarterly plan term. The most recent term ended September 30, 2019. The ESPP is considered compensatory under current Internal Revenue Service rules. At September 30, 2019, after giving effect to the shares issued as of that date, 93,905 shares remain available for future issuance under the ESPP.

2011 Executive Incentive Compensation Plan

On March 28, 2011 the Board adopted and on May 19, 2011 the Company’s shareholders approved the Company’s 2011 Executive Incentive Compensation Plan (“2011 Incentive Plan”). The 2011 Incentive Plan authorizes incentive awards to officers, key employees and non-employee directors in the form of options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, performance stock units (“deferred stock”), performance cash units, and other awards in stock, cash, or a combination of stock and cash. The 2011 Incentive Plan, as amended, allows the issuance of up to 2,500,000 shares of common stock.

During 2019, stock options covering 100,769 shares have been awarded to key executive employees and directors. These options expire seven years from the date of award and generally vest 25% each year beginning one year after the date of award. The Company also granted deferred stock awards of 157,907 shares to key employees during the first quarter of 2019 under the Company’s long-term incentive plan. These awards vest over three years with the first vesting date being March 28, 2020.

At September 30, 2019, 235,630 shares have been issued under the 2011 Incentive Plan, 1,651,801 shares are subject to currently outstanding options, deferred stock awards, and unvested restricted stock units, and 612,569 shares are eligible for grant under future awards.

Stock Option Plan for Directors

Shares of common stock are reserved for issuance to non-employee directors under options granted by the Company prior to 2011 under its Stock Option Plan for Non-Employee Directors (the “Director Plan”). Under the Director Plan nonqualified stock options to acquire shares of common stock were automatically granted to each non-employee director concurrent with annual meetings of shareholders in 2010 and earlier years, with the exercise price of options granted being the fair market value of the common stock on the date of the respective shareholder meetings. Options granted under the Director Plan expire 10 years from date of grant. No options have been granted under the Director Plan since 2011 when the Company amended the Director Plan to prohibit future option grants. As of September 30, 2019, there were 18,000 shares subject to outstanding options under the Director Plan.

Changes in Stock Options Outstanding

The following table summarizes changes in the number of outstanding stock options under the 2011 Incentive Plan and the Director Plan over the period December 31, 2018 to September 30, 2019:



				Weighted average
		Weighted average		remaining
		exercise price		contractual term
	Options	per share		in years
Outstanding – December 31, 2018	1,380,492	$	7.56	4.18
Awarded	100,769		2.69
Exercised	(22,500)		3.61
Forfeited	(147,127)		10.84
Outstanding – September 30, 2019	1,311,634		6.89	3.88

Exercisable at September 30, 2019	960,165	$	8.04	3.30
Expected to vest September 30, 2019	1,268,303		6.98	3.83

The aggregate intrinsic value of all options (the amount by which the market price of the stock on the last day of the period exceeded the market price of the stock on the date of grant) outstanding at September 30, 2019 was $539,000. The intrinsic value of all options exercised during the nine months ended September 30, 2019 was $33,000. Net cash proceeds from the exercise of all stock options were $0 in each of the nine-month periods ended September 30, 2019 and 2018.

Changes in Deferred Stock Outstanding

The following table summarizes the changes in the number of deferred stock shares under the 2011 Incentive Plan over the period December 31, 2018 to September 30, 2019:



		Weighted Average
		Grant Date
	Shares	Fair Value
Outstanding – December 31, 2018	270,066	$	4.48
Granted	157,907		2.64
Vested	(4,575)		4.56
Forfeited	(65,231)		4.28
Outstanding – September 30, 2019	358,167		3.31

Compensation Expense

Share-based compensation expense recognized for the nine months ended September 30, 2019 was $276,000 before income taxes and $218,000 after income taxes. Share-based compensation expense recognized for the nine months ended September 30, 2018 was $156,000 before income taxes and $123,000 after income taxes. Unrecognized compensation expense for the Company’s plans was $427,000 at September 30, 2019 and is expected to be recognized over a weighted-average period of 2.3 years. Share-based compensation expense is recorded as a part of selling, general and administrative expenses.

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation [Abstract]

Schedule of Changes in Number of Outstanding Stock Options Under Director Plan, Stock Plan and 2011 Incentive Plan



				Weighted average
		Weighted average		remaining
		exercise price		contractual term
	Options	per share		in years
Outstanding – December 31, 2018	1,380,492	$	7.56	4.18
Awarded	100,769		2.69
Exercised	(22,500)		3.61
Forfeited	(147,127)		10.84
Outstanding – September 30, 2019	1,311,634		6.89	3.88

Exercisable at September 30, 2019	960,165	$	8.04	3.30
Expected to vest September 30, 2019	1,268,303		6.98	3.83

Schedule of Changes in the Number of Deferred Stock Shares Under the Incentive Plan



		Weighted Average
		Grant Date
	Shares	Fair Value
Outstanding – December 31, 2018	270,066	$	4.48
Granted	157,907		2.64
Vested	(4,575)		4.56
Forfeited	(65,231)		4.28
Outstanding – September 30, 2019	358,167		3.31

Stock-Based Compensation (Narrative) (Details)

Stock-Based Compensation (Narrative) (Details) - USD ($)	3 Months Ended	9 Months Ended		96 Months Ended
	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	May 19, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding		1,311,634		1,380,492
Aggregate intrinsic value of options outstanding		$ 539,000
Intrinsic value of all options exercised		33,000
Net cash proceeds from exercise of stock options		0	$ 0
Share based compensation expense before income taxes		276,236	156,214
Share based compensation expense after income taxes		218,000	$ 123,000
Unrecognized compensation expense for awards		$ 427,000
Recognition period for unrecognized compensation expense		2 years 3 months 18 days
2011 Executive Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of awards authorized					2,500,000
Shares issued under Plan		235,630
Number of options outstanding		1,651,801
Awards eligible for grant		612,569
2011 Executive Incentive Compensation Plan [Member] \| Share-based Payment Arrangement, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage		25.00%
Stock Option Plan For Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted		0		0
Award expiration period		10 years
Number of options outstanding		18,000
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of price of common stock at which employees are able to acquire		85.00%
Shares available		93,905
Key Employees [Member] \| 2011 Executive Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred stock awards granted	157,907
Award vesting period	3 years
Key Executive Employees [Member] \| 2011 Executive Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted		100,769
Award expiration period		7 years

Stock-Based Compensation (Schedule of Changes in Number of Outstanding Stock Options Under Director Plan, Stock Plan and 2011 Incentive Plan) (Details)

Stock-Based Compensation (Schedule of Changes in Number of Outstanding Stock Options Under Director Plan, Stock Plan and 2011 Incentive Plan) (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Stock-Based Compensation [Abstract]
Options, Outstanding - December 31, 2018	1,380,492
Options, Awarded	100,769
Options, Exercised	(22,500)
Options, Forfeited	(147,127)
Options, Outstanding - September 30, 2019	1,311,634	1,380,492
Options, Exercisable at September 30, 2019	960,165
Options, Expected to vest September 30, 2019	1,268,303
Weighted average exercise price per share, Outstanding - December 31, 2018	$ 7.56
Weighted average exercise price per share, Awarded	2.69
Weighted average exercise price per share, Exercised	3.61
Weighted average exercise price per share, Forfeited	10.84
Weighted average exercise price per share, Outstanding - September 30, 2019	6.89	$ 7.56
Weighted average exercise price per share, Exercisable at September 30, 2019	8.04
Weighted average exercise price per share, Expected to vest September 30, 2019	$ 6.98
Options, Outstanding - Weighted average remaining contractual term in years	3 years 10 months 17 days	4 years 2 months 5 days
Options, Exercisable - Weighted average remaining contractual term in years	3 years 3 months 18 days
Options, Expected to vest - Weighted average remaining contractual term in years	3 years 9 months 29 days

Stock-Based Compensation (Schedule of Changes in the Number of Deferred Stock Shares Under the Incentive Plan) (Details)

Stock-Based Compensation (Schedule of Changes in the Number of Deferred Stock Shares Under the Incentive Plan) (Details) - Performance Units [Member]	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding - December 31, 2018 \| shares	270,066
Shares, Granted \| shares	157,907
Shares, Vested \| shares	(4,575)
Shares, Forfeited \| shares	(65,231)
Shares, Outstanding - September 30, 2019 \| shares	358,167
Weighted Average Grant Date Fair Value, Outstanding - December 31, 2018 \| $ / shares	$ 4.48
Weighted Average Grant Date Fair Value, Granted \| $ / shares	2.64
Weighted Average Grant Date Fair Value, Vested \| $ / shares	4.56
Weighted Average Grant Date Fair Value, Forfeited \| $ / shares	4.28
Weighted Average Grant Date Fair Value, Outstanding - September 30, 2019 \| $ / shares	$ 3.31

Inventories

9 Months Ended

Sep. 30, 2019

Inventories [Abstract]

Inventories

NOTE 6 - INVENTORIES

Inventories summarized below are priced at the lower of first-in, first-out cost or net realizable value:



	September 30		December 31
	2019		2018
Finished goods	$	8,110,000	$	9,608,000
Raw and processed materials		4,477,000		6,568,000
	$	12,587,000	$	16,176,000

Inventories (Tables)

9 Months Ended

Sep. 30, 2019

Inventories [Abstract]

Schedule of Inventories



	September 30		December 31
	2019		2018
Finished goods	$	8,110,000	$	9,608,000
Raw and processed materials		4,477,000		6,568,000
	$	12,587,000	$	16,176,000

Inventories (Schedule of Inventories) (Details)

Inventories (Schedule of Inventories) (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Inventories [Abstract]
Finished goods	$ 8,110,000	$ 9,608,000
Raw and processed materials	4,477,000	6,568,000
Inventories	$ 12,586,500	$ 16,175,616

Intangible Assets

9 Months Ended

Sep. 30, 2019

Intangible Assets [Abstract]

Intangible Assets

NOTE 7 –INTANGIBLE ASSETS

The Company’s identifiable intangible assets with finite lives, included in other assets, net on the condensed consolidated balance sheets, are being amortized over their estimated useful lives and were as follows:



		September 30, 2019
		Gross Carrying Amount		Accumulated Amortization		Impairment loss		Foreign Currency Translation		Net

Trademarks	$	98,000	$	(78,000)	$	-	$	(20,000)	$	-
Customer relationships		491,000		(230,000)		(154,000)		(107,000)		-
Technology		229,000		(189,000)		-		(40,000)		-
	$	818,000	$	(497,000)	$	(154,000)	$	(167,000)	$	-



		December 31, 2018
		Gross Carrying Amount		Accumulated Amortization		Impairment loss		Foreign Currency Translation		Net

Trademarks	$	98,000	$	(74,000)	$	-	$	(19,000)	$	5,000
Customer relationships		491,000		(230,000)		(154,000)		(107,000)		-
Technology		229,000		(178,000)		-		(51,000)		-
	$	818,000	$	(482,000)	$	(154,000)	$	(177,000)	$	5,000

Amortization expense on these identifiable intangible assets was $5,000 and $9,000 for the nine months ended September 30, 2019 and 2018, respectively. The amortization expense is included in selling, general and administrative expenses.

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Intangible Assets [Abstract]

Schedule of Finite-Lived Intangible Assets



		September 30, 2019
		Gross Carrying Amount		Accumulated Amortization		Impairment loss		Foreign Currency Translation		Net

Trademarks	$	98,000	$	(78,000)	$	-	$	(20,000)	$	-
Customer relationships		491,000		(230,000)		(154,000)		(107,000)		-
Technology		229,000		(189,000)		-		(40,000)		-
	$	818,000	$	(497,000)	$	(154,000)	$	(167,000)	$	-



		December 31, 2018
		Gross Carrying Amount		Accumulated Amortization		Impairment loss		Foreign Currency Translation		Net

Trademarks	$	98,000	$	(74,000)	$	-	$	(19,000)	$	5,000
Customer relationships		491,000		(230,000)		(154,000)		(107,000)		-
Technology		229,000		(178,000)		-		(51,000)		-
	$	818,000	$	(482,000)	$	(154,000)	$	(177,000)	$	5,000

Intangible Assets (Narrative) (Details)

Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Intangible Assets [Abstract]
Amortization expense	$ 5	$ 9

Intangible Assets (Schedule of Finite-Lived Intangible Assets) (Details)

Intangible Assets (Schedule of Finite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 818	$ 818
Accumulated Amortization	(497)	(482)
Impairment loss	(154)	(154)
Foreign Currency Translation	(167)	(177)
Net		5
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	98	98
Accumulated Amortization	(78)	(74)
Impairment loss
Foreign Currency Translation	(20)	(19)
Net		5
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	491	491
Accumulated Amortization	(230)	(230)
Impairment loss	(154)	(154)
Foreign Currency Translation	(107)	(107)
Net
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	229	229
Accumulated Amortization	(189)	(178)
Impairment loss
Foreign Currency Translation	(40)	(51)
Net

Warranty

9 Months Ended

Sep. 30, 2019

Warranty [Abstract]

Warranty

NOTE 8 – WARRANTY

We provide reserves for the estimated cost of product warranties at the time revenue is recognized. We estimate the costs of our warranty obligations based on our warranty policy or applicable contractual warranty, historical experience of known product failure rates, and use of materials and service delivery costs incurred in correcting product failures. Management reviews the estimated warranty liability on a quarterly basis to determine its adequacy. The actual warranty expense could differ from the estimates made by the Company based on product performance. The warranty liability is included in other accrued liabilities on the condensed consolidated balance sheet.

The following table presents the changes in the Company’s warranty liability for the nine-month periods ended September 30, 2019 and 2018, respectively, the majority of which relates to a five-year obligation to provide for potential future liabilities for network equipment sales.



		2019		2018
Beginning balance	$	594,000	$	603,000
Amounts charged (credited) to expense		(40,000)		116,000
Actual warranty costs paid		(28,000)		(75,000)
Ending balance	$	526,000	$	644,000

Warranty (Tables)

9 Months Ended

Sep. 30, 2019

Warranty [Abstract]

Schedule of Warranty



		2019		2018
Beginning balance	$	594,000	$	603,000
Amounts charged (credited) to expense		(40,000)		116,000
Actual warranty costs paid		(28,000)		(75,000)
Ending balance	$	526,000	$	644,000

Warranty (Details)

Warranty (Details) - USD ($) $ in Thousands	9 Months Ended
Warranty (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018
Warranty [Abstract]
Product warranty period	5 years
Beginning balance	$ 594	$ 603
Amounts charged (credited) to expense	(40)	116
Actual warranty costs paid	(28)	(75)
Ending balance	$ 526	$ 644

Contingencies

Contingencies	9 Months Ended
Contingencies	Sep. 30, 2019
Contingencies And Commitments [Abstract]
Contingencies	NOTE 9 – CONTINGENCIES In the ordinary course of business, the Company is exposed to legal actions and claims and incurs costs to defend against these actions and claims. Company management is not aware of any outstanding or pending legal actions or claims that could materially affect the Company’s financial position or results of operations.

Debt

Debt	9 Months Ended
Debt	Sep. 30, 2019
Debt [Abstract]
Debt	NOTE 10 – DEBT Line of Credit The Company has a $15,000,000 line of credit from Wells Fargo Bank, N.A. The Company had no outstanding borrowings against the line of credit at September 30, 2019 or December 31, 2018. Due to the revolving nature of loans under our credit facility, additional borrowings and periodic repayments and re-borrowings may be made until the maturity date. The total amount available for borrowings under our credit facility at September 30, 2019 was $7,018,000, based on the borrowing base calculation. Interest on borrowings on the credit line is at LIBOR plus 2.0% (4.0% at September 30, 2019). The credit agreement expires August 12, 2021 and is secured by assets of the Company. Our credit agreement contains financial covenants including a minimum liquidity balance of $10,000,000. Liquidity is calculated as the sum of unrestricted cash, marketable securities and the availability on the line of credit. The Company was in compliance with its financial covenants at September 30, 2019.

Debt (Narrative) (Details)

Debt (Narrative) (Details) - Line of Credit [Member] - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity	$ 15,000,000
Line of credit, amount outstanding	0	$ 0
Line of credit, remaining borrowing capacity	$ 7,018,000
Line of credit facility, interest rate at period end	4.00%
Line of credit, expiration date	Aug. 12, 2021
Minimum liquidity	$ 10,000,000
LIBOR [Member]
Debt Instrument [Line Items]
Line of credit, basis spread on variable rate	2.00%

Income Taxes

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2019
Income Taxes [Abstract]
Income Taxes	NOTE 11 – INCOME TAXES In the preparation of the Company’s consolidated financial statements, management calculates income taxes based upon the estimated effective rate applicable to operating results for the full fiscal year. This includes estimating the current tax liability as well as assessing differences resulting from different treatment of items for tax and book accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet. Management analyzes these assets and liabilities regularly and assesses the likelihood that deferred tax assets will be recovered from future taxable income. At September 30, 2019 there was $90,000 of net uncertain tax benefit positions that would reduce the effective income tax rate if recognized. The Company records interest and penalties related to income taxes as income tax expense in the condensed consolidated statements of income (loss) and comprehensive income (loss). The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The tax years 2016-2018 remain open to examination by the Internal Revenue Service and the years 2015-2018 remain open to examination by various state tax departments. The tax years from 2015-2018 remain open in Costa Rica. The Company’s effective income tax rate was (0.8%) for the first nine months of 2019. The effective tax rate differs from the federal tax rate of 21% due primarily to foreign losses not deductible for U.S. income tax purposes, the effect of uncertain income tax positions, and changes in valuation allowances related to deferred tax assets. The foreign operating losses may ultimately be deductible in the countries in which they occurred; however, the Company has not recorded a deferred tax asset for these losses due to uncertainty regarding the eventual realization of the benefit. The effect of the foreign operations was an overall rate decrease of approximately 7.2% for the nine months ended September 30, 2019. There were no additional uncertain tax positions identified in the first nine months of 2019. The Company's effective income tax rate for the nine months ended September 30, 2018 was 0.1%, and differed from the federal tax rate due to state income taxes, foreign tax rate differences, foreign losses not deductible for U.S. income tax purposes, provisions for interest charges for uncertain income tax positions, stock compensation shortfalls and changes in valuation allowances related to deferred tax assets.

Income Taxes (Narrative) (Details)

Income Taxes (Narrative) (Details) - USD ($)	9 Months Ended
Income Taxes (Narrative) (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018
Income Taxes [Abstract]
Uncertain tax benefit positions that would reduce the effective income tax rate if recognized	$ 90,000
Effective tax rate	(0.80%)	0.10%
Federal tax rate	21.00%
Foreign net operating loss carry-forwards and credits	$ 0
Foreign income taxes, net of foreign tax credits	7.20%
Uncertain tax positions	$ 0

Segment Information

9 Months Ended

Sep. 30, 2019

Segment Information [Abstract]

Segment Information

NOTE 12 – SEGMENT INFORMATION

Effective January 1, 2019, the Company realigned the financial reporting for its business units. As a result of this realignment, certain corporate general and administrative expenses that were previously included within the business unit level as fully allocated costs are now categorized as “Other”. The Company classifies its businesses into the four segments as follows:

Transition Networks manufactures media converters, NIDs, NICs, Ethernet switches and other connectivity products that offer customers the ability to affordably integrate the benefits of fiber optics into any data network;

Suttle manufactures and markets connectivity infrastructure products for broadband and voice communications;

JDL Technologies provides technology solutions that address prevalent IT challenges, including virtualization and cloud solutions, managed services, wired and wireless network design and implementation, and converged infrastructure configuration and deployment; and

Net2Edge develops, manufactures and sells edge network access products to telecommunications carriers.

Management has chosen to organize the Company and disclose reportable segments based on our products and services. Intersegment revenues are eliminated upon consolidation. In order to conform to the 2019 presentation, the Company has reclassified the 2018 corporate expenses previously allocated to reportable segments to the “Other” section.

Information concerning the Company’s continuing operations in the various segments for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Three Months Ended September 30, 2019
Sales	$	12,483,000	$	4,651,000	$	783,000	$	611,000	$	-	$	(305,000)	$	18,223,000
Cost of sales		6,441,000		3,198,000		603,000		328,000		-		(85,000)		10,485,000
Gross profit		6,042,000		1,453,000		180,000		283,000		-		(220,000)		7,738,000
Selling, general and
administrative expenses		3,810,000		888,000		349,000		653,000		629,000		(220,000)		6,109,000
Operating income (loss)		2,232,000		565,000		(169,000)		(370,000)		(629,000)		-		1,629,000
Other income (expense)		(11,000)		5,000		-		22,000		76,000		-		92,000
Income (loss) before income tax	$	2,221,000	$	570,000	$	(169,000)	$	(348,000)	$	(553,000)	$	-	$	1,721,000

Depreciation and amortization	$	74,000	$	223,000	$	26,000	$	11,000	$	-	$	-	$	334,000

Capital expenditures	$	7,000	$	-	$	4,000	$	-	$	72,000	$	-	$	83,000

Assets	$	18,487,000	$	9,212,000	$	1,419,000	$	2,627,000	$	25,989,000	$	(27,000)	$	57,707,000



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Three Months Ended September 30, 2018
Sales	$	9,231,000	$	5,009,000	$	859,000	$	405,000	$	-	$	(212,000)	$	15,292,000
Cost of sales		4,883,000		4,093,000		712,000		365,000		-		(2,000)		10,051,000
Gross profit		4,348,000		916,000		147,000		40,000		-		(210,000)		5,241,000
Selling, general and
administrative expenses		3,481,000		1,756,000		380,000		809,000		627,000		(210,000)		6,843,000
Operating (loss) income		867,000		(840,000)		(233,000)		(769,000)		(627,000)		-		(1,602,000)
Other income (expense)		(1,000)		(5,000)		-		19,000		42,000		-		55,000
Income (loss) before income tax	$	866,000	$	(845,000)	$	(233,000)	$	(750,000)	$	(585,000)	$	-	$	(1,547,000)

Depreciation and amortization	$	96,000	$	374,000	$	40,000	$	13,000	$	-	$	-	$	523,000

Capital expenditures	$	31,000	$	48,000	$	-	$	(7,000)	$	14,000	$	-	$	86,000

Assets	$	17,644,000	$	13,277,000	$	1,177,000	$	2,421,000	$	17,764,000	$	(27,000)	$	52,256,000



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Nine Months Ended September 30, 2019
Sales	$	30,548,000	$	14,918,000	$	3,942,000	$	1,856,000	$	-	$	(918,000)	$	50,346,000
Cost of sales		16,809,000		10,198,000		2,643,000		1,099,000		-		(275,000)		30,474,000
Gross profit		13,739,000		4,720,000		1,299,000		757,000		-		(643,000)		19,872,000
Selling, general and
administrative expenses		11,080,000		2,883,000		1,056,000		2,162,000		1,789,000		(643,000)		18,327,000
Operating (loss) income		2,659,000		1,837,000		243,000		(1,405,000)		(1,789,000)		-		1,545,000
Other income (expense)		(12,000)		2,994,000		(10,000)		25,000		173,000		-		3,170,000
Income (loss) before income tax	$	2,647,000	$	4,831,000	$	233,000	$	(1,380,000)	$	(1,616,000)	$	-	$	4,715,000

Depreciation and amortization	$	224,000	$	735,000	$	80,000	$	50,000	$	-	$	-	$	1,089,000

Capital expenditures	$	11,000	$	16,000	$	40,000	$	8,000	$	268,000	$	-	$	343,000



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Nine Months Ended September 30, 2018
Sales	$	26,219,000	$	17,855,000	$	2,482,000	$	1,251,000	$	-	$	(703,000)	$	47,104,000
Cost of sales		14,436,000		15,105,000		2,281,000		929,000		-		(51,000)		32,700,000
Gross profit		11,783,000		2,750,000		201,000		322,000		-		(652,000)		14,404,000
Selling, general and
administrative expenses		10,212,000		5,633,000		1,225,000		2,533,000		1,751,000		(652,000)		20,702,000
Operating (loss) income		1,571,000		(2,883,000)		(1,024,000)		(2,211,000)		(1,751,000)		-		(6,298,000)
Other income		3,000		15,000		3,000		31,000		194,000		-		246,000
Income (loss) before income tax	$	1,574,000	$	(2,868,000)	$	(1,021,000)	$	(2,180,000)	$	(1,557,000)	$	-	$	(6,052,000)

Depreciation and amortization	$	337,000	$	1,173,000	$	144,000	$	41,000	$	-	$	-	$	1,695,000

Capital expenditures	$	69,000	$	508,000	$	-	$	109,000	$	14,000	$	-	$	700,000

Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Information [Abstract]

Schedule of Segment Information



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Three Months Ended September 30, 2019
Sales	$	12,483,000	$	4,651,000	$	783,000	$	611,000	$	-	$	(305,000)	$	18,223,000
Cost of sales		6,441,000		3,198,000		603,000		328,000		-		(85,000)		10,485,000
Gross profit		6,042,000		1,453,000		180,000		283,000		-		(220,000)		7,738,000
Selling, general and
administrative expenses		3,810,000		888,000		349,000		653,000		629,000		(220,000)		6,109,000
Operating income (loss)		2,232,000		565,000		(169,000)		(370,000)		(629,000)		-		1,629,000
Other income (expense)		(11,000)		5,000		-		22,000		76,000		-		92,000
Income (loss) before income tax	$	2,221,000	$	570,000	$	(169,000)	$	(348,000)	$	(553,000)	$	-	$	1,721,000

Depreciation and amortization	$	74,000	$	223,000	$	26,000	$	11,000	$	-	$	-	$	334,000

Capital expenditures	$	7,000	$	-	$	4,000	$	-	$	72,000	$	-	$	83,000

Assets	$	18,487,000	$	9,212,000	$	1,419,000	$	2,627,000	$	25,989,000	$	(27,000)	$	57,707,000



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Three Months Ended September 30, 2018
Sales	$	9,231,000	$	5,009,000	$	859,000	$	405,000	$	-	$	(212,000)	$	15,292,000
Cost of sales		4,883,000		4,093,000		712,000		365,000		-		(2,000)		10,051,000
Gross profit		4,348,000		916,000		147,000		40,000		-		(210,000)		5,241,000
Selling, general and
administrative expenses		3,481,000		1,756,000		380,000		809,000		627,000		(210,000)		6,843,000
Operating (loss) income		867,000		(840,000)		(233,000)		(769,000)		(627,000)		-		(1,602,000)
Other income (expense)		(1,000)		(5,000)		-		19,000		42,000		-		55,000
Income (loss) before income tax	$	866,000	$	(845,000)	$	(233,000)	$	(750,000)	$	(585,000)	$	-	$	(1,547,000)

Depreciation and amortization	$	96,000	$	374,000	$	40,000	$	13,000	$	-	$	-	$	523,000

Capital expenditures	$	31,000	$	48,000	$	-	$	(7,000)	$	14,000	$	-	$	86,000

Assets	$	17,644,000	$	13,277,000	$	1,177,000	$	2,421,000	$	17,764,000	$	(27,000)	$	52,256,000



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Nine Months Ended September 30, 2019
Sales	$	30,548,000	$	14,918,000	$	3,942,000	$	1,856,000	$	-	$	(918,000)	$	50,346,000
Cost of sales		16,809,000		10,198,000		2,643,000		1,099,000		-		(275,000)		30,474,000
Gross profit		13,739,000		4,720,000		1,299,000		757,000		-		(643,000)		19,872,000
Selling, general and
administrative expenses		11,080,000		2,883,000		1,056,000		2,162,000		1,789,000		(643,000)		18,327,000
Operating (loss) income		2,659,000		1,837,000		243,000		(1,405,000)		(1,789,000)		-		1,545,000
Other income (expense)		(12,000)		2,994,000		(10,000)		25,000		173,000		-		3,170,000
Income (loss) before income tax	$	2,647,000	$	4,831,000	$	233,000	$	(1,380,000)	$	(1,616,000)	$	-	$	4,715,000

Depreciation and amortization	$	224,000	$	735,000	$	80,000	$	50,000	$	-	$	-	$	1,089,000

Capital expenditures	$	11,000	$	16,000	$	40,000	$	8,000	$	268,000	$	-	$	343,000



		Transition				JDL						Intersegment
		Networks		Suttle		Technologies		Net2Edge		Other		Eliminations		Total
Nine Months Ended September 30, 2018
Sales	$	26,219,000	$	17,855,000	$	2,482,000	$	1,251,000	$	-	$	(703,000)	$	47,104,000
Cost of sales		14,436,000		15,105,000		2,281,000		929,000		-		(51,000)		32,700,000
Gross profit		11,783,000		2,750,000		201,000		322,000		-		(652,000)		14,404,000
Selling, general and
administrative expenses		10,212,000		5,633,000		1,225,000		2,533,000		1,751,000		(652,000)		20,702,000
Operating (loss) income		1,571,000		(2,883,000)		(1,024,000)		(2,211,000)		(1,751,000)		-		(6,298,000)
Other income		3,000		15,000		3,000		31,000		194,000		-		246,000
Income (loss) before income tax	$	1,574,000	$	(2,868,000)	$	(1,021,000)	$	(2,180,000)	$	(1,557,000)	$	-	$	(6,052,000)

Depreciation and amortization	$	337,000	$	1,173,000	$	144,000	$	41,000	$	-	$	-	$	1,695,000

Capital expenditures	$	69,000	$	508,000	$	-	$	109,000	$	14,000	$	-	$	700,000

Segment Information (Narrative) (Details)

Segment Information (Narrative) (Details)	9 Months Ended
Segment Information (Narrative) (Details)	Sep. 30, 2019 segment
Segment Information [Abstract]
Number of segments	4

Segment Information (Schedule of Segment Information) (Details)

Segment Information (Schedule of Segment Information) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Sales	$ 18,222,980	$ 15,291,993	$ 50,346,350	$ 47,103,837
Cost of sales	10,485,429	10,051,419	30,473,832	32,699,559
Gross profit	7,737,551	5,240,574	19,872,518	14,404,278
Selling, general and administrative expenses	6,108,756	6,842,348	18,327,186	20,702,476
Operating profit (loss)	1,628,795	(1,601,774)	1,545,332	(6,298,198)
Other income (expense)	91,936	54,905	3,170,161	246,020
Income (Loss) from operations before income taxes	1,720,731	(1,546,869)	4,715,493	(6,052,178)
Depreciation and amortization	334,000	523,000	1,088,684	1,695,451
Capital expenditures	83,000	86,000	343,000	700,000
Assets	57,707,450	52,256,000	57,707,450	52,256,000	$ 53,321,164
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Sales	(305,000)	(212,000)	(918,000)	(703,000)
Cost of sales	(85,000)	(2,000)	(275,000)	(51,000)
Gross profit	(220,000)	(210,000)	(643,000)	(652,000)
Selling, general and administrative expenses	(220,000)	(210,000)	(643,000)	(652,000)
Depreciation and amortization
Capital expenditures
Assets	(27,000)	(27,000)	(27,000)	(27,000)
Transition Networks [Member]
Segment Reporting Information [Line Items]
Sales	12,483,000	9,231,000	30,548,000	26,219,000
Cost of sales	6,441,000	4,883,000	16,809,000	14,436,000
Gross profit	6,042,000	4,348,000	13,739,000	11,783,000
Selling, general and administrative expenses	3,810,000	3,481,000	11,080,000	10,212,000
Operating profit (loss)	2,232,000	867,000	2,659,000	1,571,000
Other income (expense)	(11,000)	(1,000)	(12,000)	3,000
Income (Loss) from operations before income taxes	2,221,000	866,000	2,647,000	1,574,000
Depreciation and amortization	74,000	96,000	224,000	337,000
Capital expenditures	7,000	31,000	11,000	69,000
Assets	18,487,000	17,644,000	18,487,000	17,644,000
Suttle [Member]
Segment Reporting Information [Line Items]
Sales	4,651,000	5,009,000	14,918,000	17,855,000
Cost of sales	3,198,000	4,093,000	10,198,000	15,105,000
Gross profit	1,453,000	916,000	4,720,000	2,750,000
Selling, general and administrative expenses	888,000	1,756,000	2,883,000	5,633,000
Operating profit (loss)	565,000	(840,000)	1,837,000	(2,883,000)
Other income (expense)	5,000	(5,000)	2,994,000	15,000
Income (Loss) from operations before income taxes	570,000	(845,000)	4,831,000	(2,868,000)
Depreciation and amortization	223,000	374,000	735,000	1,173,000
Capital expenditures		48,000	16,000	508,000
Assets	9,212,000	13,277,000	9,212,000	13,277,000
JDL Technologies [Member]
Segment Reporting Information [Line Items]
Sales	783,000	859,000	3,942,000	2,482,000
Cost of sales	603,000	712,000	2,643,000	2,281,000
Gross profit	180,000	147,000	1,299,000	201,000
Selling, general and administrative expenses	349,000	380,000	1,056,000	1,225,000
Operating profit (loss)	(169,000)	(233,000)	243,000	(1,024,000)
Other income (expense)			(10,000)	3,000
Income (Loss) from operations before income taxes	(169,000)	(233,000)	233,000	(1,021,000)
Depreciation and amortization	26,000	40,000	80,000	144,000
Capital expenditures	4,000		40,000
Assets	1,419,000	1,177,000	1,419,000	1,177,000
Net2Edge [Member]
Segment Reporting Information [Line Items]
Sales	611,000	405,000	1,856,000	1,251,000
Cost of sales	328,000	365,000	1,099,000	929,000
Gross profit	283,000	40,000	757,000	322,000
Selling, general and administrative expenses	653,000	809,000	2,162,000	2,533,000
Operating profit (loss)	(370,000)	(769,000)	(1,405,000)	(2,211,000)
Other income (expense)	22,000	19,000	25,000	31,000
Income (Loss) from operations before income taxes	(348,000)	(750,000)	(1,380,000)	(2,180,000)
Depreciation and amortization	11,000	13,000	50,000	41,000
Capital expenditures		(7,000)	8,000	109,000
Assets	2,627,000	2,421,000	2,627,000	2,421,000
Other [Member]
Segment Reporting Information [Line Items]
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses	629,000	627,000	1,789,000	1,751,000
Operating profit (loss)	(629,000)	(627,000)	(1,789,000)	(1,751,000)
Other income (expense)	76,000	42,000	173,000	194,000
Income (Loss) from operations before income taxes	(553,000)	(585,000)	(1,616,000)	(1,557,000)
Depreciation and amortization
Capital expenditures	72,000	14,000	268,000	14,000
Assets	$ 25,989,000	$ 17,764,000	$ 25,989,000	$ 17,764,000

Net Income (Loss) Per Share

Net Income (Loss) Per Share	9 Months Ended
Net Income (Loss) Per Share	Sep. 30, 2019
Net Income (Loss) Per Share [Abstract]
Net Income (Loss) Per Share	NOTE 13 – NET INCOME (LOSS) PER SHARE Basic net income (loss) per common share is based on the weighted average number of common shares outstanding during each period and year. Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding. The Company’s only potential common shares outstanding are stock options and shares associated with the long-term incentive compensation plans, which resulted in a dilutive effect of 51,042 and 8,678 for the three and nine-month periods ended September 30, 2019, respectively. Due to the net losses in the first three and nine months of 2018, there was no dilutive impact from stock options or unvested shares. The Company calculates the dilutive effect of outstanding options using the treasury stock method. Options totaling 936,817 and 1,150,865 were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2019 because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 200,260 shares would not have been included for the three and nine months ended September 30, 2019 because of unmet performance conditions. Options totaling 1,144,607 and 1,351,772 were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2018 because the exercise price was greater than the average market price of common stock during the period and deferred stock awards totaling 309,819 shares would not have been included for the three and nine months ended September 30, 2018 because of unmet performance conditions.

Net Income (Loss) Per Share (Narrative) (Details)

Net Income (Loss) Per Share (Narrative) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive effect of outstanding stock options and shares associated with long-term incentive compensation plans	51,042	0	8,678	0
Shares not included in the computation of diluted earnings per share	936,817	1,144,607	1,150,865	1,351,772
Performance Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares not included in the computation of diluted earnings per share	200,260	309,819	200,260	309,819

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Measurements [Abstract]

Fair Value Measurements

NOTE 14 – FAIR VALUE MEASUREMENTS

The accounting guidance establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1 – Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.

Level 2 – Observable inputs such as quoted prices for similar instruments and quoted prices in markets that are not active, and inputs that are directly observable or can be corroborated by observable market data. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, such as treasury securities with pricing interpolated from recent trades of similar securities, or priced with models using highly observable inputs, such as commodity options priced using observable forward prices and volatilities.

Level 3 – Significant inputs to pricing that have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as the complex and subjective models and forecasts used to determine the fair value of financial instruments.

Financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, are summarized below:



		September 30, 2019

	Level 1		Level 2		Level 3		Total Fair Value

Cash equivalents:
Money Market Funds		10,716,000		-		-		10,716,000
Subtotal		10,716,000		-		-		10,716,000

Short-term investments:
Commercial Paper		-		4,491,000		-		4,491,000
Corporate Notes/Bonds		-		1,012,000		-		1,012,000
Subtotal		-		5,503,000		-		5,503,000

Total	$	10,716,000	$	5,503,000	$	-	$	16,219,000



		December 31, 2018

	Level 1		Level 2		Level 3		Total Fair Value

Cash equivalents:
Money Market Funds	$	8,428,000	$	-	$	-	$	8,428,000
Total	$	8,428,000	$	-	$	-	$	8,428,000

We record transfers between levels of the fair value hierarchy, if necessary, at the end of the reporting period. There were no transfers between levels during the nine months ended September 30, 2019.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Measurements [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis



		September 30, 2019

	Level 1		Level 2		Level 3		Total Fair Value

Cash equivalents:
Money Market Funds		10,716,000		-		-		10,716,000
Subtotal		10,716,000		-		-		10,716,000

Short-term investments:
Commercial Paper		-		4,491,000		-		4,491,000
Corporate Notes/Bonds		-		1,012,000		-		1,012,000
Subtotal		-		5,503,000		-		5,503,000

Total	$	10,716,000	$	5,503,000	$	-	$	16,219,000



		December 31, 2018

	Level 1		Level 2		Level 3		Total Fair Value

Cash equivalents:
Money Market Funds	$	8,428,000	$	-	$	-	$	8,428,000
Total	$	8,428,000	$	-	$	-	$	8,428,000

Fair Value Measurements (Narrative) (Details)

Fair Value Measurements (Narrative) (Details)	9 Months Ended
Fair Value Measurements (Narrative) (Details)	Sep. 30, 2019 USD ($)
Fair Value Measurements [Abstract]
Transfers between levels	$ 0

Fair Value Measurements (Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details)

Fair Value Measurements (Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 10,716
Investments	5,503
Total	16,219	$ 8,428
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	10,716
Total	10,716	8,428
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	5,503
Total	5,503
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	10,716	8,428
Money Market Funds [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	10,716	$ 8,428
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	4,491
Commercial Paper [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	4,491
Corporate Notes/Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	1,012
Corporate Notes/Bonds [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 1,012

General Commitments

General Commitments	9 Months Ended
General Commitments	Sep. 30, 2019
Contingencies And Commitments [Abstract]
General Commitments	NOTE 15 – GENERAL COMMITMENTS On August 2, 2018, the Company entered into a purchase agreement with Launch Properties, LLC for the sale of the Company’s building located at 10900 Red Circle Drive, Minnetonka, MN for $10,000,000. The building currently includes the Company’s corporate administrative offices, as well as some operations for Transition Networks, Suttle and JDL Technologies. The closing of the transaction is subject to several closing conditions, including the buyer’s ability to complete due diligence within 180 days and the buyer’s ability to obtain regulatory approval for its intended use of the property. The due diligence period lapsed on January 29, 2019 and the buyer has met certain required obligations. One of the conditions of the agreement included non-refundable deposits into an escrow account. As of September 30, 2019, the balance within this escrow accounts was $175,000 and is included within restricted cash within the condensed consolidated balance sheet. If the sale proceeds, the Company currently expects the transaction to close in the second half of 2020.

General Commitments (Narrative) (Details)

General Commitments (Narrative) (Details) - USD ($)	Aug. 02, 2018	Sep. 30, 2019
Other Commitments [Line Items]
Sale of building, purchase agreement, consideration amount	$ 10,000,000
Purchase agreement, buyer to complete due diligence, period	180 days
Restricted cash		$ 677,269
Purchase Agreement [Member]
Other Commitments [Line Items]
Restricted cash		$ 175,000

Disposition Of Assets

Disposition Of Assets	9 Months Ended
Disposition Of Assets	Sep. 30, 2019
Disposition Of Assets [Abstract]
Disposition Of Assets	NOTE 16 – DISPOSITION OF ASSETS On April 5, 2019, the Company sold its Suttle FutureLink™ Fiber business line, including inventory, equipment, and customer relationships, to PPC Broadband Inc. (“PPC”). The transaction was structured as an Asset Purchase Agreement with a simultaneous signing and closing. The sale price was $5,000,000 cash, of which $500,000 was deferred into an escrow account until certain criteria are met and is recorded as restricted cash within the condensed consolidated balance sheet. The Company recognized a gain on the sale of inventory and capital equipment totaling $2,967,000 during the second quarter of 2019. Concurrent with the closing of the transaction, Suttle and PPC entered into a Transition Services Agreement under which Suttle agreed to manufacture products related to the FutureLink™ Fiber business line until September 30, 2019, to ensure seamless supply to the customer base.

Disposition Of Assets (Narrative) (Details)

Disposition Of Assets (Narrative) (Details) - USD ($)		3 Months Ended	9 Months Ended
Disposition Of Assets (Narrative) (Details) - USD ($)	Apr. 05, 2019	Jun. 30, 2019	Sep. 30, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from the sale of FutureLink Fiber business line	$ 5,000,000		$ 4,857,214
Restricted cash			677,269
Gain on sale of FutureLink Fiber business line		$ 2,967,000	2,966,906
Suttle FutureLink Fiber Business Line [Member] \| Disposal Group, Not Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restricted cash			$ 500,000

Recent Accounting Pronouncements

Recent Accounting Pronouncements	9 Months Ended
Recent Accounting Pronouncements	Sep. 30, 2019
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	NOTE 17 – RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), which amends existing guidance and requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. The Company adopted the accounting standard effective January 1, 2019. Please see Note 3 for the required disclosures related to the impact of adopting this standard. In June 2016, FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The amendments in this update replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. This ASU is intended to provide financial statement users with more decision-useful information about the expected credit losses and is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is the first quarter ending March 31, 2020. Entities may early adopt beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

Subsequent Events

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	NOTE 18 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of this filing. We do not believe there are any material subsequent events other than those disclosed in the footnotes to these financial statements that require further disclosure.

Amortized Cost

Estimated Market Value

Due within one year