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Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Risks and Uncertainties

The Company is subject to a number of risks and uncertainties similar to those of other companies, such as those associated with the continued expansion of the Company’s sales and marketing network, technological developments, intellectual property protection, development of markets for new products and services offered by the Company, the economic health of principal customers of the Company, financial and operational risks associated with expansion of testing facilities used by the Company, government regulation (including, but

not

limited to, Food and Drug Administration regulations, Brazilian laws, proposed laws and regulations, and delays in implementation of laws and regulations), competition and general economic conditions.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, including those related to bad debts, long-lived asset lives, income tax valuation and share based compensation, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

Cash Equivalents

All highly liquid investments with original maturities of

days or less are considered cash equivalents. These consist of cash savings and certificates of deposits (CD’s). As of

December 31, 2017,

there were

$4.6

million of CD’s. As of

December 31, 2016

and

2015,

there were

investments classified as cash equivalents.

Fair Value Measurements

The Company follows the provisions of Accounting Standards Codification (ASC)

820,

Fair Value Measurements and Disclosures

(“ASC

820”

), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements and expands disclosures regarding fair value measurements. Fair value is defined under ASC

820

as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC

820

must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on

three

levels of inputs, of which the

first

two

are considered observable and the last unobservable, that

may

be used to measure fair value which are the following:

Level

– Quoted prices in active markets for identical assets or liabilities.

Level

– Inputs other than Level

that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data

Level

– Unobservable inputs that are supported by little or

market activity and that are significant to the fair value

A financial instrument’s level is based on the lowest level of any input that is significant to the fair value measurement.

Inventory

Some materials used in the provision of services to our customers are included in prepaid expenses and recorded to cost of revenues upon use. Most consumables such as chemicals, antibodies and tubes are expensed as purchased.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are provided over the estimated useful lives of the assets, using the straight-line method. Repair and maintenance costs are expensed as incurred. The estimated useful lives of the assets are:

Computer software (in years)	3	to	5
Office furniture and equipment (in years)	3	to	7
Laboratory equipment (in years)	5	to	7
Leasehold improvements (in years)		Lesser of estimated useful life or lease term

The Company recorded depreciation and amortization related to property and equipment and capitalized software of

$2.8

million,

$2.3

million, and

$1.7

million in

2017,

2016

and

2015

respectively. As of

December 31, 2017

and

2016,

there was approximately

$0.5

million and

$1.2

million of new equipment

not

placed in service, respectively.

Capitalized Software Development Costs

We capitalize costs related to significant software projects developed or obtained for internal use. Costs incurred during the preliminary project work stage or conceptual stage, such as determining the performance requirements, system requirements and data conversion, are expensed as incurred. Costs incurred in the application development phase, such as coding, testing for new software and upgrades that result in additional functionality, are capitalized and are amortized using the straight-line method over the useful life of the software for

years. Costs incurred during the post-implementation/operation stage, including training costs and maintenance costs, are expensed as incurred. In accordance with Company policy, during the years ended

December 31, 2017,

2016

and

2015,

we capitalized internally developed software costs of

$511,

$315

and

$364,

respectively. Amortization expense related to software development costs was

$418,

$435

and

$422

2017,

2016,

and

2015,

respectively. Determining whether particular costs incurred are more properly attributable to the preliminary or conceptual stage, and thus expensed, or to the application development phase, and thus capitalized and amortized, depends on subjective judgments about the nature of the development work, and our judgments in this regard

may

differ from those made by other companies. General and administrative costs related to developing or obtaining such software is expensed as incurred.

Other Assets

Other assets primarily consist of capitalized legal costs relating to patent applications. The Company amortizes these costs over the lesser of the legal life or estimated useful life of the patent from the date of grant of the applicable patent. The typical life is

twenty

years. As of

December 31, 2017,

2016,

and

2015

the Company had capitalized legal costs relating to outstanding patent applications of

$711,

$715

and

$670,

respectively. Amortization expense was

$37,

$36,

and

$32

2017,

2016

and

2015,

respectively. The amount of amortization related to patent applications is expected to remain below

$50

per year for the next

five

years.

Revenue Recognition

The Company is in the business of performing drug testing services and reporting the results thereof. The Company’s services are primarily drug and alcohol testing for its customers for an agreed-upon fee per unit tested. The revenues are recognized when the drug test is performed and reported to the customer.

The Company records revenue for the shipping of samples from the customer or independent hair collection facility to the laboratory for customers that choose to use the Company’s shipping account. The Company also records revenue for the collection of the hair sample for customers that choose to have the Company manage this process at the same time the sample test is completed and results reported to the customer. The associated costs incurred in connection with these services is recorded as costs of revenue. The Company records revenue for these services on a gross basis as it has determined it is the principal under these arrangements.

The Company also provides expert testimony, when and if necessary, to support the results of the tests, which is generally billed separately and recognized as the services are provided.

Research and Development Expenses

The Company expenses all research and development costs as incurred.

Income Taxes

The Company accounts for income taxes using the liability method pursuant to ASC

740,

“Income Taxes”

. Under this method, the Company recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. The Company evaluates uncertain tax positions annually and considers whether the amounts recorded for income taxes are adequate to address the Company’s tax risk profile. The Company analyzes the potential tax liabilities of specific transactions and tax positions based on management’s judgment as to the expected outcome. As of

December 31, 2016,

the Company early adopted ASU

2015

17,

Income Taxes - Balance Sheet Classification of Deferred Taxes

Concentration of Credit Risk and Off-Balance Sheet Risk

The Company has

significant off-balance-sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash and accounts receivable. The Company’s policy is to place its cash in high quality financial institutions. At time, these deposits

may

exceed federally insured limits. The Company does

not

believe significant credit risk exists with respect to these institutions. Concentration of credit risk with respect to accounts receivable is limited to certain customers to whom the Company makes substantial sales. To reduce risk, the Company routinely assesses the financial strength of its customers and, as a consequence, believes that its accounts receivable credit risk exposure is limited. The Company maintains an allowance for potential credit losses but historically has

not

experienced any significant losses related to individual customers or groups of customers in any particular industry or geographic area. The Company does

not

require collateral.

Significant Customers

The Company had

one

customer that exceeded

10%

of revenue for the years ended

December 31, 2017

and

2016.

There were

customers that exceeded

10%

of revenue for the year ended

December 31, 2015.

The Company had

one

customer that accounted for

23%,

34%

and

11%

of the total accounts receivable balance as of

December 31, 2017,

2016

and

2015

respectively.

Comprehensive Income

The Company’s comprehensive income was

$5.9

million for the year ended

December 31, 2017

and includes the effect of foreign currency translation. Comprehensive income was the same as net income for the years ended

December 31, 2016

and

2015.

Stock-Based Compensation

The Company accounts for equity awards in accordance with ASC

718,

“

Compensation — Stock Compensation”

(”ASC

718”

). ASC

718

requires employee equity awards to be accounted for under the fair value method. It also requires the measurement of compensation cost at fair value on the date of grant and recognition of compensation expense over the service period for awards expected to vest. Accordingly, share-based compensation is measured at the grant date based on the fair value of the award. The Company uses the straight-line method to recognize share-based compensation over the service period of the award, which is generally equal to the vesting period. The Company uses the simplified approach to calculate the expected exercise date of options, which is

one

of the components used to determine the fair value of the options. This approach is used due to the small number of recipients receiving stock options

not

providing a reasonable basis for estimating expected term. In

2016,

the Company adopted ASU

2016

09,

Improvements to Employee Share-Based Payment Accounting

, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. As a result, we recognize the impact of forfeitures when they occur with

adjustment for estimated forfeitures and recognize excess tax benefits as a reduction of income tax expense regardless of whether the benefit reduces income taxes payable.

Stock compensation expense by income statement account is as follows:

	Year Ended December 31,
	2017		2016		2015
Cost of revenues	$	71	$	88	$	101
General & administrative		398		420		433
Marketing and selling		55		116		108
Research and development		58		47		32
Total stock compensation	$	582	$	671	$	674

See Note

for additional information relating to the Company’s stock plan.

Basic and Diluted Net Income per Share

Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares and dilutive common stock equivalents outstanding during the period. The number of dilutive common stock equivalents outstanding during the period has been determined in accordance with the treasury-stock method. Common equivalent shares consist of common stock issuable upon the exercise of outstanding options and the unvested portion of stock unit awards (“SUAs”).

Basic and diluted weighted average common shares outstanding are as follows:

	2017	2016	2015
Weighted average common shares outstanding, basic	5,480	5,447	5,405
Dilutive common equivalent shares	60	28	7
Weighted average common shares outstanding, assuming dilution	5,540	5,475	5,412

There were

options to purchase shares that were anti-dilutive for the years ended

December 31, 2017

and

2016.

For the year ended

December 31, 2015,

options to purchase

thousand common shares were outstanding but

not

included in the dilutive common equivalent share calculation as their effect would have been anti-dilutive.

Financial Instruments

Financial instruments include cash and accounts receivable and accounts payable. Estimated fair values of these financial instruments approximate carrying values due to their short-term nature. The Company has

three

outstanding equipment loans which have an interest rate of the

-day LIBOR rate +

2.00%,

and

one

equipment loan with an interest rate of the

-day LIBOR rate +

1.75%.

As there is a market interest rate, the carrying amount is fair value.

Basis of Preparation and Consolidation

The consolidated financial statements, include the financial statements of the Company and its subsidiaries have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”). The financial statements of the Company and its subsidiary companies have been consolidated on a line-by-line basis by adding together like items of assets, liabilities, income and expenses. All intercompany transactions and balances have been eliminated.

Foreign Currency Translation

The functional currency of our Brazil subsidiary is the Brazilian Real. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the consolidated balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities that are in the functional currency is included as a component of shareholders’ equity in accumulated other comprehensive income (loss). The total change in foreign currency translation adjustment for the year ended

December 31, 2017

was (

$238

) thousand, or (

$157

) thousand net of taxes.

Segment Reporting

The Company manages its operations as

one

segment, drug testing services. As a result, the financial information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment. See Note

for geographic breakdown of revenue.

Subsequent Events

March 7, 2018,

the Company declared a quarterly dividend of

$0.15

per share for a total of

$824,

with a payment date of

March 29, 2018

to shareholders of record on

March 19, 2018.

Recent Accounting Pronouncements

February 2016,

the FASB issued ASU

2016

02,

Leases

, which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than

months. The new standard will become effective for fiscal years beginning after

December 15, 2018

and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on its financial statements.

May 2014,

the FASB issued ASU

2014

09,

Revenue from Contracts with Customers

, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU

2014

is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU

2014

defines a

five

step process to achieve this core principle and, in doing so, more judgment and estimates

may

be required within the revenue recognition process than are required under existing U.S. GAAP.

The standard’s implementation date, as amended by ASU

2015

14,

is effective for annual periods beginning after

December 15, 2017,

and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU

2014

recognized at the date of adoption (which includes additional footnote disclosures). We have done an analysis of the impact of our pending adoption of ASU

2014

on our financial statements and have determined the implementation of this standard will

not

have a material impact on the timing and measurement of revenue recognition. The Company intends to adopt the standard at the date required for public companies.

Note 3 - Accounts Recievable

12 Months Ended

Dec. 31, 2017

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Accounts Receivable

The Company maintains an allowance for uncollectible accounts receivable based on management’s assessment of the collectability of its customer accounts by reviewing customer payment patterns and other relevant factors. The Company reviews the adequacy of the allowance for uncollectible accounts on a quarterly basis and adjusts the balance as determined necessary. Write-offs are recorded at the time a customer account is deemed uncollectable. The following is a rollforward of the Company’s allowance for doubtful accounts:

	As of December 31,
	2017			2016
Balance, beginning of period	$	50		$	59
Provision for (recoveries of) doubtful accounts		30			16
Write-offs		(16	)		(25	)
Balance, end of period	$	64		$	50

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Note 4 - Accrued Expenses

12 Months Ended

Dec. 31, 2017

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Accrued Expenses

Accrued expenses consist of the following:

	As of December 31,
	2017		2016
Accrued payroll and employee benefits	$	291	$	311
Accrued bonus expense		290		407
Accrued vacation expense		481		431
Accrued taxes		1,086		288
Accrued shipping expense		364		-
Deferred revenue		78		125
Other accrued expenses		280		426
Total Accrued Expenses	$	2,870	$	1,988

Note 5 - Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Text Block]

Income Taxes

The income tax provision consists of the following:

	As of December 31,
	2017			2016			2015
Current –
Federal	$	2,507		$	3,016		$	(214	)
State		101			114			(55	)
Foreign		898			-			-
		3,506			3,130			(269	)
Deferred –
Federal		(1,326	)		279			544
State		(124	)		(111	)		(439	)
Foreign		-			-			-
		(1,450	)		168			105
Income Tax Provision	$	2,056		$	3,298		$	(164	)

A reconciliation of the effective rate with the federal statutory rate is as follows:

	2017			2016			2015
Federal statutory rate		34.0	%		34.0	%		34.0	%
State income taxes, net of federal benefit		-0.2	%		0.1	%		-22.0	%
Permanent differences		0.4	%		0.1	%		1.3	%
Stock based compensation		-0.7	%		0.0	%		3.9	%
Federal R&D Credits		-1.3	%		-1.1	%		-29.4	%
Foreign Taxes		7.1	%		0.0	%		0.0	%
Federal Deferred Rate Decrease		-14.2	%		0.0	%		0.0	%
Effective tax rate		25.1	%		33.1	%		-12.2	%

December 22, 2017,

the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code that affected

2017,

including, but

not

limited to, accelerated depreciation that allowed for full expensing of qualified property. The Tax Act also establishes new tax laws that affects

2018

and future years, including a reduction in the U.S. federal corporate income tax rate from

35%

21%.

As a result of the Tax Act, we provisionally remeasured certain deferred tax assets and liabilities based on the rates at which they are anticipated to change to in the future, which is generally

21%.

This resulted in a reduction of the deferred tax liability of

$1.2

million, or a

14.2

percentage point reduction. This was offset in part by the impact of foreign income taxes owed (impact of

7.1%

on the rate) with the establishment of a subsidiary in Brazil. For the year ended

December 31, 2015,

the Company’s -

12.2%

effective income tax rate was primarily due to Federal and California research and development (R&D) tax credits. As of

December 31, 2017,

there were

Federal tax credit carryforwards from

2016.

As of

December 31, 2017,

there were

$731

of California tax credit carryforwards relating to

2012

2017

which have an unlimited carryforward period.

December 22, 2017,

the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin

No.

118,

Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB

118”

) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does

not

have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law.

December 31, 2017,

we have

not

completed our accounting for the tax effects of enactment of the Tax Act; however, we have made a reasonable estimate of the effects on our existing deferred tax balances and the

one

-time transition tax. For the year ended

December 31, 2017,

we recognized

transition tax because the Company’s Brazil entity is a disregarded entity for U.S. income tax purposes. In all cases, we will continue to make and refine our calculations as additional analysis is completed. In addition, our estimates

may

also be affected as we gain a more thorough understanding of the tax law.

The components of the net deferred tax liabilities included in the accompanying balance sheets are as follows:

	Year Ended December 31,
	2017			2016
Net deferred tax liability:
Excess of tax over book depreciation and amortization	$	(1,980	)	$	(3,321	)
Prepaid expenses		(39	)		(55	)
Allowance for doubtful accounts		14			18
Accrued expenses		105			133
Stock-based compensation		79			135
R&D tax credits		578			397
Net deferred tax liabilities	$	(1,243	)	$	(2,693	)

ASC

740

contains a

two

-step approach to recognizing and measuring uncertain tax positions (tax contingencies). The

first

step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than

not

that the position will be sustained on an audit, including resolution of related appeals or litigation processes, if any. The

second

step is to measure the tax benefit as the largest amount which is more than

50%

likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company’s tax positions and tax benefits, which

may

require periodic adjustments and which

may

not

accurately forecast actual outcomes. In

2016,

the Company elected to adopt ASU

2015

17,

Income Taxes - Balance Sheet Classification of Deferred Taxes

, that simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet.

The Company operates within multiple taxing jurisdictions and could be subject to audit in these jurisdictions. These audits

may

involve complex issues, which

may

require an extended period of time to resolve. The Company has provided for its estimated taxes payable in the accompanying financial statements. Interest and penalties related to income tax matters are recognized as a general and administrative expense. The Company did

not

have any interest or penalties accrued as of

December 31, 2017

and

2016.

The tax years ended

December 31, 2014

through

December 31, 2017

remain subject to examination by all major taxing authorities.

Note 6 - Preferred Stock	12 Months Ended
Note 6 - Preferred Stock	Dec. 31, 2017
Notes to Financial Statements
Preferred Stock [Text Block]	6. Preferred Stock The Board of Directors has the authority to designate authorized preferred shares in one or more series and to fix the relative rights and preferences without vote or action by the stockholders. The Board of Directors has no present plans to designate or issue any shares of preferred stock.

Note 7 - Stock-based Awards

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-Based Awards

The

2006

Incentive Plan initially adopted in

2006,

and amended and restated in

2011,

provides for grants of options with terms of up to

ten

years, grants of restricted stock or stock unit awards (SUAs), issuances of stock bonuses or grants other stock-based awards plus cash based awards, to officers, directors, employees, and consultants. Such shares are issuable out of the Company’s authorized but unissued common stock. In

2016,

the

2006

Incentive Plan was amended to increase the total number of shares issuable there under from

500

thousand to

850

thousand shares. As of

December 31, 2017,

199

thousand shares remained available for future grant under the

2006

Incentive Plan.

The fair value of the SUAs is determined by the closing price on the date of grant. The fair value of options is determined using a Black-Scholes model. The SUAs vest over a period of

two

four

years and are convertible into an equivalent number of shares of the Company’s common stock provided that the employee receiving the award remains continuously employed throughout the vesting period. The Company records compensation expense related to the SUAs and options on a straight-line basis over the vesting term. Employees are issued shares upon vesting, net of tax withholdings. As a result of our adoption of ASU

2016

2016,

we recognize the impact of forfeitures when they occur with

adjustment for estimated forfeitures and recognize excess tax benefits as a reduction of income tax expense regardless of whether the benefit reduces income taxes payable.

May 4, 2017,

the Company granted SUAs covering

12.5

thousand shares of common stock and options to acquire up to

121

thousand shares of common stock. The SUAs vest over a period of

two

years for non-employee board members and

four

years for employees and are convertible into an equivalent number of shares of the Company’s common stock provided that the director or employee receiving the award remains employed throughout the vesting period. The stock options become exercisable over

two

years for non-employee board members and

four

years for employees (the

September 15, 2015

options become exercisable over

five

years) and have a term of

years. The Company records compensation expense related to the SUAs and options on a straight-line basis over the vesting term. Employees are issued shares upon vesting, in the case of SUA’s or upon exercise of options, net of tax withholdings, unless the employee chooses to receive all shares and pay for the associated employment taxes.

other types of equity-based awards have been granted or issued under the

2006

Incentive Plan.

The following table represents all shares granted by the Company under the

2006

Incentive Plan for the last

three

years:

Grant Date	Type	Shares		Fair Value Per Share (1)
May 4, 2017	Options	121	$	4.46
May 4, 2017	SUA	13	$	18.87
May 12, 2016	Options	121	$	2.34
May 12, 2016	SUA	17	$	13.82
September 15, 2015	Options	47	$	1.91
September 15, 2015	SUA	1	$	10.21
April 29, 2015	SUA	44	$	16.10

(

)

The fair value for the SUA’s is the closing price of the Company’s stock on that date. The fair value for options represents the fair value calculated using the Black-Scholes model. Options have contractual lives of

years and the fair value calculated using a Black-Scholes model. The options granted on

September 15, 2015

have a fair value of

$1.91

per share based on the

$10.21

grant date and exercise prices and assuming a

6.5

year estimated term,

36%

volatility,

2.2%

interest rate and a

6.0%

dividend yield rate. The options granted on

May 12, 2016

have a fair value of

$2.34

per share based on the

$13.82

grant date and exercise prices and assuming a

6.25

year estimated term,

33%

volatility,

1.75%

interest rate and a

5.6%

dividend yield rate. The options granted on

May 4, 2017

have a fair value of

$4.46

per share based on the

$18.87

grant date and exercise prices and assuming a

6.25

year estimated term,

37%

volatility,

2.75%

interest rate and a

4.7%

dividend yield rate.

A summary of the Company’s stock option activity is as follows:

	Number of Shares			Weighted Ave. Exercise Price per Share		Aggregate Intrinsic Value (2)
Outstanding, December 31, 2016		160		$	12.76	$	1,907
Granted		121		$	18.87
Exercised		(2	)	$	13.82
Forfeited		-		$	-
Outstanding, December 31, 2017		279		$	15.40	$	1,436

Exercisable, December 31, 2017		56				$	446

(

)

The aggregate intrinsic value on this table was calculated based on the amount, if any, by which the closing market price of the Company’s stock on

December 31

of the applicable year exceeded the exercise price of any of the underlying options, multiplied by the number of shares subject to each such option. The closing stock price as of

December 31, 2017

and

2016

was

$20.56

and

$24.68,

respectively.

There were

2.5

thousand options exercised under the

2006

Incentive Plan during the year ended

December 31, 2017.

There were

options exercised under the

2006

Incentive Plan during the years ended

December 31, 2016

2015.

The Company had options exercised under our expired stock option plan of

134

thousand and

thousand for the years ended

December 31, 2016

and

2015,

respectively. There were

thousand options exercisable as of

December 31, 2017

and

thousand options exercisable as of

December 31, 2016.

A summary of the Company’s stock unit award activity is as follows:

				Weighted		Weighted
	Number of			Average Price		Average Fair
	Shares			per Share (3)		Value (3)
Outstanding & Unvested, December 31, 2016		74		$	14.62	$	1,077
Granted		13		$	18.87	$	236
Converted to common stock		(10	)	$	13.84	$	(138	)
Cancelled		(15	)	$	16.15	$	(241	)
Forfeited		(29	)	$	14.25	$	(418	)
Outstanding & Unvested, December 31, 2017		33		$	16.08	$	516

(

)

Weighted average price per share is the weighted grant price based on the closing market price of each of the stock grants related to each transaction type. The Weighted average fair value is the weighted average share price times the number of shares.

The fair value of stock unit award vesting was

$677

thousand,

$691

thousand and

$641

thousand for the years ended

December 31, 2017,

2016

and

2015,

respectively. The intrinsic value of stock unit awards converted to common stock was based on the stock price on the vesting date and amounted to

$776

thousand,

$727

thousand and

$824

thousand for the years ended

December 31, 2017,

2016

and

2015,

respectively.

As of

December 31, 2017,

a total of

508

thousand shares of common stock were reserved for issuance under

2006

Incentive Plan. As of

December 31, 2017,

the unamortized fair value of outstanding options and awards was

$938

thousand to be amortized over a weighted average period of approximately

2.8

years.

Note 8 - Employee Benefit Plan	12 Months Ended
Note 8 - Employee Benefit Plan	Dec. 31, 2017
Notes to Financial Statements
Compensation and Employee Benefit Plans [Text Block]	8. Employee Benefit Plan The Psychemedics Corporation 401 (k) Savings and Retirement Plan (the 401 (k) Plan) is a qualified defined contribution plan in accordance with Section 401 (k) of the Internal Revenue Code. All employees over the age of 21 are eligible to make pre-tax contributions up to a specified percentage of their compensation. Under the 401 (k) Plan, the Company may, but is not obligated to, match a portion of the employees’ contributions up to a defined maximum. Matching contributions of $246 thousand, $246 thousand and $242 thousand were made in the years ended December 31, 2017, 2016 and 2015, respectively.

Note 9 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Commitments

The Company leases certain of its facilities and equipment under operating lease agreements expiring on various dates through

February 2023.

Total minimum lease payments, including scheduled increases, are charged to operations on the straight-line basis over the life of the respective lease. Rent expense was approximately

$0.9

million,

$0.9

million and

$1.0

million in

2017,

2016

and

2015,

respectively.

December 31, 2017,

minimum commitments remaining under lease agreements were approximately as follows:

Years Ending December 31:
2018	$	928
2019		574
2020		485
2021		108
2022		108
2023		18
Total	$	2,221

Contingencies

The Company is subject legal proceedings and claims in the ordinary course of its business. The Company believes that although there can be

assurance as to the disposition of these proceedings, based upon information available to the Company as of the timing of filing of this report, the expected outcome of these matters would

not

have a material impact on the Company’s results of operations or financial condition.

Note 10 - Debt and Other Financing Agreements

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Text Block]

10.

Debt and Other Financing Arrangements

March 20, 2014,

the Company entered into an equipment financing arrangement with Banc of America Leasing & Capital, LLC (the “Lender”), which it amended on

August 8, 2014,

September 15, 2015

and

October 30, 2017,

including a Master Loan and Security Agreement and related documentation (collectively the “Equipment Loan Arrangement”) which provided the Company with the ability to finance, at its option, up to

$12.8

million of new and used equipment purchases. Each such purchase financed under the Equipment Loan Arrangement is documented by the execution of an equipment note. Each note has a maturity date of

months from the applicable loan date, and bears interest at the then current

-day LIBOR rate +

2.00%

for loans made prior to

October 2017

and the

-day LIBOR rate +

1.75%

for loans made after

October 2017.

Principal and interest are payable over the

-month repayment period and principal is repayable without premium or penalty. Borrowings under the Equipment Loan Arrangement are secured by a

first

priority security interest in the equipment acquired with the proceeds of the equipment notes. Under the Equipment Loan Arrangement, the Company is subject to a maximum quarterly funded debt to EBITDA ratio and a minimum fixed charge coverage ratio. The Company was in compliance with all loan covenants as of

December 31, 2017.

The total book value pledged as collateral for these loans as of

December 31, 2017

was

$6.9

Million.

Under the Equipment Loan Arrangement, the Company executed notes on

March 24, 2014,

May 22, 2014,

June 13, 2014,

August 8, 2014,

September 15, 2015,

March 23, 2016

and

November 10, 2017

in the amounts of

$1.1

million,

$1.9

million,

$3.0

million,

$1.0

million,

$1.1

million,

$610

thousand and

$2.1

million, respectively, for total borrowings of

$10.8

million, of which

$2.1

million and

$3.1

million was repaid in

2017

and

2016,

respectively. As of

December 31, 2017,

the Company had equipment financing line of credit availability of

$1.9

million. The weighted average interest rate for these notes for the year ended

December 31, 2017

was

3.0%

and represented

$72

thousand of interest expense. As of

December 31, 2017,

weighted average interest rate was

3.3%.

The annual principal repayment requirements for debt obligations as of

December 31, 2017

are as follows:

2018	$	957
2019		891
2020		702
2021		446
2022		381
Total long-term debt		3,377
Less current portion of long-term debt		(957	)
Total long-term debt, net of current portion	$	2,420

Note 11 - Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information [Text Block]

11.

Selected Quarterly Financial Data (Unaudited)

The following are selected quarterly financial data for the years ended

December 31, 2017

and

2016:

	Quarter Ended - 2017
	MAR 31		JUN 30		SEP 30		DEC 31
Revenues	$	10,209	$	9,684	$	10,049	$	9,760
Gross profit		5,316		4,609		5,121		4,777
Income from operations		2,268		1,710		2,232		1,947
Net income		1,500		907		1,364		2,350
Basic net income per share	$	0.27	$	0.17	$	0.25	$	0.43
Diluted net income per share	$	0.27	$	0.16	$	0.25	$	0.42

	Quarter Ended - 2016
	MAR 31			JUN 30		SEP 30		DEC 31
Revenues	$	6,667		$	9,700	$	11,849	$	10,764
Gross profit		2,738			5,209		7,105		6,398
Income (loss) from operations		(2	)		2,371		4,104		3,637
Net income (loss)		(23	)		1,633		2,708		2,360
Basic net income per share	$	0.00		$	0.30	$	0.49	$	0.44
Diluted net income per share	$	0.00		$	0.30	$	0.49	$	0.43

Note 12 - Business Segment Reporting

12 Months Ended

Dec. 31, 2017

Segment Reporting Disclosure [Text Block]

12.

Business Segment Reporting

The Company manages its operations as

one

independent distributor, which is the only customer greater than

10%

of sales. The Company’s revenues by geographic region are as follows:

	Year Ended December 31,
	2017		2016		2015
Consolidated Revenue:
United States	$	26,327	$	25,608	$	25,836
Brazil		13,069		13,083		746
Other Foreign Countries		305		289		393
Total Revenue	$	39,701	$	38,980	$	26,975

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Risks and Uncertainties [Policy Text Block]

Risks and Uncertainties

not

Use of Estimates, Policy [Policy Text Block]

Estimates

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

All highly liquid investments with original maturities of

days or less are considered cash equivalents. These consist of cash savings and certificates of deposits (CD’s). As of

December 31, 2017,

there were

$4.6

million of CD’s. As of

December 31, 2016

and

2015,

there were

investments classified as cash equivalents.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

The Company follows the provisions of Accounting Standards Codification (ASC)

820,

Fair Value Measurements and Disclosures

(“ASC

820”

820

must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on

three

levels of inputs, of which the

first

two

are considered observable and the last unobservable, that

may

be used to measure fair value which are the following:

Level

– Quoted prices in active markets for identical assets or liabilities.

Level

– Inputs other than Level

that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data

Level

– Unobservable inputs that are supported by little or

market activity and that are significant to the fair value

A financial instrument’s level is based on the lowest level of any input that is significant to the fair value measurement.

Inventory, Policy [Policy Text Block]

Inventory

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Computer software (in years)	3	to	5
Office furniture and equipment (in years)	3	to	7
Laboratory equipment (in years)	5	to	7
Leasehold improvements (in years)		Lesser of estimated useful life or lease term

The Company recorded depreciation and amortization related to property and equipment and capitalized software of

$2.8

million,

$2.3

million, and

$1.7

million in

2017,

2016

and

2015

respectively. As of

December 31, 2017

and

2016,

there was approximately

$0.5

million and

$1.2

million of new equipment

not

placed in service, respectively.

Research, Development, and Computer Software, Policy [Policy Text Block]

Capitalized Software Development Costs

December 31, 2017,

2016

and

2015,

we capitalized internally developed software costs of

$511,

$315

and

$364,

respectively. Amortization expense related to software development costs was

$418,

$435

and

$422

2017,

2016,

and

2015,

may

differ from those made by other companies. General and administrative costs related to developing or obtaining such software is expensed as incurred.

Other Assets [Policy Text Block]

Other Assets

twenty

years. As of

December 31, 2017,

2016,

and

2015

the Company had capitalized legal costs relating to outstanding patent applications of

$711,

$715

and

$670,

respectively. Amortization expense was

$37,

$36,

and

$32

2017,

2016

and

2015,

respectively. The amount of amortization related to patent applications is expected to remain below

$50

per year for the next

five

years.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company also provides expert testimony, when and if necessary, to support the results of the tests, which is generally billed separately and recognized as the services are provided.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expenses

The Company expenses all research and development costs as incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company accounts for income taxes using the liability method pursuant to ASC

740,

“Income Taxes”

December 31, 2016,

the Company early adopted ASU

2015

17,

Income Taxes - Balance Sheet Classification of Deferred Taxes

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk and Off-Balance Sheet Risk

The Company has

may

exceed federally insured limits. The Company does

not

experienced any significant losses related to individual customers or groups of customers in any particular industry or geographic area. The Company does

not

require collateral.

Major Customers, Policy [Policy Text Block]

Significant Customers

The Company had

one

customer that exceeded

10%

of revenue for the years ended

December 31, 2017

and

2016.

There were

customers that exceeded

10%

of revenue for the year ended

December 31, 2015.

The Company had

one

customer that accounted for

23%,

34%

and

11%

of the total accounts receivable balance as of

December 31, 2017,

2016

and

2015

respectively.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

The Company’s comprehensive income was

$5.9

million for the year ended

December 31, 2017

and includes the effect of foreign currency translation. Comprehensive income was the same as net income for the years ended

December 31, 2016

and

2015.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

The Company accounts for equity awards in accordance with ASC

718,

“

Compensation — Stock Compensation”

(”ASC

718”

). ASC

718

one

of the components used to determine the fair value of the options. This approach is used due to the small number of recipients receiving stock options

not

providing a reasonable basis for estimating expected term. In

2016,

the Company adopted ASU

2016

09,

Improvements to Employee Share-Based Payment Accounting

adjustment for estimated forfeitures and recognize excess tax benefits as a reduction of income tax expense regardless of whether the benefit reduces income taxes payable.

Stock compensation expense by income statement account is as follows:

	Year Ended December 31,
	2017		2016		2015
Cost of revenues	$	71	$	88	$	101
General & administrative		398		420		433
Marketing and selling		55		116		108
Research and development		58		47		32
Total stock compensation	$	582	$	671	$	674

See Note

for additional information relating to the Company’s stock plan.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Net Income per Share

Basic and diluted weighted average common shares outstanding are as follows:

	2017	2016	2015
Weighted average common shares outstanding, basic	5,480	5,447	5,405
Dilutive common equivalent shares	60	28	7
Weighted average common shares outstanding, assuming dilution	5,540	5,475	5,412

There were

options to purchase shares that were anti-dilutive for the years ended

December 31, 2017

and

2016.

For the year ended

December 31, 2015,

options to purchase

thousand common shares were outstanding but

not

included in the dilutive common equivalent share calculation as their effect would have been anti-dilutive.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments

three

outstanding equipment loans which have an interest rate of the

-day LIBOR rate +

2.00%,

and

one

equipment loan with an interest rate of the

-day LIBOR rate +

1.75%.

As there is a market interest rate, the carrying amount is fair value.

Basis of Presentation and Consolidation, Policy [Policy Text Block]

Basis of Preparation and Consolidation

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

December 31, 2017

was (

$238

) thousand, or (

$157

) thousand net of taxes.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting

The Company manages its operations as

one

for geographic breakdown of revenue.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

March 7, 2018,

the Company declared a quarterly dividend of

$0.15

per share for a total of

$824,

with a payment date of

March 29, 2018

to shareholders of record on

March 19, 2018.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

February 2016,

the FASB issued ASU

2016

02,

Leases

months. The new standard will become effective for fiscal years beginning after

December 15, 2018

May 2014,

the FASB issued ASU

2014

09,

Revenue from Contracts with Customers

, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU

2014

defines a

five

step process to achieve this core principle and, in doing so, more judgment and estimates

may

be required within the revenue recognition process than are required under existing U.S. GAAP.

The standard’s implementation date, as amended by ASU

2015

14,

is effective for annual periods beginning after

December 15, 2017,

2014

recognized at the date of adoption (which includes additional footnote disclosures). We have done an analysis of the impact of our pending adoption of ASU

2014

on our financial statements and have determined the implementation of this standard will

not

have a material impact on the timing and measurement of revenue recognition. The Company intends to adopt the standard at the date required for public companies.

Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Table Text Block]

Computer software (in years)	3	to	5
Office furniture and equipment (in years)	3	to	7
Laboratory equipment (in years)	5	to	7
Leasehold improvements (in years)		Lesser of estimated useful life or lease term

Schedule of Stock Based Compensation Expense [Table Text Block]

	Year Ended December 31,
	2017		2016		2015
Cost of revenues	$	71	$	88	$	101
General & administrative		398		420		433
Marketing and selling		55		116		108
Research and development		58		47		32
Total stock compensation	$	582	$	671	$	674

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	2017	2016	2015
Weighted average common shares outstanding, basic	5,480	5,447	5,405
Dilutive common equivalent shares	60	28	7
Weighted average common shares outstanding, assuming dilution	5,540	5,475	5,412

Note 3 - Accounts Recievable (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Credit Losses for Financing Receivables, Current [Table Text Block]

	As of December 31,
	2017			2016
Balance, beginning of period	$	50		$	59
Provision for (recoveries of) doubtful accounts		30			16
Write-offs		(16	)		(25	)
Balance, end of period	$	64		$	50

Note 4 - Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Accrued Liabilities [Table Text Block]

	As of December 31,
	2017		2016
Accrued payroll and employee benefits	$	291	$	311
Accrued bonus expense		290		407
Accrued vacation expense		481		431
Accrued taxes		1,086		288
Accrued shipping expense		364		-
Deferred revenue		78		125
Other accrued expenses		280		426
Total Accrued Expenses	$	2,870	$	1,988

Note 5 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	As of December 31,
	2017			2016			2015
Current –
Federal	$	2,507		$	3,016		$	(214	)
State		101			114			(55	)
Foreign		898			-			-
		3,506			3,130			(269	)
Deferred –
Federal		(1,326	)		279			544
State		(124	)		(111	)		(439	)
Foreign		-			-			-
		(1,450	)		168			105
Income Tax Provision	$	2,056		$	3,298		$	(164	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2017			2016			2015
Federal statutory rate		34.0	%		34.0	%		34.0	%
State income taxes, net of federal benefit		-0.2	%		0.1	%		-22.0	%
Permanent differences		0.4	%		0.1	%		1.3	%
Stock based compensation		-0.7	%		0.0	%		3.9	%
Federal R&D Credits		-1.3	%		-1.1	%		-29.4	%
Foreign Taxes		7.1	%		0.0	%		0.0	%
Federal Deferred Rate Decrease		-14.2	%		0.0	%		0.0	%
Effective tax rate		25.1	%		33.1	%		-12.2	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	Year Ended December 31,
	2017			2016
Net deferred tax liability:
Excess of tax over book depreciation and amortization	$	(1,980	)	$	(3,321	)
Prepaid expenses		(39	)		(55	)
Allowance for doubtful accounts		14			18
Accrued expenses		105			133
Stock-based compensation		79			135
R&D tax credits		578			397
Net deferred tax liabilities	$	(1,243	)	$	(2,693	)

Note 7 - Stock-based Awards (Tables)

12 Months Ended

Dec. 31, 2017

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

Grant Date	Type	Shares		Fair Value Per Share (1)
May 4, 2017	Options	121	$	4.46
May 4, 2017	SUA	13	$	18.87
May 12, 2016	Options	121	$	2.34
May 12, 2016	SUA	17	$	13.82
September 15, 2015	Options	47	$	1.91
September 15, 2015	SUA	1	$	10.21
April 29, 2015	SUA	44	$	16.10

Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares			Weighted Ave. Exercise Price per Share		Aggregate Intrinsic Value (2)
Outstanding, December 31, 2016		160		$	12.76	$	1,907
Granted		121		$	18.87
Exercised		(2	)	$	13.82
Forfeited		-		$	-
Outstanding, December 31, 2017		279		$	15.40	$	1,436

Exercisable, December 31, 2017		56				$	446

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

				Weighted		Weighted
	Number of			Average Price		Average Fair
	Shares			per Share (3)		Value (3)
Outstanding & Unvested, December 31, 2016		74		$	14.62	$	1,077
Granted		13		$	18.87	$	236
Converted to common stock		(10	)	$	13.84	$	(138	)
Cancelled		(15	)	$	16.15	$	(241	)
Forfeited		(29	)	$	14.25	$	(418	)
Outstanding & Unvested, December 31, 2017		33		$	16.08	$	516

Note 9 - Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Years Ending December 31:
2018	$	928
2019		574
2020		485
2021		108
2022		108
2023		18
Total	$	2,221

Note 10 - Debt and Other Financing Agreements (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Long-term Debt Instruments [Table Text Block]

2018	$	957
2019		891
2020		702
2021		446
2022		381
Total long-term debt		3,377
Less current portion of long-term debt		(957	)
Total long-term debt, net of current portion	$	2,420

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section 50
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 30
-Section 55
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-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
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-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Note 11 - Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information [Table Text Block]

	Quarter Ended - 2017
	MAR 31		JUN 30		SEP 30		DEC 31
Revenues	$	10,209	$	9,684	$	10,049	$	9,760
Gross profit		5,316		4,609		5,121		4,777
Income from operations		2,268		1,710		2,232		1,947
Net income		1,500		907		1,364		2,350
Basic net income per share	$	0.27	$	0.17	$	0.25	$	0.43
Diluted net income per share	$	0.27	$	0.16	$	0.25	$	0.42

	Quarter Ended - 2016
	MAR 31			JUN 30		SEP 30		DEC 31
Revenues	$	6,667		$	9,700	$	11,849	$	10,764
Gross profit		2,738			5,209		7,105		6,398
Income (loss) from operations		(2	)		2,371		4,104		3,637
Net income (loss)		(23	)		1,633		2,708		2,360
Basic net income per share	$	0.00		$	0.30	$	0.49	$	0.44
Diluted net income per share	$	0.00		$	0.30	$	0.49	$	0.43

Note 12 - Business Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2017

Revenue from External Customers by Geographic Areas [Table Text Block]

	Year Ended December 31,
	2017		2016		2015
Consolidated Revenue:
United States	$	26,327	$	25,608	$	25,836
Brazil		13,069		13,083		746
Other Foreign Countries		305		289		393
Total Revenue	$	39,701	$	38,980	$	26,975

Note 2 - Summary of Significant Accounting Policies (Details Textual) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
	Feb. 14, 2018 USD ($) $ / shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2015 USD ($) $ / shares shares
Certificates of Deposit, at Carrying Value		$ 4,600
Depreciation, Depletion and Amortization, Nonproduction		2,800	$ 2,300	$ 1,700
Public Utilities, Property, Plant and Equipment, Equipment		500	$ 1,200
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Parent		$ 5,900
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount \| shares		0	0	81
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax, Portion Attributable to Parent		$ (238)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax		$ (157)
Number of Operating Segments		1
Common Stock, Dividends, Per Share, Declared \| $ / shares		$ 0.60	$ 0.60	$ 0.60
Subsequent Event [Member]
Common Stock, Dividends, Per Share, Declared \| $ / shares	$ 0.15
Dividends Payable	$ 824
Dividends Payable, Date to be Paid	Mar. 09, 2018
Dividends Payable, Date of Record	Feb. 26, 2018
Credit Concentration Risk [Member] \| Accounts Receivable [Member] \| Customer One [Member]
Concentration Risk, Percentage		23.00%	34.00%	11.00%
Credit Concentration Risk [Member] \| Sales Revenue, Net [Member] \| Customer One [Member]
Concentration Risk, Percentage		10.00%
Customer Concentration Risk [Member] \| Sales Revenue, Net [Member]
Number of Major Customers		1	1
Patents [Member]
Amortization		$ 37	$ 36	$ 32
Finite-Lived Intangible Asset, Useful Life		20 years
Legal Cost Capitalized		$ 711	715	670
Patents [Member] \| Maximum [Member]
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months		50
Finite-Lived Intangible Assets, Amortization Expense, Year Two		50
Finite-Lived Intangible Assets, Amortization Expense, Year Three		50
Finite-Lived Intangible Assets, Amortization Expense, Year Four		50
Finite-Lived Intangible Assets, Amortization Expense, Year Five		$ 50
Software Development [Member]
Property, Plant and Equipment, Useful Life		5 years
Software Development Cost Capitalized		$ 511	315	364
Amortization		$ 418	$ 435	$ 422

Note 2 - Summary of Significant Accounting Policies - Summary of Useful Lives of Assets (Details)	12 Months Ended
	Dec. 31, 2017
Minimum [Member] \| Office Equipment [Member]
Computer software (in years) (Year)	3 years
Minimum [Member] \| Laboratory Equipment [Member]
Computer software (in years) (Year)	5 years
Minimum [Member] \| Computer Software, Intangible Asset [Member]
Computer software (in years) (Year)	3 years
Maximum [Member] \| Office Equipment [Member]
Computer software (in years) (Year)	7 years
Maximum [Member] \| Laboratory Equipment [Member]
Computer software (in years) (Year)	7 years
Maximum [Member] \| Computer Software, Intangible Asset [Member]
Computer software (in years) (Year)	5 years

Note 2 - Summary of Significant Accounting Policies - Summary of Stock Compensation Expense by Income Statement Account (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock compensation expense	$ 582	$ 671	$ 674
Cost of Sales [Member]
Stock compensation expense	71	88	101
General and Administrative Expense [Member]
Stock compensation expense	398	420	433
Selling and Marketing Expense [Member]
Stock compensation expense	55	116	108
Research and Development Expense [Member]
Stock compensation expense	$ 58	$ 47	$ 32

Note 2 - Summary of Significant Accounting Policies - Basic and Diluted Weighted Average Common Shares Outstanding (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Weighted average common shares outstanding, basic (in shares)	5,480	5,447	5,405
Dilutive common equivalent shares (in shares)	60	28	7
Weighted average common shares outstanding, assuming dilution (in shares)	5,540	5,475	5,412

Note 3 - Accounts Receivable - Summary of the Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Balance, beginning of period	$ 50	$ 59
Provision for (recoveries of) doubtful accounts	30	16
Write-offs	(16)	(25)
Balance, end of period	$ 64	$ 50

Note 4 - Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accrued payroll and employee benefits	$ 291	$ 311
Accrued bonus expense	290	407
Accrued vacation expense	481	431
Accrued taxes	1,086	288
Accrued shipping expense	364
Deferred revenue	78	125
Other accrued expenses	280	426
Total Accrued Expenses	$ 2,870	$ 1,988

- Definition

The carrying amount of consideration received or receivable as of the balance sheet date on potential earnings that were not recognized as revenue in conformity with GAAP, and which are expected to be recognized as such within one year or the normal operating cycle, if longer, including sales, license fees, and royalties, but excluding interest income.

+ References + Details

Note 5 - Income Taxes (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		34.00%	34.00%	34.00%
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		$ (1,200)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent		(14.20%)	0.00%	0.00%
Income Tax Reconciliation, Foreign Income Tax Witholdings		7.10%	0.00%	0.00%
Effective Income Tax Rate Reconciliation, Percent		25.10%	33.10%	(12.20%)
Income Tax Examination, Penalties and Interest Accrued		$ 0	$ 0
Internal Revenue Service (IRS) [Member] \| Domestic Tax Authority [Member]
Tax Credit Carryforward, Amount		0
California Franchise Tax Board [Member] \| State and Local Jurisdiction [Member]
Tax Credit Carryforward, Amount		$ 731
Maximum [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		35.00%
Minimum [Member] \| Scenario, Forecast [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%

Note 5 - Income Taxes - Summary of Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Federal	$ 2,507	$ 3,016	$ (214)
State	101	114	(55)
Foreign	898
Total Current	3,506	3,130	(269)
Federal	(1,326)	279	544
State	(124)	(111)	(439)
Foreign
Total Deffered	(1,450)	168	105
Income Tax Provision	$ 2,056	$ 3,298	$ (164)

Note 5 - Income Taxes - Reconciliation of Effective Rate with Federal Statutory Rate (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Federal statutory rate	34.00%	34.00%	34.00%
State income taxes, net of federal benefit	(0.20%)	0.10%	(22.00%)
Permanent differences	0.40%	0.10%	1.30%
Stock based compensation	(0.70%)	0.00%	3.90%
Federal R&D Credits	(1.30%)	(1.10%)	(29.40%)
Foreign Taxes	7.10%	0.00%	0.00%
Federal Deferred Rate Decrease	14.20%	0.00%	0.00%
Federal Deferred Rate Decrease	(14.20%)	0.00%	0.00%
Effective tax rate	25.10%	33.10%	(12.20%)

Note 5 - Income Taxes - Components of Net Deferred Tax Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Net deferred tax liability:
Excess of tax over book depreciation and amortization	$ (1,980)	$ (3,321)
Prepaid expenses	(39)	(55)
Allowance for doubtful accounts	14	18
Accrued expenses	105	133
Stock-based compensation	79	135
R&D tax credits	578	397
Net deferred tax liabilities	$ (1,243)	$ (2,693)

Note 7 - Stock-based Awards (Details Textual) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	May 04, 2017	May 12, 2016	Sep. 15, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				199,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	121,000			121,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				10 years
Share Price	$ 4.46	$ 2.34	$ 1.91
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 18.87	$ 13.82	$ 10.21
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	6 years 91 days	6 years 91 days	6 years 182 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	37.00%	33.00%	36.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	2.75%	1.75%	2.20%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	4.70%	5.60%	6.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period				2,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number				56,000	9,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value				$ 677	$ 691	$ 641
Conversion of Stock, Amount Issued				$ 776	$ 727	$ 824
Non-Employee Board Members [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	2 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	2 years
Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	4 years
Stock Unit Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	12,500
Employee Stock Option [Member]
Share Price				$ 20.56	$ 24.68
Incentive Plan 2006 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period				2,500	0	0
Common Stock, Capital Shares Reserved for Future Issuance				508,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options				$ 938
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term				2 years 292 days
Expired Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period					134,000	41,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				500,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				850,000

Note 7 - Stock-based Awards - Summary of Shares Granted Under the 2006 Incentive Plan (Details) - $ / shares

12 Months Ended

May 04, 2017

Dec. 31, 2017

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

121,000

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

$ 18.87

May 4, 2017 [Member]

121,000

May 4, 2017 [Member] | Stock Unit Award [Member]

^[1]

$ 4.46

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

13,000

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

^[1]

$ 18.87

May 12, 2016 [Member]

121,000

May 12, 2016 [Member] | Stock Unit Award [Member]

^[1]

$ 2.34

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

17,000

September 15, 2015 [Member]

^[1]

$ 13.82

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

47,000

September 15, 2015 [Member] | Stock Unit Award [Member]

^[1]

$ 1.91

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

1,000

April 29, 2015 [Member] | Stock Unit Award [Member]

^[1]

$ 10.21

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

44,000