Embezzlement (Notes)

12 Months Ended

Dec. 31, 2016

Unusual or Infrequent Item, or Both [Line Items]

Unusual or Infrequent Items, or Both, Disclosure [Text Block]

During the third quarter of 2016, the Company discovered embezzlement activities at its Korean subsidiary. Based upon the results of forensic investigating procedures, we identified that the embezzlement activities occurred from fiscal year 2011 through fiscal year 2016.

The amounts of the embezzlement by period are as follows:



Year	Amount
2016	$480,000
2015	338,000
2014	213,000
Prior to 2014	558,000
	$1,589,000

In the annual financial statements for all years prior to 2016, the theft losses had been expensed, although misclassified, as Cost of component revenues or Foreign currency transaction losses. Accordingly, the effects of the embezzlement on all prior years are limited to misclassifications of the expenses within the Consolidated Statements of Operations. The correction of such misclassifications does not change previously reported Net losses or Accumulated deficit.

Although we do not believe such misclassifications are material to previously issued consolidated financial statements, due to the sensitive nature of fraud and, for comparability purposes, we have restated previously issued annual financial statements to reclassify embezzlement losses into other (expense) income net. The effects of the corrections are as follows:



Year	Cost of component revenues	Foreign currency transaction (losses) gains	Other (expense) income, net
2015	$(85,000)	$(253,000)	$(338,000)
2014	(46,000)	(167,000)	(213,000)

The family of the embezzler has contributed certain assets as reparations. In addition, the Company has insurance to cover employee fraud. Whether the Company can collect the insurance and keep the assets is pending civil and criminal investigations against the embezzler. The value of the assets recovered, if any, will be recorded during the period in which settlement is determined to be probable.