View Filing Data

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
Document and Entity Information - USD ($) $ in Thousands	Dec. 31, 2013	Jan. 31, 2014	Jun. 30, 2013
Document And Entity Information
Entity Registrant Name	Applied Optoelectronics, Inc.
Entity Central Index Key	0001158114
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 0
Entity Common Stock, Shares Outstanding		12,660,885
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2013

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Current Assets
Cash and cash equivalents	$ 22,006	$ 10,723
Restricted cash	775	503
Short-term investments	7,970	0
Accounts receivable - trade, net of allowance of $42, $59 and $61, respectively	22,089	13,525
Bank acceptance receivable	0	1,034
Inventories	19,608	12,493
Prepaid expenses and other current assets	5,488	968
Total current assets	77,936	39,246
Property, plant and equipment, net of accumulated depreciation of $28,145, $24,967 and $22,556, respectively	31,134	24,838
Land use rights, net	959	674
Intangible assets, net	851	795
Other assets, net	177	195
TOTAL ASSETS	111,057	65,748
Current liabilities
Current portion of notes payable and long-term debt	17,185	13,900
Accounts payable	15,010	6,913
Bank acceptance payable	2,347	1,521
Accrued liabilities	4,515	3,243
Total current liabilities	39,057	25,577
Notes payable and long-term debt, less current portion	8,923	9,163
TOTAL LIABILITIES	47,980	34,740
Stockholders' equity (deficit):
Redeemable Convertible Preferred Stock and Convertible Preferred Stock; 5,000 shares authorized; no shares issued and outstanding at December 31, 2013, $0.001 par value; 172,200 shares authorized; 5,547 shares issued and outstanding at December 31, 2012, no par value	0	105,367
Common Stock; 45,000 shares authorized; 12,644 shares issued and outstanding at December 31, 2013. $0.001 par value; 300,000 shares authorized; 266 shares issued and outstanding at December 31, 2012 , no par value	13	1,074
Additional paid-in capital	144,023	4,468
Accumulated other comprehensive gain	2,364	2,016
Accumulated deficit	(83,323)	(81,917)
TOTAL STOCKHOLDERS' EQUITY	63,077	31,008
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 111,057	$ 65,748

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Accounts receivable allowance	$ 42	$ 59	$ 61
Accumulated depreciation	$ 28,145	$ 24,967	$ 22,556
Convertible Preferred Stock par value	$ 0.001	$ 0.000
Convertible Preferred Stock shares authorized	5,000,000	172,200,000
Convertible Preferred Stock shares issued	0	5,547,000
Convertible Preferred Stock shares outstanding	0	5,547,000
Common stock par value	$ .001	$ 0.000
Common stock shares authorized	45,000,000	300,000,000
Common stock shares issued	12,644,000	266,000
Common stock shares outstanding	12,644,000	266,000

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Revenue, net	$ 78,424	$ 63,421	$ 47,840
Cost of goods sold	55,396	44,492	34,468
Gross profit	23,028	18,929	13,372
Operating expenses
Research and development	8,512	7,603	6,451
Sales and marketing	4,191	3,135	2,412
General and administrative	10,632	8,012	8,243
Total operating expenses	23,335	18,750	17,106
Income (loss) from operations	(307)	179	(3,734)
Other income (expense)
Interest expense	(1,125)	(1,381)	(1,338)
Other income (expense), net	26	257	(256)
Total other expense	(1,099)	(1,124)	(1,594)
Loss before income taxes	(1,406)	(945)	(5,328)
Income taxes	0	0	0
Net loss	$ (1,406)	$ (945)	$ (5,328)
Net loss per share-basic and diluted, as revised	$ (0.14)	$ (3.56)	$ (20.21)
Weighted average shares used to compute net loss per share, as revised: Basic and diluted	9,964,955	265,576	263,658

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement of Comprehensive Income [Abstract]
Net loss	$ (1,406)	$ (945)	$ (5,328)
Foreign currency translation adjustment, net of tax of $0, $0 and $0	348	44	434
Comprehensive loss	$ (1,058)	$ (901)	$ (4,894)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Net Income
-URI http://asc.fasb.org/extlink&oid=6518256

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=31042434&loc=d3e3602-108585

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.19)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.18)
-URI http://asc.fasb.org/extlink&oid=26872669&loc=d3e20235-122688

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.22)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=28358780&loc=d3e565-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 5

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement of Comprehensive Income [Abstract]
Foreign currency translation tax	$ 0	$ 0	$ 0

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated other comprehensive gain	Total
Beginning balance, shares at Dec. 31, 2010	4,118,000	261,000
Beginning balance, value at Dec. 31, 2010	$ 90,424	$ 1,052	$ 3,671	$ (75,644)	$ 1,538	$ 21,041
Public offering of common stock, net, value						0
Preferred stock issued, net, shares	223,000
Preferred stock issued, net, value	$ 3,949					3,949
Issuance of stock for consultancy service, shares		1,000
Issuance of stock for consultancy service, value		$ 1				(1)
Stock options exercised, shares		3,000
Stock options exercised, value		$ 16				16
Stock based compensation			563			563
Net loss				(5,328)		(5,328)
Foreign currency translation adjustment					434	434
Ending balance, shares at Dec. 31, 2011	4,341,000	265,000
Ending balance, value at Dec. 31, 2011	$ 94,373	$ 1,069	4,234	(80,972)	1,972	20,676
Public offering of common stock, net, value						0
Preferred stock issued, net, shares	1,206,000
Preferred stock issued, net, value	$ 10,994					10,994
Issuance of stock for consultancy service, value						0
Stock options exercised, shares		1,000
Stock options exercised, value		$ 5				5
Stock based compensation			161			161
Issuance of warrants			73			73
Net loss				(945)		(945)
Foreign currency translation adjustment					44	44
Ending balance, shares at Dec. 31, 2012	5,547,000	266,000
Ending balance, value at Dec. 31, 2012	$ 105,367	$ 1,074	4,468	(81,917)	2,016	31,008
Public offering of common stock, net, shares		3,600,000
Public offering of common stock, net, value		$ 3	31,445			31,448
Convert preferred stock common stock upon public offering, shares	(5,601,000)	8,739,000
Convert preferred stock common stock upon public offering, value	$ (105,801)	$ (1,211)	107,012
Issuance of stock for consultancy service, value						0
Stock options exercised, shares		29,000
Stock options exercised, value		$ 87	86			173
Stock based compensation			1,012			1,012
Warrants exercised, shares issued	54,000	10,000
Warrants exercised, value	$ 434	$ 60				494
Net loss				(1,406)		(1,406)
Foreign currency translation adjustment					348	348
Ending balance, shares at Dec. 31, 2013	0	12,644,000
Ending balance, value at Dec. 31, 2013	$ 0	$ 13	$ 144,023	$ (83,323)	$ 2,364	$ 63,077

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities:
Net loss	$ (1,406)	$ (945)	$ (5,328)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for obsolete inventory	492	858	1,579
Depreciation and amortization	3,407	2,942	3,112
Loss on disposal of assets	1	36	80
Stock-based compensation and warrant expense	1,069	161	563
Changes in operating assets and liabilities:
Accounts receivable	(8,457)	(1,158)	(4,498)
Bank acceptance receivable	1,036	(1,034)	0
Inventory	(7,520)	(538)	(1,578)
Other current assets	(4,622)	(261)	473
Accounts payable	8,079	(961)	1,534
Accrued liabilities	1,369	542	(62)
Net cash used in operating activities	(6,552)	(358)	(4,125)
Investing activities:
Purchase of short-term investments	(7,970)	0	0
Purchase of property, plant and equipment	(9,600)	(3,178)	(1,790)
Proceeds from disposal of equipment	0	138	387
Deposits and deferred charges	(43)	(41)	(1)
Purchase of intangible assets	(123)	(209)	(167)
Net cash used in investing activities	(17,736)	(3,290)	(1,571)
Financing activities:
Proceeds from issuance of notes payable and long-term debt	2,851	845	0
Principal payments of long-term debt and notes payable	(285)	(707)	(245)
Proceeds from line of credit borrowings	23,192	15,560	16,098
Repayments of line of credit borrowings	(23,008)	(13,692)	(15,200)
Proceeds from bank acceptance payable	6,778	3,746	662
Repayments of bank acceptance payable	(6,026)	(2,894)	0
Repayments of shareholder loans	0	(150)	(1,200)
Increase in restricted cash	(249)	(193)	(155)
Exercise of stock options	173	5	16
Exercise of warrants	494	0	0
Common stock issued for consultant services	0	0	1
Proceeds from initial public offering, net	31,448	0	0
Issuance of preferred stock, net	0	10,234	2,859
Net cash provided by financing activities	35,368	12,754	2,836
Effect of exchange rate changes on cash	203	(150)	136
Net increase (decrease) in cash	11,283	8,956	(2,724)
Cash and cash equivalents at beginning of year	10,723	1,768	4,492
Cash and cash equivalents at end of year	22,006	10,723	1,768
Cash paid for:
Interest	1,133	1,469	1,392
Income taxes	1	0	1
Conversion of shareholders' loan to preferred stock	$ 0	$ 760	$ 1,100

A. ORGANIZATION AND OPERATIONS

12 Months Ended

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND OPERATIONS

Applied Optoelectronics, Inc. (“AOI” or the “Company”) was incorporated in the State of Texas on February 28, 1997. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for three networking end-markets: cable television, fiber-to-the-home and internet data centers. The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment.

Prime World International Holdings, Ltd. (“Prime World”) is a wholly-owned subsidiary of the Company incorporated in the British Virgin Islands on January 13, 2006. Prime World is the parent company of Global Technology, Inc. (“Global”). Global was established in June 2002 in the People’s Republic of China (“PRC”) and was acquired by Prime World on March 30, 2006. The Company also operates a division, AOI—Taiwan, which is qualified to do business in Taiwan and primarily manufactures transceivers and performs research and development activities.

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries and are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements relate to, among other things, allowance for doubtful accounts, inventory reserve, share-based compensation expense, estimated useful lives of property and equipment, and taxes.

Foreign Currency Translation

All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the exchange rate as of the balance sheet date. Revenue and expense accounts are translated at weighted-average rates for the reporting period. Translation adjustments do not impact the results of operations and are reported as a separate component of stockholders’ equity. Foreign currency transaction gains and losses are included in the consolidated statements of operations.

Fair Value

The carrying value of cash, cash equivalents and short-term investments, accounts receivable, accounts payable, and note receivable approximate their historical fair values due to their short-term maturities. The carrying value of the debt approximates its fair value due to the short-term nature of the debt since it renews frequently at current interest rates. Management believes that the interest rates in effect at each year end represent the current market rates for similar borrowings.

Cash and Cash Equivalents

The Company considers all highly liquid securities with an original maturity of ninety days or less from the date of purchase to be cash equivalents. Cash in foreign accounts was approximately $6.6 million and $1.1 million at December 31, 2013 and 2012, respectively.

The Company maintains cash and cash equivalents at U.S. financial institutions for which the combined account balances in individual institutions may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. As of December 31, 2013, approximately $16.0 million of U.S. deposits were not covered by FDIC insurance. The Company has not experienced any losses and believes it is not exposed to any significant risk with such accounts.

Restricted Cash/Compensating Balances

The Company is required to maintain a compensation deposit equal to 30% of its bank acceptance notes to vendors with a China bank. The Company’s Taiwan subsidiary also uses time deposits for customs guarantee. As of December 31, 2013 and 2012, the amount of restricted cash was $0.8 million and $0.5 million, respectively.

Short-Term Investments

The Company invests its excess cash in bank certificate of deposit. As of December 31, 2013, the Company invested $8.0 million in certificates of deposit in RMB currencies with Taiwan banks. The maturity dates range from 6 months to 12 months.

The Company arranged a revolving line of credit agreement with the same Taiwan bank by pledging 100% of its certificates of deposit. As of December 31, 2013, the pledged certificate of deposit for such arrangement amount is $4.0 million.

Accounts Receivable/Allowance for Doubtful Accounts

The Company carries its accounts receivable at the net amount that it estimates to be collectible. An allowance for uncollectable accounts is maintained through a charge against operations. The allowance is determined by management review of outstanding amounts per customer, historical payments and the aging of accounts.

Bank Acceptance Receivable

The Company carries its bank acceptance receivables at face value or discounted value if they are not interest bearing. The maturity date of the receivables are all within one year of the original issuance date and are carried at face value.

10.

Concentration of Credit Risk and Significant Customers

Financial instruments which potentially subject the Company to concentrations of credit risk include cash, cash equivalents and accounts receivable. The Company places all cash and cash equivalents with high-credit quality financial institutions.

The Company performs ongoing credit valuations of its customers’ financial condition whenever deemed necessary and generally does not require deposits or collateral to support customer receivables. The historical amount of losses on uncollectible accounts has been within the Company’s estimates. The Company generates much of its revenue from a limited number of customers. In 2013, 2012 and 2011, its top ten customers represented 76.9%, 77.6% and 76.6% of its revenue, respectively. In 2013, Cisco Systems, Inc. represented 21.8% of its revenue, Amazon represented 18.2% of its revenue and Biogenomics Corp., a distributor, represented 8.7% of its total revenue. The five largest receivable balances for customers represented an aggregate of 66%, and 58% of total accounts receivable at December 31, 2013 and 2012, respectively.

11.

Fair Value Accounting

The fair value measurement standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard characterizes inputs used in determining fair value according to a hierarchy that prioritized inputs based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows:

Level 1—Inputs represent quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3—Inputs that are not observable from objective sources, such as management’s internally developed assumptions used in pricing an asset or liability.

Assets and liabilities that are required to be fair valued on a recurring basis include money market funds, marketable securities, equity instruments and contingent consideration.

Money market funds are valued with Level 1 inputs, using quoted market prices, and are included in cash and cash equivalents on the Company’s consolidated balance sheets.

12.

Inventories

Inventories are stated at the lower of cost (average-cost method) or market. Work in process and finished goods includes materials, labor and allocated overhead. The Company assesses the valuation of its inventory on a periodic basis and provides write-offs for the value of estimated excess and obsolete inventory based on estimates of future demand.

13.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the following estimated useful lives:

	Useful lives

Buildings	20 - 40 years

Land improvements	10 years

Machinery and equipment	3 - 20 years

Furniture and fixtures	1 - 8 years

Computer equipment and software	3 - 7 years

Leasehold improvements	The shorter of the life of the applicable lease or the useful life of the improvement

Transportation equipment	5 years

Major improvements are capitalized and expenditures for maintenance and repairs are expensed as incurred. Construction in progress represents property, plant and equipment under construction or being installed. Costs include original cost, installation, construction and other direct costs which include interest on borrowings used to finance the asset. Construction in progress is transferred to the appropriate fixed asset account and depreciation commences when the asset has been substantially completed and placed in service.

Land use rights allow the Company rights for 50 years to certain land in Ningbo, China on which the Company built a facility that included office space, manufacturing operations and employee dormitories. The land use rights are recorded at cost and are amortized on the straight-line basis over the useful life of the related contract. The land use rights expire on October 7, 2054.

14.

Intangible Assets

Intangible assets consist of intellectual property that is stated at cost less accumulated amortization. As of December 31, 2013, the Company had 113 total patents issued. The costs incurred to obtain such patents have been capitalized and are being amortized over an estimated life of 20 years. The Company periodically evaluates its intangible assets to determine whether events or changes in circumstances indicate that a patent or trademark may not be applicable to the Company’s current products or is no longer in use. If such a determination is made, the intangible asset is impaired and the remaining value of the patent or trademark will be expensed at that time.

15.

Impairment of Long-Lived Assets

The Company accounts for impairment of long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment, (“ASC 360”). Long-lived assets consist primarily of property, plant and equipment. In accordance with ASC 360, the Company periodically evaluates long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When triggering event indicators are present, the Company obtains appraisals on an asset by asset basis, and will recognize an impairment loss when the sum of the appraised values is less than the carrying amounts of such assets. The appraised values, based on reasonable and supportable assumptions and projections, require subjective judgments. Depending on the assumptions and estimates used, the appraised values projected in the evaluation of long-lived assets can vary within a range of outcomes. The appraisals consider the likelihood of possible outcomes in determining the best estimate for the value of the assets.

The measurement for such an impairment loss is then based on the fair value of the asset as determined by the appraisals.

16.

Comprehensive Income (Loss)

ASC 220, Comprehensive Income, (“ASC 220”) establishes rules for reporting and display of comprehensive income and its components. ASC 220 requires that unrealized gains and losses on the Company’s foreign currency translation adjustments be included in comprehensive income.

17.

Share-based Compensation

The Company accounts for share-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation. Share-based compensation expense is recognized based on the estimated grant date fair value, net of an estimated forfeiture rate, in order to recognize compensation cost for those shares expected to vest. Compensation cost is recognized on a straight-line basis over the vesting period of the options.

18.

Revenue Recognition

The Company derives revenue from the manufacture and sale of fiber optic networking products. Revenue recognition follows the criteria of ASC 605, Revenue Recognition. Specifically, the Company recognizes revenue when persuasive evidence exists of an arrangement with a customer, usually in the form of a customer purchase order; delivery to a third party carrier has occurred; title and risk of loss have transferred to the customer; the price is fixed or determinable; collectability is reasonably assured and there are no uncertainties with respect to customer acceptance. The Company may offer units (samples) to current and potential customers at no charge for evaluation or qualification purposes. Such sample units are expensed as selling or research and development costs when shipped.

19.

Advertising Costs

Advertising costs are charged to operations as incurred and amounted to approximately $121,000, $80,000 and $104,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

20.

Research and Development

Research and development costs are charged to operations as incurred. The Company receives reimbursement for certain development costs, which are capitalized when incurred, up to the reimbursable amount.

21.

Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC 740, Income Taxes. The liability method is used to account for deferred income taxes. Under the liability method, deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The realizability of deferred tax assets are evaluated annually and a valuation allowance is provided if it is unlikely that the deferred tax assets will not give rise to future benefits in the Company’s tax returns.

Uncertain tax provisions are recorded at their net recognizable amount, based on the amount of tax, interest and penalties that management deems is more likely than not to be sustained upon settlement with the tax authorities in the domestic and international jurisdictions in which the Company operates. The Company records tax-related interest and penalties as a component of income tax expense.

22.

Supplemental Cash Flow Information

During the years ended December 31, 2012 and 2011, $0.8 million and $1.1 million in aggregate principal amount of the convertible shareholder notes was converted by the holders, respectively. Upon conversion, 72,381 shares and 60,556 shares of Series G Preferred Stock were issued to the holders, respectively.

23.

New Accounting Standards Adopted in this Report

ASU 2011-04. In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This ASU represents the converged guidance of the FASB and the IASB on measuring fair value and for disclosing information about fair value measurements. The amendments in this ASU clarify the board of directors’ intent about the application of existing fair value measurement and disclosure requirements and changes particular principles or requirements for measuring fair value and for disclosing information about fair value measurements. ASU 2011-04 is effective prospectively for interim and annual reporting periods beginning after December 15, 2011. The Company adopted the provisions of ASU 2011-04 on January 1, 2012, and the adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

24.

Reverse Stock Split

On May 1, 2013, the Company’s board of directors approved, and holders of the requisite number of outstanding shares of our capital stock approved on May 21, 2013, an amendment to our certificate of incorporation to effect a reverse stock split with respect to our securities. Based on the prior board and stockholder approvals, on August 16, 2013 the Company’s board of directors determined that the ratio for the reverse stock split would be 30-to-one. The reverse stock split was effected on August 20, 2013, the date that the amendment to our certificate of incorporation was filed with the Delaware Secretary of State. The reverse stock split is reflected in the accompanying consolidated financial statements and related notes on a retroactive basis for all periods presented.

C. EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic net loss per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from options, restricted stock units and warrants outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive. Therefore, basic and dilutive earnings per share are the same.

The following table presents the calculation of basic and diluted EPS:

	Year ended December 31,
	2013			2012			2011
	(in thousands, except per share data)
Numerator:
Net loss	$	(1,406	)	$	(945	)	$	(5,328	)
Denominator:
Weighted average shares used to compute net loss per share
Basic and diluted		9,965			266			264
Net loss per share
Basic and diluted	$	(0.14	)	$	(3.56	)	$	(20.21	)

The following potentially dilutive securities were excluded from the computation of diluted net loss per share as their effect would have been antidilutive:

	2013		2012		2011
			(in thousands)
Employee stock options		595		419		377
Preferred stock warrants		33		96		122
Restricted stock units		33		–		–
		661		515		499

D. INVENTORIES

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

4. INVENTORIES

At December 31, 2013 and 2012, inventories consisted of the following:

	2013		2012
	(in thousands)
Raw materials	$	8,832	$	4,755
Work in process		8,708		4,434
Finished goods		2,068		3,304
	$	19,608	$	12,493

For the years ended December 31, 2013, 2012 and 2011, the lower of cost or market adjustment expensed for inventory was $0.5 million, $0.9 million and $1.6 million, respectively.

E. PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

At December 31, 2013 and 2012, property, plant and equipment consisted of the following:

	2013			2012
	(in thousands)
Land improvements	$	103		$	93
Building and improvements		16,016			15,239
Machinery and equipment		37,490			29,977
Furniture and fixtures		1,047			739
Computer equipment and software		3,563			2,851
Transportation equipment		188			173
		58,407			49,072
Less accumulated depreciation and amortization		(28,145	)		(24,967	)
		30,262			24,105
Construction in progress		139			–
Land		733			733
Property, plant and equipment, net	$	31,134		$	24,838

For the years ended December 31, 2013, 2012 and 2011, depreciation expense of property, plant and equipment was $3.3 million $2.9 million and $3.1 million, respectively.

F. INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

At December 31, 2013 and 2012, intangible assets consisted of the following:

	2013
	Gross Amount		Accumulated amortization			Intangible assets, net
	(in thousands)
Patents	$	1,632	$	(784	)	$	848
Trademarks		10		(7	)		3
Total tangible assets		1,642		(791	)		851

	2012
	Gross Amount		Accumulated amortization			Intangible assets, net
	(in thousands)
Patents	$	1,509	$	(718	)	$	791
Trademarks		10		(6	)		4
Total tangible assets		1,519		(724	)		795

For the years ended December 31, 2013, 2012 and 2011, amortization expense for intangible assets, included in general and administrative expenses on the income statement, was $68,000 $60,000 and $46,000, respectively. The remaining weighted average amortization period for intangible assets is approximately 12 years.

At December 31, 2013, approximate amortization expense for intangible assets was as follows (in thousands):

2014	$	68
2015		68
2016		68
2017		68
2018		68
Thereafter		511
	$	851

G. FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2013 (in thousands):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable remaining inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	22,006	$	–	$	–	$	22,006
Restricted cash		775		–		–		775
Short term investments		7,970						7,970
Total assets	$	30,751	$	–	$	–	$	30,751
Liabilities:
Bank acceptance payable			$	2,347			$	2,347
Total liabilities	$	–	$	2,347	$	–	$	2,347

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2012 (in thousands):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable remaining inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	10,723	$	–	$	–	$	10,723
Restricted cash		503		–		–		503
Bank acceptance receivable		–		1,034		–		1,034
Total assets	$	11,226	$	1,034	$	–	$	12,260
Liabilities:
Interest rate swap	$	–	$	11	$	–	$	11
Bank acceptance payable				1,521				1,521
Total liabilities	$	–	$	1,532	$	–	$	1,532

- 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

H. NOTES PAYABLE AND LONG-TERM DEBT

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consisted of the following:

	December 31, 2013
	2013		2012
	(in thousands)
Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 1.125% (floor rate: 4.375%), maturing May 3, 2014	$	–	$	141
Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4%), maturing November 15, 2014		3,076		3,181
Revolving line of credit with a U.S. bank up to $7,000 with interest at prime plus 0.5% (floor rate: 3.75%), maturing November 15, 2015		7,000		8,637
Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4.00%), maturing September 10, 2017		1,850		–
Revolving line of credit with a China bank up to $12,000 with interest at 108%-110% of China Prime rate which ranged from 6.48% to 6.60% in 2013 with various maturity dates from January 2014 to August 2014		7,053		10,668
Revolving line of credit with a China bank up to $3,280 with interest ranged from 4.10% to 4.15% with various maturity dates from January 2014 to March 2014		2,413		–
Note payable to a finance company due in monthly installments with 9% interest, maturing October 31, 2013		–		38
Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% or LIBOR plus 1.28% maturing in December 2014		3,795		–
Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		921		398
Total		26,108		23,063
Less current portion		17,185		13,900
Long term portion	$	8,923	$	9,163
Bank Acceptance Payable
Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $741, and maturity dates ranging from January 2014 to June 2014		2,347		1,521

The current portion of long-term debt is the amount payable within one year of the balance sheet date of December 31, 2013. The prime rate of interest was 3.25% on December 31, 2013 and 2012.

Maturities of notes payable and long-term debt are as follows for the future years ending December 31(in thousands):

2014	$	17,185
2015		7,998
2016		529
2017		396
Total outstanding	$	26,108

The U.S. bank loans and line of credit agreement require the Company to meet certain financial covenants including a minimum current ratio, debt service coverage, unrestricted cash and maximum debt over tangible net worth ratio requirements. Collateral for the U.S. bank loans and line of credit includes substantially all of the assets of the Company. As of December 31, 2013, the Company was in compliance with all of its financial and operational covenants associated with these loans.

As of December 31, 2013, the Company had $9.1 million of unused borrowing capacity.

In December 2013, the Company renewed its U.S. revolving line of credit of $7.0 million with the same U.S. bank with a maturity date of November 15, 2015. The interest rate on this line of credit is the prime rate plus 0.50% or the floor rate 3.75%, whichever is higher.

The Company issued warrants to the same U.S. bank in connection with the renewals of the loan in 2009, 2010 and 2012. The Company estimated the fair value of these warrants at the date of the grant using the Black-Scholes option-pricing model and records the expense over the life of the warrants. As of December 31, 2013, 32,665 warrants related to these loans are outstanding. As of December 31, 2013, $16,000 remains to be expensed for these warrants and this expense is expected to be recognized over the next four years.

The Company, through its China subsidiary, established RMB and USD currency lines of credit for $12.1 million and $3.3 million with a China Bank as of December 31, 2013. The interest rate for RMB line of credit ranged 108 % and 110% of the China prime rate. The interest rate for USD currency ranged from 4.1% to 4.2%. This credit line is a revolving line that is renewable by its anniversary. Collateral for the loans includes the land use rights, building and equipment located in China.

The Company extended its equipment financing agreement of $1.0 million with a Taiwan bank in 2013. The financing agreement required equipment collateral. The agreement requires monthly installment payments over 24 months and ends in July 2015. The financing agreement bears interest at the rate of 4.95%.

The Company, through its Taiwan branch, established a $8 million revolving line of credit with Taiwan banks in 2013. The financing agreement required collateral of its time deposit of $8.0 million that is included in short-term investment. The interest rate for the revolving line of credit is variable every six months at Taiwan Time Deposit Interest Rate Index plus 0.41% maturing in December 2014, which is 1.78% as of December 31, 2013.

I. SHORT-TERM LOAN WITH SHAREHOLDERS

12 Months Ended

Dec. 31, 2013

I. Short-Term Loan With Shareholders

SHORT-TERM LOAN WITH SHAREHOLDERS

In 2010, the Company borrowed $3.2 million from 12 shareholders under the terms of unsecured promissory note agreements. These notes bore an interest rate of 6% with maturity dates of 18 months from the effective dates of the notes originally maturing on October 21, 2011, but extended to December 31, 2012. The note holders were also issued warrants that expire by April 23, 2020, to purchase 51,200 shares of the Company’s Series F Preferred Stock, with an exercise price of $7.50 per share. As part of the loan maturity date extension, additional warrants to purchase 6,081 shares of the Company’s Series G Preferred Stock were issued in 2011 with an exercise price of $18.00 per share that expire on April 23, 2020.

In 2011, two of the note holders converted their respective notes into shares of Series G Preferred Stock and four of the notes were repaid in full. In 2012, five of the remaining note holders converted their respective notes into shares of Series G Preferred Stock and one of the notes was repaid. As of December 31, 2012, all principal and interest related to these notes had been fully satisfied.

During the year ended December 31, 2013, warrants related to these loans were exercised for 64,219 shares of common stock.

J. ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2013

Payables and Accruals [Abstract]

ACCRUED LIABILITIES

Accrued liabilities consisted of the following as of December 31:

	2013		2012
	(in thousands)
Accrued payroll	$	2,279	$	1,631
Accrued employee benefits		489		429
Accrued taxes		270		167
Accrued interest		34		74
Advance payments		128		189
Accrued commission		148		69
Accrued professional fees		–		22
Accrued other		1,167		662
	$	4,515	$	3,243

K. OTHER INCOME AND EXPENSE

12 Months Ended

Dec. 31, 2013

Other income (expense)

OTHER INCOME AND EXPENSE

Other income and expense consisted of the following as of December 31:

	2013			2012			2011
	(in thousands)
Interest income	$	104		$	26		$	15
Unrealized foreign exchange gain (loss)		(342	)		217			(352	)
Realized foreign exchange gain (loss)		(70	)		(79	)		83
Government subsidy income		322			92			77
Other non-operating gain (loss)		4			38			1
Gain (loss) on disposal of assets		8			(37	)		(80	)
	$	26		$	257		$	(256	)

L. INCOME TAXES

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

The sources of our income or loss from operations before income taxes were as follows:

	Year ended December 31,
	2013			2012			2011
	(in thousands)
Domestic	$	(684	)	$	(3,077)		$	(3,513	)
Foreign loss		(722	)		2,132			(1,815	)
Total loss	$	(1,406	)	$	(945	)	$	(5,328	)

Deferred income tax assets and liabilities result principally from net operating losses, different methods of recognizing depreciation, reserve for doubtful accounts, inventory reserves for obsolescence and accrued vacation, together with timing differences between book and tax reporting. At December 31, the net deferred tax assets and liabilities are comprised of the following approximate amounts:

	2013			2012
	(in thousands)
NOL Carryforward	$	14,908		$	22,673
Inventory reserves		489			389
Stock compensation		624			511
Fixed assets and intangibles		(1,631	)		1,582	)
Impairment loss		(615	)		(614	)
Other		335			267
		14,110			21,644
Less valuation allowance		(14,110	)		(21,644	)
Deferred tax assets, net	$	–		$	–

The valuation allowance was established to reduce the deferred tax asset for the amount that will likely not be realized. This reduction is primarily necessary due to the uncertainty of the Company’s ability to utilize all of the net operating loss carry forwards. The valuation allowance decreased by $7.5 million in 2013 and increased by approximately $1.5 million and $0.8 million in 2012 and 2011, respectively.

As of December 31, 2013 and 2012, and for the periods then ended, the Company had no uncertain tax positions.

The Company has a U.S. net operating loss carry forward of approximately $65.7 million, which expires between 2020 and 2033. The Company also has U.S. research and development tax credits of $1.6 million which expire between 2020 and 2032. The Company has a net operating loss carryforward from its China operations of approximately $3.6 million, which expires between 2014 and 2017. Utilization of net operating losses and tax credit carryforwards are subject to a substantial annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382. Based upon analysis performed with respect to Section 382 of the Internal Revenue Code, approximately $21.7 million of the total available U.S. net operating loss carry forwards will not be available for utilization as an offset to taxable income in future periods. Because of changes in control that are deemed to have occurred under Section 382, the Company’s net operating loss carry forward available in calendar year 2013 to shelter taxable income was limited to $41.3 million at December 31, 2013, with an additional $3.7 million becoming available between 2014 and 2025. The additional $3.7 million is subject to an annual limitation of the $0.3 million. Additional ownership changes could result in the expiration of the net operating loss and tax credit carryforward before utilization.

The Company files income tax returns in the U.S federal jurisdiction and various states and foreign jurisdictions. As of December 31, 2013, the Company’s federal returns for the year ended December 31, 2011 through the current period are still open to examination. In addition, all of the net operating losses and research and development credit carry forwards that may be utilized in future years are still subject to examination. The Company is not currently subject to U.S. federal, state and local, or non-U.S. income tax examinations by any tax authorities.

A reconciliation of the U.S. federal income tax rate of 34% for the years ended December 31, 2013, 2012 and 2011 to the Company’s effective income tax rate follows:

	2013			2012			2011
	(in thousands)
Expected (benefit) taxes	$	(467	)	$	(293	)	$	(1,808	)
Non-deductible expenses		619			(760	)		1,003
(Decrease) Increase in valuation allowance		(7,533	)		1,545			845
Section 382 limitation		7,423
Other		(42	)		(492	)		(40	)
Tax expense	$	–		$	–		$	–

The Company’s wholly owned subsidiary, Prime World is a tax-exempt entity under the Income Tax Code of the British Virgin Islands.

The Company’s wholly owned subsidiary, Global Technology, Inc., has enjoyed preferential tax concessions in China as a national high-tech enterprise. In March 2007, China’s parliament enacted the PRC Enterprise Income Tax Law, or the EIT Law, under which, effective January 1, 2008, China adopted a uniform income tax rate of 25% for all enterprises including foreign invested enterprises. Global Technology, Inc. was recognized as a National high-tech enterprise in 2008 and was entitled to a 15% tax rate for a three year period from November 2008 to November 2011. In 2011, Global Technology, Inc. renewed its National high-tech enterprise certificate and was therefore extended its three year tax preferential status from November 2011 to November 2014.

For 2011 and 2012, there were no identified uncertain tax positions. During 2013, our liabilities for uncertain tax positions increased by $2.2 million based on tax positions related to our net operating loss carryforwards. As of December 31, 2013, we had $2.2 million, of unrecognized tax benefits on net operating loss carryforwards that must be certified under the dual consolidated loss rules. If recognized, there would be no impact our effective tax rate as a result of the full valuation allowance previously recognized. We believe that it is reasonably possible that $0 of our remaining unrecognized tax positions may be recognized by the end of 2014 as a result of a lapse of the statute of limitations.

M. SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2013

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

SHARE-BASED COMPENSATION

The Company’s board of directors and stockholders previously approved, the 1998 Share Incentive Plan, the 2000 Share Incentive Plan, the 2004 Share Incentive Plan and the 2006 Share Incentive Plan, (collectively the “Prior Plans”). As of December 31, 2013, the Company had options outstanding to purchase 708,473 shares of common stock under its Prior Plans with a weighted average exercise price of $6.68 per share. Following the Company’s initial public offering in September 2013, no further awards will be granted under the Prior Plans. However, all outstanding awards under the Prior Plans will continue to exist and will continue to be governed by their existing terms.

On April 12, 2013, our board of directors adopted and approved the Company’s 2013 Equity Incentive Plan, (the “2013 Plan”), and it was subsequently approved by the Company’s stockholders on May 21, 2013. As of December 31, 2013, the Company had options outstanding to purchase 759,429 shares of common stock under the 2013 Plan with a weighted average exercise price of $9.97 per share.

The Company issues stock options to employees, consultants and non-employee directors. Stock option awards for the Prior Plans and the 2013 Plan generally vest over a four year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options and restrictive stock units (“RSUs”) may be granted from these plans. Prior to the Company’s initial public offering, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third party valuation specialists.

Under the 2013 Plan, participants may be granted RSUs, representing an unfunded, unsecured right to receive common stock on the date specified in the recipient’s award. The RSUs granted under the plan generally vest over one year at a rate of 1/12^thper month. The Company recognizes compensation expense on a straight-line basis over the applicable vesting term of the award.

During the year ended December 31, 2013, the Company granted 33,000 RSUs with a total grant-date fair value of $0.3 million. The resulting compensation expense recorded in the year ended December 31, 2013 was approximately $0.2 million. At December 31, 2013, there was $0.1 million of unrecognized compensation cost related to RSUs, all of which is expected to be realized within one year.

The Company estimates the fair value of employee stock options at the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

	2013	2012	2011
Expected volatility	52 to 70%	70.0%	70.0%
Risk-free interest rate	0.96% to 2.97%	1.01%	2.32%
Expected term (years)	6.25	6.25	6.25
Expected dividend yield	-	-	-
Estimated forfeitures	7.5%	10%	13%

As there had been no market for the Company’s common stock prior to its initial public offering, the expected volatility for options granted to date was derived from an analysis of reported data for a peer group of companies that issued options with similar terms. The expected volatility has been determined using an average of the expected volatility reported by this peer group of companies. The Company uses a risk free interest rate based on the 10-year Treasury as reported during the period. The expected term of the options has been determined utilizing the simplified method which calculates a simple average based on vesting period and option life. The Company does not anticipate paying dividends in the near future. Estimated forfeitures are based on historical experience and future work force projections.

Employee share-based compensation expenses recognized for the years ended December 31, were as follows:

	2013		2012		2011
	(in thousands)
Cost of goods sold	$	56	$	7	$	35
Research and development		53		8		50
Sales and marketing		52		9		58
General and administrative		907		137		420
Total share-based compensation expense	$	1,068	$	161	$	563

Options have been granted to the Company’s employees under the five incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and semi-annually thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity:

	Number of shares			Exercise price	Weighted average exercise price
	(in thousands, except price data)
Outstanding, January 1, 2011		288		3.00 - 7.50		5.838
Granted		124		6.00		6.000
Exercised		(3	)	3.00 - 6.00		6.000
Forfeited		(25	)	6.00		6.000
Expired		(7	)	4.50 - 6.00		5.973
Outstanding, December 31, 2011		377		3.00 - 7.50		5.877
Granted		88		6.00		6.000
Exercised		(1	)	6.00 - 7.50		6.291
Forfeited		(19	)	6.00		6.000
Expired		(26	)	3.00 - 7.50		5.301
Outstanding, December 31, 2012		419		3.00 - 7.50		5.936
Granted		1,099		7.50 - 12.90		9.214
Exercised		(29	)	4.50 - 6.00		5.875
Forfeited		(16	)	3.00 - 7.50		7.099
Expired		(5	)	3.00 - 7.50		5.986
Outstanding, December 31, 2013		1,468		3.00 - 12.90		8.379
Exercisable, December 31, 2013		275		3.00 - 7.50		5.915
Vested and expected to vest		1,325		3.00 - 12.90		8.287

The following table summarizes information about the options outstanding at December 31, 2013:

Range of exercise prices	Number of shares outstanding		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)		Number of shares exercisable		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)
	(in thousands, except price data)
$3.00 - $6.00		371		5.914	$	3,373		6.59		270		5.881	$	2,463		6.22
7.50 - 12.90		1,097		9.213		6,360		9.49		5		7.500		43		1.77
Total		1,468		8.379	$	9,733		8.76		275		5.915	$	2,506		6.13

As of December 31, 2013, total compensation cost related to unvested stock options not yet recognized was $5.1 million, which is expected to be expensed over a weighted-average period of 3.41 years.

The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2013 and December 31, 2012 was $2.5 million and $0.7 million, respectively.

The number and weighted average fair value of options granted in 2013, 2012 and 2011 is as follows:

2013				2012				2011
Shares		Weighted average fair value		Shares		Weighted average fair value		Shares		Weighted average fair value
(shares in thousands)
	1,099	$	4.9986		88	$	4.9260		124	$	0.3930

N. STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

STOCKHOLDERS' EQUITY

Common Stock

The Company has authorized the issuance of up to 45,000,000 shares of common stock, all of which have been designated voting common stock, under its Amended and Restated Certificate of Incorporation.

Convertible Preferred Stock

The Company has authorized the issuance of up to 5,000,000 shares of preferred stock under the Company’s Amended and Restated Certificate of Incorporation.

Warrants

As of December 31, 2013, the Company had outstanding warrants to purchase:

• 15,999 shares of common stock at an exercise price of $6.25 per share.

• 9,999 shares of common stock at an exercise price of $15.00 per share.

• 6,667 shares of common stock at an exercise price of $10.50 per share.

For the year ended December 31, 2013, $57,000 of expense was recorded related to these warrants. At December 31, 2013, $16,000 of deferred compensation remains to be expensed for these warrants. During the year ended December 31, 2013, warrants were exercised for 74,219 shares of common stock.

Public Offering of Common Stock

On September 25, 2013, the Company sold 3.6 million shares of its common stock in its initial public offering at a price of $10.00 per share, providing proceeds of $31.5 million net of expenses and underwriting discounts and commissions. The Company’s initial public offering closed on October 1, 2013.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: 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.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

O. SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in one reportable segment. The Company’s Chief Executive Officer, who is considered to be the chief operating decision maker, manages the Company’s operations as a whole and reviews financial information presented on a consolidated basis, accompanied by information about product revenue, for purposes of evaluating financial performance and allocating resources.

The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of product manufacturing plants. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands):

	For the year ended December 31,
	2013		2012		2011
Revenues:	(in thousands)
United States	$	14,705	$	12,192	$	18,767
Taiwan		31,863		15,200		6,547
China		31,856		36,029		22,526
	$	78,424	$	63,421	$	47,840

	As of December 31,
	2013		2012		2011
Long-lived assets:		(in thousands)
United States	$	9,415		8,966	$	9,457
Taiwan		7,192		3,719		2,325
China		16,337		13,595		14,052
	$	32,944	$	26,280	$	25,834

The Company serves three primary markets, the CATV, internet data center and FTTH markets. Of the Company’s total revenues in 2013, the Company earned $47.4 million, or 60.4%, from the CATV market, $19.4 million, or 24.7%, from the internet data center market, $4.4 million, or 5.6%, from the FTTH market, and $7.3 million, or 9.3%, from other markets. Of the Company’s total revenues in 2012, the Company earned $49.8 million, or 78.6%, from the CATV market, $5.3 million, or 8.3%, from the internet data center market, $3.7 million, or 5.8% from the FTTH market, and $4.6 million, or 7.3% from other markets.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

+ Details

P. MAJOR CUSTOMERS

12 Months Ended

Dec. 31, 2013

P. Major Customers

MAJOR CUSTOMERS

The Company currently derives its revenues from customers in the United States and throughout the rest of the world. Generally, the Company does not require deposits or other collateral to support customer receivables. The Company performs an initial and periodic credit evaluation of its customers and maintains an allowance for uncollectible accounts for potential uncollectible accounts. The historical amount of losses on uncollectible accounts has been within the Company’s estimates. The Company generates much of its revenue from a limited number of customers. In 2013, 2012 and 2011, its top ten customers represented 76.9%, 77.6% and 76.6% of its revenue, respectively. In 2013, Cisco Systems, Inc. represented 21.8% of its revenue, Amazon represented 18.2% of its revenue and Biogenomics Corp., a distributor, represented 8.7% of its total revenue. The five largest receivable balances for customers represented an aggregate of 66%, and 58% of total accounts receivable at December 31, 2013 and 2012, respectively.

Q. EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

EMPLOYEE BENEFIT PLANS

On August 1, 2000, the Company established a 401(k) profit sharing plan covering employees meeting certain age and service requirements. The plan provides for discretionary Company contributions to be allocated based on the employee’s eligible contributions. The Company made no contributions to the 401(k) plan for the years ended December 31, 2013, 2012 and 2011.

Employees of Global participate in a state-mandated social security program in China. Under this program, pension costs are recorded on the basis of required monthly contributions to employees’ individual accounts during their service periods. Under the regulations of the People’s Republic of China, Global is required to make fixed contributions to a fund, which is under the administration of the local labor departments. Employees of AOI—Taiwan participate in a pension program under the Taiwan Labor Pension Act. Pension expense for Global was $384,000, $244,000 and $206,000 in 2013, 2012 and 2011, respectively. Pension expense for AOI—Taiwan was $203,000, $168,000 and $123,000 in 2013, 2012 and 2011, respectively.

R. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Commitments

The Company conducts part of its operations from leased facilities and also leases equipment. Rent expense was $0.6 million, $0.6 million and $0.4 million for the years ended December 31, 2013, 2012 and 2011, respectively.

At December 31, 2013, the approximate minimum rental commitments under noncancellable leases in excess of one year that expire at varying dates through 2017 were as follows:

Year ending December 31,	Amount
	(in thousands)
2014	$	689
2015-2017		225
	$	914

Employment Agreements and Consultancy Agreements

The Company has entered into employment and indemnification agreements with three executive officers. These agreements provide that if their employment is terminated as a result of a change of control of the Company, or if their employment is terminated for certain other reasons set forth in the agreements, the Company will be required to pay a severance payment in an amount equal to their annual base salary, and other additional compensation due under the terms of the agreements.

The Company has also entered into employment and indemnification agreements with two other executive officers. These agreements provide that if their employment is terminated as a result of a change of control of the Company, the Company will be required to pay a severance payment in an amount equal to their six months of their annual base salary, and other additional compensation due under the terms of the agreements.

In 2012, the Company entered into consulting agreements with two of its shareholders and board members for a period of one year from June 2012 to June 2013. Each agreement provides that a consulting fee will be paid to the consultant within 30 days after submission of the invoice by the consultant. The Company incurred $35,000 and $41,000 of consulting service fees to these consultants in 2013 and 2012, respectively.

Contingencies

The Company may be party to litigation, claims or assessments in the ordinary course of business. Management is not aware of any of these matters that would have a material effect on the financial condition, results of operations or cash flows of the Company.

S. RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

RELATED PARTY TRANSACTIONS

The Company had the following related parties’ activities with its shareholders:

	2013		2012		2011
	(in thousands)
Interest expense	$	–	$	36	$	176
Consulting service fees		35		41		150
Note payable		–		–		910
Interest payable		–		–		122

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

T. SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

We have evaluated subsequent events through the date the financial statements were available to be issued.

On January 28, 2014, the Company’s board of directors granted stock options for 107,800 shares of the Company’s common stock to various employees of the Company. The stock options have an exercise price of $13.84 per share and vest over a four year period from date of grant.

On January 3, 2014 the Company paid down $7.0 million of loans subsequent to year-end.

On January 6, 2014 the Company paid down $4.5 million of loans of its China subsidiary subsequent to year-end.

Subsequent to year end, the Company drew down $4.0 million of loans of its Taiwan bank facility.

U. SELECTED QUARTERLY FINANCIAL DATA

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA

The following tables set forth a summary of the Company’s quarterly financial information for each of the four quarters for the years ended December 31, 2013 and 2012.

	First			Second			Third			Fourth
Year ended December 31, 2012	Quarter			Quarter			Quarter			Quarter
	(in thousands, except percentages, share and per share data)
Revenue	$	12,506		$	15,638		$	16,416		$	18,861
Cost of goods sold		8,393			10,938			11,743			13,418
Gross profit	$	4,113		$	4,700		$	4,673		$	5,443
Gross margin		32.9%			30.1%			28.5%			28.9%

Operating expenses:
Research and development	$	1,574		$	1,708		$	2,178		$	2,144
Sales and marketing		814			806			759			756
General and administrative		1,961			1,947			1,892			2,213
Total operating expenses	$	4,349		$	4,460		$	4,829		$	5,112

Income (loss) from operations	$	(236	)	$	240		$	(156	)	$	331
Interest and other income (expense), net		(287	)		(332	)		(225	)		(280	)
Net income (loss)	$	(523	)	$	(92	)	$	(381	)	$	51

Net loss per share—basic, as revised	$	(1.97	)	$	(0.35	)	$	(1.43	)	$	0.20
Net loss per share—diluted, as revised	$	(1.97	)	$	(0.35	)	$	(1.43	)	$	0.07
Weighted average shares used to compute net loss per share, as revised:
Basic		265,168			265,590			265,920			265,920
Diluted		265,168			265,590			265,920			695,241

	First			Second			Third			Fourth
Year ended December 31, 2013	Quarter			Quarter			Quarter			Quarter
	(in thousands, except percentages, share and per share data)
Revenue	$	14,317		$	19,597		$	20,766		$	23,744
Cost of goods sold		9,732			14,150			14,445			17,068
Gross profit	$	4,585		$	5,447		$	6,321		$	6,676
Gross margin		32.0%			27.8%			30.4%			28.1%

Operating expenses:
Research and development	$	2,004		$	1,898		$	2,211		$	2,400
Sales and marketing		907			1,053			1,034			1,198
General and administrative		2,374			2,447			2,435			3,375
Total operating expenses	$	5,285		$	5,398		$	5,680		$	6,973

Income (loss) from operations	$	(700	)	$	49		$	641		$	(297	)
Interest and other income (expense), net		(294	)		(331	)		(250	)		(223	)
Net income (loss)	$	(994	)	$	(282	)	$	390		$	(520	)

Net loss per share—basic, as revised	$	(3.74	)	$	(1.04	)	$	0.04		$	(0.04	)
Net loss per share—diluted, as revised	$	(3.74	)	$	(1.04	)	$	0.04		$	(0.04	)
Weighted average shares used to compute net loss per share, as revised:
Basic		265,920			270,912			8,995,397			12,630,603
Diluted		265,920			270,912			9,154,692			12,630,603

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Foreign Currency Translation

Fair Value

Cash and Cash Equivalents

Restricted Cash/Compensating Balances

Short-Term Investments

Accounts Receivable/Allowance for Doubtful Accounts

Bank Acceptance Receivable

Concentration of Credit Risk and Significant Customers

Fair Value Accounting

Level 1—Inputs represent quoted prices in active markets for identical assets or liabilities.

Level 3—Inputs that are not observable from objective sources, such as management’s internally developed assumptions used in pricing an asset or liability.

Assets and liabilities that are required to be fair valued on a recurring basis include money market funds, marketable securities, equity instruments and contingent consideration.

Money market funds are valued with Level 1 inputs, using quoted market prices, and are included in cash and cash equivalents on the Company’s consolidated balance sheets.

Inventories

Property, Plant and Equipment

	Useful lives

Buildings	20 - 40 years

Land improvements	10 years

Machinery and equipment	3 - 20 years

Furniture and fixtures	1 - 8 years

Computer equipment and software	3 - 7 years

Leasehold improvements	The shorter of the life of the applicable lease or the useful life of the improvement

Transportation equipment	5 years

Intangible Assets

Impairment of Long-Lived Assets

The measurement for such an impairment loss is then based on the fair value of the asset as determined by the appraisals.

Comprehensive Income (Loss)

Share-based Compensation

Revenue Recognition

Advertising Costs

Advertising costs are charged to operations as incurred and amounted to approximately $121,000, $80,000 and $104,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

Research and Development

Income Taxes

Supplemental Cash Flow Information

New Accounting Standards Adopted in this Report

Reverse Stock Split

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Property, Plant and Equipment

At December 31, 2013 and 2012, property, plant and equipment consisted of the following:

	2013			2012
	(in thousands)
Land improvements	$	103		$	93
Building and improvements		16,016			15,239
Machinery and equipment		37,490			29,977
Furniture and fixtures		1,047			739
Computer equipment and software		3,563			2,851
Transportation equipment		188			173
		58,407			49,072
Less accumulated depreciation and amortization		(28,145	)		(24,967	)
		30,262			24,105
Construction in progress		139			–
Land		733			733
Property, plant and equipment, net	$	31,134		$	24,838

C. EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Computation of basic and diluted net loss per share

The following table presents the calculation of basic and diluted EPS:

	Year ended December 31,
	2013			2012			2011
	(in thousands, except per share data)
Numerator:
Net loss	$	(1,406	)	$	(945	)	$	(5,328	)
Denominator:
Weighted average shares used to compute net loss per share
Basic and diluted		9,965			266			264
Net loss per share
Basic and diluted	$	(0.14	)	$	(3.56	)	$	(20.21	)

Schedule of potentially dilutive securites

The following potentially dilutive securities were excluded from the computation of diluted net loss per share as their effect would have been antidilutive:

	2013		2012		2011
			(in thousands)
Employee stock options		595		419		377
Preferred stock warrants		33		96		122
Restricted stock units		33		–		–
		661		515		499

D. INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Schedule of inventories

At December 31, 2013 and 2012, inventories consisted of the following:

	2013		2012
	(in thousands)
Raw materials	$	8,832	$	4,755
Work in process		8,708		4,434
Finished goods		2,068		3,304
	$	19,608	$	12,493

E. PROPERTY, PLANT AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

At December 31, 2013 and 2012, property, plant and equipment consisted of the following:

	2013			2012
	(in thousands)
Land improvements	$	103		$	93
Building and improvements		16,016			15,239
Machinery and equipment		37,490			29,977
Furniture and fixtures		1,047			739
Computer equipment and software		3,563			2,851
Transportation equipment		188			173
		58,407			49,072
Less accumulated depreciation and amortization		(28,145	)		(24,967	)
		30,262			24,105
Construction in progress		139			–
Land		733			733
Property, plant and equipment, net	$	31,134		$	24,838

F. INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

At December 31, 2013 and 2012, intangible assets consisted of the following:

	2013
	Gross Amount		Accumulated amortization			Intangible assets, net
	(in thousands)
Patents	$	1,632	$	(784	)	$	848
Trademarks		10		(7	)		3
Total tangible assets		1,642		(791	)		851

	2012
	Gross Amount		Accumulated amortization			Intangible assets, net
	(in thousands)
Patents	$	1,509	$	(718	)	$	791
Trademarks		10		(6	)		4
Total tangible assets		1,519		(724	)		795

Amortization expense for intangible assets

At December 31, 2013, approximate amortization expense for intangible assets was as follows (in thousands):

2014	$	68
2015		68
2016		68
2017		68
2018		68
Thereafter		511
	$	851

G. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities at fair value

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2013 (in thousands):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable remaining inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	22,006	$	–	$	–	$	22,006
Restricted cash		775		–		–		775
Short term investments		7,970						7,970
Total assets	$	30,751	$	–	$	–	$	30,751
Liabilities:
Bank acceptance payable			$	2,347			$	2,347
Total liabilities	$	–	$	2,347	$	–	$	2,347

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2012 (in thousands):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable remaining inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	10,723	$	–	$	–	$	10,723
Restricted cash		503		–		–		503
Bank acceptance receivable		–		1,034		–		1,034
Total assets	$	11,226	$	1,034	$	–	$	12,260
Liabilities:
Interest rate swap	$	–	$	11	$	–	$	11
Bank acceptance payable				1,521				1,521
Total liabilities	$	–	$	1,532	$	–	$	1,532

H. NOTES PAYABLE AND LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Schedule of notes payable and long-term debt

Notes payable and long-term debt consisted of the following:

	December 31, 2013
	2013		2012
	(in thousands)
Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 1.125% (floor rate: 4.375%), maturing May 3, 2014	$	–	$	141
Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4%), maturing November 15, 2014		3,076		3,181
Revolving line of credit with a U.S. bank up to $7,000 with interest at prime plus 0.5% (floor rate: 3.75%), maturing November 15, 2015		7,000		8,637
Term loan with a U.S. bank with monthly payments of principal and interest at prime plus 0.75% (floor rate: 4.00%), maturing September 10, 2017		1,850		–
Revolving line of credit with a China bank up to $12,000 with interest at 108%-110% of China Prime rate which ranged from 6.48% to 6.60% in 2013 with various maturity dates from January 2014 to August 2014		7,053		10,668
Revolving line of credit with a China bank up to $3,280 with interest ranged from 4.10% to 4.15% with various maturity dates from January 2014 to March 2014		2,413		–
Note payable to a finance company due in monthly installments with 9% interest, maturing October 31, 2013		–		38
Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% or LIBOR plus 1.28% maturing in December 2014		3,795		–
Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		921		398
Total		26,108		23,063
Less current portion		17,185		13,900
Long term portion	$	8,923	$	9,163
Bank Acceptance Payable
Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $741, and maturity dates ranging from January 2014 to June 2014		2,347		1,521

Maturities of notes payable and long-term debt

Maturities of notes payable and long-term debt are as follows for the future years ending December 31(in thousands):

2014	$	17,185
2015		7,998
2016		529
2017		396
Total outstanding	$	26,108

J. ACCRUED LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2013

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consisted of the following as of December 31:

	2013		2012
	(in thousands)
Accrued payroll	$	2,279	$	1,631
Accrued employee benefits		489		429
Accrued taxes		270		167
Accrued interest		34		74
Advance payments		128		189
Accrued commission		148		69
Accrued professional fees		–		22
Accrued other		1,167		662
	$	4,515	$	3,243

K. OTHER INCOME AND EXPENSE (Tables)

12 Months Ended

Dec. 31, 2013

Other income (expense)

Schedule of other income and expense

Other income and expense consisted of the following as of December 31:

	2013			2012			2011
	(in thousands)
Interest income	$	104		$	26		$	15
Unrealized foreign exchange gain (loss)		(342	)		217			(352	)
Realized foreign exchange gain (loss)		(70	)		(79	)		83
Government subsidy income		322			92			77
Other non-operating gain (loss)		4			38			1
Gain (loss) on disposal of assets		8			(37	)		(80	)
	$	26		$	257		$	(256	)

L. INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income or loss from operations before income taxes

The sources of our income or loss from operations before income taxes were as follows:

	Year ended December 31,
	2013			2012			2011
	(in thousands)
Domestic	$	(684	)	$	(3,077)		$	(3,513	)
Foreign loss		(722	)		2,132			(1,815	)
Total loss	$	(1,406	)	$	(945	)	$	(5,328	)

Net deferred tax assets and liabilities

At December 31, the net deferred tax assets and liabilities are comprised of the following approximate amounts:

	2013			2012
	(in thousands)
NOL Carryforward	$	14,908		$	22,673
Inventory reserves		489			389
Stock compensation		624			511
Fixed assets and intangibles		(1,631	)		1,582	)
Impairment loss		(615	)		(614	)
Other		335			267
		14,110			21,644
Less valuation allowance		(14,110	)		(21,644	)
Deferred tax assets, net	$	–		$	–

Effective income tax rate

A reconciliation of the U.S. federal income tax rate of 34% for the years ended December 31, 2013, 2012 and 2011 to the Company’s effective income tax rate follows:

	2013			2012			2011
	(in thousands)
Expected (benefit) taxes	$	(467	)	$	(293	)	$	(1,808	)
Non-deductible expenses		619			(760	)		1,003
(Decrease) Increase in valuation allowance		(7,533	)		1,545			845
Section 382 limitation		7,423
Other		(42	)		(492	)		(40	)
Tax expense	$	–		$	–		$	–

M. SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2013

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

Fair value of employee stock options

The Company estimates the fair value of employee stock options at the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

	2013	2012	2011
Expected volatility	52 to 70%	70.0%	70.0%
Risk-free interest rate	0.96% to 2.97%	1.01%	2.32%
Expected term (years)	6.25	6.25	6.25
Expected dividend yield	-	-	-
Estimated forfeitures	7.5%	10%	13%

Schedule of employee stock-based compensation expenses

Employee share-based compensation expenses recognized for the years ended December 31, were as follows:

	2013		2012		2011
	(in thousands)
Cost of goods sold	$	56	$	7	$	35
Research and development		53		8		50
Sales and marketing		52		9		58
General and administrative		907		137		420
Total share-based compensation expense	$	1,068	$	161	$	563

Summary of option activity

The following is a summary of option activity:

	Number of shares			Exercise price	Weighted average exercise price
	(in thousands, except price data)
Outstanding, January 1, 2011		288		3.00 - 7.50		5.838
Granted		124		6.00		6.000
Exercised		(3	)	3.00 - 6.00		6.000
Forfeited		(25	)	6.00		6.000
Expired		(7	)	4.50 - 6.00		5.973
Outstanding, December 31, 2011		377		3.00 - 7.50		5.877
Granted		88		6.00		6.000
Exercised		(1	)	6.00 - 7.50		6.291
Forfeited		(19	)	6.00		6.000
Expired		(26	)	3.00 - 7.50		5.301
Outstanding, December 31, 2012		419		3.00 - 7.50		5.936
Granted		1,099		7.50 - 12.90		9.214
Exercised		(29	)	4.50 - 6.00		5.875
Forfeited		(16	)	3.00 - 7.50		7.099
Expired		(5	)	3.00 - 7.50		5.986
Outstanding, December 31, 2013		1,468		3.00 - 12.90		8.379
Exercisable, December 31, 2013		275		3.00 - 7.50		5.915
Vested and expected to vest		1,325		3.00 - 12.90		8.287

Options outstanding

The following table summarizes information about the options outstanding at December 31, 2013:

Range of exercise prices	Number of shares outstanding		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)		Number of shares exercisable		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)
	(in thousands, except price data)
$3.00 - $6.00		371		5.914	$	3,373		6.59		270		5.881	$	2,463		6.22
7.50 - 12.90		1,097		9.213		6,360		9.49		5		7.500		43		1.77
Total		1,468		8.379	$	9,733		8.76		275		5.915	$	2,506		6.13

Number and weighted average fair value of options granted

The number and weighted average fair value of options granted in 2013, 2012 and 2011 is as follows:

2013				2012				2011
Shares		Weighted average fair value		Shares		Weighted average fair value		Shares		Weighted average fair value
(shares in thousands)
	1,099	$	4.9986		88	$	4.9260		124	$	0.3930

O. SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Revenue and asset information by geographic region

	For the year ended December 31,
	2013		2012		2011
Revenues:	(in thousands)
United States	$	14,705	$	12,192	$	18,767
Taiwan		31,863		15,200		6,547
China		31,856		36,029		22,526
	$	78,424	$	63,421	$	47,840

	As of December 31,
	2013		2012		2011
Long-lived assets:		(in thousands)
United States	$	9,415		8,966	$	9,457
Taiwan		7,192		3,719		2,325
China		16,337		13,595		14,052
	$	32,944	$	26,280	$	25,834

R. COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Minimum rental commitments under noncancellable leases

At December 31, 2013, the approximate minimum rental commitments under noncancellable leases in excess of one year that expire at varying dates through 2016 were as follows:

Year ending December 31,	Amount
	(in thousands)
2014	$	689
2015-2017		225
	$	914

S. RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2013

Related parties activities

The Company had the following related parties’ activities with its shareholders:

	2013		2012		2011
	(in thousands)
Interest expense	$	–	$	36	$	176
Consulting service fees		35		41		150
Note payable		–		–		910
Interest payable		–		–		122

U. SELECTED QUARTERLY FINANCIAL DATA (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data

The following tables set forth a summary of the Company’s quarterly financial information for each of the four quarters for the years ended December 31, 2013 and 2012.

	First			Second			Third			Fourth
Year ended December 31, 2012	Quarter			Quarter			Quarter			Quarter
	(in thousands, except percentages, share and per share data)
Revenue	$	12,506		$	15,638		$	16,416		$	18,861
Cost of goods sold		8,393			10,938			11,743			13,418
Gross profit	$	4,113		$	4,700		$	4,673		$	5,443
Gross margin		32.9%			30.1%			28.5%			28.9%

Operating expenses:
Research and development	$	1,574		$	1,708		$	2,178		$	2,144
Sales and marketing		814			806			759			756
General and administrative		1,961			1,947			1,892			2,213
Total operating expenses	$	4,349		$	4,460		$	4,829		$	5,112

Income (loss) from operations	$	(236	)	$	240		$	(156	)	$	331
Interest and other income (expense), net		(287	)		(332	)		(225	)		(280	)
Net income (loss)	$	(523	)	$	(92	)	$	(381	)	$	51

Net loss per share—basic, as revised	$	(1.97	)	$	(0.35	)	$	(1.43	)	$	0.20
Net loss per share—diluted, as revised	$	(1.97	)	$	(0.35	)	$	(1.43	)	$	0.07
Weighted average shares used to compute net loss per share, as revised:
Basic		265,168			265,590			265,920			265,920
Diluted		265,168			265,590			265,920			695,241

	First			Second			Third			Fourth
Year ended December 31, 2013	Quarter			Quarter			Quarter			Quarter
	(in thousands, except percentages, share and per share data)
Revenue	$	14,317		$	19,597		$	20,766		$	23,744
Cost of goods sold		9,732			14,150			14,445			17,068
Gross profit	$	4,585		$	5,447		$	6,321		$	6,676
Gross margin		32.0%			27.8%			30.4%			28.1%

Operating expenses:
Research and development	$	2,004		$	1,898		$	2,211		$	2,400
Sales and marketing		907			1,053			1,034			1,198
General and administrative		2,374			2,447			2,435			3,375
Total operating expenses	$	5,285		$	5,398		$	5,680		$	6,973

Income (loss) from operations	$	(700	)	$	49		$	641		$	(297	)
Interest and other income (expense), net		(294	)		(331	)		(250	)		(223	)
Net income (loss)	$	(994	)	$	(282	)	$	390		$	(520	)

Net loss per share—basic, as revised	$	(3.74	)	$	(1.04	)	$	0.04		$	(0.04	)
Net loss per share—diluted, as revised	$	(3.74	)	$	(1.04	)	$	0.04		$	(0.04	)
Weighted average shares used to compute net loss per share, as revised:
Basic		265,920			270,912			8,995,397			12,630,603
Diluted		265,920			270,912			9,154,692			12,630,603

B. Summary Of Significant Accounting Policies (Details)	12 Months Ended
B. Summary Of Significant Accounting Policies (Details)	Dec. 31, 2013
Building [Member]
Property, plant and equipment useful lives	20 - 40 years
Land Improvements [Member]
Property, plant and equipment useful lives	10 years
Machinery and Equipment [Member]
Property, plant and equipment useful lives	3 - 20 years
Furniture and Fixtures [Member]
Property, plant and equipment useful lives	1 - 8 years
Computer Equipment and Software [Member]
Property, plant and equipment useful lives	3 - 7 years
Leaseholds and Leasehold Improvements [Member]
Property, plant and equipment useful lives	The shorter of the life of the applicable lease or the useful life of the improvement
Transportation Equipment [Member]
Property, plant and equipment useful lives	5 years

B. Summary Of Significant Accounting Policies (Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash and cash equivalents	$ 22,006	$ 10,723	$ 1,768	$ 4,492
Cash in excess of FDIC insurance	16,000
Advertising Costs	121	80	104
Principal amount of convertible shareholder notes	0	$ 760	$ 1,100
Shares issued upon conversion of convertible notes		72,381	60,556
Foreign Accounts
Cash and cash equivalents	6,600	$ 1,100
TAIWAN
Restricted cash	800	$ 500
Certificates of deposit	8,000
Pledged certificate of deposit for line of credit	$ 4,000

C. Earnings Per Share (Details-Calculation EPS) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Abstract]
Net loss	$ (520)	$ 390	$ (282)	$ (994)	$ 51	$ (381)	$ (92)	$ (523)	$ (1,406)	$ (945)	$ (5,328)
Weighted average shares used to compute net loss per share
Basic and Diluted									9,964,955	265,576	263,658
Net income (loss) per share
Basic and diluted									$ (0.14)	$ (3.56)	$ (20.21)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

C. Earnings Per Share (Details-Potentially Dilutive Shares) - shares	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Potentially dilutive securities excluded from EPS	661,000	515,000	499,000
Employee Stock Option [Member]
Potentially dilutive securities excluded from EPS	595,000	419,000	377,000
Preferred Stock Warrants [Member]
Potentially dilutive securities excluded from EPS	33,000	96,000	122,000
Restricted Stock Units (RSUs) [Member]
Potentially dilutive securities excluded from EPS	33,000	0	0

D. Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 8,832	$ 4,755
Work in process	8,708	4,434
Finished goods	2,068	3,304
Inventories	$ 19,608	$ 12,493

D. Inventory (Narrative) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Inventory Disclosure [Abstract]
Lower of cost or market adjustment for inventory	$ 500	$ 900	$ 1,600

E. Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Property, plant and equipment, gross	$ 58,407	$ 49,072
Less accumulated depreciation and amortization	(28,145)	(24,967)	$ (22,556)
Property, plant and equipment	30,262	24,105
Construction in progress	139	0
Land	733	733
Property, plant and equipment, net	31,134	24,838
Land Improvements [Member]
Property, plant and equipment, gross	103	93
Building and Building Improvements [Member]
Property, plant and equipment, gross	16,016	15,239
Machinery and Equipment [Member]
Property, plant and equipment, gross	37,490	29,977
Furniture and Fixtures [Member]
Property, plant and equipment, gross	1,047	739
Computer Equipment and Software [Member]
Property, plant and equipment, gross	3,563	2,851
Transportation Equipment [Member]
Property, plant and equipment, gross	$ 188	$ 173

E. Property, Plant and Equipment (Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 3,300	$ 2,900	$ 3,100

F. Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Gross Amount	$ 1,642	$ 1,519
Accumulated amortization	(791)	(724)
Intangible assets, net	851	795
Patents [Member]
Gross Amount	1,632	1,509
Accumulated amortization	(784)	(718)
Intangible assets, net	848	791
Trademarks [Member]
Gross Amount	10	10
Accumulated amortization	(7)	(6)
Intangible assets, net	$ 3	$ 4

F. Intangible Assets (Details-Amortization Schedule) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
2014	$ 68
2015	68
2016	68
2017	68
2018	68
Thereafter	511
Amortization expense for intangible assets	$ 851	$ 795

F. Intangible Assets (Narrative) - USD ($) $ in Thousands	12 Months Ended
F. Intangible Assets (Narrative) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense for intangible assets	$ 68	$ 60	$ 46

G. Fair Value of Financial Instruments (Details-Summary) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Assets:
Cash and cash equivalents	$ 22,006	$ 10,723
Restricted cash	775	503
Short term investments	7,970	1,034
Total assets	30,751	12,260
Liabilities:
Interest rate swap		11
Bank acceptance payable	2,347	1,521
Total liabilities	2,347	1,532
Fair Value, Inputs, Level 1 [Member]
Assets:
Cash and cash equivalents	22,006	10,723
Restricted cash	775	503
Short term investments	7,970	0
Total assets	30,751	11,226
Liabilities:
Interest rate swap		0
Bank acceptance payable	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Short term investments	0	1,034
Total assets	0	1,034
Liabilities:
Interest rate swap		11
Bank acceptance payable	2,347	1,521
Total liabilities	2,347	1,532
Fair Value, Inputs, Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Short term investments	0	0
Total assets	0	0
Liabilities:
Interest rate swap		0
Bank acceptance payable	0	0
Total liabilities	$ 0	$ 0

H. Notes Payable and Long-Term Debt (Details-Schedule of Debt) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Notes payable and long-term debt total	$ 26,108	$ 23,063
Current portion of notes payable and long-term debt	17,185	13,900
Long term portion of notes payable and long-term debt	8,923	9,163
Bank acceptance notes	2,347	1,521
Term loan 1
Notes payable and long-term debt total	$ 0	141
Debt maturity date	May 03, 2014
Interest rate	prime plus 1.125%
Term loan 2
Notes payable and long-term debt total	$ 3,076	3,181
Debt maturity date	Nov. 15, 2014
Interest rate	prime plus 0.75%
Line of Credit
Notes payable and long-term debt total	$ 7,000	8,637
Debt maturity date	Nov. 15, 2014
Interest rate	prime plus 1.0%
Term Loan 3
Notes payable and long-term debt total	$ 1,850	0
Debt maturity date	Sep. 10, 2017
Interest rate	prime plus 1.25%
Line of Credit 2
Notes payable and long-term debt total	$ 7,053	10,668
Debt maturity date	Aug. 15, 2014
Interest rate	110% of China Prime rate
Line of Credit 3
Notes payable and long-term debt total	$ 2,413	0
Debt maturity date	Feb. 28, 2014
Interest rate	6.16%
Note payable 1
Notes payable and long-term debt total	$ 0	38
Debt maturity date	Oct. 31, 2013
Interest rate	9%
Line of Credit 4
Notes payable and long-term debt total	$ 3,795
Interest rate	Interest Rate Index plus 0.41% or LIBOR plus 1.28%
Note payable 2
Notes payable and long-term debt total	$ 921	$ 398
Debt maturity date	Jul. 30, 2015
Interest rate	4.95%

H. Notes Payable and Long-Term Debt (Details-Maturities) $ in Thousands	Dec. 31, 2013 USD ($)
Maturities of notes payable and long-term debt
2014	$ 17,185
2015	7,998
2016	529
2017	396
Total outstanding	$ 26,108

H. Notes Payable and Long-Term Debt (Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Unused borrowing capacity	$ 9,100
CHINA \| China, Yuan Renminbi
Revolving line of credit maximum borrowing capacity	$ 12,100
Interest rate on line of credit	108% to 110% of the China prime rate
CHINA \| United States of America, Dollars
Revolving line of credit maximum borrowing capacity	$ 3,300
Interest rate on line of credit	4.1% to 4.2%
TAIWAN
Revolving line of credit maximum borrowing capacity	$ 8,000
Revolving line of credit, maturity date		Dec. 31, 2014
Interest rate on line of credit		Taiwan Time Deposit Interest Rate Index plus 0.41%
UNITED STATES
Revolving line of credit maximum borrowing capacity	$ 7,000
Revolving line of credit, maturity date	Nov. 15, 2015
Interest rate on line of credit	<p style="text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The interest rate on this line of credit is the prime rate plus 0.50% or the floor rate 3.75%, whichever is higher.</font></p>
Warrants outstanding	32,665
Amount remains to be expensed for warrants	16

I. Short-Term Loan With Shareholders (Narrative)	Dec. 31, 2013 shares
I. Short-Term Loan With Shareholders
Warrants exercised	64,219

J. Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Payables and Accruals [Abstract]
Accrued payroll	$ 2,279	$ 1,631
Accrued employee benefits	489	429
Accrued property taxes	270	167
Accrued interest	34	74
Accrued payments	128	189
Accrued commission	148	69
Accrued professional fees	0	22
Accrued other	1,167	662
Total accrued liabilities	$ 4,515	$ 3,243

K. Other Income and Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Other income (expense)
Interest income									$ 104	$ 26	$ 15
Unrealized foreign exchange gain (loss)									(342)	217	(352)
Realized foreign exchange gain (loss)									(70)	(79)	83
Government subsidy income									322	92	77
Other non-operating gain (loss)									4	38	1
Gain (loss) on disposal of assets									8	(37)	(80)
Total other income and expense	$ (223)	$ (250)	$ (331)	$ (294)	$ (280)	$ (225)	$ (332)	$ (287)	$ 26	$ 257	$ (256)

L. Income Taxes (Details-Operations Income) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Domestic	$ (684)	$ (3,513)	$ (2,144)
Foreign (loss)	(722)	(1,815)	(1,236)
Total loss	$ (1,406)	$ (5,328)	$ (3,380)

L. Income Taxes (Details-Deferred Income Taxes) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
NOL Carryforward	$ 14,908	$ 22,673
Inventory reserves	489	389
Stock compensation	624	511
Fixed assets and intangibles	(1,631)	(1,582)
Impairment loss	(615)	(614)
Other	335	267
Deferred tax assets, gross	14,110	21,644
Less valuation allowance	(14,110)	(21,644)
Deferred tax assets, net	$ 0	$ 0

L. Income Taxes (Details-Reconciliation) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Expected (benefit) taxes	$ (467)	$ (293)	$ (1,808)
Non-deductible expenses	619	(760)	1,003
Decrease) Increase in valuation allowance	(7,533)	1,545	845
Section 382 limitation	7,423	0	0
Other	(42)	(492)	(40)
Tax expense	$ 0	$ 0	$ 0

L. Income Taxes (Narrative) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
L. Income Taxes (Narrative) - USD ($) $ in Thousands	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2011
Valuation allowance increased	$ 1,500	$ 0	$ 800
Net operating loss carryforward	$ 22,673	14,908
Research and development tax credits		1,600
UNITED STATES
Net operating loss carryforward		65,700
CHINA
Net operating loss carryforward		$ 3,600

M. Share-Based Compensation (Details-Assumptions) - Employee Stock Option [Member]	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Expected term (years)	6 years 3 months	6 years 3 months	6 years 3 months
Expected dividend yield	0.00%	0.00%	0.00%
Estimated forfeitures	10.00%	7.50%	13.00%
Minimum
Expected volatility	52.00%
Risk-free interest rate	0.96%
Maximum
Expected volatility	70.00%
Risk-free interest rate	2.97%

M. Share-Based Compensation (Details-Share-based Compensation) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee stock-based compensation expense	$ 1,068	$ 161	$ 563
Cost of Sales [Member]
Employee stock-based compensation expense	56	7	35
Research and Development Expense [Member]
Employee stock-based compensation expense	53	8	50
Selling and Marketing Expense [Member]
Employee stock-based compensation expense	52	9	58
General and Administrative Expense [Member]
Employee stock-based compensation expense	$ 907	$ 137	$ 420

M. Share-Based Compensation (Details-Option Activity) - Employee Stock Option [Member] - $ / shares	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Number of Shares
Outstanding, beginning balance	419,000	377,000	288,000
Granted	1,099,000	88,000	124,000
Exercised	(29,000)	(1,000)	(3,000)
Forfeited	(16,000)	(19,000)	(25,000)
Expired	(5,000)	(26,000)	(7,000)
Outstanding, ending balance	1,468,000	419,000	377,000
Exericsable, ending balance	275,000
Vested and expected to vest	1,325,000
Weighted Average Exercise Price
Outstanding, beginning balance	$ 5.936	$ 5.877	$ 5.838
Granted	9.214	6.000	6.000
Exercised	5.875	6.291	6.000
Forfeited	7.099	6.000	6.000
Expired	5.986	5.301	5.973
Outstanding, ending balance	8.379	$ 5.936	$ 5.877
Exericsable, ending balance	5.915
Vested and expected to vest	$ 8.287

M. Share-Based Compensation (Details-Minimum and Maximum) - Employee Stock Option [Member] - $ / shares	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Weighted Average Exercise Price
Outstanding, beginning balance	$ 5.936	$ 5.877	$ 5.838
Granted	9.214	6.000	6.000
Exercised	5.875	6.291	6.000
Forfeited	7.099	6.000	6.000
Expired	5.986	5.301	5.973
Outstanding, ending balance	8.379	5.936	5.877
Exericsable, ending balance	5.915
Vested and expected to vest	8.287
Minimum
Weighted Average Exercise Price
Outstanding, beginning balance	3.00	3.00	3.00
Granted	7.50
Exercised	4.50	6.00	3.00
Forfeited	3.00
Expired	3.00	3.00	4.50
Outstanding, ending balance	3.00	3.00	3.00
Exericsable, ending balance	3.00
Vested and expected to vest	3.00
Maximum
Weighted Average Exercise Price
Outstanding, beginning balance	7.50	7.50	7.50
Granted	12.90	6.00	6.00
Exercised	6.00	7.50	6.00
Forfeited	7.50	6.00	6.00
Expired	7.50	7.50	6.00
Outstanding, ending balance	12.90	$ 7.50	$ 7.50
Exericsable, ending balance	7.50
Vested and expected to vest	$ 12.90

M. Share-Based Compensation (Details-Options Summary) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Weighted average remaining contractual life (years)	8 years 9 months 4 days
Weighted average remaining contractual life (years)	6 years 1 month 17 days
$3.00 - $6.00
Weighted average remaining contractual life (years)	6 years 7 months 2 days
Weighted average remaining contractual life (years)	6 years 2 months 19 days
7.50 - 12.90
Weighted average remaining contractual life (years)	9 years 5 months 27 days
Weighted average remaining contractual life (years)	1 year 9 months 7 days
Employee Stock Option [Member]
Number of shares outstanding	1,468,000	419,000	377,000	288,000
Weighted average exercise price	$ 8.379
Aggregate intrinsic value	$ 9,733
Number of shares exercisable	275,000
Weighted average exercise price	$ 5.915
Aggregate intrinsic value	$ 2,500	$ 700
Employee Stock Option [Member] \| $3.00 - $6.00
Number of shares outstanding	371,000
Weighted average exercise price	$ 5.914
Aggregate intrinsic value	$ 3,373
Number of shares exercisable	270,000
Weighted average exercise price	$ 5.881
Aggregate intrinsic value	$ 2,463
Employee Stock Option [Member] \| 7.50 - 12.90
Number of shares outstanding	1,097,000
Weighted average exercise price	$ 9.213
Aggregate intrinsic value	$ 6,360
Number of shares exercisable	5,000
Weighted average exercise price	$ 7.500
Aggregate intrinsic value	$ 43

M. Share-Based Compensation (Details-Options Granted) - Employee Stock Option [Member] - $ / shares	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Weighted average fair value of options granted	1,099,000	88,000	124,000
Weighted average fair value	$ 4.9986	$ 4.9260	$ 0.3930

M. Stock-Based Compensation (Narrative) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Restricted Stock Units [Member]
Granted RSUs	33,000
Grant-date fair value	$ 300
Compensation expense	200
Compensation cost on unvested options not yet recognized	$ 100
Employee Stock Option [Member]
Options outstanding	1,468,000	419,000	377,000	288,000
Weighted average exercise price	$ 8.379	$ 5.936	$ 5.877	$ 5.838
Compensation cost on unvested options not yet recognized	$ 5,100
Compensation cost unrecognized weighted average period	3 years 4 months 28 days
Aggregate intrinsic value of options outstanding	$ 2,500	$ 700
Aggregate intrinsic value of options exercisable	$ 2,500	$ 700
Prior Plans
Options outstanding	708,473
Weighted average exercise price	$ 6.68
2013 Plan
Options outstanding	759,429
Weighted average exercise price	$ 9.97

N. Stockholders Equity (Narrative) $ in Thousands	12 Months Ended
N. Stockholders Equity (Narrative) $ in Thousands	Dec. 31, 2013 USD ($) shares
Equity [Abstract]
Warrant expense	$ 57,000
Deferred compensation expense	$ 16,000
Warrants exercised for common stock, shares \| shares	74,219

O. Segment And Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenues	$ 23,744	$ 20,766	$ 19,597	$ 14,317	$ 18,861	$ 16,416	$ 15,638	$ 12,506	$ 78,424	$ 63,421	$ 47,840
Long-lived assets	32,944				26,280				32,944	26,280	25,834
UNITED STATES
Revenues									14,705	12,192	18,767
Long-lived assets	9,415				8,966				9,415	8,966	9,457
TAIWAN
Revenues									31,863	15,200	6,547
Long-lived assets	7,192				3,719				7,192	3,719	2,325
CHINA
Revenues									31,856	36,029	22,526
Long-lived assets	$ 16,337				$ 13,595				$ 16,337	$ 13,595	$ 14,052

O. Segment And Geographic Information (Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
CATV markets [Member]
Revenues	$ 47,400	$ 49,800
Revenues (in percentage)	60.40%	78.60%
Internet data center [Member]
Revenues	$ 19,400	$ 5,300
Revenues (in percentage)	24.70%	8.30%
FTTH markets [Member]
Revenues	$ 4,400	$ 3,700
Revenues (in percentage)	5.60%	5.80%
Other markets [Member]
Revenues	$ 7,300	$ 4,600
Revenues (in percentage)	9.30%	7.30%

P. Major Customers (Narrative)	12 Months Ended
P. Major Customers (Narrative)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Sales Revenue, Segment [Member] \| Ten Customers
Concentration risk	76.90%	77.60%	76.60%
Sales Revenue, Segment [Member] \| Cisco Systems, Inc. [Member]
Concentration risk	21.80%
Sales Revenue, Segment [Member] \| Amazon [Member]
Concentration risk	18.20%
Sales Revenue, Segment [Member] \| Biogenomics Corp [Member]
Concentration risk	8.70%
Accounts Receivable [Member] \| Five Customers [Member]
Concentration risk	66.00%	58.00%

Q. Employee Benefit Plans (Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Global [Member]
Pension expense	$ 384	$ 244	$ 206
AOI - Taiwan [Member]
Pension expense	$ 203	$ 168	$ 123

R. Commitments And Contingencies (Details) $ in Thousands	Dec. 31, 2013 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2014	$ 689
2015-2017	225
Total	$ 914

R. Commitments And Contingencies (Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 600	$ 600	$ 400
Consulting service fees	$ 35	$ 41	$ 150

S. Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Related Party Transactions [Abstract]
Interest expense	$ 0	$ 36	$ 176
Consulting service fees	35	41	150
Note payable	0	0	910
Interest payable	$ 0	$ 0	$ 122

U. Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 23,744	$ 20,766	$ 19,597	$ 14,317	$ 18,861	$ 16,416	$ 15,638	$ 12,506	$ 78,424	$ 63,421	$ 47,840
Cost of goods sold	17,068	14,445	14,150	9,732	13,418	11,743	10,938	8,393	55,396	44,492	34,468
Gross profit	$ 6,676	$ 6,321	$ 5,447	$ 4,585	$ 5,443	$ 4,673	$ 4,700	$ 4,113	23,028	18,929	13,372
Gross margin	28.10%	30.40%	27.80%	32.00%	28.90%	28.50%	30.10%	32.90%
Operating expenses:
Research and development	$ 2,400	$ 2,211	$ 1,898	$ 2,004	$ 2,144	$ 2,178	$ 1,708	$ 1,574	8,512	7,603	6,451
Sales and marketing	1,198	1,034	1,053	907	756	759	806	814	4,191	3,135	2,412
General and administrative	3,375	2,435	2,447	2,374	2,213	1,892	1,947	1,961	10,632	8,012	8,243
Amortization of intangible assets									68	60	46
Total operating expenses	6,973	5,680	5,398	5,285	5,112	4,829	4,460	4,349	23,335	18,750	17,106
Income (loss) from operations	(297)	641	49	(700)	331	(156)	240	(236)	(307)	179	(3,734)
Interest and other income (expense), net	(223)	(250)	(331)	(294)	(280)	(225)	(332)	(287)	26	257	(256)
Net income (loss)	$ (520)	$ 390	$ (282)	$ (994)	$ 51	$ (381)	$ (92)	$ (523)	$ (1,406)	$ (945)	$ (5,328)
Net loss per share-basic, as revised	$ (0.04)	$ 0.04	$ (1.04)	$ (3.74)	$ 0.20	$ (1.43)	$ (0.35)	$ (1.97)
Net loss per share-diluted, as revised	$ (0.04)	$ 0.04	$ (1.04)	$ (3.74)	$ 0.07	$ (1.43)	$ (0.35)	$ (1.97)
Weighted average shares used to compute net loss per share, as revised:
Basic	12,630,603	8,995,397	270,912	265,920	265,920	265,920	265,590	265,168
Diluted	12,630,603	9,154,692	270,912	265,920	695,241	265,920	265,590	265,168