Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Dougherty's Pharmacy, Inc. | |
Entity Central Index Key | 1,080,029 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
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 | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 23,066,564 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 | |
Entity Small Business | true |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 59 | $ 86 |
Restricted cash | 304 | 303 |
Trade accounts receivable, net | 1,622 | 1,673 |
Other receivables | 359 | 345 |
Receivable from affiliates | 10 | 6 |
Inventories, net | 3,518 | 3,562 |
Prepaid expenses | 209 | 267 |
Total current assets | 6,081 | 6,242 |
Long term receivable | 448 | 448 |
Property and equipment, net | 1,046 | 1,045 |
Intangible assets, net | 2,724 | 2,892 |
Deferred tax asset | 2,000 | 2,000 |
Total assets | 12,299 | 12,627 |
Current Liabilities | ||
Accounts payable | 3,017 | 3,123 |
Accrued liabilities | 583 | 429 |
Notes payable, current portion | 708 | 813 |
Revolving credit facility | 3,975 | 3,831 |
Total current liabilities | 8,283 | 8,196 |
Notes payable, long-term portion | 2,661 | 2,801 |
Total liabilities | 10,944 | 10,997 |
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 7,500,000 shares authorized: none issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value; 50,000,000 shares authorized; 24,117,164 shares issued and 23,087,164 shares outstanding at March 31, 2018; 24,003,310 shares issued and 22,973,310 shares outstanding at December 31, 2017 | 2 | 2 |
Additional paid-in capital | 60,212 | 60,221 |
Accumulated deficit | (58,462) | (58,196) |
Treasury stock, at cost, 1,030,000 shares | (397) | (397) |
Total stockholders' equity | 1,355 | 1,630 |
Total liabilities and stockholders' equity | $ 12,299 | $ 12,627 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ .0001 | $ 0.0001 |
Preferred stock, shares authorized | 7,500,000 | 7,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 24,117,164 | 24,003,310 |
Common stock, shares outstanding | 23,087,164 | 22,973,310 |
Treasury stock, at cost | 1,030,000 | 1,030,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenue | $ 9,455 | $ 10,055 |
Cost of sales (exclusive of depreciation and amortization shown separately down below) | 6,887 | 7,268 |
Gross profit | 2,568 | 2,787 |
Operating expenses | ||
Selling, general and administrative expenses | 2,518 | 2,564 |
Non-cash stock compensation | (9) | 12 |
Depreciation and amortization | 242 | 266 |
Total operating expenses | 2,751 | 2,842 |
Operating loss | (183) | (55) |
Other income | 37 | 0 |
Interest expense | (110) | (102) |
Loss before provision for income tax | (256) | (157) |
Income tax provision | (10) | (11) |
Net loss | $ (266) | $ (168) |
Basic and diluted net loss per share attributable to common stockholders | $ (0.01) | $ (0.01) |
Weighted-average number of shares - Basic and diluted | 23,087,164 | 22,417,760 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net loss | $ (266) | $ (168) |
Items not requiring (providing) cash | ||
Depreciation and amortization | 242 | 266 |
Stock-based compensation | (9) | 12 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 47 | 269 |
Inventories | 44 | (102) |
Prepaid expenses and other assets | 44 | (25) |
Accounts payable | (106) | 238 |
Accrued liabilities | 154 | 64 |
Net cash provided by operating activities | 150 | 554 |
Investing Activities | ||
Purchases of property and equipment | (75) | (41) |
Cash proceeds from disposition of CPOC | 0 | 617 |
Net cash (used in) provided by investing activities | (75) | 576 |
Financing Activities | ||
Payments on notes payable | (4,545) | (5,083) |
Proceeds from notes payable | 4,444 | 4,418 |
Net cash used in financing activities | (101) | (665) |
Net (decrease) increase in cash | (26) | 465 |
Cash, beginning of period | 389 | 361 |
Cash, end of period | 363 | 826 |
Supplemental Cash Flow Information | ||
Cash paid for income taxes | 2 | 1 |
Cash paid for interest | $ 111 | $ 100 |
Reconciliation of Cash to the C
Reconciliation of Cash to the Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | ||||
Cash | $ 59 | $ 86 | $ 523 | |
Restricted cash | 304 | 303 | 303 | |
Total cash | $ 363 | $ 389 | $ 826 | $ 361 |
1. Organization and Significant
1. Organization and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | 1. Organization and Significant Accounting Policies Description of Business Dougherty’s Pharmacy, Inc. (“Dougherty’s” or the “Company”) is a value oriented company focused on successfully acquiring, managing and growing community based pharmacies in the Southwest Region. Dougherty’s was incorporated in Delaware on August 8, 2000. A summary of the Company’s investments at Dougherty’s, is shown in the table below: Date Entity Transaction Description % Ownership March 2004 Dougherty’s Holdings, Inc. and subsidiaries (“DHI”or “the Borrowers”) Acquisition of retail pharmacy 100% September 2010 ASDS of Orange County, Inc. (“ASDS”), Holding company for Investment in CRESA Partners of Orange County, L.P. (“CPOC”) 100% On February 7, 2017, CRESA Partners of Orange County, L.P., an affiliate of Cresa Partners-West, Inc. was acquired by Savills Studley, Inc. liquidating the partnership interest in its entirety held by ASDS. ASDS remains active as a holding company for the remaining payouts. On May 6, 2017, the Company sold its pharmacy in Humble, Texas, acquired in September 2014, and received total cash proceeds of $274,000 related to this transaction. The revenues and earnings of the pharmacy are not significant to the consolidated financial statements taken as a whole. On February 6, 2018, the Company opened a new retail pharmacy location at The Campus at Legacy West in Plano, Texas (“Legacy”). This new location will offer pharmacy services and retail products to the approximately 3,000 JCPenney Home Office employees and is open to all other future tenants and visitors of The Campus at Legacy West. Dougherty’s is initially filling prescriptions via concierge service from its pharmacy on Campbell Road until the new location receives its pharmacy license, which is expected to occur within the standard 90-day waiting period or soon thereafter. Dougherty’s anticipates first year revenues from the new location of less than $1.0 million as the pharmacy establishes itself at the new location . Our business requires us to rely on cash flow from operations and the revolving credit facility as our primary sources of funding to operate and meet our financial obligations in the foreseeable future. Historically, much of our debt has been renewed or refinanced in the ordinary course of business. We maintain a level of liquidity sufficient to allow us to cover our cash needs in the short-term. Over the long-term, we manage our cash and capital structure to maintain our financial position and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, capital expenditure requirements, and future investments or acquisitions. As of March 31, 2018 we had cash and restricted cash of approximately $363,000, working capital of approximately negative $2.2 million and total outstanding debt of $7.3 million, including $4.0 million for the revolving credit facility. Negative working capital is due to the reclassification of the revolving credit facility to current liabilities to present the consolidated financial statements in conformity with GAAP. The reclassification does not affect the representation of the Company’s overall performance. Cash provided from operating activities for the three months ended March 31, 2018 was $150,000. Management believes it will have adequate cash to operate the Company and renew, extend, or refinance the revolving credit facility in the next twelve months. Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Dougherty’s and all subsidiaries for which the Company has a controlling financial interest. Dougherty’s uses the cost method of accounting to recognize investments in and income from entities where Dougherty’s does not have a significant influence. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared by the Company, in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X, and have not been audited. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017 included in the Company’s Registration Statement on Form 10. In the opinion of management, the interim unaudited consolidated financial statements included herein contain all adjustments, including normal recurring adjustments, considered necessary to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented. Due to seasonality, the results of operations for the three months ended March 31, 2018, are not necessarily indicative of the results to be expected for any future interim period for the year ending December 31, 2018. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Concentration of Credit Risk The Company’s credit risk relates primarily to its trade accounts receivables and its receivables from affiliates, along with cash deposits maintained at financial institutions in excess of federally insured limits on interest bearing accounts. Management performs continuing evaluations of debtors’ financial condition and maintains an allowance for uncollectible accounts as determined necessary. Accounts Receivable Receivables recorded in the financial statements represent valid claims against debtors for services rendered or other charges arising on or before the balance sheet date. Management makes estimates of the collectibility of accounts receivable. Specifically, management analyzes accounts receivable and historical bad debts, customer credit-worthiness, current economic trends, and changes in customer payment terms and collections trends when evaluating the adequacy of the allowance for doubtful accounts. Any change in the assumptions used in analyzing accounts receivable may result in additional allowances for doubtful accounts being recognized in the periods in which the change in assumptions occurs. At March 31, 2018 and 2017, all of the trade accounts receivable were from retail pharmacy operations. Inventories Inventories consist of health care product finished goods held for resale, valued at the lower of cost using the first-in, first-out method or net realizable value. The Company maintains an estimated reserve against inventory for excess, slow-moving, and obsolete inventory as well as inventory for which carrying value is in excess of its net realizable value. Long-Lived Assets The Company evaluates the recoverability of the carrying value of its long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Revenue Recognition Revenues generated by the retail pharmacy operations are reported at the estimated net realizable amounts expected to be received from individuals, third-party payors, institutional health care providers and others. The Company recognizes revenue from the sale of pharmaceutical products and retail merchandise as transactions occur and product is delivered to the customer. Revenue from product sales is recognized at the point of sale and service revenue is recognized at the time services are provided. Sales and similar taxes collected from clients are excluded from revenues. The obligation is included in accounts payable until the taxes are remitted to the appropriate taxing authorities. Substantially all revenues earned during the three months ended March 31, 2018 and 2017, were earned from the retail pharmacy operations. Cost of Sales Cost of sales includes the purchase price of goods sold, prescription packaging, compounded prescription direct labor, inventory obsolescence, freight costs, cash discounts and vendor rebates. Rebates or refunds received by the Company from its suppliers are considered as an adjustment of the prices of the supplier’s products purchased by the Company. Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Tax positions are recognized if it is more-likely-than-not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more-likely-than-not means a likelihood of more than 50%; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. On December 22, 2017, the President signed into law the “Tax Cuts and Jobs Act” (the “TCJA”). Among numerous changes to existing tax laws, the TCJA permanently reduces the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The effects on deferred tax balances of changes in tax rates are required to be taken into consideration in the period in which the changes are enacted, regardless of when they are effective. As the result of the reduction of the corporate income tax rate under the TCJA, the Company estimated the revaluation of its net deferred tax assets and recorded a provisional noncash income tax loss of approximately $1.0 million for year ended December 31, 2017. The Company has not completed all of its processes to determine the TCJA’s final impact. The final impact may differ from this provisional amount due to, among other things, changes in interpretations and assumptions the Company has made thus far and the issuance of additional regulatory or other guidance. The accounting is expected to be completed by the time the 2017 federal income tax return is filed in 2018. Earnings per Share Basic earnings per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net loss and unrecognized stock based compensation by the weighted-average number of common shares outstanding during the period and the unvested restricted stock units. The unrecognized stock based compensation as of March 31, 2018 and 2017 is $22,000 and $27,000, respectively; the unvested restricted stock units is 170,150 and 135,300, respectively. Due to the net losses for both years, restricted stock units for 2018 and 2017 were anti-dilutive. New Accounting Pronouncements ASU No. 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and becomes effective on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. Our current minimum lease commitments are disclosed in Note 4. Accounting Standards Update ("ASU") No. 2014-09 "Revenue from Contracts with Customers (Topic 606)” In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), or Accounting Standards Codification 606 (“ASC 606”). This guidance outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. Under the new revenue recognition standard, entities apply a five-step model that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, companies identify the performance obligations within their contracts with customers, allocate the transaction price received from customers to each performance obligation identified within their contracts, and recognize revenue as the performance obligations are satisfied. During 2015, 2016, and 2017, the FASB issued various amendments which provide additional clarification and implementation guidance on ASC 606. Specifically, these amendments clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, clarify how an entity should identify performance obligations and licensing implementation guidance, as well as account for shipping and handling fees and freight service, assess collectability, present sales tax, treat non-cash consideration, and account for completed and modified contracts at the time of transition. The new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. The Company adopted the new revenue recognition standard as of January 1, 2018. The adoption of this standard did not result in a change in its recognition of pharmacy retail sales of prescriptions and products as no performance obligations exist within contracts with customers as discussed below. Had a change occurred, the change would have been applied using the modified retrospective approach. The retail pharmacy operations recognize revenue for pharmaceutical products sold under prescriptions and non-pharmaceutical products at the time the customer takes possession of the merchandise through the point of sale system as transactions occur. Each prescription claim is its own arrangement with the customer and is a performance obligation that is reported at the estimated net realizable amounts expected to be received from individuals, third-party payors, institutional health care providers and others. The Company provides retail pharmacy prescriptions and products to residents at long-term care facilities. Revenue is recognized through the billing system at the time of delivery as transactions occur. Each prescription claim is its own arrangement with the customer and is a performance obligation that is reported at the estimated net realizable amounts expected to be received from individuals, third-party payors, institutional health care providers and others. Prescription co-payments are typically not collected at the time products are delivered but are billed to the individuals as part of normal billing procedures and subject to normal accounts receivable collections procedures. The Company has contracts with certain of the long-term care facilities for the delivery of those prescriptions, certain computer and medication dispensing equipment and software and support services all of which are specifically outlined in the contract. The contracts provide for reimbursement of certain costs for certain of these services. As it relates to the long-term care contracts and any other support services provided to its customers, the Company has determined that no revenue is recognized from separate and distinct performance obligations other than the retail sale of the pharmacy prescriptions and products. |
2. Notes Payable
2. Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | 2. Notes Payable Notes payable consist of the following: March 31, 2018 December 31, 2017 (Unaudited) (Audited) First National Bank of Omaha Credit Facility and Promissory Note secured by certain retail pharmacy assets Revolving line of credit in the principal amount of $4,450,000, interest at LIBOR plus 3.25% (4.92% at Mar 31, 2018) $ 3,975,000 $ 3,831,000 Term note in the principal amount of $432,859 at fixed interest rate of 8.11% per annum payable in 36 monthly installments of $13,641. Final payment plus accrued and unpaid interest due in full on April 10, 2020. 300,000 335,000 Term note in the principal amount of $1,827,850 with interest payable at prime plus 2.6% (7.35% at Mar 31, 2018) per annum payable in monthly installments of $15,232 plus interest, a final payment of $929,157 plus all accrued and unpaid interest due in full on July 10, 2020. 1,326,000 1,371,000 Term note in the principal amount of $1,241,350 with interest payable at prime plus 2.6% (7.35% at Mar 31, 2018 ) per annum payable in monthly installments of $10,344 plus interest, a final payment of $638,850 plus all accrued and unpaid interest due in full on January 10, 2020. 838,000 869,000 Term note in the principal amount of $744,100 with interest payable at prime plus 2.38% (7.13% at Mar 31, 2018 ) per annum payable in monthly installments of $6,200 plus interest, a final payment of $378,251 plus all accrued and unpaid interest due in full on August 10, 2020. 552,000 570,000 Term note in the principal amount of $305,350 with interest payable at prime plus 2.4% (7.15% at Mar 31, 2018 ) per annum payable in monthly installments of $2,545 plus interest, a final payment of $155,220 plus all accrued and unpaid interest due in full on August 10, 2019. 193,000 202,000 Acquisition Notes Payable , unsecured Notes payable to sellers of acquired pharmacies with varying monthly payments with interest at 5.5% due through September 2018. 52,000 97,000 Insurance notes payable, secured by the respective insurance policies Notes payable for the Company’s insurance policy premiums with varying monthly payments due through September 2018. Interest rates vary up to 4.076% 108,000 170,000 7,344,000 7,445,000 Less current portion (4,683,000 ) (4,644,000 ) $ 2,661,000 $ 2,801,000 Future maturities of notes payable at March 31, 2018, are as follows: 2018 $ 4,683,000 2019 1,299,000 2020 1,362,000 $ 7,344,000 The revolving credit facility (“the Revolver”) with the First National Bank of Omaha (“the Lender”) is secured by, but not limited to, the accounts receivable, inventory, and the fixed assets of the Borrowers. On July 1, 2017, the Company obtained an extension of the Revolver, through September 1, 2017. On August 9, 2017, the Company obtained an additional term for the Revolver in the amount of $4,450,000 effective September 1, 2017, and then effective February 1, 2018, in the amount of $4,000,000. Outstanding advances und er the Revolver will bear interest at LIBOR plus 3.25% (4.92% at March 31, 2018); accrued and unpaid interest on the Revolver is due monthly. All outstanding principal under the Revolver plus all accrued and unpaid interest thereon is due and payable in full on August 1, 2018. As of the date of this report, the Lender has indicated it does not intend to renew the Revolver on the maturity date. The Company is actively engaged negotiating the re-financing of this indebtedness, and believes that it will be able to do so prior to the maturity date; provided, however, the Company can provide no such assurances. The Revolver is secured by certain retail pharmacy assets, specifically but not limited to, inventory, equipment, software, accounts receivable, intangibles and deposit accounts of the Company. The Revolver is subject to certain financial restrictions, subject to the Lender’s prior written approval, including, but not limited to, capital expenditures not to exceed $200,000, additional indebtedness, acquisitions of entities and payment of dividends and distributions. Effective December 31, 2017, the Borrowers will maintain a minimum debt service coverage ratio of not less than 1.00 to 1.00, as defined. As of March 31, 2018 the Borrowers were not in compliance with this financial covenant. |
3. Stock and Share-Based Compen
3. Stock and Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock and Share-Based Compensation | 3. Stock and Share-Based Compensation Restricted Share Unit Incentive Plan On November 13, 2013, the Board of Directors approved and adopted the Restricted Share Unit (“RSU”) Incentive Plan. Under the plan the Company can award RSUs to employees and non-employee directors and consultants pursuant to restricted stock agreements contingent upon continuous service. Under the restricted stock agreements, the restricted shares will vest annually over a four-year period and will be payable in stock, valued at the fair market value on the grant date. As of March 31, 2018, the following shares had been issued under the 2013 RSU Plan: Year of Issuance: Number of Shares Fair Value at Date of Grant Shares Vested Non-Vested Cancelled 2013 120,000 $ 26,400 115,000 – 5,000 2014 122,100 $ 30,946 86,700 15,150 20,250 2015 150,000 $ 39,000 70,000 30,000 50,000 2016 – – – – – 2017 563,000 $ 114,030 111,600 45,000 406,400 2018 80,000 $ 11,192 – 80,000 – 1,035,100 $ 221,568 383,300 170,150 481,650 |
4. Commitments and Contingencie
4. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 4. Commitments and Contingencies Operating Leases The Company leases their pharmacy, corporate offices and certain pharmacy equipment under non-cancelable operating lease agreements. Certain leases contain renewal options and provide that the Company pay taxes, insurance, maintenance and other operating expenses. Minimum lease payments under all non-cancelable operating lease agreements for the thee months ended March 31, 2018, are as follows: 2018 $ 779,000 2019 795,000 2020 713,000 2021 669,000 2022 680,000 Thereafter 3,680,000 $ 7,316,000 Legal Proceedings The Company is occasionally involved in other claims and proceedings, which are incidental to its business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company. |
5. Related Party Transactions
5. Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5. Related Party Transactions During the three months ended March 31, 2018 and 2017, the Company paid fees to its directors of $12,000 and $13,000 for their roles as members of the Board of Directors and its related committees; fees paid to the Company’s Chairman totaled $30,000 for management and other services provided. |
6. Subsequent Events
6. Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 6. Subsequent Events On April 3, 2018, total principal amount due and owing under the promissory note issued by a bank in favor of an individual who was previously, through August of 2008, a related party of the Company, for which the Company was a co-guarantor as of March 31, 2018, was satisfied in full by the primary obligor. The restricted cash balance of $304,000, for which the Company was required to provide as escrow, was released as unrestricted and can be used for operations. |
1. Organization and Significa13
1. Organization and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Dougherty’s Pharmacy, Inc. (“Dougherty’s” or the “Company”) is a value oriented company focused on successfully acquiring, managing and growing community based pharmacies in the Southwest Region. Dougherty’s was incorporated in Delaware on August 8, 2000. A summary of the Company’s investments at Dougherty’s, is shown in the table below: Date Entity Transaction Description % Ownership March 2004 Dougherty’s Holdings, Inc. and subsidiaries (“DHI”or “the Borrowers”) Acquisition of retail pharmacy 100% September 2010 ASDS of Orange County, Inc. (“ASDS”), Holding company for Investment in CRESA Partners of Orange County, L.P. (“CPOC”) 100% On February 7, 2017, CRESA Partners of Orange County, L.P., an affiliate of Cresa Partners-West, Inc. was acquired by Savills Studley, Inc. liquidating the partnership interest in its entirety held by ASDS. ASDS remains active as a holding company for the remaining payouts. On May 6, 2017, the Company sold its pharmacy in Humble, Texas, acquired in September 2014, and received total cash proceeds of $274,000 related to this transaction. The revenues and earnings of the pharmacy are not significant to the consolidated financial statements taken as a whole. On February 6, 2018, the Company opened a new retail pharmacy location at The Campus at Legacy West in Plano, Texas (“Legacy”). This new location will offer pharmacy services and retail products to the approximately 3,000 JCPenney Home Office employees and is open to all other future tenants and visitors of The Campus at Legacy West. Dougherty’s is initially filling prescriptions via concierge service from its pharmacy on Campbell Road until the new location receives its pharmacy license, which is expected to occur within the standard 90-day waiting period or soon thereafter. Dougherty’s anticipates first year revenues from the new location of less than $1.0 million as the pharmacy establishes itself at the new location . Our business requires us to rely on cash flow from operations and the revolving credit facility as our primary sources of funding to operate and meet our financial obligations in the foreseeable future. Historically, much of our debt has been renewed or refinanced in the ordinary course of business. We maintain a level of liquidity sufficient to allow us to cover our cash needs in the short-term. Over the long-term, we manage our cash and capital structure to maintain our financial position and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, capital expenditure requirements, and future investments or acquisitions. As of March 31, 2018 we had cash and restricted cash of approximately $363,000, working capital of approximately negative $2.2 million and total outstanding debt of $7.3 million, including $4.0 million for the revolving credit facility. Negative working capital is due to the reclassification of the revolving credit facility to current liabilities to present the consolidated financial statements in conformity with GAAP. The reclassification does not affect the representation of the Company’s overall performance. Cash provided from operating activities for the three months ended March 31, 2018 was $150,000. Management believes it will have adequate cash to operate the Company and renew, extend, or refinance the revolving credit facility in the next twelve months. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Dougherty’s and all subsidiaries for which the Company has a controlling financial interest. Dougherty’s uses the cost method of accounting to recognize investments in and income from entities where Dougherty’s does not have a significant influence. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared by the Company, in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X, and have not been audited. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017 included in the Company’s Registration Statement on Form 10. In the opinion of management, the interim unaudited consolidated financial statements included herein contain all adjustments, including normal recurring adjustments, considered necessary to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented. Due to seasonality, the results of operations for the three months ended March 31, 2018, are not necessarily indicative of the results to be expected for any future interim period for the year ending December 31, 2018. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s credit risk relates primarily to its trade accounts receivables and its receivables from affiliates, along with cash deposits maintained at financial institutions in excess of federally insured limits on interest bearing accounts. Management performs continuing evaluations of debtors’ financial condition and maintains an allowance for uncollectible accounts as determined necessary. |
Accounts Receivable | Accounts Receivable Receivables recorded in the financial statements represent valid claims against debtors for services rendered or other charges arising on or before the balance sheet date. Management makes estimates of the collectibility of accounts receivable. Specifically, management analyzes accounts receivable and historical bad debts, customer credit-worthiness, current economic trends, and changes in customer payment terms and collections trends when evaluating the adequacy of the allowance for doubtful accounts. Any change in the assumptions used in analyzing accounts receivable may result in additional allowances for doubtful accounts being recognized in the periods in which the change in assumptions occurs. At March 31, 2018 and 2017, all of the trade accounts receivable were from retail pharmacy operations. |
Inventories | Inventories Inventories consist of health care product finished goods held for resale, valued at the lower of cost using the first-in, first-out method or net realizable value. The Company maintains an estimated reserve against inventory for excess, slow-moving, and obsolete inventory as well as inventory for which carrying value is in excess of its net realizable value. |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of the carrying value of its long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
Revenue Recognition | Revenue Recognition Revenues generated by the retail pharmacy operations are reported at the estimated net realizable amounts expected to be received from individuals, third-party payors, institutional health care providers and others. The Company recognizes revenue from the sale of pharmaceutical products and retail merchandise as transactions occur and product is delivered to the customer. Revenue from product sales is recognized at the point of sale and service revenue is recognized at the time services are provided. Sales and similar taxes collected from clients are excluded from revenues. The obligation is included in accounts payable until the taxes are remitted to the appropriate taxing authorities. Substantially all revenues earned during the three months ended March 31, 2018 and 2017, were earned from the retail pharmacy operations. |
Cost of Sales | Cost of Sales Cost of sales includes the purchase price of goods sold, prescription packaging, compounded prescription direct labor, inventory obsolescence, freight costs, cash discounts and vendor rebates. Rebates or refunds received by the Company from its suppliers are considered as an adjustment of the prices of the supplier’s products purchased by the Company. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Tax positions are recognized if it is more-likely-than-not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more-likely-than-not means a likelihood of more than 50%; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. On December 22, 2017, the President signed into law the “Tax Cuts and Jobs Act” (the “TCJA”). Among numerous changes to existing tax laws, the TCJA permanently reduces the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The effects on deferred tax balances of changes in tax rates are required to be taken into consideration in the period in which the changes are enacted, regardless of when they are effective. As the result of the reduction of the corporate income tax rate under the TCJA, the Company estimated the revaluation of its net deferred tax assets and recorded a provisional noncash income tax loss of approximately $1.0 million for year ended December 31, 2017. The Company has not completed all of its processes to determine the TCJA’s final impact. The final impact may differ from this provisional amount due to, among other things, changes in interpretations and assumptions the Company has made thus far and the issuance of additional regulatory or other guidance. The accounting is expected to be completed by the time the 2017 federal income tax return is filed in 2018. |
Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net loss and unrecognized stock based compensation by the weighted-average number of common shares outstanding during the period and the unvested restricted stock units. The unrecognized stock based compensation as of March 31, 2018 and 2017 is $22,000 and $27,000, respectively; the unvested restricted stock units is 170,150 and 135,300, respectively. Due to the net losses for both years, restricted stock units for 2018 and 2017 were anti-dilutive. |
New Accounting Pronouncements | New Accounting Pronouncements ASU No. 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and becomes effective on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. Our current minimum lease commitments are disclosed in Note 4. Accounting Standards Update ("ASU") No. 2014-09 "Revenue from Contracts with Customers (Topic 606)” In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), or Accounting Standards Codification 606 (“ASC 606”). This guidance outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. Under the new revenue recognition standard, entities apply a five-step model that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, companies identify the performance obligations within their contracts with customers, allocate the transaction price received from customers to each performance obligation identified within their contracts, and recognize revenue as the performance obligations are satisfied. During 2015, 2016, and 2017, the FASB issued various amendments which provide additional clarification and implementation guidance on ASC 606. Specifically, these amendments clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, clarify how an entity should identify performance obligations and licensing implementation guidance, as well as account for shipping and handling fees and freight service, assess collectability, present sales tax, treat non-cash consideration, and account for completed and modified contracts at the time of transition. The new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. The Company adopted the new revenue recognition standard as of January 1, 2018. The adoption of this standard did not result in a change in its recognition of pharmacy retail sales of prescriptions and products as no performance obligations exist within contracts with customers as discussed below. Had a change occurred, the change would have been applied using the modified retrospective approach. The retail pharmacy operations recognize revenue for pharmaceutical products sold under prescriptions and non-pharmaceutical products at the time the customer takes possession of the merchandise through the point of sale system as transactions occur. Each prescription claim is its own arrangement with the customer and is a performance obligation that is reported at the estimated net realizable amounts expected to be received from individuals, third-party payors, institutional health care providers and others. The Company provides retail pharmacy prescriptions and products to residents at long-term care facilities. Revenue is recognized through the billing system at the time of delivery as transactions occur. Each prescription claim is its own arrangement with the customer and is a performance obligation that is reported at the estimated net realizable amounts expected to be received from individuals, third-party payors, institutional health care providers and others. Prescription co-payments are typically not collected at the time products are delivered but are billed to the individuals as part of normal billing procedures and subject to normal accounts receivable collections procedures. The Company has contracts with certain of the long-term care facilities for the delivery of those prescriptions, certain computer and medication dispensing equipment and software and support services all of which are specifically outlined in the contract. The contracts provide for reimbursement of certain costs for certain of these services. As it relates to the long-term care contracts and any other support services provided to its customers, the Company has determined that no revenue is recognized from separate and distinct performance obligations other than the retail sale of the pharmacy prescriptions and products. |
1. Organization and Significa14
1. Organization and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Investments | Date Entity Transaction Description % Ownership March 2004 Dougherty’s Holdings, Inc. and subsidiaries (“DHI”or “the Borrowers”) Acquisition of retail pharmacy 100% September 2010 ASDS of Orange County, Inc. (“ASDS”), Holding company for Investment in CRESA Partners of Orange County, L.P. (“CPOC”) 100% |
2. Notes Payable (Tables)
2. Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | March 31, 2018 December 31, 2017 (Unaudited) (Audited) First National Bank of Omaha Credit Facility and Promissory Note secured by certain retail pharmacy assets Revolving line of credit in the principal amount of $4,450,000, interest at LIBOR plus 3.25% (4.92% at Mar 31, 2018) $ 3,975,000 $ 3,831,000 Term note in the principal amount of $432,859 at fixed interest rate of 8.11% per annum payable in 36 monthly installments of $13,641. Final payment plus accrued and unpaid interest due in full on April 10, 2020. 300,000 335,000 Term note in the principal amount of $1,827,850 with interest payable at prime plus 2.6% (7.35% at Mar 31, 2018) per annum payable in monthly installments of $15,232 plus interest, a final payment of $929,157 plus all accrued and unpaid interest due in full on July 10, 2020. 1,326,000 1,371,000 Term note in the principal amount of $1,241,350 with interest payable at prime plus 2.6% (7.35% at Mar 31, 2018 ) per annum payable in monthly installments of $10,344 plus interest, a final payment of $638,850 plus all accrued and unpaid interest due in full on January 10, 2020. 838,000 869,000 Term note in the principal amount of $744,100 with interest payable at prime plus 2.38% (7.13% at Mar 31, 2018 ) per annum payable in monthly installments of $6,200 plus interest, a final payment of $378,251 plus all accrued and unpaid interest due in full on August 10, 2020. 552,000 570,000 Term note in the principal amount of $305,350 with interest payable at prime plus 2.4% (7.15% at Mar 31, 2018 ) per annum payable in monthly installments of $2,545 plus interest, a final payment of $155,220 plus all accrued and unpaid interest due in full on August 10, 2019. 193,000 202,000 Acquisition Notes Payable , unsecured Notes payable to sellers of acquired pharmacies with varying monthly payments with interest at 5.5% due through September 2018. 52,000 97,000 Insurance notes payable, secured by the respective insurance policies Notes payable for the Company’s insurance policy premiums with varying monthly payments due through September 2018. Interest rates vary up to 4.076% 108,000 170,000 7,344,000 7,445,000 Less current portion (4,683,000 ) (4,644,000 ) $ 2,661,000 $ 2,801,000 |
Future maturities of notes payable | 2018 $ 4,683,000 2019 1,299,000 2020 1,362,000 $ 7,344,000 |
3. Stock and Share-Based Comp16
3. Stock and Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Restricted stock activity | Year of Issuance: Number of Shares Fair Value at Date of Grant Shares Vested Non-Vested Cancelled 2013 120,000 $ 26,400 115,000 – 5,000 2014 122,100 $ 30,946 86,700 15,150 20,250 2015 150,000 $ 39,000 70,000 30,000 50,000 2016 – – – – – 2017 563,000 $ 114,030 111,600 45,000 406,400 2018 80,000 $ 11,192 – 80,000 – 1,035,100 $ 221,568 383,300 170,150 481,650 |
4. Commitments and Contingenc17
4. Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum operating lease payments | 2018 $ 779,000 2019 795,000 2020 713,000 2021 669,000 2022 680,000 Thereafter 3,680,000 $ 7,316,000 |
1. Organization and Significa18
1. Organization and Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Dougherty's Holdings, Inc. [Member] | |
Ownership percentage | 100.00% |
Date of investment | Mar. 1, 2004 |
Transaction description | Acquisition of retail pharmacy |
ASDS of Orange County, Inc. [Member] | |
Ownership percentage | 100.00% |
Date of investment | Sep. 1, 2010 |
Transaction description | Holding company for Investment in CRESA Partners of Orange County, L.P. ("CPOC") |
1. Organization and Significa19
1. Organization and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and restricted cash | $ 363,000 | $ 826,000 | $ 389,000 | $ 361,000 |
Working capital | (2,200,000) | |||
Total debt outstanding | 7,344,000 | $ 7,445,000 | ||
Revolving credit facility | 4,000,000 | |||
Cash provided from operating activities | 150,000 | 554,000 | ||
Noncash income tax loss | 1,000,000 | |||
Unrecognized stock based compensation | $ 22,000 | $ 27,000 | ||
Unvested restricted stock units | 170,150 | 135,300 | ||
Antidilutive shares excluded from EPS | 170,150 | 135,300 |
2. Notes Payable (Details - Not
2. Notes Payable (Details - Notes payable) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Notes payable | $ 7,344,000 | $ 7,445,000 |
Notes payable - current | (4,683,000) | (4,644,000) |
Notes payable - long term | 2,661,000 | 2,801,000 |
Revolving Credit Facility [Member] | ||
Notes payable | $ 3,975,000 | 3,831,000 |
Interest rate description | LIBOR plus 3.25% | |
Term Note 1 [Member] | ||
Notes payable | $ 300,000 | 335,000 |
Debt face amount | $ 432,859 | |
Interest rate description | Fixed rate of 8.11% | |
Debt maturity date | Apr. 10, 2020 | |
Debt periodic frequency | monthly | |
Debt periodic payment | $ 13,641 | |
Term Note 2 [Member] | ||
Notes payable | 1,326,000 | 1,371,000 |
Debt face amount | $ 1,827,850 | |
Interest rate description | Prime plus 2.6% | |
Interest rate at period end | 7.35% | |
Debt maturity date | Jul. 10, 2020 | |
Debt periodic frequency | monthly | |
Debt periodic payment | $ 15,232 | |
Debt baloon payment | 929,157 | |
Term Note 3 [Member] | ||
Notes payable | 838,000 | $ 869,000 |
Debt face amount | $ 1,241,350 | |
Interest rate description | Prime plus 2.6% | |
Interest rate at period end | 7.35% | |
Debt maturity date | Jan. 10, 2020 | |
Debt periodic frequency | monthly | |
Debt periodic payment | $ 10,344 | |
Debt baloon payment | 638,850 | |
Term Note 4 [Member] | ||
Notes payable | 552,000 | $ 570,000 |
Debt face amount | $ 744,100 | |
Interest rate description | Prime plus 2.38% | |
Interest rate at period end | 7.13% | |
Debt maturity date | Aug. 10, 2020 | |
Debt periodic frequency | monthly | |
Debt periodic payment | $ 6,200 | |
Debt baloon payment | 378,251 | |
Term Note 5 [Member] | ||
Notes payable | 193,000 | 202,000 |
Debt face amount | $ 305,350 | |
Interest rate description | Prime plus 2.4% | |
Interest rate at period end | 7.15% | |
Debt maturity date | Aug. 10, 2019 | |
Debt periodic frequency | monthly | |
Debt periodic payment | $ 2,545 | |
Debt baloon payment | 155,220 | |
Acquisition Notes Payable [Member] | ||
Notes payable | $ 52,000 | 97,000 |
Interest rate description | 5.5% | |
Interest rate at period end | 5.50% | |
Debt maturity date | Sep. 30, 2018 | |
Insurance Notes Payable [Member] | ||
Notes payable | $ 108,000 | $ 170,000 |
Interest rate description | Rates vary up to 4.076% | |
Debt maturity date | Sep. 30, 2018 |
2. Notes Payable (Details - Fut
2. Notes Payable (Details - Future debt maturities) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Future maturities 2018 | $ 4,683,000 | |
Future maturities 2019 | 1,299,000 | |
Future maturities 2020 | 1,362,000 | |
Future maturities total | $ 7,344,000 | $ 7,445,000 |
2. Notes Payable (Details Narra
2. Notes Payable (Details Narrative) - Revolving Credit Facility [Member] - First National Bank [Member] | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Line of credit collateral | Secured by, but not limited to, the accounts receivable, inventory and fixed assets |
Line of credit maximum amount | $ 4,000,000 |
Line of credit interest rate | LIBOR plus 3.25% |
Interest rate at period end | 4.92% |
3. Stock and Share-Based Comp23
3. Stock and Share-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares non-vested | 170,150 | 135,300 |
Restricted Stock Units (RSUs) [Member] | ||
Number of shares | 1,035,100 | |
RSU 1 [Member] | ||
Date of grant | 2,013 | |
Number of shares | 120,000 | |
Fair value at date of grant | $ 26,400 | |
Shares vested | 115,000 | |
Shares non-vested | 0 | |
Shares cancelled | 5,000 | |
RSU 2 [Member] | ||
Date of grant | 2,014 | |
Number of shares | 122,100 | |
Fair value at date of grant | $ 30,946 | |
Shares vested | 86,700 | |
Shares non-vested | 15,150 | |
Shares cancelled | 20,250 | |
RSU 3 [Member] | ||
Date of grant | 2,015 | |
Number of shares | 150,000 | |
Fair value at date of grant | $ 39,000 | |
Shares vested | 70,000 | |
Shares non-vested | 30,000 | |
Shares cancelled | 50,000 | |
RSU 4 [Member] | ||
Date of grant | 2,016 | |
Number of shares | 0 | |
Fair value at date of grant | $ 0 | |
Shares vested | 0 | |
Shares non-vested | 0 | |
Shares cancelled | 0 | |
RSU 5 [Member] | ||
Date of grant | 2,017 | |
Number of shares | 563,000 | |
Fair value at date of grant | $ 114,030 | |
Shares vested | 111,600 | |
Shares non-vested | 45,000 | |
Shares cancelled | 406,400 | |
RSU 6 [Member] | ||
Date of grant | 2,018 | |
Number of shares | 80,000 | |
Fair value at date of grant | $ 11,192 | |
Shares vested | 0 | |
Shares non-vested | 80,000 | |
Shares cancelled | 0 |
4. Commitments and Contingenc24
4. Commitments and Contingencies (Details - Minimum lease payments) | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum lease payment 2018 | $ 779,000 |
Minimum lease payment 2019 | 795,000 |
Minimum lease payment 2020 | 713,000 |
Minimum lease payment 2021 | 669,000 |
Minimum lease payment 2022 | 680,000 |
Minimum lease payment thereafter | 3,680,000 |
Future minimum operating lease payments | $ 7,316,000 |
5. Related Party Transactions (
5. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Directors [Member] | ||
Director fees | $ 12,000 | $ 13,000 |
Chairman [Member] | ||
Management fees | $ 30,000 | $ 30,000 |