Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 04, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | Chembio Diagnostics, Inc. | ||
Entity Central Index Key | 0001092662 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 106,974,102 | ||
Entity Common Stock, Shares Outstanding | 17,733,617 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | NY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 18,271,352 | $ 12,524,551 |
Accounts receivable, net of allowance for doubtful accounts of $62,000 and $42,000 at December 31, 2019 and 2018, respectively | 3,661,325 | 7,373,971 |
Inventories, net | 9,598,030 | 7,851,222 |
Prepaid expenses and other current assets | 693,013 | 702,010 |
TOTAL CURRENT ASSETS | 32,223,720 | 28,451,754 |
FIXED ASSETS: | ||
Property, plant and equipment, net | 5,933,569 | 2,873,920 |
Finance lease right-of-use assets, net | 210,350 | 0 |
OTHER ASSETS: | ||
Operating right-of-use assets, net | 7,030,744 | 0 |
Intangible assets, net | 3,914,352 | 3,884,831 |
Goodwill | 5,872,690 | 4,983,127 |
Deposits and other assets | 543,539 | 717,551 |
TOTAL ASSETS | 55,728,964 | 40,911,183 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued liabilities | 5,526,243 | 5,888,681 |
Deferred revenue | 125,000 | 422,905 |
Note payable | 180,249 | 207,694 |
Finance lease liabilities | 41,894 | 0 |
Operating lease liabilities | 568,294 | 0 |
TOTAL CURRENT LIABILITIES | 6,441,680 | 6,519,280 |
OTHER LIABILITIES: | ||
Long-term operating lease liabilities | 6,969,603 | 0 |
Long-term finance lease liabilities | 171,953 | 0 |
Note payable | 0 | 171,821 |
Long-term debt, and debt discount and issuance costs | 17,644,149 | 0 |
Deferred tax liability | 466,326 | 892,308 |
TOTAL LIABILITIES | 31,693,711 | 7,583,409 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock - 10,000,000 shares authorized; none outstanding | 0 | 0 |
Common stock - $.01 par value; 100,000,000 shares authorized, 17,733,617 and 17,166,459 shares issued and outstanding at December 31, 2019 and 2018, respectively | 177,335 | 171,664 |
Additional paid-in capital | 95,433,077 | 90,953,788 |
Accumulated deficit | (71,585,003) | (57,909,874) |
Accumulated other comprehensive income | 9,844 | 112,196 |
TOTAL STOCKHOLDERS' EQUITY | 24,035,253 | 33,327,774 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 55,728,964 | $ 40,911,183 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Accounts receivable, allowance for doubtful accounts | $ 62,000 | $ 42,000 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 17,733,617 | 17,166,459 |
Common stock, shares outstanding (in shares) | 17,733,617 | 17,166,459 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES: | ||
TOTAL REVENUES | $ 34,464,032 | $ 34,581,440 |
COSTS AND EXPENSES: | ||
Cost of product sales | 22,394,317 | 22,599,432 |
Research and development expenses | 8,538,416 | 8,526,256 |
Selling, general and administrative expenses | 16,138,424 | 11,100,775 |
Acquisition costs | 721,465 | 337,645 |
TOTAL COSTS AND EXPENSES | 47,792,622 | 42,564,108 |
LOSS FROM OPERATIONS | (13,328,590) | (7,982,668) |
OTHER (EXPENSE) INCOME: | ||
Interest (expense) income, net | (846,831) | 49,498 |
LOSS BEFORE INCOME TAX BENEFIT | (14,175,421) | (7,933,170) |
Income tax benefit | (500,292) | (67,521) |
NET LOSS | $ (13,675,129) | $ (7,865,649) |
Basic loss per share (in dollars per share) | $ (0.81) | $ (0.54) |
Diluted loss per share (in dollars per share) | $ (0.81) | $ (0.54) |
Weighted average number of shares outstanding, basic (in shares) | 16,954,142 | 14,432,505 |
Weighted average number of shares outstanding, diluted (in shares) | 16,954,142 | 14,432,505 |
Net Product Sales [Member] | ||
REVENUES: | ||
TOTAL REVENUES | $ 28,844,997 | $ 27,913,209 |
R&D and Grant Revenue [Member] | ||
REVENUES: | ||
TOTAL REVENUES | 4,680,282 | 5,719,458 |
License and Royalty Revenue [Member] | ||
REVENUES: | ||
TOTAL REVENUES | $ 938,753 | $ 948,773 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||
Net loss | $ (13,675,129) | $ (7,865,649) |
Other comprehensive loss: | ||
Foreign currency translation adjustments | (102,352) | (66,752) |
COMPREHENSIVE LOSS | $ (13,777,481) | $ (7,932,401) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] | AOCI [Member] | Total |
Balance at Dec. 31, 2017 | $ 123,185 | $ 62,821,288 | $ (50,044,225) | $ 178,948 | $ 13,079,196 |
Balance (in shares) at Dec. 31, 2017 | 12,318,570 | ||||
Common Stock: | |||||
New stock from offerings | $ 45,098 | 27,431,162 | 0 | 0 | 27,476,260 |
New stock from offerings (in shares) | 4,509,760 | ||||
Restricted stock issued | $ 2,668 | (2,668) | 0 | 0 | 0 |
Restricted stock issued (in shares) | 266,839 | ||||
Restricted stock compensation | $ 0 | 281,249 | 0 | 0 | 281,249 |
Options: | |||||
Exercised | $ 713 | 71,201 | 0 | 0 | $ 71,914 |
Exercised (in shares) | 71,290 | 71,290 | |||
Stock option compensation | $ 0 | 351,556 | 0 | 0 | $ 351,556 |
Warrants and Other: | |||||
Comprehensive loss | 0 | 0 | 0 | (66,752) | (66,752) |
Net loss | 0 | 0 | (7,865,649) | 0 | (7,865,649) |
Balance at Dec. 31, 2018 | $ 171,664 | 90,953,788 | (57,909,874) | 112,196 | 33,327,774 |
Balance (in shares) at Dec. 31, 2018 | 17,166,459 | ||||
Common Stock: | |||||
Restricted stock issued | $ 3,819 | (128,081) | 0 | 0 | (124,262) |
Restricted stock issued (in shares) | 381,908 | ||||
Restricted stock compensation | $ 0 | 1,394,812 | 0 | 0 | 1,394,812 |
Issuance of common stock for business acquired | $ 1,537 | 441,754 | 0 | 0 | 443,291 |
Issuance of common stock for business acquired (in shares) | 153,707 | ||||
Options: | |||||
Exercised | $ 315 | 32,171 | 0 | 0 | $ 32,486 |
Exercised (in shares) | 31,543 | 31,543 | |||
Stock option compensation | $ 0 | 261,088 | 0 | 0 | $ 261,088 |
Warrants and Other: | |||||
Warrant on Term Debt | 0 | 1,196,093 | 0 | 0 | 1,196,093 |
Contingent Earnout for business acquired | 0 | 1,281,452 | 0 | 0 | 1,281,452 |
Comprehensive loss | 0 | 0 | 0 | (102,352) | (102,352) |
Net loss | 0 | 0 | (13,675,129) | 0 | (13,675,129) |
Balance at Dec. 31, 2019 | $ 177,335 | $ 95,433,077 | $ (71,585,003) | $ 9,844 | $ 24,035,253 |
Balance (in shares) at Dec. 31, 2019 | 17,733,617 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Cash received from customers and grants | $ 37,930,172 | $ 29,804,273 |
Cash paid to suppliers and employees | (45,655,562) | (41,624,299) |
Cash paid for operating and finance leases | (640,844) | 0 |
Interest and taxes, net | (689,272) | 38,585 |
Net cash used in operating activities | (9,055,506) | (11,781,441) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of businesses, net of cash acquired | (100,000) | (5,491,204) |
Acquisition of and deposits on fixed assets | (3,502,540) | (1,467,192) |
Patent application costs | (297,006) | 0 |
Working capital adjustments related to business combination | 145,760 | 0 |
Net cash used in investing activities | (3,753,786) | (6,958,396) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from option exercises | 32,486 | 71,914 |
Principal payments for finance leases | (19,875) | 0 |
Payments on debt issuance costs | (186,313) | 0 |
Payments on note payable | (181,822) | (64,481) |
Proceeds from issuance of long-term debt, net | 18,850,000 | 0 |
Proceeds from sale of common stock, net | 0 | 27,476,260 |
Net cash provided by financing activities | 18,494,476 | 27,483,693 |
Effect of exchange rate changes on cash | 61,617 | (9,607) |
INCREASE IN CASH AND CASH EQUIVALENTS | 5,746,801 | 8,734,249 |
Cash and cash equivalents - beginning of the period | 12,524,551 | 3,790,302 |
Cash and cash equivalents - end of the period | 18,271,352 | 12,524,551 |
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES: | ||
Net loss | (13,675,129) | (7,865,649) |
Adjustments: | ||
Depreciation and amortization | 1,916,194 | 902,505 |
Share based compensation | 1,655,900 | 632,805 |
Benefit from deferred tax liability | (513,715) | (78,432) |
Provision for doubtful accounts | 20,000 | 0 |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | 3,764,045 | (5,150,072) |
Inventories | (1,457,612) | (3,077,104) |
Prepaid expenses and other current assets | 64,355 | (118,293) |
Deposits and other assets | (90,624) | 0 |
Accounts payable and accrued liabilities | (441,015) | 2,599,894 |
Deferred revenue | (297,905) | 372,905 |
Net cash used in operating activities | (9,055,506) | (11,781,441) |
Supplemental disclosures for non-cash investing and financing activities: | ||
Deposits on manufacturing equipment transferred to fixed assets | 430,000 | 257,455 |
Deposits and other assets transferred to intangible assets | 0 | 118,899 |
Seller-financed equipment purchases | 0 | 326,110 |
Issuance of common stock for net assets of business acquired | 443,291 | 0 |
Contingent liability earnout | $ 1,225,000 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 — DESCRIPTION OF BUSINESS: Chembio Diagnostics, Inc. and its subsidiaries (collectively, the “Company” or “Chembio”), develop, manufacture, and commercialize point-of-care diagnostic tests that are used to detect and diagnose diseases. The Company is pursuing three corporate priorities: (1) expand its commercialization, (2) advance its research and development pipeline, and (3) prepare for future growth. All products that are currently being developed are based on the Company’s patented DPP ® The Company’s product commercialization and product development efforts are focused on infectious disease testing and technology collaborations. In infectious disease, the Company is commercializing tests for HIV and Syphilis, Zika virus, and developing tests for malaria, dengue virus, chikungunya virus, ebola, lassa Rickettsia typhi Burkholderia pseudomallei Orientia tsutsugamushi Large and growing markets have been established for these kinds of tests, initially in high prevalence regions where they are indispensable for large scale prevention and treatment programs. More generally, the Company believes there is and will continue to be a growing demand for diagnostic products that can provide accurate, actionable diagnostic information in a rapid, cost-effective manner at the point of care. The Company’s products are sold to medical laboratories and hospitals, governmental and public health entities, non-governmental organizations, medical professionals and retail establishments, both domestically and internationally, under the Company’s STAT PAK ®, ® ® ® The Company routinely enters into arrangements with governmental and non-governmental organizations for the funding of certain research and development efforts. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS [Abstract] | |
ACQUISITIONS | NOTE 2 — ACQUISITIONS: Orangelife On November 25, 2019, pursuant to a quote purchase agreement, the Company acquired all of the outstanding shares of Orangelife Comercio e Industria Ltda., or Orangelife, a privately-held Brazilian company, which is an original equipment manufacturer of point-of-care tests approved by the Brazilian Health Surveillance Agency (Agência Nacional de Vigilância Sanitária, or ANVISA) for infectious diseases that include HIV, Hepatitis C, Zika, Chikungunya, and Dengue Fever. Orangelife tests are manufactured in its Rio de Janeiro facility, which is ISO-certified and approved by ANVISA to produce Class II/III/IV medical devices. The purchase price includes the following consideration: · $150,000 in cash and 153,707 shares of our common stock. · Entry into a consulting agreement with Dr. Marco Collovati, the founder and chief executive officer of Orangelife, pursuant to which we may issue to Dr. Collovati up to 316,456 shares of our common stock based on achievement of certain regulatory milestones prior to November 25, 2022. All of the shares may be deliverable in the event of change in control of our company. The number of shares issued is subjected to adjustments based upon Orangelife’s working capital at closing. The purchase consideration is subject to routine post-closing adjustments. The acquisition of Orangelife will allow us to expand our commercial presence by offering our products to the state, private, and pharmacy markets in Brazil, in addition to providing local support to our long time customer Bio-Manguinhos, the subsidiary of the Oswaldo Cruz Foundation (Fiocruz) that oversees development and production of vaccines, diagnostics, and biopharmaceuticals, primarily to meet the demands of Brazil’s national public health system. The results of Orangelife’s operations have been reflected in the consolidated financial statements since November 25, 2019. The acquisition was accounted for using the purchase method of accounting. The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of November 25, 2019: Amount Net current assets $ 320,293 Property, plant and equipment and other assets 226,035 Inventory 289,205 Goodwill 986,058 Deferred tax liability (50,000 ) Other intangible assets (estimated useful life): Trade name (0.5 years) 5,000 Customer contracts / relationships (5 years) 195,000 Total consideration $ 1,971,591 The Company calculated the fair value of the fixed assets based on the net book value of Orangelife as that approximates fair value. The trade name, customer contracts/relationships and contingent earnouts were based on discounted cash flows using management estimates. As a result of the consideration paid exceeding the fair value of the net assets acquired, goodwill in the amount of $986,058 was recorded in connection with this acquisition, none of which will be deductible for tax purposes. In addition, the Company recorded $200,000 in intangible assets associated with the addition of Orangelife’s trade name and customer base. The Consolidated Statements of Operations for the year ended December 31, 2019 include $325,853 of transaction costs related to the Orangelife acquisition. The following represents pro forma operating results for the year ended December 31, 2019 as if the operations of Orangelife had been included in the Company’s Consolidated Statements of Operations as of January 1, 2019. This pro forma financial information is unaudited and presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred if the acquisition of Orangelife and the other transactions contemplated by this acquisition had been completed as of January 1, 2019, nor is it necessarily indicative of the future operating results of Chembio Diagnostics and Orangelife on a combined and consolidated basis. Unaudited Proforma December 31, 2019 Total revenues $ 35,157,248 Net loss $ (13,654,001 ) Net loss per common share $ (0.80 ) Diluted net loss per common share $ (0.80 ) opTricon On November 6, 2018, pursuant to a share purchase agreement, the Company acquired all of the outstanding shares of opTricon GmbH (“opTricon”), a privately-held Germany based developer and manufacturer of handheld analyzers for rapid diagnostic tests, for $5.5 million in cash, subject to routine post-closing adjustments. Since 2015, the Company and opTricon have been parties to an agreement under which the Company has collaborated in developing its DPP Micro Reader, a handheld, battery-operated analyzer that uses an innovative image sensor to provide, when combined with the Company’s DPP tests, a quantitative interpretation of diagnostic results. The Company purchased opTricon because it believes it will enable it to promote DPP tests and DPP Micro Readers more actively across global markets. The results of opTricon operations have been reflected in the consolidated financial statements since November 6, 2018. As a result of the consideration paid exceeding the fair value of the net assets acquired, goodwill in the amount of $3,290,888 was recorded in connection with this acquisition, none of which will be deductible for tax purposes. In addition, the Company recorded $2,260,000 in intangible assets associated with the addition of opTricon’s developed technology and customer base. The Consolidated Statements of Operations for the year ended December 31, 2019 and 2018 includes $395,612 and $337,645 of transaction costs related to the opTricon acquisition, respectively. The acquisition was accounted for using the purchase method of accounting. The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of November 6, 2018: Amount Net current assets $ 404,204 Property, plant and equipment 125,000 Goodwill 3,383,112 Deferred tax liability (681,112 ) Other intangible assets (estimated useful life): Developed technology (7 years) 1,900,000 Customer contracts / relationships (10 years) 360,000 Total consideration $ 5,491,204 The Company calculated the fair value of the fixed assets based on the net book value of opTricon as that approximates fair value. The developed technology and customer contracts/relationships were based on discounted cash flows using management estimates. The following represents unaudited pro forma operating results for the year ended December 31, 2018 as if the operations of opTricon had been included in the Company’s Consolidated Statements of Operations as of January 1, 2018: Proforma December 31, 2018 Total revenues $ 36,614,995 Net loss $ (8,394,074 ) Net loss per common share $ (0.58 ) Diluted net loss per common share $ (0.58 ) The pro forma financial information includes business combination accounting effects from the acquisition including amortization charges from acquired intangible assets of opTricon approximately $ 351,000 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SIGNIFICANT ACCOUNTING POLICIES: (a) Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation. (b) Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Judgments and estimates of uncertainties are required in applying the Company’s accounting policies in certain areas. Generally, matters subject to estimation and judgment include accounts receivable realization, inventory obsolescence, asset impairments, recognition of revenue pursuant to milestones, useful lives of intangible and fixed assets, stock-based compensation, and deferred tax asset valuation allowances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates. (c) Fair Value of Financial Instruments: The carrying value for cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value due to the immediate or short-term maturity of these financial instruments. Included in cash and cash equivalents is $16.0 million and $4.7 million as of December 31, 2019 and 2018, respectively, of money market funds that are Level 1 fair value measurements under the hierarchy. The fair value of the Company’s notes payable approximates the recorded value as the rate is based upon the current rates offered to the Company for similar financial instruments. Fair value measurements of all financial assets and liabilities that are being measured and reported on a fair value basis are required to be classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). (d) Cash and Cash Equivalents: Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or less. (e) Concentrations of Credit Risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade receivables. The Company places its temporary cash instruments with well-known financial institutions and, at times, may maintain balances in excess of the FDIC insurance limit. The Company monitors the credit ratings of the financial institutions to mitigate this risk. Concentration of credit risk with respect to trade receivables is principally mitigated by the Company’s ability to obtain letters of credit from certain foreign customers and its diverse customer base, both in number of customers and geographic locations. (f) Inventories: Inventories, consisting of material, labor and manufacturing overhead, are stated at the lower of cost and net realizable value. Cost is determined on the first-in, first-out method. The Company’s policy is to periodically evaluate the market value of the inventory and the stage of product life cycle, and record a write-down for any inventory considered slow moving or obsolete. (g) Fixed Assets: Fixed assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which range from three to seven years. Leasehold improvements are amortized over the useful life of the asset or the lease term, whichever is shorter. Deposits paid for fixed assets are capitalized and not depreciated until the related asset is placed in service. (h) License Agreements: The Company records up-front payments related to license agreements as prepaids and amortizes them over their respective economic life. As of December 31, 2019 and 2018, total prepaids were $100,000 and $100,000, respectively. Amortization expenses for the licenses above for the years ended December 31, 2019, and 2018 were $0, and $0, respectively. (i) Valuation of Long-Lived Assets and Intangible Assets: Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. No impairment of long-lived tangible and intangible assets was recorded for the years ended December 31, 2019 and 2018. (j) Revenue Recognition: In May 2014, the Financial Accounting Standards Board (“FASB”) issued converged guidance on recognizing revenue in contracts with customers, Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers The new revenue standards became effective for the Company on January 1, 2018 and were adopted using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any material accounting changes that impacted the amount of reported revenues with respect to its product revenue, license and royalty revenue, and R&D, milestone and grant revenues, no adjustment to retained earnings was required upon adoption. The Company adopted the standards to contracts that were not completed at the date of initial application (January 1, 2018). Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation. Product Revenues Revenues from product sales are recognized and commissions are accrued when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon tendering to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred because the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Freight and distribution activities on products are performed after the customer obtains control of the goods. The Company has made an accounting policy election to account for shipping and handling activities that occur either when or after goods are tendered to the customer as a fulfillment activity, and therefore recognizes freight and distribution expenses in Cost of Product Sales. The Company excludes certain taxes from the transaction price (e.g., sales, value added and some excise taxes). Our contracts with customers often include promises to transfer products or services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. Typical products sold are diagnostic tests and typical services performed are R&D feasibility studies. Revenues from sale of products are recognized point-in-time and revenues from R&D feasibility studies are recognized ratably, over the period of the agreement. Judgement The Company’s payment terms vary by the type and location of the Company’s customer and products or services offered. Payment terms differ by jurisdiction and customer but payment is generally required in a term ranging from 30 to 60 days from date of shipment or satisfaction of the performance obligation. Reserves for Discounts and Allowances Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers. The Company’s process for estimating reserves established for these variable consideration components does not differ materially from its historical practices. Product revenue reserves, which are classified as a reduction in product revenues, are generally related to discounts. Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on all information (historical, current and forecasted) that is reasonably available to the Company, taking into consideration the type of customer, the type of transaction and the specific facts and circumstances of each arrangement. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. Royalty Revenues The Company receives royalty revenues on sales by its licensee of products covered under patents that it owns. The Company does not have future performance obligations under this license arrangement. The Company records these revenues based on estimates of the sales that occurred during the relevant period as a component of license and royalty revenues. The relevant period estimates of sales are based on interim data provided by the licensee and analysis of historical royalties that have been paid to the Company, adjusted for any changes in facts and circumstances, as appropriate. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter. Historically, adjustments have not been material when compared to actual amounts paid by licensee. R&D and grant revenue All such contracts are evaluated under the five-step model described above. For certain contracts that represent grants where the funder does not meet the definition of a customer, the Company recognizes revenue when earned in accordance with ASC 958. Such contracts are further described under Disaggregation of Revenue In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. This ASU clarifies the guidance presented in Topic 958, “Not-for-Profit Entities,” of the FASB’s Accounting Standards Codification (ASC) for evaluating whether a transaction is reciprocal (i.e., an exchange transaction) or nonreciprocal (i.e., a contribution) and for distinguishing between conditional and unconditional contributions. The ASU also clarifies the guidance used by entities other than not-for-profits to identify and account for contributions made. Disaggregation of Revenue The following tables disaggregate Total Revenues for the year ended December 31, 2019, by type of transaction and by geography: Exchange Transactions Non-Exchange Transactions Total Net product sales $ 28,844,997 $ – $ 28,844,997 R&D, milestone and grant revenue 3,321,031 1,359,251 4,680,282 License and royalty revenue 938,753 – 938,753 $ 33,104,781 $ 1,359,251 $ 34,464,032 Exchange transactions are recognized in accordance with ASC 606, while non-exchange transactions are recognized in accordance with ASU No. 2018-08. Total Africa $ 7,564,360 Asia 888,800 Europe & Middle East 6,498,995 Latin America 11,808,768 United States 7,703,109 $ 34,464,032 The following tables disaggregate Total Revenues for the year ended December 31, 2018, by type of transaction and by geography: Exchange Transactions Non-Exchange Transactions Total Net product sales $ 27,913,209 $ – $ 27,913,209 R&D, milestone and grant revenue 2,687,210 3,032,248 5,719,458 License and royalty revenue 948,773 – 948,773 $ 34,581,440 $ 3,032,248 $ 34,581,440 Exchange transactions are recognized in accordance with ASC 606, while non-exchange transactions are recognized in accordance with ASU No. 2018-08. Total Africa $ 8,838,632 Asia 1,404,982 Europe & Middle East 4,895,273 Latin America 12,546,083 United States 6,896,470 $ 34,581,440 Contract Liabilities Deferred revenue relates to payments received in advance of performance under the contract. Deferred revenue is recognized as revenue as (or when) the Company performs under the contract. At December 31, 2018, the Company reported $422,905 in deferred revenue of which $422,905 was earned and recognized as R&D, milestone and grant revenue during the year ended December 31, 2019. At December 31, 2019, the Company reported $125,000 in deferred revenue which is expected to be recognized during the first quarter of 2020. In April 2017, the Company entered into a $1.1 million agreement with FIND to develop a simple, point-of-care fever panel assay that can identify multiple life-threatening acute febrile illnesses common in the Asia Pacific region. The Company earned $0.2 million and $1.1 million for the year ended December 31, 2019, and from inception through December 31, 2019, respectively as R&D, milestone and grant revenue in the Company’s Consolidated Statements of Operations. In August 2016, the Company was awarded a grant of $5.9 million from BARDA, which is part of the U.S. Department of Health And Human Resources to develop a rapid Zika virus assay. The Company earned $0.6 million and $5.9 million for the year ended December 31, 2019 and from inception through December 31, 2019, respectively, as R&D, milestone and grant revenue in the Company’s Consolidated Statements of Operations. (k) Research and Development: Research and development (R&D) costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. (l) Stock-Based Compensation: The fair value of restricted stock and restricted stock unit awards are their fair value on the date of grant. Stock-based compensation expense for stock options is calculated using the Black-Scholes valuation model based on awards ultimately expected to vest together with the fair value of restricted stock and restricted stock unit awards, are, reduced for actual forfeitures, and, expensed on a straight-line basis over the requisite service period of the grant. During 2018, the Company adopted ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting”. (m) I ncome Taxes: The Company accounts for income taxes under an asset and liability approach that recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company follows a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The guidance relates to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to uncertain tax positions are recorded in tax expense. The Company assesses the realizability of its net deferred tax assets on an annual basis. If, after considering all relevant positive and negative evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized, the Company will reduce the net deferred tax assets by a valuation allowance. The realization of net deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of net operating loss carryforwards. (n) Loss Per Share: Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period including outstanding restricted stock that by its terms is includible in the calculation. Diluted loss per share for the years ended December 31, 2019, and 2018 reflects the potential dilution from the exercise or conversion of other securities into common stock, if dilutive. There were 666,197, and 732,906 options outstanding as of December 31, 2019 and 2018, respectively, which were not included in the calculation of diluted income per share for the years ended because their effect would have been anti-dilutive. (o) Goodwill and Intangible Assets: Goodwill represents the excess of the purchase price the Company paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s acquisition of opTricon in November 2018, Chembio Diagnostics Malaysia in January 2017 and Orangelife in November 2019. Goodwill is not amortized but rather is tested annually as of the first day of the fiscal fourth quarter, or sooner if the Company believes that indicators of impairment exist. The Company makes a qualitative evaluation about the likelihood of goodwill impairment, which is based on a number of applicable factors. If the Company concludes that it is more likely than not that the carrying value of the applicable reporting unit is greater than its fair value, then it would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value, provided the impairment charge does not exceed the total amount of goodwill allocated to the reporting unit. For the year ended December 31, 2019 and 2018, there was no impairment of goodwill and other intangible assets. Following is a table that reflects changes in Goodwill: Beginning balance January 1, 2019 $ 4,983,127 Acquisition of Orangelife 986,058 Chembio Diagnostics GmbH measurement period adjustment (99,648 ) Changes in foreign currency exchange rate 3,153 Balance at December 31, 2019 $ 5,872,690 Intangible assets consist of the following at: Weighted Average Remaining Life December 31, 2019 December 31, 2018 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Intellectual property 6 $ 1,418,681 $ 299,232 $ 1,119,449 $ 1,089,688 $ 173,633 $ 916,055 Developed technology 6 1,922,682 266,550 1,656,132 1,910,315 – 1,910,315 Customer contracts/relationships 7 1,325,521 270,902 1,054,619 1,121,600 151,929 969,671 Trade names 8 114,946 30,794 84,152 108,521 19,731 88,790 $ 4,781,830 $ 867,478 $ 3,914,352 $ 4,230,124 $ 345,293 $ 3,884,831 Amortization expense for the year ended December 31, 2019 and 2018 was $515,263 and $233,734, respectively, and is recorded within COGS, R&D and Selling, General and Administrative expenses. Amortization expense, subject to changes in currency exchange rates, is expected to be approximately $590,000 per year from 2020 through 2024, and total $1 million for all of the years thereafter. (p) Allowance for Doubtful Accounts: The Company records allowances for doubtful accounts for the estimated probable losses on uncollectible accounts receivable. The allowance is based upon the credit worthiness of the Company’s customers, the Company’s historical experience, the age of the receivable and current market and economic conditions. Receivables are written off against these allowances in the period they are determined to be uncollectible. (q) Acquisition Costs: Acquisition costs include period expenses, primarily professional services, related to acquisition activities. (r) Foreign Currency Translation: The functional currency of a foreign subsidiary is the local currency. Assets and liabilities of foreign subsidiaries that use a currency other than U.S. dollars as their functional currency are translated to U.S. dollars at end of period currency exchange rates. The consolidated statements of operations of foreign subsidiaries are translated to U.S. dollars at average period currency exchange rates. The effect of translation for foreign subsidiaries is generally reported in other comprehensive income. Foreign transaction gains/losses are immaterial. (s) Recent Accounting Pronouncements Affecting the Company: In February 2016, the FASB issued ASU No. 2016-02, Leases Codification Improvements to Topic 842, Leases Leases (Topic 842) Targeted Improvements As further discussed on Note 12(c) – Leases, the Company adopted Topic 842 on January 1, 2019 under the optional transition method and elected the short-term lease exception and available practical expedients. Under the transition method, the Company did not adjust its comparative period financial information or make the new required lease disclosures for periods before the effective date. The impact of adoption of right-of-use assets and liabilities on January 1, 2019 was $0.8 million, and $0.8 million, respectively. In March 2016, the FASB issued authoritative guidance under ASU 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The Company adopted ASU 2016-15 in the first quarter of 2018. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting The Company adopted ASU 2017-09 in the first quarter of 2018. In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features and Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this ASU addresses the complexity of accounting for certain financial instruments with down round features. Per the ASU, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The ASU is effective for public entities for fiscal years beginning after December 15, 2018 and the Company adopted it effective January 1, 2019. This ASU is applicable to the stock warrants issued as part of the Credit Agreement, as further discussed in Note 14 – Warrants. In July 2018, the FASB issued ASU 2018-08 N ot-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made to clarify the accounting guidance related to contributions made or received. This guidance primarily affects not-for-profit entities, although it also applies to businesses to the extent that they make or receive contributions, including grants. ASU 2018-08 clarifies and improves the scope and accounting guidance for both contributions received and made in order to assist entities in evaluating if those transactions should be accounted for as contributions under the scope of Topic 958, or as an exchange transaction subject to other guidance. Public entities are required to apply the amendments on contributions received and contributions made to annual periods beginning after June 15, 2018, and December 15, 2018, respectively, each including interim periods within those annual periods. Early adoption is permitted, and the Company adopted ASU 2018-08 effective as of January 1, 2018. The impact of adoption was immaterial. In |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 4 — INVENTORIES: Inventories consist of the following at December 31, 2019: December 31 2019 2018 Raw Materials $ 2,901,319 $ 2,803,677 Work in Process 793,343 263,043 Finished Goods 5,903,368 4,784,502 $ 9,598,030 $ 7,851,222 |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
FIXED ASSETS [Abstract] | |
FIXED ASSETS | NOTE 5 — FIXED ASSETS: Fixed assets consist of the following at December 31, 2019: December 31 2019 2018 Machinery and Equipment $ 7,955,511 $ 6,070,137 Furniture and Fixtures 21,477 35,287 Computer Equipment 416,359 435,348 Leasehold Improvements 3,038,469 2,334,512 Enterprise Business Systems 1,830,925 462,420 Less: Accumulated Depreciation and Amortization (7,329,173 ) (6,463,784 ) $ 5,933,569 $ 2,873,920 Depreciation expense for the 2019 and 2018 years totaled $933,558 and $634,261, respectively. As of December 31, 2019 and 2018, the Company has purchased manufacturing equipment that is not yet in use and therefore has not been depreciated, aggregating $1,400,181 and $428,859, respectively. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 6 — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES: Accounts payable and accrued liabilities consist of the following at December 31, 2019: December 31 2019 2018 Accounts Payable - suppliers $ 3,144,098 $ 3,622,765 Accrued Commissions & Royalties 931,760 867,344 Accrued Payroll 231,753 48,867 Accrued Vacation 410,199 264,789 Accrued Bonuses 215,000 494,318 Accrued Expenses - Other 593,433 590,598 $ 5,526,243 $ 5,888,681 |
DEFERRED RESEARCH AND DEVELOPME
DEFERRED RESEARCH AND DEVELOPMENT REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
DEFERRED RESEARCH AND DEVELOPMENT REVENUE [Abstract] | |
DEFERRED RESEARCH AND DEVELOPMENT REVENUE | NOTE 7 — DEFERRED RESEARCH AND DEVELOPMENT REVENUE: The Company recognizes income from R&D milestones when those milestones are reached and non-milestone contracts and grants when earned. These projects are invoiced after expenses are incurred. Any projects or grants funded in advance are deferred until earned. As of December 31, 2019 and 2018, there were $125,000 and $422,905 unearned advanced revenues, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 8 The components of (loss) before income taxes consisted of the following: Year Ending December 31, 2019 2018 United States operations $ (12,504,780 ) $ (7,137,428 ) International operations (1,670,641 ) (795,742 ) (Loss) before taxes $ (14,175,421 ) $ (7,933,170 ) T he (benefit from) provision for income taxes for the years ended December Year Ending December 31, 2019 2018 Current Federal $ – $ – State 9,790 10,911 Foreign 3,633 – Total current (benefit) provision 13,423 10,911 Deferred Federal – – State – – Foreign (513,715 ) (78,432 ) Total deferred (benefit) provision (513,715 ) (78,432 ) Total (benefit) provision $ (500,292 ) $ (67,521 ) A reconciliation of the Federal statutory rate to the effective rate applicable to loss before income taxes is as follows: Year Ending December 31, 2019 2018 Federal income tax at statutory rates 21.00 % 21.00 % State income taxes, net of federal benefit (0.05 )% (0.10 )% Nondeductible expenses (1.00 )% (1.58 )% Foreign rate differential 0.45 % 0.36 % Change in valuation allowance (17.51 )% (18.44 )% Other .64 % (0.39 )% Income tax benefit 3.53 % 0.85 % In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance allows companies to make an accounting policy election to either (1) account for GILTI as a component of tax expense in the period in which they are subject to the rules (the period cost method), or (ii) account for GILTI in the Company’s measurement of deferred taxes (the deferred method). After completing the analysis of the GILTI provisions, the Company elected to account for GILTI using the period cost method. The Company had an ownership change as described in Internal Revenue Code Sec. 382 during 2004 (“2004 change”). As a result, the Company’s net operating losses prior to the 2004 change of $5,832,516 were subject to an annual limitation of $150,608 and for the first five (5) years are entitled to a BIG (Built-In-Gains) of $488,207 per year. These net operating losses expire in 2020 through 2024. The Company had a second ownership change during 2006 (“2006 change”). The net operating losses incurred between the 2004 change and the 2006 change of $8,586,861 were subject to an annual limitation of $1,111,831 and for the first five (5) years are entitled to a BIG of $1,756,842 per year. These net operating losses expire in 2024 through 2026. After applying the above limitations, at December 31, 2019, the Company has post-change net operating loss carry-forwards of approximately $ which expire between 2020 and 2037 and $ which do not expire. In addition the Company has research and development tax credit carryforwards of approximately $ for the year ended December 31, , which expire between 2020 and 2036. The Company has state net operating loss carryforwards of approximately $ which generally expire between 2035 and 2039. The Company has foreign net operating loss carryforwards of approximately $3,355,645 which generally expire between 2025 and 2026. 2019 2018 Inventory reserves $ 196,193 $ 204,206 Accrued expenses 105,323 175,168 Net operating loss carry-forwards 10,079,317 7,122,576 Research and development credit 1,679,495 1,696,870 Stock-based compensation 581,053 215,797 Lease obligations 1,646,584 – Depreciation 44,993 139,362 Total deferred tax assets 14,332,958 9,553,979 Right-of-use assets (1,538,129 ) – Intangibles (921,807 ) (968,849 ) Total deferred tax liabilities (2,459,936 ) (968,849 ) Net deferred tax assets before valuation allowance 11,873,022 8,585,130 Less valuation allowances (12,339,348 ) (9,477,438 ) Net noncurrent deferred tax liabilities $ (466,326 ) $ (892,308 ) The Company does not provide for U.S. income taxes on unremitted earnings of foreign subsidiaries as its present intention is to reinvest the unremitted earnings in the Company’s foreign operations. At December 31, 2019 there were no unremitted earnings of foreign subsidiaries. Interest and penalties, if any, related to income tax liabilities are included in income tax expense. As of December 31, 2019, the Company does not have a liability for uncertain tax positions. The Company files Federal and state income tax returns, Chembio Germany files in Germany, Chembio Brazil files in Brazil and Chembio Malaysia files in Malaysia and has been on tax holiday which expired on December 31, 2018. With few exceptions, tax years for fiscal through are open and potentially subject to examination by federal, state and foreign taxing authorities. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 9 — STOCKHOLDERS’ EQUITY: (a) Common Stock During 2019, options to purchase 54,343 shares of the Company’s common stock were exercised for 31,543 shares of common stock at exercise prices ranging from $3.48 to $4.35. During 2018, options to purchase 144,947 shares of the Company’s common stock were exercised for 71,290 shares of common stock at exercise prices ranging from $3.48 to $5.64 by surrendering options and shares of common stock already owned. In November 2018, the Company closed on an underwritten public offering of 2,726,000 shares of its common stock, including the underwriter’s exercise of its overallotment of 355,565 shares, at $6.75 per share. The net proceeds of the offering, after deducting the underwriter’s discounts and other offering expenses payable by the Company, was approximately $16.5 million. In February 2018, the Company closed on an underwritten registered public offering of 1,783,760 shares of its common stock at $6.75 per share. The net proceeds of the offering, after deducting the underwriter’s discounts and other offering expenses payable by the Company, was approximately $10.9 million. (b) Preferred Stock The Company has 10,000,000 shares of preferred stock authorized and none outstanding. These shares can become issuable upon an approved resolution by the board of directors and the filing of a Certificate of Designation with the state of Nevada. (c) Options, Restricted Stock, and Restricted Stock Units The Board of Directors or its Compensation Committee may issue options, restricted stock, and restricted stock units pursuant to employee stock incentive plans that have been approved by the Company’s stockholders. (d) Warrants As of December 31, 2019, the Company has 550,000 warrants outstanding to purchase shares of common stock as further discussed in Note 14 – Warrants. |
EQUITY INCENTIVE PLANS
EQUITY INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2019 | |
EQUITY INCENTIVE PLANS [Abstract] | |
EQUITY INCENTIVE PLANS | NOTE 10 — EQUITY INCENTIVE PLANS: Effective June 3, 2008, the Company’s stockholders voted to approve the 2008 Stock Incentive Plan (“SIP”), with 625,000 shares of common stock available to be issued. At the Annual Stockholder Meeting on September 22, 2011 the Company’s stockholders voted to approve an increase to the shares of common stock issuable under the SIP by 125,000 to 750,000. Under the terms of the SIP, which expired during 2018, the Board of Directors or its Compensation Committee had the discretion to select the persons to whom awards were to be granted. Awards could be stock options, restricted stock and/or restricted stock units (“Equity Award Units”). The awards became vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through December 31, 2019, there were 0 options exercised, and at December 31, 2019, 0 options were outstanding and no Equity Award Units were available to be issued under the SIP. Effective June 19, 2014, the Company’s stockholders voted to approve the 2014 Stock Incentive Plan (“SIP14”), with 800,000 shares of common stock available to be issued. Under the terms of the SIP14, the Board or its Compensation Committee has the discretion to select the persons to whom awards are to be granted. Awards can be in the form of Equity Award Units. The awards become vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through December 31, 2019, there were 54,343 options exercised, and at December 31, 2019, 642,625 options were outstanding and 148,667 Equity Award Units were still available to be issued under the SIP14. Effective June 18, 2019, the Company’s stockholders voted to approve the 2019 Omnibus Incentive Plan (“2019 Plan”), with 2,400,000 shares of common stock available to be issued. In addition, shares of Common Stock underlying any outstanding award granted under the 2019 Plan that, following the effective date of the 2019 Plan, expires, or is terminated, surrendered or forfeited for any reason without issuance of such shares shall be available for the grant of new awards under the 2019 Plan. Under the terms of the 2019 Plan, the Board or its Compensation Committee has the discretion to select the persons to whom awards are to be granted. Awards can be in the form of options, stock appreciation rights, restricted stock, restricted stock unit, or other stock-based award under the 2019 Plan (collectively, 2019 Equity Units). The awards become vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through December 31, 2019, there were 375,000 2019 Equity Units awarded under the 2019 Plan, and 2,025,000 2019 Equity Units available to be awarded. The Company’s results for the years ended December 31, 2019 and 2018 include stock-based compensation expense totaling $1,655,900 and $632,805, respectively. Such amounts have been included in the Consolidated Statements of Operations within cost of product sales ($10,806 and $25,615, respectively), research and development ($228,597 and $78,831, respectively) and selling, general and administrative expenses ($1,416,497 and $528,360, respectively). Stock option compensation expense in the years ended December 31, 2019 and 2018 represents the estimated fair value of options outstanding, which is being amortized on a straight-line basis over the requisite vesting period of the entire award. The stock compensation expense were $261,088 and $351,556 in December 31, 2019 and 2018, respectively. No stock options were issued during 2019. The weighted average estimated fair value of stock options granted in the year ended December 31, 2018 was $3.76 per share. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. The expected volatility is based upon historical volatility of the Company’s stock and other contributing factors. The expected term is based on the Company’s historical experience with similar type options. The weighted-average assumptions made in calculating the fair values of options are as follows for the respective years ended December 31: 2019 2018 Expected term (in years) n/a 4.96 Expected volatility n/a 39.91 % Expected dividend yield n/a n/a Risk-free interest rate n/a 2.70 % The following table provides stock option activity for the years ended December 31, 2019 and 2018: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2017 810,670 $ 5.18 3.69 years $ 2,477,853 Granted 93,750 9.80 Exercised 144,947 4.83 523,327 Forfeited/expired/cancelled 47,505 8.82 Outstanding at December 31, 2018 711,968 $ 5.62 3.33 years $ 687,364 Exercisable at December 31, 2018 396,799 $ 4.70 2.66 years $ 568,956 Outstanding at December 31, 2018 711,968 $ 5.62 3.33 years $ 687,364 Granted – $ 0.00 – Exercised 54,343 $ 3.60 172,242 Forfeited/expired/cancelled 15,000 $ 5.68 – Outstanding at December 31, 2019 642,625 $ 5.79 2.57 years $ 285,925 Exercisable at December 31, 2019 493,958 $ 5.22 2.20 years $ 285,925 The following table summarizes information about stock options outstanding at December 31, 2019: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Shares Outstanding Average Remaining Contract Life (Year) Weighted Average Exercise Price Aggregate Intrinsic Value Shares Exercisable Weighted Average Exercise Price Aggregate Intrinsic Value 1 to 2.79999 – – $ – $ – – $ – $ – 2.8 to 4.59999 250,000 1.20 3.42 285,925 250,000 3.42 285,925 4.6 to 6.39999 137,875 2.44 5.87 – 87,125 5.89 – 6.4 to 8.19999 207,875 4.05 7.31 – 138,083 7.22 – 8.2 to 12 46,875 3.60 11.45 – 18,750 11.45 – Total 642,625 2.57 $ 5.79 $ 285,925 493,958 $ 5.22 $ 285,925 The average remaining contract life for the shares exercisable is 2.2 years, as of December 31, 2019. As of December 31, 2019, there was $432,746 of net unrecognized compensation cost related to stock options that are not vested, which is expected to be recognized over a weighted average period of approximately 2.00 years. The total fair value of shares vested during the year ended December 31, 2019, was $469,032. The following table summarizes information about restricted stock and restricted stock units outstanding as of December 31, 2019: Number of Shares & Units Weighted Average Grant Date Fair Value Unvested at December 31, 2018 287,564 $ 9.65 Granted 375,000 5.80 Vested (116,578 ) 9.65 Forfeited/expired/cancelled – – Unvested at December 31, 2019 545,986 7.47 As of December 31, 2019, there was $3,273,929 of net unrecognized compensation cost related to restricted stock and restricted stock units that are not vested, which is expected to be recognized over a weighted average period of approximately 1.4 years. Stock based compensation cost related to restricted stock and restricted stock units recognized during the years ended December 31, 2019 and 2018 was $1,394,814 and $281,249, respectively. |
GEOGRAPHIC INFORMATION AND ECON
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY | 12 Months Ended |
Dec. 31, 2019 | |
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY [Abstract] | |
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY | NOTE 11 — GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY: The Company produces only one group of similar products known collectively as “rapid medical tests,” and it operates in a single business segment. Net product sales by geographic area are as follows: Year Ending December 31, 2019 2018 Africa $ 7,564,360 $ 8,838,632 Asia 888,800 1,404,982 Europe & Middle East 3,781,761 2,208,063 Latin America 11,808,767 12,546,083 United States 4,801,309 2,915,449 $ 28,844,997 $ 27,913,209 Long-lived assets by geographic area are as follows: 2019 2018 Asia $ 393,299 $ 466,185 Europe & Middle East 165,029 123,752 Latin America 60,527 – United States 5,314,715 2,283,983 $ 5,933,569 $ 2,873,920 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS [Abstract] | |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS | NOTE 12 — COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS: a) Employment Contracts: The Company has multi-year contracts with two key employees. The contracts call for salaries presently aggregating $730,000 per year, and they expire in March 2020 and December 2021. The following table is a schedule of future minimum salary commitments: 2020 $ 365,000 2021 365,000 Chembio’s President & CEO, the key employee whose agreement was set to expire in March 2020, resigned effective as of January 3, 2020. b) Pension Plan: The Company has a 401(k) plan established for its employees whereby it matches 40% of the first 5% (or 2% of salary) that an employee contributes to the plan. Matching contribution expenses totaled $93,892 and $94,544 for the years ended December 31, 2019 and 2018, respectively. c) Leases: Chembio’s leases have historically been limited to its facilities in New York, Germany, Malaysia & Brazil. As of December 31, 2019, the Company was a party to eight leases. One of the leases is subject to a sublease for the remainder of its term, as further described below. The Company’s leases generally include optional renewal periods. Upon entering into a new lease, the Company evaluates the leasehold improvements and regulatory requirements related to its operations in that location. To the extent that the initial lease term of the related lease is less than the useful life of the leasehold improvements and potential regulatory costs associated with moving the facility, the Company concludes that it is reasonably certain that a renewal option will be exercised, and thus that renewal period is included in the lease term and the related payments are reflected in the right-of-use (“ROU”) asset and lease liability. In January 2019 the Company recognized $0.8 million and $0.8 million of right-of-use assets and liabilities, respectively. During 2019, the Company entered into a new lease agreement for its new headquarter location in Hauppauge, NY. the right-of-use asset acquired in exchange for right-of-use liabilities was approximately $6.5 million. The Company’s leases generally include fixed rental payments with defined annual increases. While certain of the Company’s leases are gross leases, the majority of the Company’s leases are net leases in which the Company makes separate payments to the lessor based on the lessor’s property and casualty insurance costs, the property taxes assessed on the property, and a portion of the common area maintenance where applicable. The Company has elected the practical expedient not to separate lease and nonlease components for all of the Company’s facility leases. The Company has also elected the practical expedient for short-term lease exception for all of its facility leases. The components of lease expense were as follows: Year Ended December 31, 2019 Operating lease expense $ 1,655,573 Finance lease cost Amortization of right-of-use assets $ 23,373 Interest on lease liabilities 7,892 Total finance lease expense $ 31,265 Rent expense was $653,155 for the year ended December 31, 2018. Supplemental cash flow and other information related to leases were as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 632,952 Operating cash flows for finance leases 7,892 Financing cash flows for finance leases 19,875 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 7,030,744 Finance leases 210,350 Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating Leases Operating lease right-of-use assets $ 7,030,744 – Current portion of operating lease liability 568,294 Operating lease liabilities 6,969,603 Total operating lease liabilities $ 7,537,897 Finance Leases Finance lease right of use asset $ 233,722 Accumulated depreciation (23,372 ) Finance lease right of use asset, net $ 210,350 Current portion of finance lease liability 41,894 Finance lease liability 171,953 Total finance lease liabilities $ 213,847 Weighted Average Remaining Lease Term Operating leases 9.3 Finance leases 4.8 Weighted Average Discount Rate Operating leases 8.67 % Finance leases 7.00 % During 2019, the Company executed an operating sublease related to its former Holbrook, New York facility. The sublease runs conterminously with the base lease in Holbrook, for which the Company remains primarily responsible. In addition, the Company entered into a finance lease agreement relating to office furniture in June 2019. The Company recognized the corresponding lease asset and liability effective June 30, 2019 and recorded related depreciation starting on July 1, 2019. Monthly payments towards this lease commenced in July 2019. At the time of the initial assessment, the Company did not have an established incremental borrowing rate and the interest rates implicit in each of the leases were not readily determinable, therefore the Company used an interest rate based on the market place for public debt. In September 2019, the Company entered into a credit agreement for a $20 million term loan as described on Note 13 - Long Term Debt. Maturities of lease liabilities as of December 31, 2019 were as follows. Operating Leases Finance Leases 2020 $ 1,205,161 $ 55,536 2021 1,209,787 55,536 2022 1,057,757 55,536 2023 1,026,272 55,536 2024 1,018,875 27,767 Thereafter 5,773,887 – Total lease payments $ 11,291,739 $ 249,911 Less: imputed interest (3,753,842 ) (36,064 ) Total $ 7,537,897 $ 213,847 As previously disclosed in the Company’s 2018 Annual Report on Form 10-K, and under the previous lease accounting standard, future minimum lease payments for operating leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows for the years ending December 31: 2019 $ 384,308 2020 88,576 2021 – $ 472,884 d) Economic Dependency: Customers are considered major customers when net sales exceed 10% of the Company’s total net sales for period or outstanding trade receivables exceed 10% of accounts receivable. The Company had the following major customers for the respective periods: For the years ended Accounts Receivable December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Net Sales % of Net Sales Net Sales % of Net Sales Customer 1 $ 11,263,573 39 % $ 11,333,767 33 % $ 941,962 $ 3,499,340 Customer 2 5,782,543 20 % 4,346,640 13 % 16,033 1,033,824 The following table delineates purchases the Company had with vendors in excess of 10% of total purchases for the periods indicated: For the years ended Accounts Payable December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Purchases % of Purc. Purchases % of Purc. Vendor 1 * * 1,646,614 16 % * 164,312 In the tables above, an asterisk (*) indicates that purchases from the vendor did not exceed 10% for the period indicated. The Company purchases materials pursuant to intellectual property rights agreements that are important components in its products. Management believes that other suppliers could provide similar materials on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which could adversely affect operating results. e) Litigation: From time to time, the Company is involved in certain legal actions arising in the ordinary course of business. The outcomes of such actions, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s future financial position or results of operations. f) Governmental Regulation: All of the Company’s existing and proposed diagnostic products are regulated by the U.S. Food and Drug Administration, U.S. Department of Agriculture, certain U.S., state and local agencies, and/or comparable regulatory bodies in other countries. Most aspects of development, production, and marketing, including product testing, authorizations to market, labeling, promotion, manufacturing, and record keeping, are subject to regulatory review. After marketing approval has been granted, Chembio must continue to comply with governmental regulations. Failure to comply with applicable requirements can lead to sanctions, including withdrawal of products from the market, recalls, refusal to authorize government contracts, product seizures, civil money penalties, injunctions, and criminal prosecution. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | NOTE 13 — LONG-TERM DEBT: In September 2017, the Company entered into an agreement with an equipment vendor to purchase automated assembly equipment for approximately $660,000. The terms call for payments of 30% down, 60% at time of factory acceptance testing and 10% after delivery. The vendor agreed to lend the Company 15%, 40%, and 10%, of each originally scheduled payment, respectively. The Company paid interest at an annual rate of 12% until delivery. Beginning in September 2018, the Company began making monthly payments of principal and interest of approximately $20,150, at an annual rate of 12% over a twenty-four month period. The remaining balance was entirely short-term as of December 31, 2019. On September 3, 2019, the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings II, LP (the “Lender”). The Credit Agreement provides for a $20,000,000 senior secured term loan credit facility, which was drawn in full on September 4, 2019. Under the terms of the Credit Agreement, the Company may use the proceeds (i) for general working capital purposes and other permitted corporate purposes, (ii) to refinance certain of the Company’s existing indebtedness and (iii) to pay fees, costs and expenses incurred in connection with the Credit Agreement, including the Lender’s closing cost amount of $550,000, which was netted from the proceeds, and a financing fee of $600,000 (3.0% of gross proceeds) payable to Craig-Hallum Capital Group LLC, the Company’s financial advisor for the financing. Principal outstanding under the Credit Agreement bears interest at a rate per annum equal to the sum of (a) the greater of the one-month London Interbank Offered Rate and 2.5% plus (b) 8.75%. At any time at which an event of default has occurred and is continuing, the interest rate will increase by 4.0%. Accrued interest is payable on a monthly basis. On December 31, 2019 the interest rate was 11.25%. No principal repayments are due under the Credit Agreement prior to September 30, 2022, unless the Company elects to prepay principal or principal is accelerated pursuant to an event of default identified in the Credit Agreement. Principal installments in the amount of $300,000 are payable on the last day of each of the eleven months from September 2022 through July 2023, and all remaining principal is payable at maturity on September 3, 2023. The Company may prepay outstanding principal from time to time, subject to payment of a premium on the prepaid principal amount equal to 10% through September 3, 2020, 8% from September 4, 2020 through September 3, 2021, and 4% from September 4, 2021 through September 3, 2022. No premium will be due with respect to any prepayment made on or after September 4, 2022. As of December 31, 2019, the loan balance, net of unamortized discounts and debt issuance costs, was $17.6 million, and the company was in compliance with its loan covenants. Our obligations under the Credit Agreement are secured by a first priority, perfected lien on substantially all of our property and assets, including our equity interests in our subsidiaries. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2019 | |
WARRANTS [Abstract] | |
WARRANTS | NOTE 14 — WARRANTS: In connection with entering into the Credit Agreement, on September 3, 2019, the Company issued to the Lender a seven-year warrant (the “Warrant”) to purchase up to 550,000 shares of the Company’s common stock at a per-share exercise price of $5.22. The Warrant is exercisable for cash or on a net, or “cashless,” basis, and the exercise price of the Warrant is subject to price-based, weighted-average antidilution adjustments for one year after issuance. The Warrant was evaluated by the Company and classified to stockholder’s equity. Its fair value was estimated using a Black-Scholes option-pricing model using the assumptions below. Stock price on issuance date $ 5.40 Strike Price $ 5.22 Risk-free interest rate 1.45 % Volatility 43.65 % Expected life 7 years The fair value of the Warrant was determined to be approximately $1.4 million at $2.49 per share. As of December 31, 2019, the balance recorded in the Company’s Stockholders’ Equity for the Warrants, net of allocated issuance costs, was $1.2 million. As of December 31, 2019, no warrants were exercised and no warrants have expired. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Principles of Consolidation | (a) Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation. |
Use of Estimates | (b) Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Judgments and estimates of uncertainties are required in applying the Company’s accounting policies in certain areas. Generally, matters subject to estimation and judgment include accounts receivable realization, inventory obsolescence, asset impairments, recognition of revenue pursuant to milestones, useful lives of intangible and fixed assets, stock-based compensation, and deferred tax asset valuation allowances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates. |
Fair Value of Financial Instruments | (c) Fair Value of Financial Instruments: The carrying value for cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value due to the immediate or short-term maturity of these financial instruments. Included in cash and cash equivalents is $16.0 million and $4.7 million as of December 31, 2019 and 2018, respectively, of money market funds that are Level 1 fair value measurements under the hierarchy. The fair value of the Company’s notes payable approximates the recorded value as the rate is based upon the current rates offered to the Company for similar financial instruments. Fair value measurements of all financial assets and liabilities that are being measured and reported on a fair value basis are required to be classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents: Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or less. |
Concentrations of Credit Risk | (e) Concentrations of Credit Risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade receivables. The Company places its temporary cash instruments with well-known financial institutions and, at times, may maintain balances in excess of the FDIC insurance limit. The Company monitors the credit ratings of the financial institutions to mitigate this risk. Concentration of credit risk with respect to trade receivables is principally mitigated by the Company’s ability to obtain letters of credit from certain foreign customers and its diverse customer base, both in number of customers and geographic locations. |
Inventories | (f) Inventories: Inventories, consisting of material, labor and manufacturing overhead, are stated at the lower of cost and net realizable value. Cost is determined on the first-in, first-out method. The Company’s policy is to periodically evaluate the market value of the inventory and the stage of product life cycle, and record a write-down for any inventory considered slow moving or obsolete. |
Fixed Assets | (g) Fixed Assets: Fixed assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which range from three to seven years. Leasehold improvements are amortized over the useful life of the asset or the lease term, whichever is shorter. Deposits paid for fixed assets are capitalized and not depreciated until the related asset is placed in service. |
License Agreements | (h) License Agreements: The Company records up-front payments related to license agreements as prepaids and amortizes them over their respective economic life. As of December 31, 2019 and 2018, total prepaids were $100,000 and $100,000, respectively. Amortization expenses for the licenses above for the years ended December 31, 2019, and 2018 were $0, and $0, respectively. |
Valuation of Long-Lived Assets and Intangible Assets | (i) Valuation of Long-Lived Assets and Intangible Assets: Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. No impairment of long-lived tangible and intangible assets was recorded for the years ended December 31, 2019 and 2018. |
Revenue Recognition | (j) Revenue Recognition: In May 2014, the Financial Accounting Standards Board (“FASB”) issued converged guidance on recognizing revenue in contracts with customers, Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers The new revenue standards became effective for the Company on January 1, 2018 and were adopted using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any material accounting changes that impacted the amount of reported revenues with respect to its product revenue, license and royalty revenue, and R&D, milestone and grant revenues, no adjustment to retained earnings was required upon adoption. The Company adopted the standards to contracts that were not completed at the date of initial application (January 1, 2018). Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation. Product Revenues Revenues from product sales are recognized and commissions are accrued when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon tendering to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred because the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Freight and distribution activities on products are performed after the customer obtains control of the goods. The Company has made an accounting policy election to account for shipping and handling activities that occur either when or after goods are tendered to the customer as a fulfillment activity, and therefore recognizes freight and distribution expenses in Cost of Product Sales. The Company excludes certain taxes from the transaction price (e.g., sales, value added and some excise taxes). Our contracts with customers often include promises to transfer products or services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. Typical products sold are diagnostic tests and typical services performed are R&D feasibility studies. Revenues from sale of products are recognized point-in-time and revenues from R&D feasibility studies are recognized ratably, over the period of the agreement. Judgement The Company’s payment terms vary by the type and location of the Company’s customer and products or services offered. Payment terms differ by jurisdiction and customer but payment is generally required in a term ranging from 30 to 60 days from date of shipment or satisfaction of the performance obligation. Reserves for Discounts and Allowances Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers. The Company’s process for estimating reserves established for these variable consideration components does not differ materially from its historical practices. Product revenue reserves, which are classified as a reduction in product revenues, are generally related to discounts. Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on all information (historical, current and forecasted) that is reasonably available to the Company, taking into consideration the type of customer, the type of transaction and the specific facts and circumstances of each arrangement. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. Royalty Revenues The Company receives royalty revenues on sales by its licensee of products covered under patents that it owns. The Company does not have future performance obligations under this license arrangement. The Company records these revenues based on estimates of the sales that occurred during the relevant period as a component of license and royalty revenues. The relevant period estimates of sales are based on interim data provided by the licensee and analysis of historical royalties that have been paid to the Company, adjusted for any changes in facts and circumstances, as appropriate. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter. Historically, adjustments have not been material when compared to actual amounts paid by licensee. R&D and grant revenue All such contracts are evaluated under the five-step model described above. For certain contracts that represent grants where the funder does not meet the definition of a customer, the Company recognizes revenue when earned in accordance with ASC 958. Such contracts are further described under Disaggregation of Revenue In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. This ASU clarifies the guidance presented in Topic 958, “Not-for-Profit Entities,” of the FASB’s Accounting Standards Codification (ASC) for evaluating whether a transaction is reciprocal (i.e., an exchange transaction) or nonreciprocal (i.e., a contribution) and for distinguishing between conditional and unconditional contributions. The ASU also clarifies the guidance used by entities other than not-for-profits to identify and account for contributions made. Disaggregation of Revenue The following tables disaggregate Total Revenues for the year ended December 31, 2019, by type of transaction and by geography: Exchange Transactions Non-Exchange Transactions Total Net product sales $ 28,844,997 $ – $ 28,844,997 R&D, milestone and grant revenue 3,321,031 1,359,251 4,680,282 License and royalty revenue 938,753 – 938,753 $ 33,104,781 $ 1,359,251 $ 34,464,032 Exchange transactions are recognized in accordance with ASC 606, while non-exchange transactions are recognized in accordance with ASU No. 2018-08. Total Africa $ 7,564,360 Asia 888,800 Europe & Middle East 6,498,995 Latin America 11,808,768 United States 7,703,109 $ 34,464,032 The following tables disaggregate Total Revenues for the year ended December 31, 2018, by type of transaction and by geography: Exchange Transactions Non-Exchange Transactions Total Net product sales $ 27,913,209 $ – $ 27,913,209 R&D, milestone and grant revenue 2,687,210 3,032,248 5,719,458 License and royalty revenue 948,773 – 948,773 $ 34,581,440 $ 3,032,248 $ 34,581,440 Exchange transactions are recognized in accordance with ASC 606, while non-exchange transactions are recognized in accordance with ASU No. 2018-08. Total Africa $ 8,838,632 Asia 1,404,982 Europe & Middle East 4,895,273 Latin America 12,546,083 United States 6,896,470 $ 34,581,440 Contract Liabilities Deferred revenue relates to payments received in advance of performance under the contract. Deferred revenue is recognized as revenue as (or when) the Company performs under the contract. At December 31, 2018, the Company reported $422,905 in deferred revenue of which $422,905 was earned and recognized as R&D, milestone and grant revenue during the year ended December 31, 2019. At December 31, 2019, the Company reported $125,000 in deferred revenue which is expected to be recognized during the first quarter of 2020. In April 2017, the Company entered into a $1.1 million agreement with FIND to develop a simple, point-of-care fever panel assay that can identify multiple life-threatening acute febrile illnesses common in the Asia Pacific region. The Company earned $0.2 million and $1.1 million for the year ended December 31, 2019, and from inception through December 31, 2019, respectively as R&D, milestone and grant revenue in the Company’s Consolidated Statements of Operations. In August 2016, the Company was awarded a grant of $5.9 million from BARDA, which is part of the U.S. Department of Health And Human Resources to develop a rapid Zika virus assay. The Company earned $0.6 million and $5.9 million for the year ended December 31, 2019 and from inception through December 31, 2019, respectively, as R&D, milestone and grant revenue in the Company’s Consolidated Statements of Operations. |
Research and Development | (k) Research and Development: Research and development (R&D) costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. |
Stock-Based Compensation | (l) Stock-Based Compensation: The fair value of restricted stock and restricted stock unit awards are their fair value on the date of grant. Stock-based compensation expense for stock options is calculated using the Black-Scholes valuation model based on awards ultimately expected to vest together with the fair value of restricted stock and restricted stock unit awards, are, reduced for actual forfeitures, and, expensed on a straight-line basis over the requisite service period of the grant. During 2018, the Company adopted ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting”. |
Income Taxes | (m) I ncome Taxes: The Company accounts for income taxes under an asset and liability approach that recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company follows a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The guidance relates to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to uncertain tax positions are recorded in tax expense. The Company assesses the realizability of its net deferred tax assets on an annual basis. If, after considering all relevant positive and negative evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized, the Company will reduce the net deferred tax assets by a valuation allowance. The realization of net deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of net operating loss carryforwards. |
Loss Per Share | (n) Loss Per Share: Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period including outstanding restricted stock that by its terms is includible in the calculation. Diluted loss per share for the years ended December 31, 2019, and 2018 reflects the potential dilution from the exercise or conversion of other securities into common stock, if dilutive. There were 666,197, and 732,906 options outstanding as of December 31, 2019 and 2018, respectively, which were not included in the calculation of diluted income per share for the years ended because their effect would have been anti-dilutive. |
Goodwill and Intangible Assets | (o) Goodwill and Intangible Assets: Goodwill represents the excess of the purchase price the Company paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s acquisition of opTricon in November 2018, Chembio Diagnostics Malaysia in January 2017 and Orangelife in November 2019. Goodwill is not amortized but rather is tested annually as of the first day of the fiscal fourth quarter, or sooner if the Company believes that indicators of impairment exist. The Company makes a qualitative evaluation about the likelihood of goodwill impairment, which is based on a number of applicable factors. If the Company concludes that it is more likely than not that the carrying value of the applicable reporting unit is greater than its fair value, then it would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value, provided the impairment charge does not exceed the total amount of goodwill allocated to the reporting unit. For the year ended December 31, 2019 and 2018, there was no impairment of goodwill and other intangible assets. Following is a table that reflects changes in Goodwill: Beginning balance January 1, 2019 $ 4,983,127 Acquisition of Orangelife 986,058 Chembio Diagnostics GmbH measurement period adjustment (99,648 ) Changes in foreign currency exchange rate 3,153 Balance at December 31, 2019 $ 5,872,690 Intangible assets consist of the following at: Weighted Average Remaining Life December 31, 2019 December 31, 2018 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Intellectual property 6 $ 1,418,681 $ 299,232 $ 1,119,449 $ 1,089,688 $ 173,633 $ 916,055 Developed technology 6 1,922,682 266,550 1,656,132 1,910,315 – 1,910,315 Customer contracts/relationships 7 1,325,521 270,902 1,054,619 1,121,600 151,929 969,671 Trade names 8 114,946 30,794 84,152 108,521 19,731 88,790 $ 4,781,830 $ 867,478 $ 3,914,352 $ 4,230,124 $ 345,293 $ 3,884,831 Amortization expense for the year ended December 31, 2019 and 2018 was $515,263 and $233,734, respectively, and is recorded within COGS, R&D and Selling, General and Administrative expenses. Amortization expense, subject to changes in currency exchange rates, is expected to be approximately $590,000 per year from 2020 through 2024, and total $1 million for all of the years thereafter. |
Allowance for Doubtful Accounts | (p) Allowance for Doubtful Accounts: The Company records allowances for doubtful accounts for the estimated probable losses on uncollectible accounts receivable. The allowance is based upon the credit worthiness of the Company’s customers, the Company’s historical experience, the age of the receivable and current market and economic conditions. Receivables are written off against these allowances in the period they are determined to be uncollectible. |
Acquisition Costs | (q) Acquisition Costs: Acquisition costs include period expenses, primarily professional services, related to acquisition activities. |
Foreign Currency Translation | (r) Foreign Currency Translation: The functional currency of a foreign subsidiary is the local currency. Assets and liabilities of foreign subsidiaries that use a currency other than U.S. dollars as their functional currency are translated to U.S. dollars at end of period currency exchange rates. The consolidated statements of operations of foreign subsidiaries are translated to U.S. dollars at average period currency exchange rates. The effect of translation for foreign subsidiaries is generally reported in other comprehensive income. Foreign transaction gains/losses are immaterial. |
Recent Accounting Pronouncements Affecting the Company | In February 2016, the FASB issued ASU No. 2016-02, Leases Codification Improvements to Topic 842, Leases Leases (Topic 842) Targeted Improvements As further discussed on Note 12(c) – Leases, the Company adopted Topic 842 on January 1, 2019 under the optional transition method and elected the short-term lease exception and available practical expedients. Under the transition method, the Company did not adjust its comparative period financial information or make the new required lease disclosures for periods before the effective date. The impact of adoption of right-of-use assets and liabilities on January 1, 2019 was $0.8 million, and $0.8 million, respectively. In March 2016, the FASB issued authoritative guidance under ASU 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The Company adopted ASU 2016-15 in the first quarter of 2018. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting The Company adopted ASU 2017-09 in the first quarter of 2018. In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features and Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this ASU addresses the complexity of accounting for certain financial instruments with down round features. Per the ASU, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The ASU is effective for public entities for fiscal years beginning after December 15, 2018 and the Company adopted it effective January 1, 2019. This ASU is applicable to the stock warrants issued as part of the Credit Agreement, as further discussed in Note 14 – Warrants. In July 2018, the FASB issued ASU 2018-08 N ot-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made to clarify the accounting guidance related to contributions made or received. This guidance primarily affects not-for-profit entities, although it also applies to businesses to the extent that they make or receive contributions, including grants. ASU 2018-08 clarifies and improves the scope and accounting guidance for both contributions received and made in order to assist entities in evaluating if those transactions should be accounted for as contributions under the scope of Topic 958, or as an exchange transaction subject to other guidance. Public entities are required to apply the amendments on contributions received and contributions made to annual periods beginning after June 15, 2018, and December 15, 2018, respectively, each including interim periods within those annual periods. Early adoption is permitted, and the Company adopted ASU 2018-08 effective as of January 1, 2018. The impact of adoption was immaterial. In |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Orangelife [Member] | |
Business Acquisition [Line Items] | |
Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of November 25, 2019: Amount Net current assets $ 320,293 Property, plant and equipment and other assets 226,035 Inventory 289,205 Goodwill 986,058 Deferred tax liability (50,000 ) Other intangible assets (estimated useful life): Trade name (0.5 years) 5,000 Customer contracts / relationships (5 years) 195,000 Total consideration $ 1,971,591 |
Unaudited Pro forma Operating Results | The following represents pro forma operating results for the year ended December 31, 2019 as if the operations of Orangelife had been included in the Company’s Consolidated Statements of Operations as of January 1, 2019. This pro forma financial information is unaudited and presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred if the acquisition of Orangelife and the other transactions contemplated by this acquisition had been completed as of January 1, 2019, nor is it necessarily indicative of the future operating results of Chembio Diagnostics and Orangelife on a combined and consolidated basis. Unaudited Proforma December 31, 2019 Total revenues $ 35,157,248 Net loss $ (13,654,001 ) Net loss per common share $ (0.80 ) Diluted net loss per common share $ (0.80 ) |
opTricon [Member] | |
Business Acquisition [Line Items] | |
Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of November 6, 2018: Amount Net current assets $ 404,204 Property, plant and equipment 125,000 Goodwill 3,383,112 Deferred tax liability (681,112 ) Other intangible assets (estimated useful life): Developed technology (7 years) 1,900,000 Customer contracts / relationships (10 years) 360,000 Total consideration $ 5,491,204 |
Unaudited Pro forma Operating Results | The following represents unaudited pro forma operating results for the year ended December 31, 2018 as if the operations of opTricon had been included in the Company’s Consolidated Statements of Operations as of January 1, 2018: Proforma December 31, 2018 Total revenues $ 36,614,995 Net loss $ (8,394,074 ) Net loss per common share $ (0.58 ) Diluted net loss per common share $ (0.58 ) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Disaggregation of Revenue | The following tables disaggregate Total Revenues for the year ended December 31, 2019, by type of transaction and by geography: Exchange Transactions Non-Exchange Transactions Total Net product sales $ 28,844,997 $ – $ 28,844,997 R&D, milestone and grant revenue 3,321,031 1,359,251 4,680,282 License and royalty revenue 938,753 – 938,753 $ 33,104,781 $ 1,359,251 $ 34,464,032 Exchange transactions are recognized in accordance with ASC 606, while non-exchange transactions are recognized in accordance with ASU No. 2018-08. Total Africa $ 7,564,360 Asia 888,800 Europe & Middle East 6,498,995 Latin America 11,808,768 United States 7,703,109 $ 34,464,032 The following tables disaggregate Total Revenues for the year ended December 31, 2018, by type of transaction and by geography: Exchange Transactions Non-Exchange Transactions Total Net product sales $ 27,913,209 $ – $ 27,913,209 R&D, milestone and grant revenue 2,687,210 3,032,248 5,719,458 License and royalty revenue 948,773 – 948,773 $ 34,581,440 $ 3,032,248 $ 34,581,440 Exchange transactions are recognized in accordance with ASC 606, while non-exchange transactions are recognized in accordance with ASU No. 2018-08. Total Africa $ 8,838,632 Asia 1,404,982 Europe & Middle East 4,895,273 Latin America 12,546,083 United States 6,896,470 $ 34,581,440 |
Changes in Goodwill | Following is a table that reflects changes in Goodwill: Beginning balance January 1, 2019 $ 4,983,127 Acquisition of Orangelife 986,058 Chembio Diagnostics GmbH measurement period adjustment (99,648 ) Changes in foreign currency exchange rate 3,153 Balance at December 31, 2019 $ 5,872,690 |
Intangible Assets | Intangible assets consist of the following at: Weighted Average Remaining Life December 31, 2019 December 31, 2018 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Intellectual property 6 $ 1,418,681 $ 299,232 $ 1,119,449 $ 1,089,688 $ 173,633 $ 916,055 Developed technology 6 1,922,682 266,550 1,656,132 1,910,315 – 1,910,315 Customer contracts/relationships 7 1,325,521 270,902 1,054,619 1,121,600 151,929 969,671 Trade names 8 114,946 30,794 84,152 108,521 19,731 88,790 $ 4,781,830 $ 867,478 $ 3,914,352 $ 4,230,124 $ 345,293 $ 3,884,831 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES [Abstract] | |
Inventories | Inventories consist of the following at December 31, 2019: December 31 2019 2018 Raw Materials $ 2,901,319 $ 2,803,677 Work in Process 793,343 263,043 Finished Goods 5,903,368 4,784,502 $ 9,598,030 $ 7,851,222 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FIXED ASSETS [Abstract] | |
Fixed Assets | Fixed assets consist of the following at December 31, 2019: December 31 2019 2018 Machinery and Equipment $ 7,955,511 $ 6,070,137 Furniture and Fixtures 21,477 35,287 Computer Equipment 416,359 435,348 Leasehold Improvements 3,038,469 2,334,512 Enterprise Business Systems 1,830,925 462,420 Less: Accumulated Depreciation and Amortization (7,329,173 ) (6,463,784 ) $ 5,933,569 $ 2,873,920 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of the following at December 31, 2019: December 31 2019 2018 Accounts Payable - suppliers $ 3,144,098 $ 3,622,765 Accrued Commissions & Royalties 931,760 867,344 Accrued Payroll 231,753 48,867 Accrued Vacation 410,199 264,789 Accrued Bonuses 215,000 494,318 Accrued Expenses - Other 593,433 590,598 $ 5,526,243 $ 5,888,681 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES [Abstract] | |
Components of (Loss) Before Income Taxes | The components of (loss) before income taxes consisted of the following: Year Ending December 31, 2019 2018 United States operations $ (12,504,780 ) $ (7,137,428 ) International operations (1,670,641 ) (795,742 ) (Loss) before taxes $ (14,175,421 ) $ (7,933,170 ) |
(Benefit) Provision for Income Taxes | The components of (loss) before income taxes consisted of the following: Year Ending December 31, 2019 2018 United States operations $ (12,504,780 ) $ (7,137,428 ) International operations (1,670,641 ) (795,742 ) (Loss) before taxes $ (14,175,421 ) $ (7,933,170 ) T he (benefit from) provision for income taxes for the years ended December Year Ending December 31, 2019 2018 Current Federal $ – $ – State 9,790 10,911 Foreign 3,633 – Total current (benefit) provision 13,423 10,911 Deferred Federal – – State – – Foreign (513,715 ) (78,432 ) Total deferred (benefit) provision (513,715 ) (78,432 ) Total (benefit) provision $ (500,292 ) $ (67,521 ) |
Reconciliation of Federal Statutory Rate to Effective Rate Applicable to Loss Before Income Taxes | A reconciliation of the Federal statutory rate to the effective rate applicable to loss before income taxes is as follows: Year Ending December 31, 2019 2018 Federal income tax at statutory rates 21.00 % 21.00 % State income taxes, net of federal benefit (0.05 )% (0.10 )% Nondeductible expenses (1.00 )% (1.58 )% Foreign rate differential 0.45 % 0.36 % Change in valuation allowance (17.51 )% (18.44 )% Other .64 % (0.39 )% Income tax benefit 3.53 % 0.85 % |
Deferred Tax Assets and Liabilities | 2019 2018 Inventory reserves $ 196,193 $ 204,206 Accrued expenses 105,323 175,168 Net operating loss carry-forwards 10,079,317 7,122,576 Research and development credit 1,679,495 1,696,870 Stock-based compensation 581,053 215,797 Lease obligations 1,646,584 – Depreciation 44,993 139,362 Total deferred tax assets 14,332,958 9,553,979 Right-of-use assets (1,538,129 ) – Intangibles (921,807 ) (968,849 ) Total deferred tax liabilities (2,459,936 ) (968,849 ) Net deferred tax assets before valuation allowance 11,873,022 8,585,130 Less valuation allowances (12,339,348 ) (9,477,438 ) Net noncurrent deferred tax liabilities $ (466,326 ) $ (892,308 ) |
EQUITY INCENTIVE PLANS (Tables)
EQUITY INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EQUITY INCENTIVE PLANS [Abstract] | |
Assumptions Made in Calculating Fair Values of Options | The weighted-average assumptions made in calculating the fair values of options are as follows for the respective years ended December 31: 2019 2018 Expected term (in years) n/a 4.96 Expected volatility n/a 39.91 % Expected dividend yield n/a n/a Risk-free interest rate n/a 2.70 % |
Stock Option Activity | The following table provides stock option activity for the years ended December 31, 2019 and 2018: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2017 810,670 $ 5.18 3.69 years $ 2,477,853 Granted 93,750 9.80 Exercised 144,947 4.83 523,327 Forfeited/expired/cancelled 47,505 8.82 Outstanding at December 31, 2018 711,968 $ 5.62 3.33 years $ 687,364 Exercisable at December 31, 2018 396,799 $ 4.70 2.66 years $ 568,956 Outstanding at December 31, 2018 711,968 $ 5.62 3.33 years $ 687,364 Granted – $ 0.00 – Exercised 54,343 $ 3.60 172,242 Forfeited/expired/cancelled 15,000 $ 5.68 – Outstanding at December 31, 2019 642,625 $ 5.79 2.57 years $ 285,925 Exercisable at December 31, 2019 493,958 $ 5.22 2.20 years $ 285,925 |
Stock Options Outstanding | The following table summarizes information about stock options outstanding at December 31, 2019: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Shares Outstanding Average Remaining Contract Life (Year) Weighted Average Exercise Price Aggregate Intrinsic Value Shares Exercisable Weighted Average Exercise Price Aggregate Intrinsic Value 1 to 2.79999 – – $ – $ – – $ – $ – 2.8 to 4.59999 250,000 1.20 3.42 285,925 250,000 3.42 285,925 4.6 to 6.39999 137,875 2.44 5.87 – 87,125 5.89 – 6.4 to 8.19999 207,875 4.05 7.31 – 138,083 7.22 – 8.2 to 12 46,875 3.60 11.45 – 18,750 11.45 – Total 642,625 2.57 $ 5.79 $ 285,925 493,958 $ 5.22 $ 285,925 |
Summary of Restricted Stock and Restricted Stock Units Outstanding | The following table summarizes information about restricted stock and restricted stock units outstanding as of December 31, 2019: Number of Shares & Units Weighted Average Grant Date Fair Value Unvested at December 31, 2018 287,564 $ 9.65 Granted 375,000 5.80 Vested (116,578 ) 9.65 Forfeited/expired/cancelled – – Unvested at December 31, 2019 545,986 7.47 |
GEOGRAPHIC INFORMATION AND EC_2
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY [Abstract] | |
Net Product Sales by Geographic Area | The Company produces only one group of similar products known collectively as “rapid medical tests,” and it operates in a single business segment. Net product sales by geographic area are as follows: Year Ending December 31, 2019 2018 Africa $ 7,564,360 $ 8,838,632 Asia 888,800 1,404,982 Europe & Middle East 3,781,761 2,208,063 Latin America 11,808,767 12,546,083 United States 4,801,309 2,915,449 $ 28,844,997 $ 27,913,209 |
Long-lived Assets by Geographic Area | Long-lived assets by geographic area are as follows: 2019 2018 Asia $ 393,299 $ 466,185 Europe & Middle East 165,029 123,752 Latin America 60,527 – United States 5,314,715 2,283,983 $ 5,933,569 $ 2,873,920 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS [Abstract] | |
Future Minimum Salary Commitment | The following table is a schedule of future minimum salary commitments: 2020 $ 365,000 2021 365,000 |
Components of Lease Expense | The components of lease expense were as follows: Year Ended December 31, 2019 Operating lease expense $ 1,655,573 Finance lease cost Amortization of right-of-use assets $ 23,373 Interest on lease liabilities 7,892 Total finance lease expense $ 31,265 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow and other information related to leases were as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 632,952 Operating cash flows for finance leases 7,892 Financing cash flows for finance leases 19,875 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 7,030,744 Finance leases 210,350 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating Leases Operating lease right-of-use assets $ 7,030,744 – Current portion of operating lease liability 568,294 Operating lease liabilities 6,969,603 Total operating lease liabilities $ 7,537,897 Finance Leases Finance lease right of use asset $ 233,722 Accumulated depreciation (23,372 ) Finance lease right of use asset, net $ 210,350 Current portion of finance lease liability 41,894 Finance lease liability 171,953 Total finance lease liabilities $ 213,847 Weighted Average Remaining Lease Term Operating leases 9.3 Finance leases 4.8 Weighted Average Discount Rate Operating leases 8.67 % Finance leases 7.00 % |
Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows. Operating Leases Finance Leases 2020 $ 1,205,161 $ 55,536 2021 1,209,787 55,536 2022 1,057,757 55,536 2023 1,026,272 55,536 2024 1,018,875 27,767 Thereafter 5,773,887 – Total lease payments $ 11,291,739 $ 249,911 Less: imputed interest (3,753,842 ) (36,064 ) Total $ 7,537,897 $ 213,847 |
Future Minimum Lease Payments | As previously disclosed in the Company’s 2018 Annual Report on Form 10-K, and under the previous lease accounting standard, future minimum lease payments for operating leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows for the years ending December 31: 2019 $ 384,308 2020 88,576 2021 – $ 472,884 |
Customer and Purchase Concentration Risks | Customers are considered major customers when net sales exceed 10% of the Company’s total net sales for period or outstanding trade receivables exceed 10% of accounts receivable. The Company had the following major customers for the respective periods: For the years ended Accounts Receivable December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Net Sales % of Net Sales Net Sales % of Net Sales Customer 1 $ 11,263,573 39 % $ 11,333,767 33 % $ 941,962 $ 3,499,340 Customer 2 5,782,543 20 % 4,346,640 13 % 16,033 1,033,824 The following table delineates purchases the Company had with vendors in excess of 10% of total purchases for the periods indicated: For the years ended Accounts Payable December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Purchases % of Purc. Purchases % of Purc. Vendor 1 * * 1,646,614 16 % * 164,312 In the tables above, an asterisk (*) indicates that purchases from the vendor did not exceed 10% for the period indicated. |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
WARRANTS [Abstract] | |
Warrants Fair Value Assumptions | The Warrant was evaluated by the Company and classified to stockholder’s equity. Its fair value was estimated using a Black-Scholes option-pricing model using the assumptions below. Stock price on issuance date $ 5.40 Strike Price $ 5.22 Risk-free interest rate 1.45 % Volatility 43.65 % Expected life 7 years |
ACQUISITIONS, Orangelife (Detai
ACQUISITIONS, Orangelife (Details) - USD ($) | Nov. 25, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Fair values of Assets Acquired and Liabilities Assumed [Abstract] | |||
Goodwill | $ 5,872,690 | $ 4,983,127 | |
Other intangible assets (estimated useful life): | |||
Acquisition costs | 721,465 | 337,645 | |
Unaudited Pro Forma Operating Results [Abstract] | |||
Total revenues | 35,157,248 | 36,614,995 | |
Net loss | $ (13,654,001) | $ (8,394,074) | |
Net loss per common share (in dollars per share) | $ (0.80) | $ (0.58) | |
Diluted net loss per common share (in dollars per share) | $ (0.80) | $ (0.58) | |
Orangelife [Member] | |||
Business Combination, Consideration Transferred [Abstract] | |||
Cash payment | $ 150,000 | ||
Shares issued (in shares) | 153,707 | ||
Fair values of Assets Acquired and Liabilities Assumed [Abstract] | |||
Net current assets | $ 320,293 | ||
Property, plant and equipment and other assets | 226,035 | ||
Inventory | 289,205 | ||
Goodwill | 986,058 | ||
Deferred tax liability | (50,000) | ||
Other intangible assets (estimated useful life): | |||
Other intangible assets | 200,000 | ||
Total consideration | 1,971,591 | ||
Acquisition costs | $ 325,853 | ||
Orangelife [Member] | Maximum [Member] | |||
Business Combination, Consideration Transferred [Abstract] | |||
Additional stock payment for acquisition based on certain milestones (in shares) | 316,456 | ||
Orangelife [Member] | Trade Name [Member] | |||
Other intangible assets (estimated useful life): | |||
Other intangible assets | $ 5,000 | ||
Weighted average useful life | 6 months | ||
Orangelife [Member] | Customer Contracts / Relationships [Member] | |||
Other intangible assets (estimated useful life): | |||
Other intangible assets | $ 195,000 | ||
Weighted average useful life | 5 years |
ACQUISITIONS, opTricon (Details
ACQUISITIONS, opTricon (Details) - USD ($) | Nov. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Combination, Consideration Transferred [Abstract] | |||
Acquisition costs | $ 721,465 | $ 337,645 | |
Fair values of Assets Acquired and Liabilities Assumed [Abstract] | |||
Goodwill | 5,872,690 | 4,983,127 | |
Unaudited Pro Forma Operating Results [Abstract] | |||
Total revenue | 35,157,248 | 36,614,995 | |
Net loss | $ (13,654,001) | $ (8,394,074) | |
Net loss per common share (in dollars per share) | $ (0.80) | $ (0.58) | |
Diluted net loss per common share (in dollars per share) | $ (0.80) | $ (0.58) | |
opTricon [Member] | |||
Business Combination, Consideration Transferred [Abstract] | |||
Acquisition costs | $ 395,612 | $ 337,645 | |
Fair values of Assets Acquired and Liabilities Assumed [Abstract] | |||
Net current assets | $ 404,204 | ||
Property, plant and equipment | 125,000 | ||
Goodwill | 3,383,112 | ||
Deferred tax liability | (681,112) | ||
Other intangible assets (estimated useful life): | |||
Other intangible assets | 2,260,000 | ||
Total consideration | 5,491,204 | ||
Unaudited Pro Forma Operating Results [Abstract] | |||
Total revenue | 2,214,000 | ||
Net loss | 213,000 | ||
Amortization of Intangible Assets | $ 351,000 | ||
opTricon [Member] | Developed Technology [Member] | |||
Other intangible assets (estimated useful life): | |||
Other intangible assets | $ 1,900,000 | ||
Weighted average useful life | 7 years | ||
opTricon [Member] | Customer Contracts / Relationships [Member] | |||
Other intangible assets (estimated useful life): | |||
Other intangible assets | $ 360,000 | ||
Weighted average useful life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Part 1 (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2017 | Aug. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 18,271,352 | $ 12,524,551 | ||
License Agreements [Abstract] | ||||
Prepaid payments for license agreements | 100,000 | 100,000 | ||
Amortization expenses | 0 | 0 | ||
Valuation of Long-Lived Assets and Intangible Assets [Abstract] | ||||
Goodwill impairment loss | 0 | 0 | ||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 34,464,032 | 34,581,440 | ||
Contract Liabilities [Abstract] | ||||
Deferred revenue | 125,000 | $ 422,905 | ||
Earned grant revenue | $ 422,905 | |||
Loss Per Share [Abstract] | ||||
Options and warrants excluded from computation of earnings per share (in shares) | 666,197 | 732,906 | ||
Fever Panel [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | $ 200,000 | |||
Contract Liabilities [Abstract] | ||||
Maximum amount of development agreement | 1,100,000 | |||
Revenue from grants from inception | $ 1,100,000 | |||
Zika Virus [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | $ 600,000 | |||
Contract Liabilities [Abstract] | ||||
Maximum amount of development agreement | 5,900,000 | |||
Revenue from grants from inception | $ 5,900,000 | |||
Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | $ 33,104,781 | $ 34,581,440 | ||
Non-Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 1,359,251 | 3,032,248 | ||
Africa [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 7,564,360 | 8,838,632 | ||
Asia [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 888,800 | 1,404,982 | ||
Europe & Middle East [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 6,498,995 | 4,895,273 | ||
Latin America [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 11,808,768 | 12,546,083 | ||
United States [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 7,703,109 | 6,896,470 | ||
Net Product Sales [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 28,844,997 | 27,913,209 | ||
Net Product Sales [Member] | Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 28,844,997 | 27,913,209 | ||
Net Product Sales [Member] | Non-Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 0 | 0 | ||
Net Product Sales [Member] | Africa [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 7,564,360 | 8,838,632 | ||
Net Product Sales [Member] | Asia [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 888,800 | 1,404,982 | ||
Net Product Sales [Member] | Europe & Middle East [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 3,781,761 | 2,208,063 | ||
Net Product Sales [Member] | Latin America [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 11,808,767 | 12,546,083 | ||
Net Product Sales [Member] | United States [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 4,801,309 | 2,915,449 | ||
License and Royalty Revenue [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 938,753 | 948,773 | ||
License and Royalty Revenue [Member] | Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 938,753 | 948,773 | ||
License and Royalty Revenue [Member] | Non-Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 0 | 0 | ||
R&D, Milestone and Grant Revenue [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 4,680,282 | 5,719,458 | ||
R&D, Milestone and Grant Revenue [Member] | Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | 3,321,031 | 2,687,210 | ||
R&D, Milestone and Grant Revenue [Member] | Non-Exchange Transactions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Total revenues | $ 1,359,251 | 3,032,248 | ||
Minimum [Member] | ||||
Fixed Assets [Abstract] | ||||
Estimated useful lives of fixed assets | 3 years | |||
Product Revenue [Abstract] | ||||
Revenue, payment terms | 30 days | |||
Maximum [Member] | ||||
Fixed Assets [Abstract] | ||||
Estimated useful lives of fixed assets | 7 years | |||
Product Revenue [Abstract] | ||||
Revenue, payment terms | 60 days | |||
Money Market Funds [Member] | Level 1 [Member] | ||||
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 16,000,000 | $ 4,700,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Part 2 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets [Assets] | ||
Impairment of intangible assets | $ 0 | $ 0 |
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 4,983,127 | |
Acquisition of Orangelife | 986,058 | |
Chembio Diagnostics GmbH measurement period adjustment | (99,648) | |
Changes in foreign currency exchange rate | 3,153 | |
Goodwill, Ending balance | 5,872,690 | 4,983,127 |
Intangible assets [Abstract] | ||
Accumulated Amortization | 0 | 0 |
Net Book Value | 3,914,352 | 3,884,831 |
Amortization Expense [Abstract] | ||
Amortization expense | 515,263 | 233,734 |
2020 | 590,000 | |
2021 | 590,000 | |
2022 | 590,000 | |
2023 | 590,000 | |
2024 | 590,000 | |
Thereafter | 1,000,000 | |
Recent Accounting Pronouncements Affecting the Company [Abstract] | ||
Operating lease, right-of-use assets | 7,030,744 | 0 |
Operating lease, liability | $ 7,537,897 | |
Intellectual Property [Member] | ||
Intangible assets [Abstract] | ||
Weighted average remaining life of intangible assets | 6 years | |
Developed Technology [Member] | ||
Intangible assets [Abstract] | ||
Weighted average remaining life of intangible assets | 6 years | |
Customer Contracts / Relationships [Member] | ||
Intangible assets [Abstract] | ||
Weighted average remaining life of intangible assets | 7 years | |
Trade Names [Member] | ||
Intangible assets [Abstract] | ||
Weighted average remaining life of intangible assets | 8 years | |
OpTricon, RVR and Orangelife [Member] | ||
Intangible assets [Abstract] | ||
Cost | $ 4,781,830 | 4,230,124 |
Accumulated Amortization | 867,478 | 345,293 |
Net Book Value | 3,914,352 | 3,884,831 |
OpTricon, RVR and Orangelife [Member] | Intellectual Property [Member] | ||
Intangible assets [Abstract] | ||
Cost | 1,418,681 | 1,089,688 |
Accumulated Amortization | 299,232 | 173,633 |
Net Book Value | 1,119,449 | 916,055 |
OpTricon, RVR and Orangelife [Member] | Developed Technology [Member] | ||
Intangible assets [Abstract] | ||
Cost | 1,922,682 | 1,910,315 |
Accumulated Amortization | 266,550 | 0 |
Net Book Value | 1,656,132 | 1,910,315 |
OpTricon, RVR and Orangelife [Member] | Customer Contracts / Relationships [Member] | ||
Intangible assets [Abstract] | ||
Cost | 1,325,521 | 1,121,600 |
Accumulated Amortization | 270,902 | 151,929 |
Net Book Value | 1,054,619 | 969,671 |
OpTricon, RVR and Orangelife [Member] | Trade Names [Member] | ||
Intangible assets [Abstract] | ||
Cost | 114,946 | 108,521 |
Accumulated Amortization | 30,794 | 19,731 |
Net Book Value | $ 84,152 | 88,790 |
Topic 842 [Member] | ||
Recent Accounting Pronouncements Affecting the Company [Abstract] | ||
Operating lease, right-of-use assets | 800,000 | |
Operating lease, liability | $ 800,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
INVENTORIES [Abstract] | ||
Raw Materials | $ 2,901,319 | $ 2,803,677 |
Work in Process | 793,343 | 263,043 |
Finished Goods | 5,903,368 | 4,784,502 |
Inventories | $ 9,598,030 | $ 7,851,222 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of fixed assets [Abstract] | ||
Less: Accumulated Depreciation and Amortization | $ (7,329,173) | $ (6,463,784) |
Fixed assets, net | 5,933,569 | 2,873,920 |
Depreciation expense | 933,558 | 634,261 |
Machinery and Equipment [Member] | ||
Summary of fixed assets [Abstract] | ||
Fixed assets, gross | 7,955,511 | 6,070,137 |
Furniture and Fixtures [Member] | ||
Summary of fixed assets [Abstract] | ||
Fixed assets, gross | 21,477 | 35,287 |
Computer Equipment [Member] | ||
Summary of fixed assets [Abstract] | ||
Fixed assets, gross | 416,359 | 435,348 |
Leasehold Improvements [Member] | ||
Summary of fixed assets [Abstract] | ||
Fixed assets, gross | 3,038,469 | 2,334,512 |
Enterprise Business Systems [Member] | ||
Summary of fixed assets [Abstract] | ||
Fixed assets, gross | 1,830,925 | 462,420 |
Manufacturing Equipment [Member] | ||
Summary of fixed assets [Abstract] | ||
Fixed assets, gross | $ 1,400,181 | $ 428,859 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | ||
Accounts payable - suppliers | $ 3,144,098 | $ 3,622,765 |
Accrued Commissions & Royalties | 931,760 | 867,344 |
Accrued payroll | 231,753 | 48,867 |
Accrued vacation | 410,199 | 264,789 |
Accrued bonuses | 215,000 | 494,318 |
Accrued Expenses - Other | 593,433 | 590,598 |
Total | $ 5,526,243 | $ 5,888,681 |
DEFERRED RESEARCH AND DEVELOP_2
DEFERRED RESEARCH AND DEVELOPMENT REVENUE (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
DEFERRED RESEARCH AND DEVELOPMENT REVENUE [Abstract] | ||
Deferred revenue | $ 125,000 | $ 422,905 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2003 | Dec. 31, 2005 | |
Current [Abstract] | ||||
Federal | $ 0 | $ 0 | ||
State | 9,790 | 10,911 | ||
Foreign | 3,633 | 0 | ||
Total current (benefit) provision | 13,423 | 10,911 | ||
Deferred [Abstract] | ||||
Federal | 0 | 0 | ||
State | 0 | 0 | ||
Foreign | (513,715) | (78,432) | ||
Total deferred (benefit) provision | (513,715) | (78,432) | ||
Total (benefit) provision | $ (500,292) | $ (67,521) | ||
Taxes [Abstract] | ||||
Federal income tax at statutory rates | 21.00% | 21.00% | ||
State income taxes, net of federal benefit | (0.05%) | (0.10%) | ||
Nondeductible expenses | (1.00%) | (1.58%) | ||
Foreign rate differential | 0.45% | 0.36% | ||
Change in valuation allowance | (17.51%) | (18.44%) | ||
Other | 0.64% | (0.39%) | ||
Income tax benefit | 3.53% | 0.85% | ||
Income Taxes [Abstract] | ||||
Net operating losses | $ 5,832,516 | $ 8,586,861 | ||
Annual limitation | 150,608 | 1,111,831 | ||
Built-in-gains of net operating losses | $ 488,207 | $ 1,756,842 | ||
Tax Credit Carryforward [Abstract] | ||||
Operating loss carryforwards, subject to expiration | $ 27,235,494 | |||
Operating loss carryforwards, not subject to expiration | 16,242,683 | |||
Components of Deferred Tax Assets and Liabilities [Abstract] [Abstract] | ||||
Inventory reserves | 196,193 | $ 204,206 | ||
Accrued expenses | 105,323 | 175,168 | ||
Net operating loss carry-forwards | 10,079,317 | 7,122,576 | ||
Research and development credit | 1,679,495 | 1,696,870 | ||
Stock-based compensation | 581,053 | 215,797 | ||
Lease obligations | 1,646,584 | 0 | ||
Depreciation | 44,993 | 139,362 | ||
Total deferred tax assets | 14,332,958 | 9,553,979 | ||
Right-of-use assets | (1,538,129) | 0 | ||
Intangible | (921,807) | (968,849) | ||
Total deferred tax liabilities | (2,459,936) | (968,849) | ||
Net deferred tax assets before valuation allowance | 11,873,022 | 8,585,130 | ||
Less valuation allowances | (12,339,348) | (9,477,438) | ||
Net noncurrent deferred tax liabilities | (466,326) | (892,308) | ||
Components of (loss) before income taxes [Abstract] | ||||
United States operations | (12,504,780) | (7,137,428) | ||
International operations | (1,670,641) | (795,742) | ||
(Loss) before taxes | (14,175,421) | $ (7,933,170) | ||
Unremitted earnings of foreign subsidiaries | $ 0 | |||
Income Tax Contingencies [Abstract] | ||||
Open tax year | 2016 2017 2018 2019 | |||
State [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Operating loss carryforwards, subject to expiration | $ 1,912,798 | |||
Foreign [Member] | ||||
Tax Credit Carryforward [Abstract] | ||||
Operating loss carryforwards, not subject to expiration | $ 3,355,645 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2018 | Feb. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Common Stock [Abstract] | ||||
Number of stock options exercised under the plan (in shares) | 54,343 | 144,947 | ||
Exercised (in shares) | 31,543 | 71,290 | ||
Exercise prices of stock option, minimum (in dollars per share) | $ 3.48 | $ 3.48 | ||
Exercise prices of stock option, maximum (in dollars per share) | 4.35 | $ 5.64 | ||
Underwritten public offering (in shares) | 2,726,000 | 1,783,760 | ||
Underwritten exercise of overallotment (in shares) | 355,565 | |||
Public offering price per share (in dollars per share) | $ 6.75 | $ 6.75 | $ 5.40 | |
Net proceeds after underwriting discounts and other offering expenses | $ 16,500,000 | $ 10,900,000 | $ 0 | $ 27,476,260 |
Preferred Stock [Abstract] | ||||
Preferred stock - shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Preferred stock - shares outstanding (in shares) | 0 | 0 | ||
Warrants [Abstract] | ||||
Warrants outstanding (in shares) | 550,000 |
EQUITY INCENTIVE PLANS, Part 1
EQUITY INCENTIVE PLANS, Part 1 (Details) - USD ($) | Sep. 22, 2011 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 19, 2014 | Jun. 03, 2008 |
Stock options, additional disclosure [Abstract] | ||||||
Outstanding, aggregate intrinsic value, end of period | $ 285,925 | |||||
Exercisable, aggregate intrinsic value, end of period | 285,925 | |||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||||
Allocated share-based compensation expense | $ 1,655,900 | $ 632,805 | ||||
Stock Options [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Weighted average estimated grant-date fair value of stock options granted (in dollars per share) | $ 0 | $ 3.76 | ||||
Assumptions made in calculating fair values of options [Abstract] | ||||||
Expected term | 4 years 11 months 16 days | |||||
Expected volatility | 39.91% | |||||
Risk-free interest rate | 2.70% | |||||
Stock options, number of shares [Roll forward] | ||||||
Outstanding, beginning of period (in shares) | 711,968 | 810,670 | ||||
Granted (in shares) | 0 | 93,750 | ||||
Exercised (in shares) | 54,343 | 144,947 | ||||
Forfeited/expired/cancelled (in shares) | 15,000 | 47,505 | ||||
Outstanding, end of period (in shares) | 642,625 | 711,968 | 810,670 | |||
Exercisable, end of period (in shares) | 493,958 | 396,799 | ||||
Stock options, weighted average exercise price per share [Roll Forward] | ||||||
Outstanding, beginning of period (in dollars per share) | $ 5.62 | $ 5.18 | ||||
Granted (in dollars per share) | 0 | 9.80 | ||||
Exercised (in dollars per share) | 3.60 | 4.83 | ||||
Forfeited/expired/cancelled (in dollars per share) | 5.68 | 8.82 | ||||
Outstanding, end of period (in dollars per share) | 5.79 | 5.62 | $ 5.18 | |||
Exercisable, end of period (in dollars per share) | $ 5.22 | $ 4.70 | ||||
Stock options, additional disclosure [Abstract] | ||||||
Outstanding, weighted average remaining contract term | 2 years 6 months 25 days | 3 years 3 months 29 days | 3 years 5 months 5 days | |||
Exercisable, weighted average remaining contract term | 2 years 2 months 12 days | 2 years 7 months 28 days | ||||
Outstanding, aggregate intrinsic value, beginning of period | $ 687,364 | $ 2,477,853 | ||||
Granted, aggregate intrinsic value | 0 | |||||
Exercised, aggregate intrinsic value | 172,242 | 523,327 | ||||
Forfeited/expired/cancelled, aggregate intrinsic value | 0 | |||||
Outstanding, aggregate intrinsic value, end of period | 285,925 | 687,364 | $ 2,477,853 | |||
Exercisable, aggregate intrinsic value, end of period | 285,925 | 568,956 | ||||
Net unrecognized compensation cost | $ 432,746 | |||||
Weighted average period for recognition of net unrecognized compensation cost | 2 years | |||||
Total fair value of stock options vested during period | $ 469,032 | |||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||||
Allocated share-based compensation expense | $ 261,088 | 351,556 | ||||
2008 Stock Incentive Plan [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Options still available to be issued (in shares) | 0 | |||||
Stock options, number of shares [Roll forward] | ||||||
Exercised (in shares) | 0 | |||||
Outstanding, end of period (in shares) | 0 | |||||
2008 Stock Incentive Plan [Member] | Stock Options [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Number of shares authorized under the plan (in shares) | 750,000 | 625,000 | ||||
Increase in number of shares authorized (in shares) | 125,000 | |||||
2014 Stock Incentive Plan [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Options still available to be issued (in shares) | 148,667 | |||||
2014 Stock Incentive Plan [Member] | Stock Options [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Number of shares authorized under the plan (in shares) | 800,000 | |||||
Stock options, number of shares [Roll forward] | ||||||
Exercised (in shares) | 54,343 | |||||
Outstanding, end of period (in shares) | 642,625 | |||||
2019 Omnibus Incentive Plan [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Options still available to be issued (in shares) | 2,025,000 | |||||
Number of restricted shares awarded under the plan (in shares) | 375,000 | |||||
2019 Omnibus Incentive Plan [Member] | Stock Options [Member] | ||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||
Number of shares authorized under the plan (in shares) | 2,400,000 | |||||
Cost of Goods Sold [Member] | ||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||||
Allocated share-based compensation expense | $ 10,806 | 25,615 | ||||
Research and Development Expense [Member] | ||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||||
Allocated share-based compensation expense | 228,597 | 78,831 | ||||
Selling, General and Administrative Expenses [Member] | ||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||||
Allocated share-based compensation expense | $ 1,416,497 | $ 528,360 |
EQUITY INCENTIVE PLANS, Part 2
EQUITY INCENTIVE PLANS, Part 2 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Range of Exercise Prices [Abstract] | ||
Range of exercise prices, minimum (in dollars per share) | $ 3.48 | $ 3.48 |
Range of exercise prices, maximum (in dollars per share) | $ 4.35 | $ 5.64 |
Stock Options Outstanding [Abstract] | ||
Shares outstanding (in shares) | 642,625 | |
Average remaining contract life | 2 years 6 months 25 days | |
Weighted average exercise price (in dollars per share) | $ 5.79 | |
Aggregate intrinsic value | $ 285,925 | |
Stock Options Exercisable [Abstract] | ||
Shares exercisable (in shares) | 493,958 | |
Weighted average exercise price (in dollars per share) | $ 5.22 | |
Aggregate intrinsic value | $ 285,925 | |
1 to 2.79999 [Member] | ||
Range of Exercise Prices [Abstract] | ||
Range of exercise prices, minimum (in dollars per share) | $ 1 | |
Range of exercise prices, maximum (in dollars per share) | $ 2.79999 | |
Stock Options Outstanding [Abstract] | ||
Shares outstanding (in shares) | 0 | |
Average remaining contract life | 0 years | |
Weighted average exercise price (in dollars per share) | $ 0 | |
Aggregate intrinsic value | $ 0 | |
Stock Options Exercisable [Abstract] | ||
Shares exercisable (in shares) | 0 | |
Weighted average exercise price (in dollars per share) | $ 0 | |
Aggregate intrinsic value | $ 0 | |
2.8 to 4.59999 [Member] | ||
Range of Exercise Prices [Abstract] | ||
Range of exercise prices, minimum (in dollars per share) | $ 2.8 | |
Range of exercise prices, maximum (in dollars per share) | $ 4.59999 | |
Stock Options Outstanding [Abstract] | ||
Shares outstanding (in shares) | 250,000 | |
Average remaining contract life | 1 year 2 months 12 days | |
Weighted average exercise price (in dollars per share) | $ 3.42 | |
Aggregate intrinsic value | $ 285,925 | |
Stock Options Exercisable [Abstract] | ||
Shares exercisable (in shares) | 250,000 | |
Weighted average exercise price (in dollars per share) | $ 3.42 | |
Aggregate intrinsic value | $ 285,925 | |
4.6 to 6.39999 [Member] | ||
Range of Exercise Prices [Abstract] | ||
Range of exercise prices, minimum (in dollars per share) | $ 4.6 | |
Range of exercise prices, maximum (in dollars per share) | $ 6.39999 | |
Stock Options Outstanding [Abstract] | ||
Shares outstanding (in shares) | 137,875 | |
Average remaining contract life | 2 years 5 months 8 days | |
Weighted average exercise price (in dollars per share) | $ 5.87 | |
Aggregate intrinsic value | $ 0 | |
Stock Options Exercisable [Abstract] | ||
Shares exercisable (in shares) | 87,125 | |
Weighted average exercise price (in dollars per share) | $ 5.89 | |
Aggregate intrinsic value | $ 0 | |
6.4 to 8.19999 [Member] | ||
Range of Exercise Prices [Abstract] | ||
Range of exercise prices, minimum (in dollars per share) | $ 6.4 | |
Range of exercise prices, maximum (in dollars per share) | $ 8.19999 | |
Stock Options Outstanding [Abstract] | ||
Shares outstanding (in shares) | 207,875 | |
Average remaining contract life | 4 years 18 days | |
Weighted average exercise price (in dollars per share) | $ 7.31 | |
Aggregate intrinsic value | $ 0 | |
Stock Options Exercisable [Abstract] | ||
Shares exercisable (in shares) | 138,083 | |
Weighted average exercise price (in dollars per share) | $ 7.22 | |
Aggregate intrinsic value | $ 0 | |
8.2 to 12 [Member] | ||
Range of Exercise Prices [Abstract] | ||
Range of exercise prices, minimum (in dollars per share) | $ 8.2 | |
Range of exercise prices, maximum (in dollars per share) | $ 12 | |
Stock Options Outstanding [Abstract] | ||
Shares outstanding (in shares) | 46,875 | |
Average remaining contract life | 3 years 7 months 6 days | |
Weighted average exercise price (in dollars per share) | $ 11.45 | |
Aggregate intrinsic value | $ 0 | |
Stock Options Exercisable [Abstract] | ||
Shares exercisable (in shares) | 18,750 | |
Weighted average exercise price (in dollars per share) | $ 11.45 | |
Aggregate intrinsic value | $ 0 |
EQUITY INCENTIVE PLANS, Part 3
EQUITY INCENTIVE PLANS, Part 3 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted Average Grant Date Fair Value [Abstract] | ||
Allocated share-based compensation expense | $ 1,655,900 | $ 632,805 |
Restricted Stock and Restricted Stock Units [Member] | ||
Number of Shares & Units [Abstract] | ||
Outstanding, beginning of period (in shares) | 287,564 | |
Granted (in shares) | 375,000 | |
Vested (in shares) | (116,578) | |
Forfeited/expired/cancelled (in shares) | 0 | |
Outstanding, end of period (in shares) | 545,986 | 287,564 |
Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding, beginning of period (in dollars per share) | $ 9.65 | |
Granted (in dollars per share) | 5.80 | |
Vested (in dollars per share) | 9.65 | |
Forfeited/expired/cancelled (in dollars per share) | 0 | |
Outstanding, end of period (in dollars per share) | $ 7.47 | $ 9.65 |
Net unrecognized compensation cost | $ 3,273,929 | |
Weighted average period for recognition of net unrecognized compensation cost | 1 year 4 months 24 days | |
Allocated share-based compensation expense | $ 1,394,814 | $ 281,249 |
GEOGRAPHIC INFORMATION AND EC_3
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | $ 34,464,032 | $ 34,581,440 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | 5,933,569 | 2,873,920 |
Net Product Sales [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 28,844,997 | 27,913,209 |
Africa [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 7,564,360 | 8,838,632 |
Africa [Member] | Net Product Sales [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 7,564,360 | 8,838,632 |
Asia [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 888,800 | 1,404,982 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | 393,299 | 466,185 |
Asia [Member] | Net Product Sales [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 888,800 | 1,404,982 |
Europe & Middle East [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 6,498,995 | 4,895,273 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | 165,029 | 123,752 |
Europe & Middle East [Member] | Net Product Sales [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 3,781,761 | 2,208,063 |
Latin America [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 11,808,768 | 12,546,083 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | 60,527 | 0 |
Latin America [Member] | Net Product Sales [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 11,808,767 | 12,546,083 |
United States [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | 7,703,109 | 6,896,470 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | 5,314,715 | 2,283,983 |
United States [Member] | Net Product Sales [Member] | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Net sales | $ 4,801,309 | $ 2,915,449 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)KeyEmployeeLease | Dec. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 03, 2019USD ($) | ||
Employment Contracts [Abstract] | |||||
Number of key employees with whom Company has employment contracts | KeyEmployee | 2 | ||||
Aggregate annual salaries of employment contracts | $ 730,000 | ||||
Contract one, expiration date | Mar. 31, 2020 | ||||
Contract two, expiration date | Mar. 31, 2021 | ||||
Future minimum salary commitments [Abstract] | |||||
2020 | $ 365,000 | ||||
2021 | $ 365,000 | ||||
Pension Plan [Abstract] | |||||
Percentage of employer's matching contribution | 40.00% | ||||
Expenses related to matching contribution | $ 93,892 | $ 94,544 | |||
Leases [Abstract] | |||||
Number of leases entered | Lease | 8 | ||||
Number of subleases entered | Lease | 1 | ||||
Right-of-use asset acquired in exchange for right-of-use liabilities | $ 7,030,744 | ||||
Components of Lease Expense [Abstract] | |||||
Operating lease expense | 1,655,573 | ||||
Finance lease cost [Abstract] | |||||
Amortization of right-of-use assets | 23,373 | ||||
Interest on lease liabilities | 7,892 | ||||
Total finance lease expense | 31,265 | ||||
Rent expense | 653,155 | ||||
Cash paid for amounts included in the measurement of lease liabilities [Abstract] | |||||
Operating cash flows for operating leases | 632,952 | ||||
Operating cash flows for finance leases | 7,892 | ||||
Financing cash flows for finance leases | 19,875 | 0 | |||
Right-of-use assets obtained in exchange for lease obligations [Abstract] | |||||
Operating leases | 7,030,744 | ||||
Finance leases | 210,350 | ||||
Operating Leases [Abstract] | |||||
Operating lease, right-of-use assets | 7,030,744 | 0 | |||
Current portion of operating lease liability | 568,294 | 0 | |||
Operating lease liabilities | 6,969,603 | 0 | |||
Total operating lease liabilities | 7,537,897 | ||||
Finance Leases [Abstract] | |||||
Finance lease right of use asset | 233,722 | ||||
Accumulated depreciation | (23,372) | ||||
Finance lease right of use asset, net | 210,350 | 0 | |||
Current portion of finance lease liability | 41,894 | 0 | |||
Finance lease liability | 171,953 | 0 | |||
Total finance lease liability | $ 213,847 | ||||
Weighted Average Remaining Lease Term [Abstract] | |||||
Operating leases | 9 years 3 months 18 days | ||||
Finance leases | 4 years 9 months 18 days | ||||
Weighted Average Discount Rate [Abstract] | |||||
Operating leases | 8.67% | ||||
Finance leases | 7.00% | ||||
Maturities of Operating Lease Liabilities [Abstract] | |||||
2020 | $ 1,205,161 | ||||
2021 | 1,209,787 | ||||
2022 | 1,057,757 | ||||
2023 | 1,026,272 | ||||
2024 | 1,018,875 | ||||
Thereafter | 5,773,887 | ||||
Total lease payments | 11,291,739 | ||||
Less: imputed interest | (3,753,842) | ||||
Total | 7,537,897 | ||||
Maturities of Finance Lease Liabilities [Abstract] | |||||
2020 | 55,536 | ||||
2021 | 55,536 | ||||
2022 | 55,536 | ||||
2023 | 55,536 | ||||
2024 | 27,767 | ||||
Thereafter | 0 | ||||
Total lease payments | 249,911 | ||||
Less: imputed interest | (36,064) | ||||
Total finance lease liability | 213,847 | ||||
Minimum Lease Payments under Non-cancellable Operating Leases [Abstract] | |||||
2019 | 384,308 | ||||
2020 | 88,576 | ||||
2021 | 0 | ||||
Total | 472,884 | ||||
Concentrations [Abstract] | |||||
Net sales | 34,464,032 | 34,581,440 | |||
Accounts Receivable | 3,661,325 | 7,373,971 | |||
Hauppauge, NY [Member] | |||||
Leases [Abstract] | |||||
Right-of-use asset acquired in exchange for right-of-use liabilities | 6,500,000 | ||||
Right-of-use assets obtained in exchange for lease obligations [Abstract] | |||||
Operating leases | 6,500,000 | ||||
Senior Secured Term Loan Credit Facility [Member] | |||||
Weighted Average Discount Rate [Abstract] | |||||
Debt instrument, face amount | $ 20,000,000 | $ 20,000,000 | |||
Customer Concentration Risk [Member] | Customer 1 [Member] | |||||
Concentrations [Abstract] | |||||
Accounts Receivable | 941,962 | 3,499,340 | |||
Customer Concentration Risk [Member] | Customer 2 [Member] | |||||
Concentrations [Abstract] | |||||
Accounts Receivable | 16,033 | 1,033,824 | |||
Supplier Concentration Risk [Member] | Vendor 1 [Member] | |||||
Concentrations [Abstract] | |||||
Accounts Payable | [1] | $ 164,312 | |||
Maximum [Member] | |||||
Pension Plan [Abstract] | |||||
Employee contribution subject to employer matching contribution | 5.00% | ||||
Employer matching contribution | 2.00% | ||||
Sales [Member] | Customer Concentration Risk [Member] | Customer 1 [Member] | |||||
Concentrations [Abstract] | |||||
Concentration risk percentage | 39.00% | 33.00% | |||
Net sales | $ 11,263,573 | $ 11,333,767 | |||
Sales [Member] | Customer Concentration Risk [Member] | Customer 2 [Member] | |||||
Concentrations [Abstract] | |||||
Concentration risk percentage | 20.00% | 13.00% | |||
Net sales | $ 5,782,543 | $ 4,346,640 | |||
Purchases [Member] | Supplier Concentration Risk [Member] | Vendor 1 [Member] | |||||
Concentrations [Abstract] | |||||
Concentration risk percentage | [1] | 16.00% | |||
Purchases | [1] | $ 1,646,614 | |||
Topic 842 [Member] | |||||
Operating Leases [Abstract] | |||||
Operating lease, right-of-use assets | 800,000 | ||||
Total operating lease liabilities | 800,000 | ||||
Maturities of Operating Lease Liabilities [Abstract] | |||||
Total | $ 800,000 | ||||
[1] | In the tables above, an asterisk (*) indicates that purchases from the vendor did not exceed 10% for the period indicated. |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - Note Payable - Equipment Vendor [Member] - USD ($) | 1 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2019 | |
Debt Instruments [Abstract] | ||
Debt instrument, face amount | $ 660,000 | |
Percentage of first payment of the term | 30.00% | |
Percentage of second payment of the term | 60.00% | |
Percentage of prepayment after delivery | 10.00% | |
Percentage of first payment of the term by the vendor | 15.00% | |
Percentage of second payment of the term by the vendor | 40.00% | |
Percentage of payment after delivery by the vendor | 10.00% | |
Annual interest rate | 12.00% | |
Periodic payment debt instrument, principal and interest | $ 20,150 | |
Term of debt instrument | 24 months |
LONG-TERM DEBT, Credit Agreemen
LONG-TERM DEBT, Credit Agreement (Details) - Senior Secured Term Loan Credit Facility [Member] - USD ($) | Sep. 03, 2019 | Dec. 31, 2019 | Sep. 30, 2019 |
Credit Agreement [Abstract] | |||
Debt instrument, face amount | $ 20,000,000 | $ 20,000,000 | |
Lender's closing cost | 550,000 | ||
Financing fee | $ 600,000 | ||
Percentage of gross proceeds considered as financing fee | 3.00% | ||
Interest rate | 8.75% | 11.25% | |
Increase in interest rate in event of default | 4.00% | ||
Principal installment payable | $ 300,000 | ||
Debt instrument maturity date | Sep. 3, 2023 | ||
Outstanding loan balance, net | $ 17,600,000 | ||
September 4, 2019 to September 3 ,2020 [Member] | |||
Credit Agreement [Abstract] | |||
Percentage of prepaid principal as premium | 10.00% | ||
September 4, 2020 to September 3 ,2021 [Member] | |||
Credit Agreement [Abstract] | |||
Percentage of prepaid principal as premium | 8.00% | ||
September 4, 2021 to September 3 ,2022 [Member] | |||
Credit Agreement [Abstract] | |||
Percentage of prepaid principal as premium | 4.00% | ||
LIBOR [Member] | |||
Credit Agreement [Abstract] | |||
Term of variable rate | 1 month | ||
Basis spread on variable rate | 2.50% |
WARRANTS (Details)
WARRANTS (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Sep. 03, 2019shares | Nov. 30, 2018$ / shares | Feb. 28, 2018$ / shares | |
WARRANTS [Abstract] | ||||
Warrant term | 7 years | |||
Warrants to purchase of common stock (in shares) | shares | 550,000 | |||
Estimated Fair Value of Warrant Assumptions [Abstract] | ||||
Stock price on issuance date (in dollars per share) | $ / shares | $ 5.40 | $ 6.75 | $ 6.75 | |
Strike Price (in dollars per share) | $ / shares | $ 5.22 | |||
Expected life | 7 years | |||
Fair value of warrants | $ | $ 1.4 | |||
Fair value of warrants (in dollars per share) | $ / shares | $ 2.49 | |||
Warrants outstanding | $ | $ 1.2 | |||
Number of warrants exercised (in shares) | shares | 0 | |||
Number of warrants expired (in shares) | shares | 0 | |||
Risk-Free Interest Rate [Member] | ||||
Estimated Fair Value of Warrant Assumptions [Abstract] | ||||
Measurement input | 0.0145 | |||
Volatility [Member] | ||||
Estimated Fair Value of Warrant Assumptions [Abstract] | ||||
Measurement input | 0.4365 |