Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | IRADIMED CORP | |
Entity Central Index Key | 1,325,618 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,711,975 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 16,004,062 | $ 19,368,114 |
Accounts receivable, net of allowance for doubtful accounts of $50,772 as of September 30, 2016 and $31,672 as of December 31, 2015 | 4,493,262 | 3,863,632 |
Investments | 7,811,611 | 7,602,204 |
Inventory, net | 3,467,543 | 2,383,158 |
Prepaid expenses and other current assets | 445,565 | 320,529 |
Prepaid income taxes | 215,873 | 273,968 |
Deferred income taxes | 317,709 | 141,446 |
Total current assets | 32,755,625 | 33,953,051 |
Property and equipment, net | 1,283,809 | 905,622 |
Intangible assets, net | 766,089 | 193,243 |
Deferred income taxes | 519,886 | 88,398 |
Other assets | 162,723 | 103,893 |
Total assets | 35,488,132 | 35,244,207 |
Current liabilities: | ||
Accounts payable | 991,918 | 1,005,460 |
Accrued payroll and benefits | 1,295,915 | 1,288,248 |
Other accrued taxes | 191,281 | 30,687 |
Warranty reserve | 38,142 | 34,081 |
Deferred revenue | 751,140 | 529,867 |
Other current liability | 115,489 | |
Total current liabilities | 3,383,885 | 2,888,343 |
Deferred revenue | 1,461,563 | 422,839 |
Total liabilities | 4,845,448 | 3,311,182 |
Stockholders' equity: | ||
Common stock; $0.0001 par value; 31,500,000 shares authorized; 10,711,975 shares issued and outstanding as of September 30, 2016 and 11,175,125 shares issued and outstanding as of December 31, 2015 | 1,129 | 1,118 |
Additional paid-in capital | 21,887,503 | 19,332,023 |
Retained earnings | 18,728,914 | 12,655,169 |
Treasury stock | (9,969,468) | |
Accumulated other comprehensive loss | (5,394) | (55,285) |
Total stockholders' equity | 30,642,684 | 31,933,025 |
Total liabilities and stockholders' equity | $ 35,488,132 | $ 35,244,207 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CONDENSED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 50,772 | $ 31,672 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 31,500,000 | 31,500,000 |
Common stock, shares issued | 10,711,975 | 11,175,125 |
Common stock, shares outstanding | 10,711,975 | 11,175,125 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 7,673,217 | $ 8,193,616 | $ 26,506,275 | $ 22,794,464 |
Cost of revenue | 1,405,884 | 1,590,222 | 4,850,748 | 4,340,429 |
Gross profit | 6,267,333 | 6,603,394 | 21,655,527 | 18,454,035 |
Operating expenses: | ||||
General and administrative | 1,869,927 | 1,675,784 | 7,217,854 | 5,629,071 |
Sales and marketing | 1,346,742 | 1,206,203 | 4,039,550 | 3,399,581 |
Research and development | 457,134 | 518,562 | 983,291 | 1,264,310 |
Total operating expenses | 3,673,803 | 3,400,549 | 12,240,695 | 10,292,962 |
Income from operations | 2,593,530 | 3,202,845 | 9,414,832 | 8,161,073 |
Other (expense) income, net | (4,017) | 64,709 | 23,092 | 157,660 |
Income before provision for income taxes | 2,589,513 | 3,267,554 | 9,437,924 | 8,318,733 |
Provision for income taxes | 1,029,029 | 1,400,406 | 3,364,179 | 3,193,519 |
Net income | $ 1,560,484 | $ 1,867,148 | $ 6,073,745 | $ 5,125,214 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.15 | $ 0.17 | $ 0.56 | $ 0.47 |
Diluted (in dollars per share) | $ 0.13 | $ 0.15 | $ 0.50 | $ 0.42 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 10,684,650 | 11,028,551 | 10,852,476 | 10,970,189 |
Diluted (in shares) | 11,867,997 | 12,382,531 | 12,055,467 | 12,294,307 |
CONDENSED STATEMENTS OF COMPREH
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 1,560,484 | $ 1,867,148 | $ 6,073,745 | $ 5,125,214 |
Other comprehensive income (loss): | ||||
Change in fair value of available-for-sale securities, net of tax benefit of $7,211 and $6,369 for the three months ended September 30, 2016 and 2015, respectively, and $1,220 and $8,833 for the nine months ended September 30, 2016 and 2015, respectively | (13,049) | (10,341) | (1,156) | (14,343) |
Realized loss on available-for-sale securities reclassified to net income, net of tax benefit of $12,778 and $0 for the three months ended September 30, 2016 and 2015, respectively, and $29,495 and $0 for the nine months ended September 30, 2016 and 2015, respectively | 22,091 | 51,047 | ||
Other comprehensive income (loss) | 9,042 | (10,341) | 49,891 | (14,343) |
Comprehensive income | $ 1,569,526 | $ 1,856,807 | $ 6,123,636 | $ 5,110,871 |
CONDENSED STATEMENTS OF COMPRE6
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Change in fair value of available-for-sale securities, net of tax benefit | $ 7,211 | $ 6,369 | $ 1,220 | $ 8,833 |
Reclassification to net income, net of tax benefit | $ 12,778 | $ 0 | $ 29,495 | $ 0 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities: | ||
Net income | $ 6,073,745 | $ 5,125,214 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debt expense | 19,100 | 15,728 |
Provision for excess and obsolete inventory | 86,543 | 103,471 |
Depreciation and amortization | 184,282 | 163,709 |
Excess tax benefit on the exercise of stock options | (550,431) | (878,146) |
Stock-based compensation | 1,788,045 | 913,234 |
Impairment of intangible assets | 55,433 | |
Loss on maturity of investments | 80,542 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (648,730) | (1,483,730) |
Inventory | (1,170,928) | (236,923) |
Prepaid expenses and other current assets | (96,865) | (80,182) |
Other assets | (87,001) | (22,589) |
Deferred income taxes | (638,467) | (93,858) |
Accounts payable | (13,542) | 287,715 |
Accrued payroll and benefits | 7,667 | (109,934) |
Other accrued taxes | 160,594 | (42,495) |
Warranty reserve | 4,061 | 35,155 |
Deferred revenue | 1,259,997 | 347,442 |
Other current liabilities | 115,489 | |
Accrued income taxes, net of prepaid income taxes | 608,526 | 983,366 |
Net cash provided by operating activities | 7,182,627 | 5,082,610 |
Investing activities: | ||
Purchases of investments | (4,284,445) | |
Proceeds from maturity of investments | 4,075,103 | |
Purchases of property and equipment | (547,087) | (193,368) |
Capitalized intangible assets | (588,228) | (13,110) |
Net cash used in investing activities | (1,344,657) | (206,478) |
Financing activities: | ||
Proceeds from stock option exercises | 217,015 | 320,807 |
Income tax benefits credited to equity | 550,431 | 878,146 |
Purchases of treasury stock | (9,969,468) | |
Net cash (used in) provided by financing activities | (9,202,022) | 1,198,953 |
Net (decrease) increase in cash and cash equivalents | (3,364,052) | 6,075,085 |
Cash and cash equivalents, beginning of period | 19,368,114 | 9,454,150 |
Cash and cash equivalents, end of period | 16,004,062 | 15,529,235 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | $ 3,392,722 | $ 2,402,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation | |
Basis of Presentation | 1 — Basis of Presentation The accompanying interim condensed financial statements of IRADIMED CORPORATION (“IRADIMED”, the “Company”, “we”, “our”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim financial information is unaudited, but reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These accompanying interim condensed financial statements should be read with the financial statements and related footnotes to financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015. The accounting policies followed in the preparation of these interim condensed financial statements are consistent in all material respects with those described in Note 1 of our 10-K. Certain prior year amounts have been reclassified to conform to current year presentation. FDA Matters The FDA conducted a routine inspection of our prior facility between April 7 and April 16, 2014. This was the first FDA inspection of our facility since the voluntary product recall in August 2012 of certain infusion sets and the voluntary recall in July 2013 of our Dose Error Reduction System (“DERS”) software. The FDA issued a Form 483 on April 16, 2014 that identified eight observations. The majority of the observations related to procedural and documentation issues associated with the design, development, validation testing and documentation of software used in certain of our products. Other observations were related to the design validation of pump labeling, design analysis of tube stretching, procedures for post-market design review, and control and procedures related to handling certain reported complaints. We submitted a response to the Form 483 in May 2014 and June 2014 in which we described our proposed corrective and preventative actions to address each of the FDA’s observations. On September 2, 2014, we received a warning letter from the FDA relating to this inspection (the “Warning Letter”). The Warning Letter stated that the FDA accepted as adequate several of our responses to Form 483 observations, identified two responses whose accuracy will be determined in the next scheduled inspection of our facility and identified issues for which our response was determined to be inadequate. The issues identified as inadequate concern our procedures for validating device design primarily related to software quality assurance. Also, the Warning Letter raised a new issue. The Warning Letter stated that modifications made to software on our previously cleared infusion pumps, the MRidium 3860 and MRidium 3850, were “significant” and required submission of new premarket notifications under Section 510(k) (a “510(k) submission”) of the FDC Act. These modifications were made over time. We believe they were insignificant and did not require premarket notification submissions. However, the FDA indicated that the modifications of the software for the MRidium 3860 and the software for the MRidium 3850 were “significant” modifications because they could significantly affect the safety or effectiveness of these devices. As a result, the Warning Letter states that the products being sold by us are “adulterated” and “misbranded” under the FDC Act. The Warning Letter also indicates that the MRidium 3860+ infusion pump requires separate FDA clearance from the MRidium 3860 and MRidium 3850. The Warning Letter requested that we immediately cease activities that result in the misbranding or adulteration of the MRidium 3860 MRI infusion pump, MRidium 3850 MRI infusion pump and the MRidium 3860+ MRI infusion pump, including the commercial distribution of the devices. We immediately complied with the Warning Letter and ceased sale and distribution of the identified products in the United States. On September 4, 2014, we submitted to the FDA our initial response to the Warning Letter and on September 17, 2014 we sent an additional response that included supplemental information related to the Form 483 inspection observations for which the FDA considered our initial responses inadequate. On November 25, 2014, we announced that we filed the 510(k) submission related to our MRidium 3860+ MRI IV infusion pumps and on December 12, 2014 we were notified that our 510(k) submission had been formally accepted for review by the FDA. On December 22, 2014, under FDA enforcement discretion, we announced that we resumed domestic distribution of our MRI compatible MRidium 3860+ MRI IV infusion pump systems, without the DERS option. On January 28, 2015, under FDA enforcement discretion, we announced that we resumed domestic distribution of our DERS option. On December 9, 2015, we met with the FDA to review responses to the agency’s additional information letter. On March 24, 2016, we received a letter dated March 23, 2016 stating that our 510(k) submission was denied with a finding of non-substantial equivalence. This finding was due to a lack of human factors data demonstrating that our DERS was adequately validated and that we may resubmit a new 510(k) application with data showing our infusion pump to be substantially equivalent to similar devices in the market. Specifically, the agency stated that two of fifty-six test subjects in our human factors tests unintentionally bypassed the DERS feature, thus avoiding the DERS hard dose limits that healthcare institutions can program into our MRI compatible MRidium 3860+ infusion pumps. On April 7, 2016, we submitted an appeal to this determination to a higher level within the FDA. On May 2, 2016, we met with the FDA to review our appeal. On June 2, 2016, we received FDA’s written response to our appeal. In this response, FDA reinstated the subject 510(k) and we were granted another 180 days to make certain specified changes to several messages displayed by the infusion pump. Specifically, changes to messages the infusion pump displays to clarify whether the DERS is active or inactive and to better describe the over and under range indications. Further, the FDA’s response also stated that no additional human factors usability testing is required. We continue to work with the FDA to fully resolve the Warning Letter and complete the review of the 510(k) submission. See the Legal matters portion of Note 12. Certain Significant Risks and Uncertainties We market our products to end users in the United States and to distributors internationally. Sales to end users in the United States are generally made on open credit terms. Management maintains an allowance for potential credit losses. Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update replaces the current impairment methodology by requiring entities to use a forward-looking approach based on expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates on certain types of financial instruments, including trade receivables. This update is effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2020. Early adoption is permitted. We are evaluating this guidance and have not yet determined the effect it will have on our financial statements and related disclosures, if any. In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of excess tax benefits on the statement of cash flows, classification of awards as either equity or liabilities and an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of 2017. Early adoption is permitted. We are in the process of determining the method and date of adoption and assessing the impact of the update on our financial statements and footnote disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by all leases not considered short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying assets under which right-of-use assets and lease liabilities are not recognized and lease payments are generally recognized as expense over the lease term on a straight-line basis. The accounting by lessors will remain largely unchanged from current U.S. GAAP. This update is effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2019. Early adoption is permitted. We are in the process of determining the method of adoption and assessing the impact of the update on our financial condition and results of operations. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in the update apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The update is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2017. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We do not expect the adoption of this guidance will have a material impact upon our statement of financial position. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330). The amendments in this update require that inventory within the scope of this ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. The amendments in this ASU do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured at first-in, first-out (FIFO) or average cost. The update is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2017. The amendments in this update should be applied prospectively and early adoption is permitted. We do not expect the adoption of this guidance will have a material impact upon our financial condition or results of operations. In May 2014, the FASB issued ASU 2014-09, Revenue Contracts with Customers (Topic 606). This update provides guidance on the recognition of revenue based upon the entity’s contracts with customers to transfer goods or services at an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2018. Early adoption is now permitted. We are evaluating this guidance and have not yet determined the effect it will have on our financial statements and related disclosures, if any. |
Basic and Diluted Net Income pe
Basic and Diluted Net Income per Share | 9 Months Ended |
Sep. 30, 2016 | |
Basic and Diluted Net Income per Share | |
Basic and Diluted Net Income per Share | 2 — Basic and Diluted Net Income per Share Basic net income per share is based upon the weighted-average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The underwriters’ warrants, stock options and restricted stock units granted by us represent the only dilutive effect reflected in diluted weighted-average shares outstanding. The following table presents the computation of basic and diluted net income per share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) Net income $ $ $ $ Weighted-average shares outstanding — Basic Effect of dilutive securities: Underwriters’ warrants Stock Options Restricted Stock Units — — Weighted-average shares outstanding — Diluted Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ Stock options to purchase shares of our common stock and restricted stock units excluded from the calculation of diluted net income per share because the effect would have been anti-dilutive are as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Anti-dilutive stock options and restricted stock units |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2016 | |
Inventory | |
Inventory | 3 — Inventory Inventory consists of: September 30, December 31, (unaudited) Raw materials $ $ Work in process Finished goods Inventory before allowance for excess and obsolete Allowance for excess and obsolete ) ) Total $ $ |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property and Equipment | |
Property and Equipment | 4 — Property and Equipment Property and equipment consist of: September 30, December 31, (unaudited) Computer software and hardware $ $ Furniture and fixtures Leasehold improvements Machinery and equipment Tooling in-process Accumulated depreciation ) ) Total $ $ Depreciation and amortization expense of property and equipment was $58,903 and $48,615 for the three months ended September 30, 2016 and 2015, respectively, and $168,900 and $136,532 for the nine months ended September 30, 2016 and 2015. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets | |
Intangible Assets | 5 — Intangible Assets The following table summarizes the components of intangible asset balances: September 30, December 31, (unaudited) Patents — in use $ $ Patents — in process Internally developed software — in use Internally developed software — in process — Trademarks Accumulated amortization ) ) Total $ $ Amortization expense of intangible assets was $2,634 and $8,830 for the three months ended September 30, 2016 and 2015, respectively, and $15,382 and $27,177 for the nine months ended September 30, 2016 and 2015. During the nine months ended September 30, 2015, we recorded an impairment charge of $55,433 on patents related to certain of our IV sets. This charge is included as general and administrative expense in our Condensed Statements of Operations. Expected annual amortization expense for the remaining portion of 2016 and the next five years related to intangible assets is as follows (excludes in process intangible assets): Three months ending December 31, 2016 $ 2017 2018 2019 2020 2021 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Stock Based Compensation | 6 — Stock-Based Compensation Stock-based compensation was recognized as follows in the Condensed Statements of Operations: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Cost of revenue $ $ $ $ General and administrative Sales and marketing Research and development Total $ $ $ $ As of September 30, 2016 we had $2,107,164 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.9 years. As of September 30, 2016, we had $1,342,245 of unrecognized compensation cost related to unvested Restricted Stock Units (RSUs), which is expected to be recognized over a weighted-average period of 3.0 years. The following table presents a summary of our stock-based compensation activity for the nine months ended September 30, 2016: Stock Restricted Outstanding beginning of period — Awards granted Awards exercised ) — Awards canceled ) ) Outstanding end of period RSUs are granted at a value equal to the market price of our common stock on the date of grant. RSUs are settled in shares at the end of their vesting period, which is generally four years for employees and two years for directors. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments | |
Investments | 7 — Investments Our investments consisted of corporate bonds that we have classified as available-for-sale and are summarized in the following tables: September 30, 2016 Cost Gross Gross Fair Corporate bonds: U.S. corporations $ $ $ $ International corporations Total $ $ $ $ December 31, 2015 Cost Gross Gross Fair Corporate bonds: U.S. corporations $ $ — $ $ International corporations — Total $ $ — $ $ Unrealized gains and losses from the above investments for all periods presented are attributable to changes in interest rates. We do not believe any of these unrealized changes represent other-than-temporary impairments based on our evaluation of available evidence as of September 30, 2016. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 8 — Fair Value Measurements The fair value of our assets and liabilities subject to recurring fair value measurements are as follows: Fair Value at September 30, 2016 Fair Quoted Prices Significant Significant Corporate bonds: U.S. corporations $ $ — $ $ — International corporations — — Total $ $ — $ $ — Fair Value at December 31, 2015 Fair Quoted Prices Significant Significant Corporate bonds: U.S. corporations $ $ — $ $ — International corporations — — Total $ $ — $ $ — Our corporate bonds are valued by a third-party custodian at closing prices from national exchanges or pricing vendors on the valuation date. There were no transfers into or out of any Levels during the nine months ended September 30, 2016 or the year ended December 31, 2015. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | 9 — Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, for the three months ended September 30, 2016 and 2015 are as follows: Unrealized (Losses) Balances at June 30, 2016 $ ) Losses, net ) Reclassification realized in net earnings Balances at September 30, 2016 $ ) Balances at June 30, 2015 $ ) Losses, net ) Balances at September 30, 2015 $ ) The components of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2016 and 2015 are as follows: Unrealized (Losses) Balances at December 31, 2015 $ ) Losses, net ) Reclassification realized in net earnings Balances at September 30, 2016 $ ) Balances at December 31, 2014 $ ) Losses, net ) Balances at September 30, 2015 $ ) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Income Taxes | 10 — Income Taxes We recorded provisions for income taxes of $1,029,029 and $3,364,179 for the three and nine months ended September 30, 2016, respectively. Our effective tax rate was 39.7% and 35.6% for the three and nine months ended September 30, 2016, respectively. Our effective tax rates for the three and nine months ended September 30, 2016 differed from the U.S. Federal statutory rate primarly due to U.S state tax expense, partially offset by the domestic production activities deduction and research and development credits. We recorded provisions for income taxes of $1,400,406 and $3,193,519 for the three and nine months ended September 30, 2015, respectively. Our effective tax rate was 42.9% and 38.4% for the three and nine months ended September 30, 2015, respectively. Our effective tax rates for the three and nine months ended September 30, 2015 differed from the U.S. Federal statutory rate primarily due to the write-off of deferred taxes associated with certain of our stock options, higher U.S. state income tax expense and higher incentive stock option expense, partially offset by a higher domestic production activities deduction and discrete items. As of September 30, 2016 and December 31, 2015, we have not identified or accrued for any uncertain tax positions. We are currently unaware of any uncertain tax positions that could result in significant payments, accruals or other material deviations in this estimate over the next 12 months. We file tax returns in the United States Federal jurisdiction and many state jurisdictions. The Company is subject to income tax examinations for our United States Federal taxes for 2013 and subsequent years and various State income taxes for 2012 and subsequent years. |
Segment, Customer and Geographi
Segment, Customer and Geographic Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment, Customer and Geographic Information | |
Segment, Customer and Geographic Information | 11 — Segment, Customer and Geographic Information We operate in one reportable segment which is the development, manufacture and sale of MRI compatible IV infusion pump systems and products for use by hospitals and acute care facilities during MRI procedures. In the U.S., we sell our products through our direct sales force and outside of the U.S. we sell our products through distributors who resell our products to end users. Revenue information by geographic region is as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) United States $ $ $ $ International $ $ $ $ Revenue information by type is as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Devices $ $ $ $ Disposable IV Sets and Services $ $ $ $ Property and equipment, net, information by geographic region is as follows: September 30, December 31, (unaudited) United States $ $ International Total $ $ Long-lived assets held outside of the United States consist principally of tooling, which is a component of property and equipment, net. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12 — Commitments and Contingencies Leases. In January 2014, we entered into a non-cancelable operating lease, commencing July 1, 2014, for a new manufacturing and headquarters facility in Winter Springs, Florida owned by Susi, LLC, an entity controlled by our Chairman, President, CEO and controlling stockholder, Roger Susi. Pursuant to the terms of our lease for this property, the monthly base rent is $32,649, adjusted annually for changes in the consumer price index. Under the terms of the lease, we are responsible for property taxes, insurance and maintenance expenses. The term of the lease expires on May 31, 2019. Unless advance written notice of termination is timely provided, the lease will automatically renew for two successive terms of five years each beginning in 2019 and again in 2024, and thereafter, will be renewed for successive terms of one year each. A summary of our non-cancelable operating lease commitments as of September 30, 2016 is as follows: Three months ending December 31, 2016 $ 2017 2018 2019 2020 — Total non-cancelable operating lease commitments $ Rent expense under our operating leases was $101,372 and $100,037 for the three months ended September 30, 2016 and 2015, respectively, and $303,811 and 300,670 for the nine months ended September 30, 2016 and 2015, respectively. Leasehold improvements are amortized over the shorter of the initial lease term or the estimated useful life. Purchase commitments. We had various purchase orders for goods or services totaling approximately $4,384,686 at September 30, 2016 and $3,564,088 at December 31, 2015. No amounts related to these purchase orders have been recognized in our balance sheet. Legal matters. On September 10, 2014, a Civil Action was filed in the U.S. District Court for the Southern District of Florida (“Lam Civil Action”). The Lam Civil Action was a putative class action lawsuit brought against the Company and certain individuals who are officers and / or directors of the Company. The plaintiff was an alleged shareholder of the Company, and in the operative complaint sought relief on behalf of a class of persons who purchased the Company’s common stock during the period from July 15, 2014 through September 17, 2014. The complaint alleged that the defendants failed to disclose material information concerning the Company’s compliance with FDA regulations in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that the putative class members suffered damages as a result. The complaint additionally alleged “control person” liability against the individual defendants under Section 20(a) of the Securities Exchange Act of 1934. The Company disputed the plaintiff’s allegations and theories of liability. On May 26, 2015, the court granted the defendants’ motions to dismiss the complaint in its entirety. On June 22, 2015, the plaintiff filed a notice of appeal in the U.S. Court of Appeals for the Eleventh Circuit. The appeal was dismissed with prejudice by the Court of Appeals on October 28, 2015 on joint motion of the parties. In addition to the foregoing, we may from time to time become party to various legal proceedings or claims that arise in the ordinary course of business. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock. | |
Common Stock | 13 — Common Stock The table below summarizes our common stock activity (shares): Balance, December 31, 2015 Option exercises Underwriters’ warrants exercises Purchases of treasury stock ) Balance, September 30, 2016 On January 28, 2016 (the “Authorization Date”), the Board of Directors approved a stock repurchase program, authorizing the repurchase of up to $10.0 million of our common stock through January 28, 2017. Since the Authorization Date and through September 30, 2016, we used $9,969,468 to acquire 569,213 shares of our common stock. Our treasury stock is currently available for general corporate purposes. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation | |
FDA Matters | FDA Matters The FDA conducted a routine inspection of our prior facility between April 7 and April 16, 2014. This was the first FDA inspection of our facility since the voluntary product recall in August 2012 of certain infusion sets and the voluntary recall in July 2013 of our Dose Error Reduction System (“DERS”) software. The FDA issued a Form 483 on April 16, 2014 that identified eight observations. The majority of the observations related to procedural and documentation issues associated with the design, development, validation testing and documentation of software used in certain of our products. Other observations were related to the design validation of pump labeling, design analysis of tube stretching, procedures for post-market design review, and control and procedures related to handling certain reported complaints. We submitted a response to the Form 483 in May 2014 and June 2014 in which we described our proposed corrective and preventative actions to address each of the FDA’s observations. On September 2, 2014, we received a warning letter from the FDA relating to this inspection (the “Warning Letter”). The Warning Letter stated that the FDA accepted as adequate several of our responses to Form 483 observations, identified two responses whose accuracy will be determined in the next scheduled inspection of our facility and identified issues for which our response was determined to be inadequate. The issues identified as inadequate concern our procedures for validating device design primarily related to software quality assurance. Also, the Warning Letter raised a new issue. The Warning Letter stated that modifications made to software on our previously cleared infusion pumps, the MRidium 3860 and MRidium 3850, were “significant” and required submission of new premarket notifications under Section 510(k) (a “510(k) submission”) of the FDC Act. These modifications were made over time. We believe they were insignificant and did not require premarket notification submissions. However, the FDA indicated that the modifications of the software for the MRidium 3860 and the software for the MRidium 3850 were “significant” modifications because they could significantly affect the safety or effectiveness of these devices. As a result, the Warning Letter states that the products being sold by us are “adulterated” and “misbranded” under the FDC Act. The Warning Letter also indicates that the MRidium 3860+ infusion pump requires separate FDA clearance from the MRidium 3860 and MRidium 3850. The Warning Letter requested that we immediately cease activities that result in the misbranding or adulteration of the MRidium 3860 MRI infusion pump, MRidium 3850 MRI infusion pump and the MRidium 3860+ MRI infusion pump, including the commercial distribution of the devices. We immediately complied with the Warning Letter and ceased sale and distribution of the identified products in the United States. On September 4, 2014, we submitted to the FDA our initial response to the Warning Letter and on September 17, 2014 we sent an additional response that included supplemental information related to the Form 483 inspection observations for which the FDA considered our initial responses inadequate. On November 25, 2014, we announced that we filed the 510(k) submission related to our MRidium 3860+ MRI IV infusion pumps and on December 12, 2014 we were notified that our 510(k) submission had been formally accepted for review by the FDA. On December 22, 2014, under FDA enforcement discretion, we announced that we resumed domestic distribution of our MRI compatible MRidium 3860+ MRI IV infusion pump systems, without the DERS option. On January 28, 2015, under FDA enforcement discretion, we announced that we resumed domestic distribution of our DERS option. On December 9, 2015, we met with the FDA to review responses to the agency’s additional information letter. On March 24, 2016, we received a letter dated March 23, 2016 stating that our 510(k) submission was denied with a finding of non-substantial equivalence. This finding was due to a lack of human factors data demonstrating that our DERS was adequately validated and that we may resubmit a new 510(k) application with data showing our infusion pump to be substantially equivalent to similar devices in the market. Specifically, the agency stated that two of fifty-six test subjects in our human factors tests unintentionally bypassed the DERS feature, thus avoiding the DERS hard dose limits that healthcare institutions can program into our MRI compatible MRidium 3860+ infusion pumps. On April 7, 2016, we submitted an appeal to this determination to a higher level within the FDA. On May 2, 2016, we met with the FDA to review our appeal. On June 2, 2016, we received FDA’s written response to our appeal. In this response, FDA reinstated the subject 510(k) and we were granted another 180 days to make certain specified changes to several messages displayed by the infusion pump. Specifically, changes to messages the infusion pump displays to clarify whether the DERS is active or inactive and to better describe the over and under range indications. Further, the FDA’s response also stated that no additional human factors usability testing is required. We continue to work with the FDA to fully resolve the Warning Letter and complete the review of the 510(k) submission. See the Legal matters portion of Note 12. |
Certain Significant Risks and Uncertainties | Certain Significant Risks and Uncertainties We market our products to end users in the United States and to distributors internationally. Sales to end users in the United States are generally made on open credit terms. Management maintains an allowance for potential credit losses. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update replaces the current impairment methodology by requiring entities to use a forward-looking approach based on expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates on certain types of financial instruments, including trade receivables. This update is effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2020. Early adoption is permitted. We are evaluating this guidance and have not yet determined the effect it will have on our financial statements and related disclosures, if any. In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of excess tax benefits on the statement of cash flows, classification of awards as either equity or liabilities and an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of 2017. Early adoption is permitted. We are in the process of determining the method and date of adoption and assessing the impact of the update on our financial statements and footnote disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by all leases not considered short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying assets under which right-of-use assets and lease liabilities are not recognized and lease payments are generally recognized as expense over the lease term on a straight-line basis. The accounting by lessors will remain largely unchanged from current U.S. GAAP. This update is effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2019. Early adoption is permitted. We are in the process of determining the method of adoption and assessing the impact of the update on our financial condition and results of operations. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in the update apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The update is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2017. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We do not expect the adoption of this guidance will have a material impact upon our statement of financial position. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330). The amendments in this update require that inventory within the scope of this ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. The amendments in this ASU do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured at first-in, first-out (FIFO) or average cost. The update is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2017. The amendments in this update should be applied prospectively and early adoption is permitted. We do not expect the adoption of this guidance will have a material impact upon our financial condition or results of operations. In May 2014, the FASB issued ASU 2014-09, Revenue Contracts with Customers (Topic 606). This update provides guidance on the recognition of revenue based upon the entity’s contracts with customers to transfer goods or services at an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period, which will require us to adopt this update in the first quarter of 2018. Early adoption is now permitted. We are evaluating this guidance and have not yet determined the effect it will have on our financial statements and related disclosures, if any. |
Basic and Diluted Net Income 22
Basic and Diluted Net Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Basic and Diluted Net Income per Share | |
Schedule of computation of basic and diluted net income per share | Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) Net income $ $ $ $ Weighted-average shares outstanding — Basic Effect of dilutive securities: Underwriters’ warrants Stock Options Restricted Stock Units — — Weighted-average shares outstanding — Diluted Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ |
Schedule of stock options to purchase shares of common stock and restricted stock units excluded from the calculation of diluted net income per share | Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Anti-dilutive stock options and restricted stock units |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory | |
Schedule of inventory | September 30, December 31, (unaudited) Raw materials $ $ Work in process Finished goods Inventory before allowance for excess and obsolete Allowance for excess and obsolete ) ) Total $ $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property and Equipment | |
Schedule of property and equipment | September 30, December 31, (unaudited) Computer software and hardware $ $ Furniture and fixtures Leasehold improvements Machinery and equipment Tooling in-process Accumulated depreciation ) ) Total $ $ |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets | |
Summary of the components of intangible asset balances | September 30, December 31, (unaudited) Patents — in use $ $ Patents — in process Internally developed software — in use Internally developed software — in process — Trademarks Accumulated amortization ) ) Total $ $ |
Schedule of expected annual amortization expense related to intangible assets (excluding in process intangible assets) | Three months ending December 31, 2016 $ 2017 2018 2019 2020 2021 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Schedule of stock-based compensation | Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Cost of revenue $ $ $ $ General and administrative Sales and marketing Research and development Total $ $ $ $ |
Summary of stock options and restricted stock units activity | Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Cost of revenue $ $ $ $ General and administrative Sales and marketing Research and development Total $ $ $ $ |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments | |
Summary of available for sale securities | September 30, 2016 Cost Gross Gross Fair Corporate bonds: U.S. corporations $ $ $ $ International corporations Total $ $ $ $ December 31, 2015 Cost Gross Gross Fair Corporate bonds: U.S. corporations $ $ — $ $ International corporations — Total $ $ — $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of the fair value of assets and liabilities subject to recurring fair value measurements | Fair Value at September 30, 2016 Fair Quoted Prices Significant Significant Corporate bonds: U.S. corporations $ $ — $ $ — International corporations — — Total $ $ — $ $ — Fair Value at December 31, 2015 Fair Quoted Prices Significant Significant Corporate bonds: U.S. corporations $ $ — $ $ — International corporations — — Total $ $ — $ $ — |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Loss | |
Schedule of components of accumulated other comprehensive loss, net of tax | Unrealized (Losses) Balances at June 30, 2016 $ ) Losses, net ) Reclassification realized in net earnings Balances at September 30, 2016 $ ) Balances at June 30, 2015 $ ) Losses, net ) Balances at September 30, 2015 $ ) Unrealized (Losses) Balances at December 31, 2015 $ ) Losses, net ) Reclassification realized in net earnings Balances at September 30, 2016 $ ) Balances at December 31, 2014 $ ) Losses, net ) Balances at September 30, 2015 $ ) |
Segment, Customer and Geograp30
Segment, Customer and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment, Customer and Geographic Information | |
Schedule of revenue information by geographic region | Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) United States $ $ $ $ International $ $ $ $ |
Schedule of revenue information by external customers by product | Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Devices $ $ $ $ Disposable IV Sets and Services $ $ $ $ |
Schedule of property and equipment, net information by geographic region | September 30, December 31, (unaudited) United States $ $ International Total $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments | Three months ending December 31, 2016 $ 2017 2018 2019 2020 — Total non-cancelable operating lease commitments $ |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock. | |
Summary of common stock activity | Balance, December 31, 2015 Option exercises Underwriters’ warrants exercises Purchases of treasury stock ) Balance, September 30, 2016 |
Basis of Presentation (Details)
Basis of Presentation (Details) - item | Sep. 02, 2014 | Apr. 16, 2014 |
FDA Matters | ||
Number of observations | 8 | |
Number of identified responses whose accuracy will be determined | 2 |
Basic and Diluted Net Income 34
Basic and Diluted Net Income per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Basic and Diluted Net Income per Share | ||||
Net income | $ 1,560,484 | $ 1,867,148 | $ 6,073,745 | $ 5,125,214 |
Weighted-average shares outstanding - Basic (in shares) | 10,684,650 | 11,028,551 | 10,852,476 | 10,970,189 |
Effect of dilutive securities: | ||||
Underwriters' warrants | 103,268 | 133,093 | 104,069 | 115,598 |
Stock Options | 1,077,209 | 1,220,887 | 1,097,957 | 1,208,520 |
Restricted Stock Units | 2,870 | 965 | ||
Weighted-average shares outstanding - Diluted (in shares) | 11,867,997 | 12,382,531 | 12,055,467 | 12,294,307 |
Basic net income per share (in dollars per share) | $ 0.15 | $ 0.17 | $ 0.56 | $ 0.47 |
Diluted net income per share (in dollars per share) | $ 0.13 | $ 0.15 | $ 0.50 | $ 0.42 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Anti-dilutive stock options and restricted stock units (in shares) | 83,913 | 5,804 | 89,347 | 25,341 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory | ||
Raw materials | $ 2,707,647 | $ 2,025,674 |
Work in process | 177,563 | 184,478 |
Finished goods | 782,034 | 286,164 |
Inventory before allowance for excess and obsolete | 3,667,244 | 2,496,316 |
Allowance for excess and obsolete | (199,701) | (113,158) |
Total | $ 3,467,543 | $ 2,383,158 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property and equipment | |||||
Property and equipment, gross | $ 2,421,411 | $ 2,421,411 | $ 1,874,324 | ||
Accumulated depreciation | (1,137,602) | (1,137,602) | (968,702) | ||
Total | 1,283,809 | 1,283,809 | 905,622 | ||
Depreciation and amortization expense of property and equipment | 58,903 | $ 48,615 | 168,900 | $ 136,532 | |
Computer software and hardware | |||||
Property and equipment | |||||
Property and equipment, gross | 449,525 | 449,525 | 404,950 | ||
Furniture and fixtures | |||||
Property and equipment | |||||
Property and equipment, gross | 349,854 | 349,854 | 267,643 | ||
Leasehold improvements | |||||
Property and equipment | |||||
Property and equipment, gross | 191,139 | 191,139 | 191,139 | ||
Machinery and equipment | |||||
Property and equipment | |||||
Property and equipment, gross | 1,017,962 | 1,017,962 | 963,897 | ||
Tooling in-process | |||||
Property and equipment | |||||
Property and equipment, gross | $ 412,931 | $ 412,931 | $ 46,695 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Intangible assets | |||||
Intangible Assets, gross | $ 970,782 | $ 970,782 | $ 382,554 | ||
Accumulated amortization | (204,693) | (204,693) | (189,311) | ||
Total | 766,089 | 766,089 | 193,243 | ||
Amortization expense of intangible assets | 2,634 | $ 8,830 | 15,382 | $ 27,177 | |
Impairment of intangible assets | $ 55,433 | ||||
Expected annual amortization expense | |||||
Three months ending December 31, 2016 | 2,635 | 2,635 | |||
2,017 | 10,538 | 10,538 | |||
2,018 | 10,538 | 10,538 | |||
2,019 | 10,538 | 10,538 | |||
2,020 | 10,538 | 10,538 | |||
2,021 | 10,538 | 10,538 | |||
Patents - in use | |||||
Intangible assets | |||||
Intangible Assets, gross | 168,383 | 168,383 | 168,383 | ||
Patents - in process | |||||
Intangible assets | |||||
Intangible Assets, gross | 62,292 | 62,292 | 47,474 | ||
Internally developed software - in use | |||||
Intangible assets | |||||
Intangible Assets, gross | 148,967 | 148,967 | 148,967 | ||
Internally developed software - in process | |||||
Intangible assets | |||||
Intangible Assets, gross | 568,123 | 568,123 | |||
Trademarks | |||||
Intangible assets | |||||
Intangible Assets, gross | $ 23,017 | $ 23,017 | $ 17,730 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock Based Compensation | ||||
Stock based compensation | $ 192,456 | $ 331,148 | $ 1,788,045 | $ 913,234 |
Total unrecognized stock based compensation expense | 2,107,164 | $ 2,107,164 | ||
Weighted average period expected to be recognized | 1 year 10 months 24 days | |||
Cost of revenue | ||||
Stock Based Compensation | ||||
Stock based compensation | 36,023 | 23,138 | $ 106,723 | 57,938 |
General and administrative | ||||
Stock Based Compensation | ||||
Stock based compensation | 15,964 | 152,213 | 1,241,856 | 402,097 |
Sales and marketing | ||||
Stock Based Compensation | ||||
Stock based compensation | 126,527 | 148,598 | 398,131 | 417,248 |
Research and development | ||||
Stock Based Compensation | ||||
Stock based compensation | 13,942 | $ 7,199 | 41,335 | $ 35,951 |
RSUs | ||||
Stock Based Compensation | ||||
Total unrecognized stock based compensation expense | $ 1,342,245 | $ 1,342,245 | ||
Weighted average period expected to be recognized | 3 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) | 9 Months Ended |
Sep. 30, 2016shares | |
Options | |
Awards | |
Outstanding beginning of period (in shares) | 1,629,342 |
Awards granted (in shares) | 24,000 |
Awards exercised (in shares) | (101,063) |
Awards cancelled (in shares) | (48,625) |
Outstanding end of period (in shares) | 1,503,654 |
RSUs | |
Awards | |
Awards granted (in shares) | 72,951 |
Awards canceled (in shares) | (4,138) |
Outstanding end of period (in shares) | 68,813 |
RSUs | Employees | |
Awards | |
Vesting period | 4 years |
RSUs | Director | |
Awards | |
Vesting period | 2 years |
Investments (Details)
Investments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Cost | $ 7,821,290 | $ 7,691,541 |
Gross Unrealized Gains | 10,863 | |
Gross Unrealized Losses | 20,542 | 89,337 |
Fair Value | 7,811,611 | 7,602,204 |
U.S. corporations | ||
Cost | 6,496,764 | 6,176,341 |
Gross Unrealized Gains | 7,177 | |
Gross Unrealized Losses | 13,296 | 68,381 |
Fair Value | 6,490,645 | 6,107,960 |
International corporations | ||
Cost | 1,324,526 | 1,515,200 |
Gross Unrealized Gains | 3,686 | |
Gross Unrealized Losses | 7,246 | 20,956 |
Fair Value | $ 1,320,966 | $ 1,494,244 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Measurements | ||
Fair value assets, amount transferred between measurement levels | $ 0 | $ 0 |
Fair value liabilities, amount transferred between measurement levels | 0 | 0 |
Recurring | ||
Fair Value Measurements | ||
Total | 7,811,611 | 7,602,204 |
Recurring | U.S. corporations | ||
Fair Value Measurements | ||
Total | 6,490,645 | 6,107,960 |
Recurring | International corporations | ||
Fair Value Measurements | ||
Total | 1,320,966 | 1,494,244 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Total | 7,811,611 | 7,602,204 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. corporations | ||
Fair Value Measurements | ||
Total | 6,490,645 | 6,107,960 |
Recurring | Significant Other Observable Inputs (Level 2) | International corporations | ||
Fair Value Measurements | ||
Total | $ 1,320,966 | $ 1,494,244 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Loss (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Unrealized Gains (Losses) on Available-For-Sale Securities | ||||
Balance at the beginning | $ (14,436) | $ (25,475) | $ (55,285) | $ (21,473) |
Losses, net | (13,049) | (10,341) | (1,156) | (14,343) |
Reclassification realized in net earnings | 22,091 | 51,047 | ||
Balance at the end | $ (5,394) | $ (35,816) | $ (5,394) | $ (35,816) |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of the statutory U.S. federal tax rate to effective rate | ||||
Provisions for income taxes | $ 1,029,029 | $ 1,400,406 | $ 3,364,179 | $ 3,193,519 |
Effective tax rate (as a percent) | 39.70% | 42.90% | 35.60% | 38.40% |
Segment, Customer and Geograp44
Segment, Customer and Geographic Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Dec. 31, 2015USD ($) | |
Segment, Customer and Geographic Information | |||||
Number of reportable segment | item | 1 | 1 | |||
Revenue | $ 7,673,217 | $ 8,193,616 | $ 26,506,275 | $ 22,794,464 | |
Property and equipment, net | 1,283,809 | 1,283,809 | $ 905,622 | ||
Devices | |||||
Segment, Customer and Geographic Information | |||||
Revenue | 6,012,686 | 6,850,726 | 21,505,026 | 19,104,989 | |
Disposable IV Sets and Services | |||||
Segment, Customer and Geographic Information | |||||
Revenue | 1,660,531 | 1,342,890 | 5,001,249 | 3,689,475 | |
United States | |||||
Segment, Customer and Geographic Information | |||||
Revenue | 6,914,921 | 7,739,714 | 23,784,112 | 21,237,264 | |
Property and equipment, net | 1,086,140 | 1,086,140 | 837,728 | ||
International | |||||
Segment, Customer and Geographic Information | |||||
Revenue | 758,296 | $ 453,902 | 2,722,163 | $ 1,557,200 | |
Property and equipment, net | $ 197,669 | $ 197,669 | $ 67,894 |
Commitments and Contingencies45
Commitments and Contingencies (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 30, 2014USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Purchase commitments | ||||||
Purchase commitments | $ 4,384,686 | $ 4,384,686 | $ 3,564,088 | |||
Susi, LLC | Winter Springs, Florida Facility | ||||||
Leases | ||||||
Monthly base rent | $ 32,649 | |||||
Number of successive renewal terms of lease | item | 2 | |||||
Renewal term of lease beginning in 2019 | 5 years | |||||
Renewal term of lease beginning in 2024 | 5 years | |||||
Renewal term lease thereafter | 1 year | |||||
Non-cancelable operating lease commitments | ||||||
Three months ending December 31, 2016 | 98,418 | 98,418 | ||||
2,017 | 393,008 | 393,008 | ||||
2,018 | 393,008 | 393,008 | ||||
2,019 | 163,080 | 163,080 | ||||
Total non-cancelable operating lease commitments | 1,047,514 | 1,047,514 | ||||
Rent expense | $ 101,372 | $ 100,037 | $ 303,811 | $ 300,670 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Jan. 28, 2016 | |
Balances at the beginning | 11,175,125 | ||
Balances at the end | 10,711,975 | 10,711,975 | |
Treasury stock value | $ 9,969,468 | $ 9,969,468 | |
Treasury stock shares acquired | 569,213 | ||
Common Stock | |||
Balances at the beginning | 11,175,125 | ||
Option exercises | 101,063 | ||
Underwriters' warrants exercises | 5,000 | ||
Purchases of treasury stock | (569,213) | ||
Balances at the end | 10,711,975 | 10,711,975 | |
Repurchase of common stock, authorized | $ 10,000,000 |