Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | IRADIMED CORP | |
Entity Central Index Key | 0001325618 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | IRMD | |
Entity Common Stock, Shares Outstanding | 11,157,222 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 29,684,457 | $ 28,027,688 |
Accounts receivable, net of allowance for doubtful accounts of $63,894 as of March 31, 2019 and $42,443 as of December 31, 2018 | 5,328,550 | 4,209,992 |
Investments | 5,746,888 | 6,349,915 |
Inventory, net | 4,231,504 | 4,059,443 |
Prepaid expenses and other current assets | 783,170 | 526,787 |
Prepaid income taxes | 1,665,986 | 1,367,892 |
Total current assets | 47,440,555 | 44,541,717 |
Property and equipment, net | 1,902,045 | 1,869,561 |
Intangible assets, net | 819,752 | 832,519 |
Operating lease right-of-use asset | 3,127,278 | |
Deferred income taxes, net | 1,017,049 | 1,088,702 |
Other assets | 106,536 | 109,759 |
Total assets | 54,413,215 | 48,442,258 |
Current liabilities: | ||
Accounts payable | 1,180,598 | 772,470 |
Accrued payroll and benefits | 1,423,967 | 1,802,321 |
Other accrued taxes | 86,168 | 133,000 |
Warranty reserve | 74,183 | 74,524 |
Deferred revenue | 1,902,175 | 1,798,784 |
Current portion of operating lease liability | 230,271 | |
Other current liability | 108,421 | 108,421 |
Total current liabilities | 5,005,783 | 4,689,520 |
Deferred revenue | 1,864,348 | 1,807,005 |
Operating lease liability, less current portion | 2,897,007 | |
Total liabilities | 9,767,138 | 6,496,525 |
Stockholders' equity: | ||
Common stock; $0.0001 par value; 31,500,000 shares authorized; 11,144,196 shares issued and outstanding as of March 31, 2019 and 10,989,111 shares issued and outstanding as of December 31, 2018 | 1,114 | 1,099 |
Additional paid-in capital | 16,133,905 | 15,317,335 |
Retained earnings | 28,515,056 | 26,669,491 |
Accumulated other comprehensive loss | (3,998) | (42,192) |
Total stockholders' equity | 44,646,077 | 41,945,733 |
Total liabilities and stockholders' equity | $ 54,413,215 | $ 48,442,258 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CONDENSED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 63,894 | $ 42,443 |
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 | 11,144,196 | 10,989,111 |
Common stock, shares outstanding | 11,144,196 | 10,989,111 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED STATEMENTS OF OPERATIONS | ||
Revenue | $ 8,437,593 | $ 7,108,151 |
Cost of revenue | 2,047,827 | 1,691,535 |
Gross profit | 6,389,766 | 5,416,616 |
Operating expenses: | ||
General and administrative | 2,412,696 | 2,303,532 |
Sales and marketing | 2,110,652 | 1,645,936 |
Research and development | 352,573 | 379,826 |
Total operating expenses | 4,875,921 | 4,329,294 |
Income from operations | 1,513,845 | 1,087,322 |
Other income, net | 92,574 | 40,072 |
Income before provision for income taxes | 1,606,419 | 1,127,394 |
Provision for income tax (benefit) expense | (239,146) | 286,198 |
Net income | $ 1,845,565 | $ 841,196 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.17 | $ 0.08 |
Diluted (in dollars per share) | $ 0.15 | $ 0.07 |
Weighted average shares outstanding: | ||
Basic (in shares) | 11,029,639 | 10,608,387 |
Diluted (in shares) | 12,227,696 | 11,879,889 |
CONDENSED STATEMENTS OF COMPREH
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 1,845,565 | $ 841,196 |
Other comprehensive income (loss): | ||
Change in fair value of available-for-sale securities, , net of tax expense (benefit) of $11,656 and $(14,128), , respectively | 35,317 | (42,651) |
Realized loss on available-for-sale securities reclassified to net income, net of tax (benefit) expense of $(949) and $86, respectively | 2,877 | (429) |
Other comprehensive income (loss) | 38,194 | (43,080) |
Comprehensive income | $ 1,883,759 | $ 798,116 |
CONDENSED STATEMENTS OF COMPR_2
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||
Change in fair value of available-for-sale securities, tax benefit | $ 11,656 | $ (14,128) |
Reclassification to net income, tax benefit | $ (949) | $ 86 |
CONDENSED STATEMENTS OF STOCKHO
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balances at Dec. 31, 2017 | $ 1,060 | $ 12,623,181 | $ 20,355,545 | $ (48,909) | $ 32,930,877 |
Balance (in shares) at Dec. 31, 2017 | 10,596,566 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 841,196 | 841,196 | |||
Other comprehensive income (loss) | (43,080) | (43,080) | |||
Stock-based compensation | 416,327 | 416,327 | |||
Net share settlement of restricted stock units | (4,376) | (4,376) | |||
Net share settlement of restricted stock units (in shares) | 3,163 | ||||
Exercise of stock options | $ 2 | 95,922 | 95,924 | ||
Exercise of stock options (in shares) | 22,313 | ||||
Cumulative effect from adoption of accounting standard update | 10,496 | (10,496) | |||
Balances at Mar. 31, 2018 | $ 1,062 | 13,131,054 | 21,207,237 | (102,485) | 34,236,868 |
Balance (in shares) at Mar. 31, 2018 | 10,622,042 | ||||
Balances at Dec. 31, 2018 | $ 1,099 | 15,317,335 | 26,669,491 | (42,192) | 41,945,733 |
Balance (in shares) at Dec. 31, 2018 | 10,989,111 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 1,845,565 | 1,845,565 | |||
Other comprehensive income (loss) | 38,194 | 38,194 | |||
Stock-based compensation | 382,353 | 382,353 | |||
Net share settlement of restricted stock units | (22,507) | (22,507) | |||
Net share settlement of restricted stock units (in shares) | 4,322 | ||||
Exercise of stock options | $ 15 | 456,724 | 456,739 | ||
Exercise of stock options (in shares) | 150,763 | ||||
Balances at Mar. 31, 2019 | $ 1,114 | $ 16,133,905 | $ 28,515,056 | $ (3,998) | $ 44,646,077 |
Balance (in shares) at Mar. 31, 2019 | 11,144,196 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net income | $ 1,845,565 | $ 841,196 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Change in allowance for doubtful accounts | 21,450 | 8,842 |
Change in provision for excess and obsolete inventory | 120,529 | 61,011 |
Depreciation and amortization | 387,081 | 427,747 |
Stock-based compensation | 382,353 | 416,327 |
Deferred income taxes, net | 59,048 | (123,689) |
Loss (gain) on maturities of investments | 3,826 | (550) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,140,008) | 490,147 |
Inventory | (333,546) | (155,234) |
Prepaid expenses and other current assets | (665,862) | (254,051) |
Other assets | (4,891) | (18,185) |
Accounts payable | 375,202 | (80,631) |
Accrued payroll and benefits | (378,354) | (331,790) |
Other accrued taxes | (46,832) | (75,365) |
Warranty reserve | (341) | 10,414 |
Deferred revenue | 338,078 | (42,344) |
Prepaid income taxes, net of accrued income taxes | (298,094) | 410,045 |
Net cash provided by operating activities | 665,204 | 1,583,890 |
Investing activities: | ||
Proceeds from maturity of investments | 650,000 | 250,000 |
Purchases of property and equipment | (82,943) | (37,983) |
Capitalized intangible assets | (9,724) | (298) |
Net cash provided by investing activities | 557,333 | 211,719 |
Financing activities: | ||
Proceeds from exercises of stock options and underwriters' warrants | 456,739 | 95,924 |
Taxes paid related to the net share settlement of equity awards | (22,507) | (4,376) |
Net cash provided by financing activities | 434,232 | 91,548 |
Net increase in cash and cash equivalents | 1,656,769 | 1,887,157 |
Cash and cash equivalents, beginning of period | 28,027,688 | 18,205,976 |
Cash and cash equivalents, end of period | 29,684,457 | 20,093,133 |
Supplemental disclosure of cash flow information: | ||
Right-of-use asset recognized in exchange for new lease obligation | 3,182,724 | |
Operating and short-term lease payments recorded within cash flow from operating activities | $ 106,659 | $ 101,505 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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 months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. 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, 2018. The accounting policies followed in the preparation of these interim condensed financial statements, except as described in Note 1, are consistent in all material respects with those described in Note 1 of our Form 10-K. We operate in one reportable segment which is the development, manufacture and sale of MRI compatible medical devices, related accessories, disposables and services for use by hospitals and acute care facilities during MRI procedures. FDA Warning Letter 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 DERS software. The FDA issued a Form 483 on April 16, 2014 that identified eight observations. Most 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 responses 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 states 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 states 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 had been made over time. We believed 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. Between July 11 and July 18, 2016, the FDA conducted a routine inspection of our facility. This was the first FDA inspection of our facility since the receipt of the Warning Letter. During this inspection, the updated documents and actions implemented in response to the Warning Letter findings were reviewed, and the FDA determined that no further actions were necessary. On December 15, 2016, we received FDA 510(k) clearance for our MRidium 3860+ MRI IV infusion pump system, including the DERS software feature. As of March 31, 2019, the Warning Letter remains open. CE Mark for 3880 Patient Vital Signs Monitoring System On January 16, 2019, we were notified by the U.K. Notified Body, UL International Ltd. (“UL”) that their recent technical file review of our 3880 MRI compatible patient vital signs monitoring system could not be completed as aspects of clinical evaluation reporting, as required by newly issued guidance from the European Union, was not acceptable, resulting in a technical non-conformity. Accordingly, UL issued a temporary EC Certificate that excludes our 3880 patient vital signs monitoring system. This temporary EC Certificate extends through July 27, 2019. We immediately suspended shipments of our 3880 patient vital signs monitor to all markets requiring a CE Mark. We are addressing the technical non-conformity, but there can be no assurance that these efforts will be successful. 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. As of March 31, 2019, one domestic customer accounted for approximately 16.2% of accounts receivable. Recent Accounting Pronouncements Accounting Pronouncements Implemented in 2019 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. We adopted this update on January 1, 2019 and, as part of that process, made the following elections: · We elected to use the hindsight practical expedient. · We elected the package of practical expedients in transition for leases that commenced prior to January 1, 2019 whereby contracts were not reassessed or reclassified from their previous assessment as of December 31, 2018. · In March 2018, the FASB approved an optional transition method that allows companies to use the effective date as the date of initial application on transition. We elected this transition method, and as a result, did not adjust comparative period financial information or make the newly required lease disclosures for periods before the effective date. · We elected to make the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. · We elected to not separate lease and nonlease components, for all leases. · We did not elect the land easement practical expedient. The impact of Topic 842 on our Balance Sheet beginning January 1, 2019 was through the recognition of an operating lease right-of-use asset and operating lease liability. Amounts recognized at January 1, 2109 for operating leases were as follows: January 1, 2019 Operating lease right-of-use asset $ 3,182,724 Current portion of operating lease liability $ 226,852 Operating lease liability, less current portion $ 2,955,872 There was no impact to our Condensed Statements of Operations, Condensed Statements of Cash Flows or beginning retained earnings related to the adoption of Topic 842. Recently Issued Accounting Pronouncements to be Implemented In August 2018, the FASB issued ASU 2018-03, Fair Value Measurement (Topic 820). This update modifies disclosure requirements related to fair value measurements. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Implementation on a prospective or retrospective basis varies by specific disclosure requirement. Early adoption is permitted. The ASU also allows for early adoption of any removed or modified disclosures upon issuance of this ASU, while delaying adoption of the additional disclosures until their effective date. We do not expect the adoption of this guidance will have a material impact upon our footnote disclosures. In June 2016, the FASB issued 2016-03, Financial Instruments – Credit Losses (Topic 326). This update requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, for available-for-sale debt securities, this ASU replaces the other-than-temporary impairment model and requires the recognition of an allowance for reductions in a security’s fair value attributable to declines in credit quality, instead of a direct writedown of the security, when a valuation decline is determined to be other-than-temporary. The ASU requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and for interim periods therein. Companies may choose to adopt this ASU as of its fiscal year beginning after December 15, 2018. We did not early adopt this standard. We do not believe this ASU will have a material impact on our financial condition or statements of operations. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Revenue Recognition | 2 — Revenue Recognition Disaggregation of Revenue We disaggregate revenue from contracts with customers by geographic region and revenue type as we believe it best depicts the nature, amount, timing and uncertainty of our revenue and cash flow. Revenue information by geographic region is as follows: Three Months Ended March 31, 2019 2018 (unaudited) United States $ 7,073,735 $ 5,977,107 International 1,363,858 1,131,044 Total revenue $ 8,437,593 $ 7,108,151 Revenue information by type is as follows: Three Months Ended March 31, 2019 2018 (unaudited) Devices: MRI compatible IV infusion pump system $ 4,192,754 $ 3,625,622 MRI compatible patient vital signs monitoring systems 1,766,608 1,203,856 Total Devices revenue 5,959,362 4,829,478 Disposables and services 2,036,674 1,939,091 Amortization of extended warranty agreements 441,557 339,582 Total revenue $ 8,437,593 $ 7,108,151 Contract Liabilities Our contract liabilities consist of: March 31, December 31, 2019 2018 (unaudited) Advance payments from customers $ 51,991 $ 180,425 Shipments in-transit 177,344 9,582 Extended warranty agreements 3,537,188 3,415,782 Total $ 3,766,523 $ 3,605,789 Changes in the contract liabilities during the periods presented are as follows: Deferred Revenue Contract liabilities, December 31, 2018 $ 3,605,789 Increases due to cash received from customers 813,298 Decreases due to recognition of revenue (652,564) Contract liabilities, March 31, 2019 $ 3,766,523 Deferred Revenue Contract liabilities, December 31, 2017 $ 3,621,256 Increases due to cash received from customers 549,032 Decreases due to recognition of revenue (591,376) Contract liabilities, March 31, 2018 $ 3,578,912 Capitalized Contract Costs Our capitalized contract costs consist of: March 31, December 31, 2019 2018 (unaudited) Capitalized contract costs $ 186,140 $ 181,248 Expense for the three months ended March 31, 2019 and 2018 related to the amortization of capitalized contract costs were immaterial to our financial statements. |
Basic and Diluted Net Income pe
Basic and Diluted Net Income per Share | 3 Months Ended |
Mar. 31, 2019 | |
Basic and Diluted Net Income per Share | |
Basic and Diluted Net Income per Share | 3 — 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 March 31, 2019 2018 (unaudited) Net income $ 1,845,565 $ 841,196 Weighted-average shares outstanding — Basic 11,029,639 10,608,387 Effect of dilutive securities: Underwriters' warrants 99,814 53,434 Stock options 996,303 1,155,708 Restricted stock units 101,940 62,360 Weighted-average shares outstanding — Diluted 12,227,696 11,879,889 Basic net income per share $ 0.17 $ 0.08 Diluted net income per share $ 0.15 $ 0.07 Stock options and warrants 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 March 31, 2019 2018 (unaudited) Anti-dilutive stock options, restricted stock units and warrants 7,123 64,382 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Inventory | 4 — Inventory Inventory consists of: March 31, December 31, 2019 2018 (unaudited) Raw materials $ 3,570,874 $ 3,408,158 Work in process 252,829 305,562 Finished goods 652,878 557,566 Inventory before allowance for excess and obsolete 4,476,581 4,271,286 Allowance for excess and obsolete (245,077) (211,843) Total $ 4,231,504 $ 4,059,443 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment | |
Property and Equipment | 5 — Property and Equipment Property and equipment consist of: March 31, December 31, 2019 2018 (unaudited) Computer software and hardware $ 593,347 $ 555,292 Furniture and fixtures 978,152 901,415 Leasehold improvements 209,226 202,026 Machinery and equipment 2,193,486 2,184,015 Tooling in-process 83,625 58,263 4,057,836 3,901,011 Accumulated depreciation (2,155,791) (2,031,450) Total $ 1,902,045 $ 1,869,561 Depreciation expense of property and equipment was $124,341 and $109,371 for the three months ended March 31, 2019 and 2018, respectively. Property and equipment, net, information by geographic region is as follows: March 31, December 31, 2019 2018 (unaudited) United States $ 1,474,529 $ 1,439,545 International 427,516 430,016 Total property and equipment, net $ 1,902,045 $ 1,869,561 Long-lived assets held outside of the United States consist principally of tooling and machinery and equipment, which are components of property and equipment, net. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets | |
Intangible Assets | 6 — Intangible Assets The following table summarizes the components of intangible asset balances: March 31, December 31, 2019 2018 (unaudited) Patents — in use $ 304,270 $ 304,270 Patents — in process 76,990 73,164 Internally developed software — in use 867,569 867,569 Internally developed software — in process 19,621 13,723 Trademarks 23,017 23,017 1,291,467 1,281,743 Accumulated amortization (471,715) (449,224) Total $ 819,752 $ 832,519 Amortization expense of intangible assets was $22,491 and $21,860 for the three months ended March 31, 2019 and 2018, respectively. Expected annual amortization expense for the remaining portion of 2019 and the next five years related to intangible assets is as follows (excludes in process intangible assets): Nine months ending December 31, 2019 $ 67,472 2020 89,963 2021 89,963 2022 89,392 2023 88,740 2024 88,439 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments | |
Investments | 7 — Investments Our investments consist of corporate bonds that we have classified as available-for-sale and are summarized in the following tables: March 31, 2019 Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value Corporate bonds: U.S. corporations $ 4,833,819 $ 1,100 $ 14,367 $ 4,820,552 International corporations 918,417 7,919 — 926,336 Total $ 5,752,236 $ 9,019 $ 14,367 $ 5,746,888 December 31, 2018 Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value Corporate bonds: U.S. corporations $ 5,487,645 $ — $ 58,309 $ 5,429,336 International corporations 918,417 2,162 — 920,579 Total $ 6,406,062 $ 2,162 $ 58,309 $ 6,349,915 Unrealized losses from the above investments for all periods presented are attributable to changes in interest rates. We do not believe any of these unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence as of March 31, 2019. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 Quoted Prices Significant in Active Other Significant Market for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Corporate bonds: U.S. corporations $ 4,820,552 $ — $ 4,820,552 $ — International corporations 926,336 — 926,336 — Total $ 5,746,888 $ — $ 5,746,888 $ — Fair Value at December 31, 2018 Quoted Prices Significant in Active Other Significant Market for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Corporate bonds: U.S. corporations $ 5,429,336 $ — $ 5,429,336 $ — International corporations 920,579 — 920,579 — Total $ 6,349,915 $ — $ 6,349,915 $ — Our corporate bonds are valued by a third-party custodian at closing prices from secondary exchanges or pricing vendors on the valuation date. There were no transfers into or out of any Levels during the three months ended March 31, 2019 or the year ended December 31, 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and 2018 are as follows: Unrealized (Losses) Gains on Available-For-Sale Securities Balance at December 31, 2018 $ (42,192) Gains on available-for-sale securities, net 35,317 Reclassification realized in net earnings 2,877 Balance at March 31, 2019 $ (3,998) Balance at December 31, 2017 $ (48,909) Losses on available-for-sale securities, net (42,651) Reclassification realized in net earnings (429) Cumulative effect from adoption of accounting standard update (10,496) Balance at March 31, 2018 $ (102,485) |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 10 — Stock-Based Compensation Stock-based compensation was recognized as follows in the Condensed Statements of Operations: Three Months Ended March 31, 2019 2018 (unaudited) Cost of revenue $ 62,524 $ 68,259 General and administrative 219,705 226,771 Sales and marketing 82,131 83,616 Research and development 17,993 37,681 Total $ 382,353 $ 416,327 As of March 31, 2019, we had $35,611 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 0.6 years. As of March 31, 2019, we had $2,870,751 of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.6 years. The following table presents a summary of our stock-based compensation activity for the three months ended March 31, 2019 (shares): Stock Restricted Options Stock Units Outstanding beginning of period 1,129,463 226,501 Awards granted — 3,592 Awards exercised/vested (150,763) (5,200) Awards canceled (750) (11,270) Outstanding end of period 977,950 213,623 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | 11 — Income Taxes For the three months ended March 31, 2019, we recorded a provision for income tax benefit of $(239,146). Our effective tax rate was (14.9) percent and differed from the U.S. Federal statutory rate primarily due to discrete items related to tax benefits associated with stock-based compensation, partially offset by U.S. state tax expense. For the three months ended March 31, 2018, we recorded a provision for income tax expense of $286,198. Our effective tax rate was 25.4 percent and differed from the U.S. Federal statutory rate primarily due to research and development credits, partially offset by U.S. state tax expense. As of March 31, 2019 and December 31, 2018, we had 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 believe that our tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from ours, which could result in the imposition of additional taxes and penalties. We file tax returns in the United States Federal jurisdiction and many U.S. state jurisdictions. The Company is subject to income tax examinations for our United States Federal and certain U.S. state income taxes for 2015 and subsequent years and various other U.S. state income taxes for 2014 and subsequent years. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 12 — Leases Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate, unless the rate implicit in the lease is readily determinable. Lease assets also include any upfront lease payments made and exclude lease incentives. Lease terms include options to extend or terminate leases when it is reasonably certain that those options will be exercised. Variable lease payments are expensed as incurred and include annual rent adjustments based on the consumer price index. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term. Lease agreements with lease and nonlease components are combined as a single lease component. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term. We have only one material lease contract outstanding. In January 2014, we entered into a non-cancelable operating lease, commencing July 1, 2014, for our manufacturing and headquarters facility in Winter Springs, Florida owned by Susi, LLC, an entity controlled by our President and CEO, Roger Susi. Pursuant to the terms of our lease for this property, the monthly base rent is $34,133, 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 initial 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. For purposes of Topic 842, we concluded that we will exercise both of the five year options, resulting in a remaining lease term of 10.2 years as of March 31, 2019. This lease agreement does not contain any residual value guarantee or material restrictive convenants. Operating lease cost recognized for the three months ended March 31, 2019 is follows in the Condensed Statements of Operations: Cost of revenue $ 46,535 General and administrative 46,044 Sales and marketing 2,605 Research and development 7,215 Total $ 102,399 Lease costs for short-term leases were immaterial for the three months ended March 31, 2019. Maturity of Operating Lease Liability as of March 31, 2019 is as follows: Nine months ending December 31, 2019 $ 307,197 2020 409,596 2021 409,596 2022 409,596 2023 409,596 Thereafter 2,218,646 Total lease payments 4,164,227 Imputed interest (1,036,949) Present value of lease liability $ 3,127,278 We used a discount rate of 6.0% to determine the present value of the operating lease liability on January 1, 2019. Undiscounted future minimum lease payments under noncancelable operating leases as of December 31, 2018 as determined prior to the adoption of ASC 842 are as follows: 2019 $ 170,664 2020 — 2021 — 2022 — 2023 — Thereafter — Total minimum lease payments $ 170,664 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13 — Commitments and Contingencies Purchase commitments. We had various purchase orders for goods or services totaling $2,920,468 and $2,674,691 as of March 31, 2019 and December 31, 2018, respectively. No amounts related to these purchase orders have been recognized in our balance sheet. Legal matters. We may from time to time become party to various legal proceedings or claims that arise in the ordinary course of business. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation | |
FDA Warning Letter | FDA Warning Letter 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 DERS software. The FDA issued a Form 483 on April 16, 2014 that identified eight observations. Most 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 responses 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 states 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 states 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 had been made over time. We believed 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. Between July 11 and July 18, 2016, the FDA conducted a routine inspection of our facility. This was the first FDA inspection of our facility since the receipt of the Warning Letter. During this inspection, the updated documents and actions implemented in response to the Warning Letter findings were reviewed, and the FDA determined that no further actions were necessary. On December 15, 2016, we received FDA 510(k) clearance for our MRidium 3860+ MRI IV infusion pump system, including the DERS software feature. As of March 31, 2019, the Warning Letter remains open. |
CE Mark for 3880 Patient Vital Signs Monitoring System | CE Mark for 3880 Patient Vital Signs Monitoring System On January 16, 2019, we were notified by the U.K. Notified Body, UL International Ltd. (“UL”) that their recent technical file review of our 3880 MRI compatible patient vital signs monitoring system could not be completed as aspects of clinical evaluation reporting, as required by newly issued guidance from the European Union, was not acceptable, resulting in a technical non-conformity. Accordingly, UL issued a temporary EC Certificate that excludes our 3880 patient vital signs monitoring system. This temporary EC Certificate extends through July 27, 2019. We immediately suspended shipments of our 3880 patient vital signs monitor to all markets requiring a CE Mark. We are addressing the technical non-conformity, but there can be no assurance that these efforts will be successful. |
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. As of March 31, 2019, one domestic customer accounted for approximately 16.2% of accounts receivable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Implemented in 2019 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. We adopted this update on January 1, 2019 and, as part of that process, made the following elections: · We elected to use the hindsight practical expedient. · We elected the package of practical expedients in transition for leases that commenced prior to January 1, 2019 whereby contracts were not reassessed or reclassified from their previous assessment as of December 31, 2018. · In March 2018, the FASB approved an optional transition method that allows companies to use the effective date as the date of initial application on transition. We elected this transition method, and as a result, did not adjust comparative period financial information or make the newly required lease disclosures for periods before the effective date. · We elected to make the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. · We elected to not separate lease and nonlease components, for all leases. · We did not elect the land easement practical expedient. The impact of Topic 842 on our Balance Sheet beginning January 1, 2019 was through the recognition of an operating lease right-of-use asset and operating lease liability. Amounts recognized at January 1, 2109 for operating leases were as follows: January 1, 2019 Operating lease right-of-use asset $ 3,182,724 Current portion of operating lease liability $ 226,852 Operating lease liability, less current portion $ 2,955,872 There was no impact to our Condensed Statements of Operations, Condensed Statements of Cash Flows or beginning retained earnings related to the adoption of Topic 842. Recently Issued Accounting Pronouncements to be Implemented In August 2018, the FASB issued ASU 2018-03, Fair Value Measurement (Topic 820). This update modifies disclosure requirements related to fair value measurements. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Implementation on a prospective or retrospective basis varies by specific disclosure requirement. Early adoption is permitted. The ASU also allows for early adoption of any removed or modified disclosures upon issuance of this ASU, while delaying adoption of the additional disclosures until their effective date. We do not expect the adoption of this guidance will have a material impact upon our footnote disclosures. In June 2016, the FASB issued 2016-03, Financial Instruments – Credit Losses (Topic 326). This update requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, for available-for-sale debt securities, this ASU replaces the other-than-temporary impairment model and requires the recognition of an allowance for reductions in a security’s fair value attributable to declines in credit quality, instead of a direct writedown of the security, when a valuation decline is determined to be other-than-temporary. The ASU requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and for interim periods therein. Companies may choose to adopt this ASU as of its fiscal year beginning after December 15, 2018. We did not early adopt this standard. We do not believe this ASU will have a material impact on our financial condition or statements of operations. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation | |
Schedule of new accounting pronouncements and changes in accounting principles | January 1, 2019 Operating lease right-of-use asset $ 3,182,724 Current portion of operating lease liability $ 226,852 Operating lease liability, less current portion $ 2,955,872 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Schedule of disaggregation of revenue by geographic region and type | Revenue information by geographic region is as follows: Three Months Ended March 31, 2019 2018 (unaudited) United States $ 7,073,735 $ 5,977,107 International 1,363,858 1,131,044 Total revenue $ 8,437,593 $ 7,108,151 Revenue information by type is as follows: Three Months Ended March 31, 2019 2018 (unaudited) Devices: MRI compatible IV infusion pump system $ 4,192,754 $ 3,625,622 MRI compatible patient vital signs monitoring systems 1,766,608 1,203,856 Total Devices revenue 5,959,362 4,829,478 Disposables and services 2,036,674 1,939,091 Amortization of extended warranty agreements 441,557 339,582 Total revenue $ 8,437,593 $ 7,108,151 |
Schedule of deferred revenue and changes in the contract liabilities | Our contract liabilities consist of: March 31, December 31, 2019 2018 (unaudited) Advance payments from customers $ 51,991 $ 180,425 Shipments in-transit 177,344 9,582 Extended warranty agreements 3,537,188 3,415,782 Total $ 3,766,523 $ 3,605,789 Changes in the contract liabilities during the periods presented are as follows: Deferred Revenue Contract liabilities, December 31, 2018 $ 3,605,789 Increases due to cash received from customers 813,298 Decreases due to recognition of revenue (652,564) Contract liabilities, March 31, 2019 $ 3,766,523 Deferred Revenue Contract liabilities, December 31, 2017 $ 3,621,256 Increases due to cash received from customers 549,032 Decreases due to recognition of revenue (591,376) Contract liabilities, March 31, 2018 $ 3,578,912 |
Schedule of capitalized contract costs | March 31, December 31, 2019 2018 (unaudited) Capitalized contract costs $ 186,140 $ 181,248 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Basic and Diluted Net Income per Share | |
Schedule of computation of basic and diluted net income per share | Three Months Ended March 31, 2019 2018 (unaudited) Net income $ 1,845,565 $ 841,196 Weighted-average shares outstanding — Basic 11,029,639 10,608,387 Effect of dilutive securities: Underwriters' warrants 99,814 53,434 Stock options 996,303 1,155,708 Restricted stock units 101,940 62,360 Weighted-average shares outstanding — Diluted 12,227,696 11,879,889 Basic net income per share $ 0.17 $ 0.08 Diluted net income per share $ 0.15 $ 0.07 |
Schedule of stock options and warrants to purchase shares of our commons stock and restricted stock units excluded from the calculation of diluted net income per share | Three Months Ended March 31, 2019 2018 (unaudited) Anti-dilutive stock options, restricted stock units and warrants 7,123 64,382 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Schedule of inventory | March 31, December 31, 2019 2018 (unaudited) Raw materials $ 3,570,874 $ 3,408,158 Work in process 252,829 305,562 Finished goods 652,878 557,566 Inventory before allowance for excess and obsolete 4,476,581 4,271,286 Allowance for excess and obsolete (245,077) (211,843) Total $ 4,231,504 $ 4,059,443 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment | |
Schedule of property and equipment | March 31, December 31, 2019 2018 (unaudited) Computer software and hardware $ 593,347 $ 555,292 Furniture and fixtures 978,152 901,415 Leasehold improvements 209,226 202,026 Machinery and equipment 2,193,486 2,184,015 Tooling in-process 83,625 58,263 4,057,836 3,901,011 Accumulated depreciation (2,155,791) (2,031,450) Total $ 1,902,045 $ 1,869,561 |
Schedule of property and equipment, net, information by geographic region | March 31, December 31, 2019 2018 (unaudited) United States $ 1,474,529 $ 1,439,545 International 427,516 430,016 Total property and equipment, net $ 1,902,045 $ 1,869,561 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets | |
Summary of the components of intangible asset balances | March 31, December 31, 2019 2018 (unaudited) Patents — in use $ 304,270 $ 304,270 Patents — in process 76,990 73,164 Internally developed software — in use 867,569 867,569 Internally developed software — in process 19,621 13,723 Trademarks 23,017 23,017 1,291,467 1,281,743 Accumulated amortization (471,715) (449,224) Total $ 819,752 $ 832,519 |
Schedule of expected annual amortization expense related to intangible assets (excludes in process intangible assets) | Nine months ending December 31, 2019 $ 67,472 2020 89,963 2021 89,963 2022 89,392 2023 88,740 2024 88,439 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments | |
Summary of available-for-sale securities | March 31, 2019 Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value Corporate bonds: U.S. corporations $ 4,833,819 $ 1,100 $ 14,367 $ 4,820,552 International corporations 918,417 7,919 — 926,336 Total $ 5,752,236 $ 9,019 $ 14,367 $ 5,746,888 December 31, 2018 Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value Corporate bonds: U.S. corporations $ 5,487,645 $ — $ 58,309 $ 5,429,336 International corporations 918,417 2,162 — 920,579 Total $ 6,406,062 $ 2,162 $ 58,309 $ 6,349,915 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Schedule of the fair value of assets and liabilities subject to recurring fair value measurements | Fair Value at March 31, 2019 Quoted Prices Significant in Active Other Significant Market for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Corporate bonds: U.S. corporations $ 4,820,552 $ — $ 4,820,552 $ — International corporations 926,336 — 926,336 — Total $ 5,746,888 $ — $ 5,746,888 $ — Fair Value at December 31, 2018 Quoted Prices Significant in Active Other Significant Market for Observable Unobservable Fair Identical Assets Inputs Inputs Value (Level 1) (Level 2) (Level 3) Corporate bonds: U.S. corporations $ 5,429,336 $ — $ 5,429,336 $ — International corporations 920,579 — 920,579 — Total $ 6,349,915 $ — $ 6,349,915 $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Loss | |
Schedule of components of accumulated other comprehensive loss, net of tax | The components of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2019 and 2018 are as follows: Unrealized (Losses) Gains on Available-For-Sale Securities Balance at December 31, 2018 $ (42,192) Gains on available-for-sale securities, net 35,317 Reclassification realized in net earnings 2,877 Balance at March 31, 2019 $ (3,998) Balance at December 31, 2017 $ (48,909) Losses on available-for-sale securities, net (42,651) Reclassification realized in net earnings (429) Cumulative effect from adoption of accounting standard update (10,496) Balance at March 31, 2018 $ (102,485) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stock-Based Compensation | |
Schedule of stock-based compensation | Three Months Ended March 31, 2019 2018 (unaudited) Cost of revenue $ 62,524 $ 68,259 General and administrative 219,705 226,771 Sales and marketing 82,131 83,616 Research and development 17,993 37,681 Total $ 382,353 $ 416,327 |
Summary of stock options and restricted stock units activity | The following table presents a summary of our stock-based compensation activity for the three months ended March 31, 2019 (shares): Stock Restricted Options Stock Units Outstanding beginning of period 1,129,463 226,501 Awards granted — 3,592 Awards exercised/vested (150,763) (5,200) Awards canceled (750) (11,270) Outstanding end of period 977,950 213,623 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of lease cost | Cost of revenue $ 46,535 General and administrative 46,044 Sales and marketing 2,605 Research and development 7,215 Total $ 102,399 |
Schedule of maturity of lease liabilities | Nine months ending December 31, 2019 $ 307,197 2020 409,596 2021 409,596 2022 409,596 2023 409,596 Thereafter 2,218,646 Total lease payments 4,164,227 Imputed interest (1,036,949) Present value of lease liability $ 3,127,278 |
Schedule of future minimum operating lease payments | 2019 $ 170,664 2020 — 2021 — 2022 — 2023 — Thereafter — Total minimum lease payments $ 170,664 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Basis of Presentation | |
Number of reportable segment | 1 |
Basis of Presentation - FDA War
Basis of Presentation - FDA Warning Letter (Details) - item | Sep. 02, 2014 | Apr. 16, 2014 |
FDA Warning Letter | ||
Number of observations | 8 | |
Number of identified responses whose accuracy will be determined | 2 |
Basis of Presentation - Certain
Basis of Presentation - Certain Significant Risks and Uncertainties (Details) - Domestic customer | 3 Months Ended |
Mar. 31, 2019 | |
Certain Significant Risks and Uncertainties | |
Number of customers | 1 |
Accounts receivable | Customer concentration risk | |
Certain Significant Risks and Uncertainties | |
Concentration risk (as a percent) | 16.20% |
Basis of Presentation - Recent
Basis of Presentation - Recent Accounting Pronouncements (Details) - USD ($) | Jan. 01, 2019 | Mar. 31, 2019 |
Leases | ||
Lease, practical expedient, use of hindsight | true | |
Lease, practical expedients, package | true | |
Operating lease right-of-use asset | $ 3,127,278 | |
Current portion of operating lease liability | 230,271 | |
Operating lease liability, less current portion | $ 2,897,007 | |
ASU 2016-02 | ||
Leases | ||
Operating lease right-of-use asset | $ 3,182,724 | |
Current portion of operating lease liability | 226,852 | |
Operating lease liability, less current portion | $ 2,955,872 |
Revenue Recognition - Informati
Revenue Recognition - Information by Geographic Region (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Contract Liabilities | |||
Total revenue | $ 8,437,593 | $ 7,108,151 | $ 7,108,151 |
United States | |||
Contract Liabilities | |||
Total revenue | 7,073,735 | 5,977,107 | |
International | |||
Contract Liabilities | |||
Total revenue | $ 1,363,858 | $ 1,131,044 |
Revenue Recognition - Informa_2
Revenue Recognition - Information by Type (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Disaggregation of Revenue | |||
Total Devices Revenue | $ 5,959,362 | $ 4,829,478 | |
Disposables and Services | 2,036,674 | 1,939,091 | |
Amortization of extended warranty agreements | 441,557 | 339,582 | |
Total revenue | 8,437,593 | 7,108,151 | $ 7,108,151 |
MRI Compatible IV Infusion Pump Systems | |||
Disaggregation of Revenue | |||
Total Devices Revenue | 4,192,754 | 3,625,622 | |
MRI Compatible Patient Vital Signs Monitoring Systems | |||
Disaggregation of Revenue | |||
Total Devices Revenue | $ 1,766,608 | $ 1,203,856 |
Revenue Recognition - Contract
Revenue Recognition - Contract Liabilities (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Deferred revenue | ||||
Advance payments from customers | $ 51,991 | $ 180,425 | ||
Shipments in-transit | 177,344 | 9,582 | ||
Extended warranty agreements | 3,537,188 | 3,415,782 | ||
Total | $ 3,605,789 | $ 3,621,256 | $ 3,766,523 | $ 3,605,789 |
Changes in contract liabilities | ||||
Contract liabilities at beginning of the year | 3,605,789 | 3,621,256 | ||
Increases due to cash received from customers | 813,298 | 549,032 | ||
Decreases due to recognition of revenue | 652,564 | (591,376) | ||
Contract liabilities at end of the year | $ 3,766,523 | $ 3,578,912 |
Revenue Recognition - Capitaliz
Revenue Recognition - Capitalized Contract Costs (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue Recognition | ||
Capitalized contract costs | $ 186,140 | $ 181,248 |
Basic and Diluted Net Income _3
Basic and Diluted Net Income per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Basic and Diluted Net Income per Share | ||
Net income | $ 1,845,565 | $ 841,196 |
Weighted-average shares outstanding - Basic (in shares) | 11,029,639 | 10,608,387 |
Effect of dilutive securities: | ||
Underwriters' warrants | 99,814 | 53,434 |
Stock options | 996,303 | 1,155,708 |
Restricted stock units | 101,940 | 62,360 |
Weighted-average shares outstanding - Diluted (in shares) | 12,227,696 | 11,879,889 |
Basic net income per share (in dollars per share) | $ 0.17 | $ 0.08 |
Diluted net income per share (in dollars per share) | $ 0.15 | $ 0.07 |
Anti-dilutive stock | ||
Anti-dilutive stock options, restricted stock units and warrants | 7,123 | 64,382 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory | ||
Raw materials | $ 3,570,874 | $ 3,408,158 |
Work in process | 252,829 | 305,562 |
Finished goods | 652,878 | 557,566 |
Inventory before allowance for excess and obsolete | 4,476,581 | 4,271,286 |
Allowance for excess and obsolete | (245,077) | (211,843) |
Total | $ 4,231,504 | $ 4,059,443 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property and equipment | |||
Property and equipment, gross | $ 4,057,836 | $ 3,901,011 | |
Accumulated depreciation | (2,155,791) | (2,031,450) | |
Total | 1,902,045 | 1,869,561 | |
Depreciation expense of property and equipment | 124,341 | $ 109,371 | |
Computer software and hardware | |||
Property and equipment | |||
Property and equipment, gross | 593,347 | 555,292 | |
Furniture and fixtures | |||
Property and equipment | |||
Property and equipment, gross | 978,152 | 901,415 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 209,226 | 202,026 | |
Machinery and equipment | |||
Property and equipment | |||
Property and equipment, gross | 2,193,486 | 2,184,015 | |
Tooling in-process | |||
Property and equipment | |||
Property and equipment, gross | $ 83,625 | $ 58,263 |
Property and Equipment - Geogra
Property and Equipment - Geographic information (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property and equipment | ||
Property and equipment, net | $ 1,902,045 | $ 1,869,561 |
United States | ||
Property and equipment | ||
Property and equipment, net | 1,474,529 | 1,439,545 |
International | ||
Property and equipment | ||
Property and equipment, net | $ 427,516 | $ 430,016 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Intangible assets | |||
Intangible Assets, gross | $ 1,291,467 | $ 1,281,743 | |
Accumulated amortization | (471,715) | (449,224) | |
Total | 819,752 | 832,519 | |
Amortization expense of intangible assets | 22,491 | $ 21,860 | |
Expected annual amortization expense | |||
Nine months ending December 31, 2019 | 67,472 | ||
2020 | 89,963 | ||
2021 | 89,963 | ||
2022 | 89,392 | ||
2023 | 88,740 | ||
2024 | 88,439 | ||
Patents - in use | |||
Intangible assets | |||
Intangible Assets, gross | 304,270 | 304,270 | |
Patents - in process | |||
Intangible assets | |||
Intangible Assets, gross | 76,990 | 73,164 | |
Internally developed software - in use | |||
Intangible assets | |||
Intangible Assets, gross | 867,569 | 867,569 | |
Internally developed software - in process | |||
Intangible assets | |||
Intangible Assets, gross | 19,621 | 13,723 | |
Trademarks | |||
Intangible assets | |||
Intangible Assets, gross | $ 23,017 | $ 23,017 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Investments | ||
Cost | $ 5,752,236 | $ 6,406,062 |
Gross Unrealized Gains | 9,019 | 2,162 |
Gross Unrealized Losses | 14,367 | 58,309 |
Fair Value | 5,746,888 | 6,349,915 |
U.S. corporations | ||
Investments | ||
Cost | 4,833,819 | 5,487,645 |
Gross Unrealized Gains | 1,100 | |
Gross Unrealized Losses | 14,367 | 58,309 |
Fair Value | 4,820,552 | 5,429,336 |
International corporations | ||
Investments | ||
Cost | 918,417 | 918,417 |
Gross Unrealized Gains | 7,919 | 2,162 |
Fair Value | $ 926,336 | $ 920,579 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 5,746,888 | 6,349,915 |
Recurring | U.S. corporations | ||
Fair Value Measurements | ||
Total | 4,820,552 | 5,429,336 |
Recurring | International corporations | ||
Fair Value Measurements | ||
Total | 926,336 | 920,579 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Total | 5,746,888 | 6,349,915 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. corporations | ||
Fair Value Measurements | ||
Total | 4,820,552 | 5,429,336 |
Recurring | Significant Other Observable Inputs (Level 2) | International corporations | ||
Fair Value Measurements | ||
Total | $ 926,336 | $ 920,579 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Component of accumulated other comprehensive loss | ||
Balance at the beginning | $ (42,192) | $ (48,909) |
Gains (Losses) on available-for-sale securities, net | 35,317 | (42,651) |
Reclassification realized in net earnings | (2,877) | 429 |
Cumulative effect from adoption of accounting standard update | (10,496) | |
Balance at the end | $ (3,998) | $ (102,485) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 382,353 | $ 416,327 |
Cost of revenue | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | 62,524 | 68,259 |
General and administrative | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | 219,705 | 226,771 |
Sales and marketing | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | 82,131 | 83,616 |
Research and development | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 17,993 | $ 37,681 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options and Restricted Stock Units Activity (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)shares | |
Stock Options | |
Stock-Based Compensation | |
Total unrecognized compensation expense | $ | $ 35,611 |
Weighted-average period expected to be recognized | 7 months 6 days |
Stock Options | |
Outstanding beginning of period (in shares) | 1,129,463 |
Awards exercised/vested (in shares) | (150,763) |
Awards cancelled (in shares) | (750) |
Outstanding end of period (in shares) | 977,950 |
Restricted Stock Units | |
Stock-Based Compensation | |
Total unrecognized compensation expense | $ | $ 2,870,751 |
Weighted-average period expected to be recognized | 2 years 7 months 6 days |
Restricted Stock Units | |
Outstanding beginning of period (in shares) | 226,501 |
Awards granted (in shares) | 3,592 |
Awards exercised/vested (in shares) | (5,200) |
Awards cancelled (in shares) | (11,270) |
Outstanding end of period (in shares) | 213,623 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reconciliation of the statutory U.S. federal tax rate to effective rate | ||
Provision for income tax (benefit) expense | $ (239,146) | $ 286,198 |
Effective tax rate (as a percent) | (14.90%) | 25.40% |
Leases (Details)
Leases (Details) | 1 Months Ended | 3 Months Ended |
Jan. 31, 2014USD ($) | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, existence of option to extend | true | |
Lessee, operating lease, existence of option to terminate | true | |
Lessee, operating lease, existence of residual value guarantee | false | |
Susi, LLC | Winter Springs, Florida Facility | ||
Lessee, Lease, Description [Line Items] | ||
Monthly base rent | $ 34,133 | |
Number of successive renewal terms of lease | 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 | |
Remaining lease term (in years) | 10 years 2 months 12 days |
Leases - Operating Lease Cost (
Leases - Operating Lease Cost (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases | |
Operating lease cost | $ 102,399 |
Cost of revenue | |
Leases | |
Operating lease cost | 46,535 |
General and administrative | |
Leases | |
Operating lease cost | 46,044 |
Sales and marketing | |
Leases | |
Operating lease cost | 2,605 |
Research and development | |
Leases | |
Operating lease cost | $ 7,215 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 |
Operating leases | ||
Nine months ending December 31, 2019 | $ 307,197 | |
2020 | 409,596 | |
2021 | 409,596 | |
2022 | 409,596 | |
2023 | 409,596 | |
Thereafter | 2,218,646 | |
Total lease payments | 4,164,227 | |
Imputed interest | (1,036,949) | |
Present value of lease liability | $ 3,127,278 | |
Discount rate | 6.00% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) | Dec. 31, 2018USD ($) |
Operating leases, future minimum payments due, fiscal year maturity | |
2019 | $ 170,664 |
Total minimum lease payments | $ 170,664 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Purchase commitments | ||
Purchase commitments | $ 2,920,468 | $ 2,674,691 |