Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 10, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Lifeloc Technologies, Inc | ||
Entity Central Index Key | 1,493,137 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 1,266,028 | ||
Entity Common Stock, Shares Outstanding | 2,454,116 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 3,772,064 | $ 3,227,190 |
Accounts receivable, net | 495,397 | 603,817 |
Inventories, net | 835,609 | 801,661 |
Income taxes receivable | 114,673 | 81,031 |
Deferred taxes | 106,434 | 114,058 |
Prepaid expenses and other | 52,072 | 23,279 |
Total current assets | 5,376,249 | 4,851,036 |
PROPERTY AND EQUIPMENT, at cost: | ||
Land | 317,932 | 317,932 |
Building | 1,928,795 | 1,911,695 |
Training courses | 432,375 | 432,375 |
Production equipment and software | 456,005 | 434,148 |
Office equipment and software | 193,332 | 193,332 |
Sales and marketing equipment | 228,908 | 232,468 |
Research and development equipment and software | 78,157 | 78,157 |
Less accumulated depreciation | (1,112,498) | (876,582) |
Total property and equipment, net | 2,523,006 | 2,723,525 |
OTHER ASSETS: | ||
Patents, net | 71,909 | 102,252 |
Deposits and other | 98,991 | 9,314 |
Deferred taxes, long term | 3,293 | 7,282 |
Total other assets | 174,193 | 118,848 |
Total assets | 8,073,448 | 7,693,409 |
CURRENT LIABILITIES: | ||
Accounts payable | 284,590 | 222,976 |
Term loan payable, current portion | 40,218 | 36,147 |
Customer deposits | 51,611 | 92,870 |
Accrued expenses | 239,833 | 274,996 |
Deferred revenue, current portion | 64,283 | 89,179 |
Reserve for warranty expense | 40,000 | 33,100 |
Total current liabilities | 720,535 | 749,268 |
TERM LOAN PAYABLE, net of current portion and debt issuance costs | 1,455,604 | 1,493,793 |
DEFERRED REVENUE, net of current portion | 8,665 | 19,163 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Common stock, no par value; 50,000,000 shares authorized, 2,454,116 shares outstanding | 4,557,320 | 4,533,012 |
Retained earnings | 1,331,324 | 898,173 |
Total stockholders' equity | 5,888,644 | 5,431,185 |
Total liabilities and stockholders' equity | $ 8,073,448 | $ 7,693,409 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
STOCKHOLDERS' EQUITY: | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, outstanding shares | 2,454,116 | 2,454,116 |
Statements of Income
Statements of Income - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
REVENUES: | ||
Product sales | $ 7,888,786 | $ 8,323,913 |
Royalties | 392,603 | 394,895 |
Rental income | 99,746 | 107,665 |
Total | 8,381,135 | 8,826,473 |
COST OF SALES | 4,202,729 | 4,425,106 |
GROSS PROFIT | 4,178,406 | 4,401,367 |
OPERATING EXPENSES: | ||
Research and development | 1,037,035 | 1,224,045 |
Sales and marketing | 1,359,043 | 1,467,344 |
General and administrative | 1,147,349 | 1,267,772 |
Total | 3,543,427 | 3,959,161 |
OPERATING INCOME | 634,979 | 442,206 |
OTHER INCOME (EXPENSE): | ||
Interest income | 13,270 | 14,737 |
Bad debt recovery | 4,500 | 12,000 |
Interest expense | (65,963) | (70,986) |
Total | (48,193) | (44,249) |
NET INCOME BEFORE PROVISION FOR TAXES | 586,786 | 397,957 |
PROVISION FOR FEDERAL AND STATE INCOME TAXES | (153,635) | (115,703) |
NET INCOME | $ 433,151 | $ 282,254 |
NET INCOME PER SHARE, BASIC | $ 0.18 | $ 0.12 |
NET INCOME PER SHARE, DILUTED | $ 0.17 | $ 0.11 |
WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,453,293 |
WEIGHTED AVERAGE SHARES, DILUTED | 2,547,430 | 2,523,676 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - USD ($) | Common Stock | Accumulated Deficit | Total |
Begning Balance, Amount at Dec. 31, 2014 | $ 4,517,468 | $ 615,919 | $ 5,133,387 |
Begning Balance, Shares at Dec. 31, 2014 | 2,447,416 | ||
Net income | 282,254 | 282,254 | |
Common stock options exercised, Amount | $ 15,544 | 15,544 | |
Common stock options exercised, Shares | 6,700 | ||
Ending Balance, Amount at Dec. 31, 2015 | $ 4,533,012 | 898,173 | 5,431,185 |
Ending Balance, Shares at Dec. 31, 2015 | 2,454,116 | ||
Net income | 433,151 | 433,151 | |
Stock based compensation expense related to stock options | $ 24,308 | 24,308 | |
Ending Balance, Amount at Dec. 31, 2016 | $ 4,557,320 | $ 1,331,324 | $ 5,888,644 |
Ending Balance, Shares at Dec. 31, 2016 | 2,454,116 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 433,151 | $ 282,254 |
Adjustments to reconcile net income to net cash provided by operating activities- | ||
Depreciation and amortization | 283,165 | 292,593 |
Provision for doubtful accounts, net change | (4,500) | 17,000 |
Provision for inventory obsolescence, net change | 0 | 5,000 |
Deferred taxes, net change | 11,613 | 6,555 |
Reserve for warranty expense, net change | 6,900 | 0 |
Stock based compensation expense related to stock options | 24,308 | 0 |
Changes in operating assets and liabilities- | ||
Accounts receivable | 112,920 | 234,635 |
Inventories | (33,948) | 138,764 |
Income taxes receivable | (33,642) | 2,244 |
Prepaid expenses and other | (28,793) | 24,280 |
Deposits and other | (89,677) | 50,067 |
Accounts payable | 61,614 | (246,594) |
Customer deposits and deferred grant revenue | (41,259) | 76,852 |
Accrued expenses | (35,163) | 42,866 |
Deferred revenue | (35,395) | 2,104 |
Net cash provided from operating activities | 631,294 | 928,620 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (42,807) | (402,799) |
Patent filing expense | (8,954) | (28,168) |
Net cash (used in) investing activities | (51,761) | (430,967) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments made on term loan | (34,659) | (35,261) |
Sale of common stock | 0 | 15,544 |
Net cash (used in) financing activities | (34,659) | (19,717) |
NET INCREASE IN CASH | 544,874 | 477,936 |
CASH, BEGINNING OF PERIOD | 3,227,190 | 2,749,254 |
CASH, END OF PERIOD | 3,772,064 | 3,227,190 |
SUPPLEMENTAL INFORMATION: | ||
Cash paid for interest | 65,421 | 70,353 |
Cash paid for income tax | $ 163,337 | $ 106,904 |
1. ORGANIZATION AND NATURE OF B
1. ORGANIZATION AND NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
ORGANIZATION AND NATURE OF BUSINESS | Lifeloc Technologies, Inc. ("Lifeloc" or the "Company") is a Colorado based developer, manufacturer and marketer of portable hand-held and fixed station breathalyzers and related accessories, supplies and education. We design, produce and sell fuel-cell based breath alcohol testing equipment. We compete in all major segments of the breath alcohol testing instrument market, including law enforcement, workplace, corrections, original equipment manufacturing ("OEM") and consumer markets. In addition, we offer a line of supplies, accessories, services, and training to support customers' alcohol testing programs. We sell globally through distributors as well as directly to users. We define our business as providing "near and remote sensing" products and solutions. Today, the majority of our revenues are derived from products and services for alcohol detection and measurement. We remain committed to growing our breath alcohol testing business. In the future, we anticipate the commercialization of new sensing and measurement products that may allow Lifeloc to successfully expand our business into new growth areas where we do not presently compete or where no satisfactory product solutions exist today. Lifeloc incorporated in Colorado in December 1983. We filed a registration statement on Form 10 with the Securities and Exchange Commission, which became effective on May 31, 2011. Our fiscal year end is December 31. Our principal executive offices are located at 12441 West 49th Avenue, Unit 4, Wheat Ridge, Colorado 80033-3338. Our telephone number is (303) 431-9500. Our websites are www.lifeloc.com, www.lifeguardbreathtester.com, and www.stsfirst.com. Information contained on our websites does not constitute part of this Form 10-K. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates in the Preparation of Financial Statements. Debt Issuance Costs Simplifying the Presentation of Debt Issuance Costs Fair Value Measurement Fair Value Measurements and Disclosures Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equity securities listed on the New York Stock Exchange. Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights. Cash and Cash Equivalents. Fair Value of Financial Instruments. Concentration of Credit Risk. We have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. Accounts Receivable Years Ended December 31 2016 2015 Balance, beginning of year $ 35,000 $ 40,000 Provision for estimated losses 5,301 6,530 Write-off of uncollectible accounts (5,301 ) (11,530 ) Balance, end of year $ 35,000 $ 35,000 The net accounts receivable balance at December 31, 2016 of $495,397 included an account from one customer of $113,948 (23%), and no more than 6% from any other single customer. The net accounts receivable balance at December 31, 2015 of $603,817 included an account from one customer of $138,909 (23%) and no more than 6% from any other single customer. Inventories. 2016 2015 Raw materials & deposits $ 592,771 $ 404,104 Work-in-process 42,366 76,903 Finished goods 287,972 408,154 Total gross inventories 923,109 889,161 Less reserve for obsolescence (87,500 ) (87,500 ) Total net inventories $ 835,609 $ 801,661 A summary of the activity in our inventory reserve for obsolescence is as follows: Years Ended December 31 2016 2015 Balance, beginning of year $ 87,500 $ 92,500 Provision for estimated obsolescence 30,134 2,640 Write-off of obsolete inventory (30,134 ) (7,640 ) Balance, end of year $ 87,500 $ 87,500 Property and Equipment. Long-Lived Assets. Patents. 2016 2015 Patents issued $ 22,775 $ 22,775 Patent applications 74,837 102,802 Accumulated amortization (25,703 ) (23,325 ) Total net patents $ 71,909 $ 102,252 Deposits and Other Assets Accrued Expenses 2016 2015 Compensation $ 135,585 $ 176,219 Property and other taxes 49,092 51,071 Rebates 37,562 47,706 State income tax 12,408 - Interest 5,186 - $ 239,833 $ 274,996 Product Warranty Reserve Years Ended December 31 2016 2015 Balance, beginning of year $ 33,100 $ 33,100 Provision for estimated warranty claims 46,980 21,277 Claims made (40,080 ) (21,277 ) Balance, end of year $ 40,000 $ 33,100 Income Taxes. Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the years ended December 31, 2016 and 2015, we did not have any interest or penalties or any significant uncertain tax positions. Revenue Recognition. Supplies are recognized as sales when they are shipped. Training revenues are recognized at the time the training occurs. We have discontinued arranging for customer financing and leasing through unrelated third parties and instead are providing for customer financing and leasing ourselves which we recognize as revenue over the applicable lease term. Occasionally, we rent used equipment to customers, and in those cases, we recognize the revenues as they are earned over the life of the contract. Revenues from these activities are included in product revenue in our statements of income. Royalty income is recognized in accordance with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable and collectability is reasonably assured. The sales of licenses to our training courses and the sale of training courses are recognized as revenue at the time of sale. Rental income from space leased to our tenants is recognized in the month in which it is due, which approximates if it were recognized on a straight-line basis over the term of the related lease. On occasion we receive customer deposits for future product orders. Customer deposits are initially recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer. Deferred Revenue. Grants Rebates. Research and Development Expenses Stock-Based Compensation Compensation – Stock Compensation ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying statement of income. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. We used the Black-Scholes option-pricing model ("Black-Scholes model") to determine fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. Stock-based compensation expense recognized under ASC 718 for years 2016 and 2015 was $24,308 and $0 respectively. Stock-based compensation expense related to employee stock options under ASC 718 for 2013 is allocated to General and Administrative Expense when incurred. Segment Reporting. Basic and Diluted Income and Loss per Common Share. Earnings Per Share Recent Accounting Pronouncements The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
3. BASIC AND DILUTED INCOME AND
3. BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Basic And Diluted Income And Loss Per Common Share | |
BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE | We report both basic and diluted net income per common share. Basic net income per common share is computed by dividing net income for the period by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing the net income for the period by the weighted average number of common and potential common shares outstanding during the period if the effect of the potential common shares is dilutive. The shares used in the calculation of dilutive potential common shares exclude options to purchase shares where the exercise price was greater than the average market price of common shares for the period. The following table presents the calculation of basic and diluted net income per common share: Years Ended December 31, 2016 December 31, 2015 Net income $ 433,151 $ 282,254 Weighted average shares-basic 2,454,116 2,453,293 Effect of dilutive potential common shares 93,314 70,383 Weighted average shares-diluted 2,547,430 2,523,676 Net income per share-basic $ .18 $ .12 Net income per share-diluted $ .17 $ .11 Antidilutive employee stock options - - |
4. STOCKHOLDERS' EQUITY
4. STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
STOCKHOLDERS' EQUITY | Stock Option Plan. Under ASC 718, the value of each employee stock option was estimated on the date of grant using the Black-Scholes model for the purpose of financial information in accordance with ASC 718. The use of a Black-Scholes model requires the use of actual employee exercise behavior data and the use of a number of assumptions including expected volatility, risk-free interest rate and expected dividends. Options to purchase 50,000 shares of stock at $8.83 apiece were granted in 2016. No employee stock options were granted in 2015. Cumulative compensation cost recognized in net income or loss with respect to options that are forfeited prior to vesting is adjusted as a reduction of compensation expense in the period of forfeiture. The volatility of the stock is based on a comparable public company's historical volatility since our stock is rarely traded. Fair value computations are highly sensitive to the volatility factor; the greater the volatility, the higher the computed fair value of options granted. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the use of assumptions, including the expected stock price volatility. Because our employee stock options have characteristics significantly different than those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our employee stock options. A summary of our stock option activity and related information for equity compensation plans approved by security holders for each of the fiscal years ended December 31, 2016 and 2015 is as follows: STOCK OPTIONS OUTSTANDING Number Outstanding Weighted Average Exercise Price Per Share BALANCE AT DECEMBER 31, 2014 92,000 $ 2.66 Granted - - Exercised (6,700 ) - Forfeited/expired (6,300 ) - BALANCE AT DECEMBER 31, 2015 79,000 $ 2.67 Granted 50,000 - Exercised - - Forfeited/expired (43,500 ) - BALANCE AT DECEMBER 31, 2016 85,500 $ 6.13 The following table summarizes information about employee stock options outstanding and exercisable at December 31, 2016: STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (in Years) Weighted-Average Exercise Price per Share Number Exercisable Weighted-Average Exercise Price per Share $2.32 35,500 1.75 $2.32 35,500 $2.32 $8.83 50,000 4.08 $8.83 - - 85,500 35,500 Of the 35,500 options exercisable as of December 31, 2016, all are incentive stock options. The exercise price of all options granted through December 31, 2016 has been equal to or greater than the fair market value, as determined by the Board. As of December 31, 2016, 31,000 options exercisable for our common stock remain available for grant under the 2013 Plan. Options to purchase 50,000 shares of stock at $8.83 apiece were granted during the year ended December 31, 2016. Vesting of these options is subject to performance achieved during the years ending December 31, 2018, 2019 and 2020. The provisions of ASC 718-10-55 require the measurement and recognition of compensation expense for all share based payment awards made to our employees and directors, including employee stock options, based on estimated fair values. Share-based compensation cost for stock options is measured at the grant date, based on the fair value as calculated by the Black-Scholes-Merton ("BSM") option-pricing model. The BSM option pricing model requires the use of actual employee exercise behavior data and the application of a number of assumptions, including expected volatility, risk free interest rate and expected dividends. For the options granted in 2016, the pricing model assumptions were: risk-free interest rate 1.46%, expected life 5 years, expected volatility 28.67%, expected dividend rate 0%. Applying these assumptions resulted in a fair value of $123,269, which will result in stock option expense of $2,054 per month through December 31, 2020 being charged against operations with a corresponding credit to capital. Share-based compensation cost for the year ended December 31, 2016 was $24,308 and $0 for the same period in 2015. No options were exercised during the year ended December 31, 2016. Holders of 6,700 options entitling them to purchase shares of stock at $2.32 apiece exercised their options during the year ended December 31, 2015. The total number of authorized shares of common stock continues to be 50,000,000, with no change in the par value per share. |
5. COMMITMENTS AND CONTINGENCIE
5. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Mortgage Expense Year Amount 2017 $ 40,707 2018 42,388 2019 44,140 2020 45,807 2021 47,856 2022 - 2024 1,284,597 Total 1,505,495 Less financing cost (9,673 ) Net term loan payable 1,495,822 Less current portion (40,218 ) Long term portion $ 1,455,604 Employee Severance Benefits Contractual Commitments and Purchase Orders Regulatory Commitments |
6. LINE OF CREDIT
6. LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
LINE OF CREDIT | As part of the long-term financing of our property purchased on October 31, 2014, we obtained a one-year $250,000 revolving line of credit facility with Bank of America, which matured on October 31, 2015 and was extended to June 30, 2017, and bears interest at a rate equal to the LIBOR daily floating rate of .6882% and .3661% on December 31, 2016 and 2015, respectively, plus 2.5%. The agreement was amended September 20, 2016 to increase the amount of the line to $500,000 and the maturity date to June 30, 2017. The revolving line of credit facility is secured by all personal property and assets, whether now owned or hereafter acquired, wherever located. There was no balance due on the line of credit as of December 31, 2016 and December 31, 2015. |
7. INCOME TAXES
7. INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
INCOME TAXES | We account for income taxes under ASC 740, which requires the use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. We have a Federal General Business Credit carryover available for 2017 of $23,923. Our income tax provision is summarized below: Years Ended December 31, 2016 December 31, 2015 Current: Federal $ 114,335 $ 88,671 State 27,686 20,477 Total current 142,021 109,148 Deferred: Federal 10,199 5,756 State 1,415 799 Total deferred 11,614 6,555 Total $ 153,635 $ 115,703 The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consists of the following: Years Ended December 31, 2016 December 31, 2015 Federal statutory rate $ 193,896 $ 143,412 Effect of: State taxes, net of federal tax benefit 29,101 21,276 Research & development credit (67,330 ) (54,741 ) Other (2,032 ) 5,756 Total $ 153,635 $ 115,703 The components of the deferred tax asset are as follows: Years Ended December 31, Current Deferred Tax Assets: 2016 2015 Bad debt reserve $ 13,300 $ 15,010 Inventory reserve 33,250 33,250 Accrued vacation 20,256 19,332 Deferred income 24,428 33,888 Warranty reserve 15,200 12,578 Total current deferred tax assets 106,434 114,058 Long Term Deferred Tax Assets: Deferred income 3,293 7,282 Total Deferred Tax Assets $ 109,727 $ 121,340 Our income tax returns are no longer subject to Federal tax examinations by tax authorities for years before 2013 or state examinations for years before 2012. |
8. LEGAL PROCEEDINGS
8. LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | We were not involved or party to any legal proceedings at December 31, 2016 or December 31, 2015, and therefore made no accruals for legal proceedings in either 2016 or 2015. |
9. MAJOR CUSTOMERS_SUPPLIERS
9. MAJOR CUSTOMERS/SUPPLIERS | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS/SUPPLIERS | We depend on sales that are generated from our customers' ongoing usage of alcohol testing instruments. One customer contributed 7% ($625,874) to our total sales in 2016, a second customer contributed 5% ($385,840), a third customer contributed 4% ($369,815), and no other customer contributed more than 3%. One customer contributed 8% ($737,834) to our total sales in 2015, a second customer contributed 8% ($734,352), a third customer contributed 3% ($307,259), and no other customer contributed more than 3%. In making this determination, we considered the federal government, state governments, local governments, and foreign governments each as a single customer. In 2016, we depended upon three vendors for approximately 24% of our purchases (three vendors and 19% respectively in 2015). |
10. DEFINED CONTRIBUTION EMPLOY
10. DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN | We have adopted a 401(k) Profit Sharing Plan ("401(k) Plan") which covers all full-time employees who have completed 3 months of full-time continuous service and are age eighteen or older. Participants may defer up to 100% of their gross pay up to 401(k) Plan limits. Participants are immediately vested in their contributions. We make monthly discretionary matching contributions of 3% of the total payroll of the participating employees. In 2016 and 2015 we contributed $45,142 and $50,223 respectively. The participants vest in Company contributions based on years of service, with a participant fully vested after six years of credited service. |
11. LICENSE OF SOFTWARE
11. LICENSE OF SOFTWARE | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
LICENSE OF SOFTWARE | In 2012 we granted a non-exclusive license to two customers for the use of our patented breath alcohol testing algorithms. The agreement provides for termination pursuant to notice requirements, and further provides for royalties based on the number of units sold which incorporate our software. The transaction is being accounted for under the guidance of ASC 605-10, Revenue Recognition |
12. BUSINESS SEGMENTS
12. BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | We currently have two business segments: (i) the sale of physical products, including portable hand-held breathalyzers and related accessories, supplies, education, training ("Product Sales"), and royalties from development contracts with OEM manufacturers ("Royalties" and, together with Product Sales, the "Products" segment), and (ii) rental of a portion of our building (the "Rentals" segment). The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Operating profits for these segments exclude unallocated corporate items. Administrative and staff costs were commonly used by all business segments and were indistinguishable. The following sets forth information about the operations of the business segments for the years ended December 31, 2016 and 2015: Revenue: 2016 2015 Product Sales $ 7,888,786 $ 8,323,913 Royalties 392,603 394,895 Products Subtotal 8,281,389 8,718,808 Rentals 99,746 107,665 Total $ 8,381,135 $ 8,826,473 Gross profit: Product Sales $ 3,751,580 $ 3,986,830 Royalties 392,603 394,895 Products Subtotal 4,144,183 4,381,725 Rentals 34,223 19,642 Total $ 4,178,406 $ 4,401,367 Interest expense: Product Sales $ 38,582 $ 36,584 Royalties - - Products Subtotal 38,582 36,584 Rentals 27,381 34,402 Total $ 65,963 $ 70,986 Net income before taxes: Product Sales $ 187,341 $ 17,822 Royalties 392,603 394,895 Products Subtotal 579,944 412,717 Rentals 6,842 (14,760 ) Total $ 586,786 $ 397,957 There were no intersegment revenues. At December 31, 2016, $667,717 of our assets were used in the Rentals segment, with the remainder, $7,405,731, used in the Products and unallocated segments. Future rental income and related expenses will depend on whether existing leases are renewed. Minimum base rents for leases in place at December 31, 2016 are scheduled to be $75,627 in 2017. |
13. SUBSEQUENT EVENTS
13. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
SUBSEQUENT EVENTS | We evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosure in the notes to our financial statements, except as follows. On March 8, 2017 we acquired certain assets known as the RADAR Assets, which included handheld hardware device technology (the "Device") for measuring the breath alcohol content of the user and software technology designed to allow the Device to be configured and to capture and manage the data being returned from the Device for $860,000 cash. Based on Level 3 inputs which consisted of estimates of cost to manufacture the devices, future cash flows, and cost of filing patent applications, the purchase price was allocated as follows: Reporting Center Software $ 396,948 Devices 350,552 Patents 100,000 Production Equipment 12,500 Total $ 860,000 The Reporting Center Software and the Patents will be depreciated over 15 years using the straight line method, and the Devices and Production Equipment will be depreciated over 5 years using the double declining balance method. Amortization expense for 2017 is estimated to be $27,608, and for the next 4 years it is estimated to be $33,130 per year. Depreciation expense will vary by year. For 2017 it is estimated to be $60,508. Revenues are generated by renting or selling devices to direct customers as well as resellers, and are recognized as earned revenue at the time of sale or usage. |
2. SUMMARY OF SIGNIFICANT ACC20
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements. |
Debt Issuance Costs | Debt Issuance Costs Simplifying the Presentation of Debt Issuance Costs |
Fair Value Measurement | Fair Value Measurement Fair Value Measurements and Disclosures Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equity securities listed on the New York Stock Exchange. Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. |
Concentration of Credit Risk | Concentration of Credit Risk. We have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. |
Accounts Receivable | Accounts Receivable Years Ended December 31 2016 2015 Balance, beginning of year $ 35,000 $ 40,000 Provision for estimated losses 5,301 6,530 Write-off of uncollectible accounts (5,301 ) (11,530 ) Balance, end of year $ 35,000 $ 35,000 The net accounts receivable balance at December 31, 2016 of $495,397 included an account from one customer of $113,948 (23%), and no more than 6% from any other single customer. The net accounts receivable balance at December 31, 2015 of $603,817 included an account from one customer of $138,909 (23%) and no more than 6% from any other single customer. |
Inventories | Inventories. 2016 2015 Raw materials & deposits $ 592,771 $ 404,104 Work-in-process 42,366 76,903 Finished goods 287,972 408,154 Total gross inventories 923,109 889,161 Less reserve for obsolescence (87,500 ) (87,500 ) Total net inventories $ 835,609 $ 801,661 A summary of the activity in our inventory reserve for obsolescence is as follows: Years Ended December 31 2016 2015 Balance, beginning of year $ 87,500 $ 92,500 Provision for estimated obsolescence 30,134 2,640 Write-off of obsolete inventory (30,134 ) (7,640 ) Balance, end of year $ 87,500 $ 87,500 |
Property and Equipment | Property and Equipment. |
Long-Lived Assets | Long-Lived Assets. |
Patents | Patents. 2016 2015 Patents issued $ 22,775 $ 22,775 Patent applications 74,837 102,802 Accumulated amortization (25,703 ) (23,325 ) Total net patents $ 71,909 $ 102,252 |
Deposits and Other Assets | Deposits and Other Assets |
Accrued Expenses | Accrued Expenses 2016 2015 Compensation $ 135,585 $ 176,219 Property and other taxes 49,092 51,071 Rebates 37,562 47,706 State income tax 12,408 - Interest 5,186 - $ 239,833 $ 274,996 |
Product Warranty Reserve | Product Warranty Reserve Years Ended December 31 2016 2015 Balance, beginning of year $ 33,100 $ 33,100 Provision for estimated warranty claims 46,980 21,277 Claims made (40,080 ) (21,277 ) Balance, end of year $ 40,000 $ 33,100 |
Income Taxes | Income Taxes. Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the years ended December 31, 2016 and 2015, we did not have any interest or penalties or any significant uncertain tax positions. |
Revenue Recognition | Revenue Recognition. Supplies are recognized as sales when they are shipped. Training revenues are recognized at the time the training occurs. We have discontinued arranging for customer financing and leasing through unrelated third parties and instead are providing for customer financing and leasing ourselves which we recognize as revenue over the applicable lease term. Occasionally, we rent used equipment to customers, and in those cases, we recognize the revenues as they are earned over the life of the contract. Revenues from these activities are included in product revenue in our statements of income. Royalty income is recognized in accordance with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable and collectability is reasonably assured. The sales of licenses to our training courses and the sale of training courses are recognized as revenue at the time of sale. Rental income from space leased to our tenants is recognized in the month in which it is due, which approximates if it were recognized on a straight-line basis over the term of the related lease. On occasion we receive customer deposits for future product orders. Customer deposits are initially recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer. |
Deferred Revenue | Deferred Revenue. |
Grants | Grants |
Rebates | Rebates. |
Research and Development Expenses | Research and Development Expenses |
Stock-Based Compensation | Stock-Based Compensation Compensation – Stock Compensation ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying statement of income. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. We used the Black-Scholes option-pricing model ("Black-Scholes model") to determine fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. Stock-based compensation expense recognized under ASC 718 for years 2016 and 2015 was $24,308 and $0 respectively. Stock-based compensation expense related to employee stock options under ASC 718 for 2013 is allocated to General and Administrative Expense when incurred. |
Segment Reporting | Segment Reporting. |
Basic and Diluted Income and Loss per Common Share | Basic and Diluted Income and Loss per Common Share. Earnings Per Share |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
2. SUMMARY OF SIGNIFICANT ACC21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of allowance for doubtful accounts | Years Ended December 31 2016 2015 Balance, beginning of year $ 35,000 $ 40,000 Provision for estimated losses 5,301 6,530 Write-off of uncollectible accounts (5,301 ) (11,530 ) Balance, end of year $ 35,000 $ 35,000 |
Inventories | 2016 2015 Raw materials & deposits $ 592,771 $ 404,104 Work-in-process 42,366 76,903 Finished goods 287,972 408,154 Total gross inventories 923,109 889,161 Less reserve for obsolescence (87,500 ) (87,500 ) Total net inventories $ 835,609 $ 801,661 |
Inventory reserve | Years Ended December 31 2016 2015 Balance, beginning of year $ 87,500 $ 92,500 Provision for estimated obsolescence 30,134 2,640 Write-off of obsolete inventory (30,134 ) (7,640 ) Balance, end of year $ 87,500 $ 87,500 |
Patents | 2016 2015 Patents issued $ 22,775 $ 22,775 Patent applications 74,837 102,802 Accumulated amortization (25,703 ) (23,325 ) Total net patents $ 71,909 $ 102,252 |
Accrued expenses | 2016 2015 Compensation $ 135,585 $ 176,219 Property and other taxes 49,092 51,071 Rebates 37,562 47,706 State income tax 12,408 - Interest 5,186 - $ 239,833 $ 274,996 |
Product warranty reserve | Years Ended December 31 2016 2015 Balance, beginning of year $ 33,100 $ 33,100 Provision for estimated warranty claims 46,980 21,277 Claims made (40,080 ) (21,277 ) Balance, end of year $ 40,000 $ 33,100 |
3. BASIC AND DILUTED INCOME A22
3. BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Basic And Diluted Income And Loss Per Common Share Tables | |
Calculation of basic and diluted net income per common share | Years Ended December 31, 2016 December 31, 2015 Net income $ 433,151 $ 282,254 Weighted average shares-basic 2,454,116 2,453,293 Effect of dilutive potential common shares 93,314 70,383 Weighted average shares-diluted 2,547,430 2,523,676 Net income per share-basic $ .18 $ .12 Net income per share-diluted $ .17 $ .11 Antidilutive employee stock options - - |
4. STOCKHOLDERS' EQUITY (Tables
4. STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders Equity Tables | |
Summary of our stock option activity | STOCK OPTIONS OUTSTANDING Number Outstanding Weighted Average Exercise Price Per Share BALANCE AT DECEMBER 31, 2014 92,000 $ 2.66 Granted - - Exercised (6,700 ) - Forfeited/expired (6,300 ) - BALANCE AT DECEMBER 31, 2015 79,000 $ 2.67 Granted 50,000 - Exercised - - Forfeited/expired (43,500 ) - BALANCE AT DECEMBER 31, 2016 85,500 $ 6.13 |
Stock options outstanding and exercisable | STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (in Years) Weighted-Average Exercise Price per Share Number Exercisable Weighted-Average Exercise Price per Share $2.32 35,500 1.75 $2.32 35,500 $2.32 $8.83 50,000 4.08 $8.83 - - 85,500 35,500 |
5. COMMITMENTS AND CONTINGENC24
5. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum future lease payments | Year Amount 2017 $ 40,707 2018 42,388 2019 44,140 2020 45,807 2021 47,856 2022 - 2024 1,284,597 Total 1,505,495 Less financing cost (9,673 ) Net term loan payable 1,495,822 Less current portion (40,218 ) Long term portion $ 1,455,604 |
7. INCOME TAXES (Tables)
7. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes Tables | |
Schedule of income tax provision | Years Ended December 31, 2016 December 31, 2015 Current: Federal $ 114,335 $ 88,671 State 27,686 20,477 Total current 142,021 109,148 Deferred: Federal 10,199 5,756 State 1,415 799 Total deferred 11,614 6,555 Total $ 153,635 $ 115,703 |
Schedule of income tax reconciliation | Years Ended December 31, 2016 December 31, 2015 Federal statutory rate $ 193,896 $ 143,412 Effect of: State taxes, net of federal tax benefit 29,101 21,276 Research & development credit (67,330 ) (54,741 ) Other (2,032 ) 5,756 Total $ 153,635 $ 115,703 |
Schedule of components of the deferred tax asset | Years Ended December 31, Current Deferred Tax Assets: 2016 2015 Bad debt reserve $ 13,300 $ 15,010 Inventory reserve 33,250 33,250 Accrued vacation 20,256 19,332 Deferred income 24,428 33,888 Warranty reserve 15,200 12,578 Total current deferred tax assets 106,434 114,058 Long Term Deferred Tax Assets: Deferred income 3,293 7,282 Total Deferred Tax Assets $ 109,727 $ 121,340 |
12. BUSINESS SEGMENTS (Tables)
12. BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operations of business segments | Revenue: 2016 2015 Product Sales $ 7,888,786 $ 8,323,913 Royalties 392,603 394,895 Products Subtotal 8,281,389 8,718,808 Rentals 99,746 107,665 Total $ 8,381,135 $ 8,826,473 Gross profit: Product Sales $ 3,751,580 $ 3,986,830 Royalties 392,603 394,895 Products Subtotal 4,144,183 4,381,725 Rentals 34,223 19,642 Total $ 4,178,406 $ 4,401,367 Interest expense: Product Sales $ 38,582 $ 36,584 Royalties - - Products Subtotal 38,582 36,584 Rentals 27,381 34,402 Total $ 65,963 $ 70,986 Net income before taxes: Product Sales $ 187,341 $ 17,822 Royalties 392,603 394,895 Products Subtotal 579,944 412,717 Rentals 6,842 (14,760 ) Total $ 586,786 $ 397,957 |
13. SUBSEQUENT EVENTS (Tables)
13. SUBSEQUENT EVENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Purchase price allocation | Reporting Center Software $ 396,948 Devices 350,552 Patents 100,000 Production Equipment 12,500 Total $ 860,000 |
2. SUMMARY OF SIGNIFICANT ACC28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Balance, beginning of year | $ 35,000 | $ 40,000 |
Provision for estimated losses | 5,301 | 6,530 |
Write-off of uncollectible accounts | (5,301) | (11,530) |
Balance, end of year | $ 35,000 | $ 35,000 |
2. SUMMARY OF SIGNIFICANT ACC29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories | |||
Raw materials & deposits | $ 592,771 | $ 404,104 | |
Work-in-process | 42,366 | 76,903 | |
Finished goods | 287,972 | 408,154 | |
Total gross inventories | 923,109 | 889,161 | |
Less reserve for obsolescence | (87,500) | (87,500) | $ (92,500) |
Total net inventories | $ 835,609 | $ 801,661 |
2. SUMMARY OF SIGNIFICANT ACC30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Inventory reserve for obsolescence, beginning of year | $ 87,500 | $ 92,500 |
Provision for estimated obsolescence | 30,134 | 2,640 |
Write-off of obsolete inventory | (30,134) | (7,640) |
Inventory reserve for obsolescence, end of year | $ 87,500 | $ 87,500 |
2. SUMMARY OF SIGNIFICANT ACC31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
Patents issued | $ 22,775 | $ 22,775 |
Patent applications | 74,837 | 102,802 |
Accumulated amortization | (25,703) | (23,325) |
Total net patents | $ 71,909 | $ 102,252 |
2. SUMMARY OF SIGNIFICANT ACC32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
Compensation | $ 135,585 | $ 176,219 |
Property and other taxes | 49,092 | 51,071 |
Rebates | 37,562 | 47,706 |
State income tax | 12,408 | 0 |
Interest | 5,186 | 0 |
Total accrued expenses | $ 239,833 | $ 274,996 |
2. SUMMARY OF SIGNIFICANT ACC33
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Product warranty reserve, beginning of year | $ 33,100 | $ 33,100 |
Provision for estimated warranty claims | 46,980 | 21,277 |
Claims made | (40,080) | (21,277) |
Product warranty reserve, end of year | $ 40,000 | $ 33,100 |
2. SUMMARY OF SIGNIFICANT ACC34
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 250,000 | |
Line of Credit Facility, Borrowing Capacity, Description | The amount of cash on deposit with two financial institutions exceeded the $250,000 federally insured limit at December 31, 2016 by $3,179,757. | |
Accounts receivable, net | $ 495,397 | $ 603,817 |
Depreciation, Depletion and Amortization, Nonproduction | 283,165 | 292,593 |
Grants reimbursement | 44,523 | 42,396 |
Stock-based compensation expense | $ 24,308 | $ 0 |
Dilution from potential common shares outstanding | $ 0.01 | $ 0.01 |
Patents [Member] | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 39,297 | $ 6,272 |
Impairment | 29,386 | 0 |
Deposits and Other Assets [Member] | ||
Depreciation, Depletion and Amortization, Nonproduction | 542 | 633 |
Long Lived Assets [Member] | ||
Impairment | 0 | 0 |
Property, Plant and Equipment [Member] | ||
Depreciation, Depletion and Amortization, Nonproduction | 243,326 | 285,688 |
Customer One [Member] | ||
Accounts receivable, net | $ 113,948 | $ 138,909 |
3. BASIC AND DILUTED INCOME A35
3. BASIC AND DILUTED INCOME AND LOSS PER COMMON SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Basic And Diluted Income And Loss Per Common Share Details | ||
Net income | $ 433,151 | $ 282,254 |
Weighted average shares-basic | 2,454,116 | 2,453,293 |
Effect of dilutive potential common shares | 93,314 | 70,383 |
Weighted average shares-diluted | 2,547,430 | 2,523,676 |
Net income per share-basic | $ 0.18 | $ 0.12 |
Net income per share-diluted | $ 0.17 | $ 0.11 |
Antidilutive employee stock options | 0 | 0 |
4. STOCKHOLDERS' EQUITY (Detail
4. STOCKHOLDERS' EQUITY (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Option Outstanding, beginning | 79,000 | 92,000 |
Option Granted | 50,000 | 0 |
Option Exercised | 0 | (6,700) |
Option Forfeited/Expired | (43,500) | (6,300) |
Option Outstanding, ending | 85,500 | 79,000 |
Option Outstanding, Weighted-Average Exercise Price per Share, beginning | $ 2.67 | $ 2.66 |
Option Granted, Weighted-Average Exercise Price per Share | 0 | 0 |
Option Exercised, Weighted-Average Exercise Price per Share | 0 | 0 |
Option Forfeited/Expired, Weighted-Average Exercise Price per Share | 0 | 0 |
Option Outstanding, Weighted-Average Exercise Price per Share, ending | $ 6.13 | $ 2.67 |
4. STOCKHOLDERS' EQUITY (Deta37
4. STOCKHOLDERS' EQUITY (Details 2) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Option Outstanding | 85,500 | 79,000 | 92,000 |
Weighted Average Exercise Price per Share | $ 6.13 | $ 2.67 | $ 2.66 |
Number Exercisable | 35,500 | ||
Price range $2.32 | |||
Range of Exercise Prices | $ 2.32 | ||
Option Outstanding | 35,500 | ||
Weighted Average Remaining Contractual Life (in Years) | 1 year 9 months | ||
Weighted Average Exercise Price per Share | $ 2.32 | ||
Number Exercisable | 35,500 | ||
Weighted Average Exercise Price per Share | $ 2.32 | ||
Price range $8.83 | |||
Range of Exercise Prices | $ 8.83 | ||
Option Outstanding | 50,000 | ||
Weighted Average Remaining Contractual Life (in Years) | 4 years 29 days | ||
Weighted Average Exercise Price per Share | $ 8.83 | ||
Number Exercisable | 0 | ||
Weighted Average Exercise Price per Share | $ 0 |
4. STOCKHOLDERS' EQUITY (Deta38
4. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders Equity Details Narrative | ||
Common stock available for grant under the new Plan adopted in 2013 | 31,000 | |
Share based compensation | $ 24,308 | $ 0 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
5. COMMITMENTS AND CONTINGENC39
5. COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 40,218 |
2,018 | 42,388 |
2,019 | 44,140 |
2,020 | 45,807 |
2,021 | 47,856 |
2022 - 2024 | 1,284,597 |
Total | 1,505,495 |
Less financing cost | (9,673) |
Net term loan payable | 1,495,822 |
Less current portion | (40,218) |
Long term portion | $ 1,455,604 |
5. COMMITMENTS AND CONTINGENC40
5. COMMITMENTS AND CONTINGENCIES (Details Narrative) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding purchase orders issued to vendors | $ 1,354,198 |
6. LINE OF CREDIT (Details Narr
6. LINE OF CREDIT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Line Of Credit Details Narrative | ||
Line of Credit Facility | $ 0 | $ 0 |
LIBOR daily floating rate | LIBOR daily floating rate of .6882% and .3661% on December 31, 2016 and 2015, respectively, plus 2.5%. |
7. INCOME TAXES (Details)
7. INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | ||
Federal | $ 114,335 | $ 88,671 |
State | 27,686 | 20,477 |
Total current | 142,021 | 109,148 |
Deferred: | ||
Federal | 10,199 | 5,756 |
State | 1,415 | 799 |
Total deferred | 11,613 | 6,555 |
Total | $ 153,635 | $ 115,703 |
7. INCOME TAXES (Details 1)
7. INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | $ 193,896 | $ 143,412 |
State taxes, net of federal tax benefit | 29,101 | 21,276 |
Research & development credit | (67,330) | (54,741) |
Other | (2,032) | 5,756 |
Total | $ 153,635 | $ 115,703 |
7. INCOME TAXES (Details 2)
7. INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Deferred Tax Assets: | ||
Bad debt reserve | $ 13,300 | $ 15,010 |
Inventory reserve | 33,250 | 33,250 |
Accrued vacation | 20,256 | 19,332 |
Deferred income | 24,428 | 33,888 |
Warranty reserve | 15,200 | 12,578 |
Total current deferred tax assets | 106,434 | 114,058 |
Long Term Deferred Tax Assets: | ||
Deferred income | 3,293 | 7,282 |
Total Deferred Tax Assets | $ 109,727 | $ 121,340 |
9. MAJOR CUSTOMERS_SUPPLIERS (D
9. MAJOR CUSTOMERS/SUPPLIERS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Sales Revenue, Goods, Net | $ 7,888,786 | $ 8,323,913 |
Customer One [Member] | ||
Concentration Risk, Percentage | 7.00% | 8.00% |
Sales Revenue, Goods, Net | $ 625,874 | $ 737,834 |
Customer Two [Member] | ||
Concentration Risk, Percentage | 5.00% | 8.00% |
Sales Revenue, Goods, Net | $ 385,840 | $ 734,352 |
Customer Three [Member] | ||
Concentration Risk, Percentage | 4.00% | 3.00% |
Sales Revenue, Goods, Net | $ 369,815 | $ 307,259 |
Vendor [Member] | ||
Concentration Risk, Percentage | 24.00% | 19.00% |
10. DEFINED CONTRIBUTION EMPL46
10. DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Percentage of payroll to discretionary contribution | 3.00% | 3.00% |
Discretionary contributions amount | $ 45,142 | $ 50,223 |
12. BUSINESS SEGMENTS (Details)
12. BUSINESS SEGMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | $ 8,381,135 | $ 8,826,473 |
Gross profit | 4,178,406 | 4,401,367 |
Interest expense | 65,963 | 70,986 |
Net income before taxes | 586,786 | 397,957 |
Product Sales | ||
Revenue | 7,888,786 | 8,323,913 |
Gross profit | 3,751,580 | 3,986,830 |
Interest expense | 38,582 | 36,584 |
Net income before taxes | 187,341 | 17,822 |
Royalties | ||
Revenue | 392,603 | 394,895 |
Gross profit | 392,603 | 394,895 |
Interest expense | 0 | 0 |
Net income before taxes | 392,603 | 394,895 |
Products Subtotal | ||
Revenue | 8,281,389 | 8,718,808 |
Gross profit | 4,144,183 | 4,381,725 |
Interest expense | 38,582 | 36,584 |
Net income before taxes | 579,944 | 412,717 |
Rentals | ||
Revenue | 99,746 | 107,665 |
Gross profit | 34,223 | 19,642 |
Interest expense | 27,381 | 34,402 |
Net income before taxes | $ 6,842 | $ (14,760) |
12. BUSINESS SEGMENTS (Details
12. BUSINESS SEGMENTS (Details Narrative) | Dec. 31, 2016USD ($) |
Segment Reporting [Abstract] | |
Rentals segment | $ 667,717 |
Rentals segment remainder | $ 7,405,731 |
13. SUBSEQUENT EVENTS (Details)
13. SUBSEQUENT EVENTS (Details) | 2 Months Ended |
Mar. 08, 2017USD ($) | |
Purchase price allocation | $ 860,000 |
Reporting Center Software | |
Purchase price allocation | 396,948 |
Devices | |
Purchase price allocation | 350,552 |
Patents | |
Purchase price allocation | 100,000 |
Production Equipment | |
Purchase price allocation | $ 12,500 |