Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 28, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Sensus Healthcare, Inc. | ||
Entity Central Index Key | 0001494891 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 63,069,039 | ||
Entity Common Stock, Shares Outstanding | 16,485,780 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | DE | ||
Entity File Number | 001-37714 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 8,100,288 | $ 12,484,256 |
Investment in debt securities | 7,389,407 | 2,892,190 |
Accounts receivable, net | 14,011,180 | 13,145,934 |
Inventories | 2,997,120 | 1,628,817 |
Prepaid and other current assets | 1,505,175 | 1,750,994 |
Total Current Assets | 34,003,170 | 31,902,191 |
Property and Equipment, Net | 1,082,428 | 891,029 |
Patent Rights, Net | 337,351 | 433,737 |
Deposits | 101,561 | 24,272 |
Operating Lease Right-of-Use Assets, Net | 1,400,037 | |
Total Assets | 36,924,547 | 33,251,229 |
Current Liabilities | ||
Accounts payable and accrued expenses | 4,779,435 | 5,166,239 |
Deferred revenue, current portion | 1,191,898 | 722,025 |
Operating lease liabilities, current portion | 309,524 | |
Product warranties | 187,454 | 136,217 |
Total Current Liabilities | 6,468,311 | 6,024,481 |
Operating Lease Liabilities | 1,115,529 | |
Deferred Revenue, Net of Current Portion | 1,339,285 | 766,732 |
Total Liabilities | 8,923,125 | 6,791,213 |
Stockholders' Equity | ||
Preferred stock, 5,000,000 shares authorized and none issued and outstanding | ||
Common stock, $0.01 par value - 50,000,000 authorized; 16,540,478 issued and 16,485,780 outstanding at December 31, 2019; 16,145,915 issued and 16,112,461 outstanding at December 31, 2018 | 165,404 | 161,459 |
Additional paid-in capital | 43,314,123 | 39,957,905 |
Treasury stock, 54,698 and 33,454 shares at cost, at December 31, 2019 and 2018, respectively | (252,570) | (133,816) |
Accumulated deficit | (15,225,535) | (13,525,532) |
Total Stockholders' Equity | 28,001,422 | 26,460,016 |
Total Liabilities and Stockholders' Equity | $ 36,924,547 | $ 33,251,229 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 16,540,478 | 16,145,915 |
Common Stock, outstanding | 16,485,780 | 16,112,461 |
Treasury stock, shares | 54,698 | 33,454 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 27,263,248 | $ 26,427,190 |
Cost of Sales | 9,706,104 | 9,516,302 |
Gross Profit | 17,557,144 | 16,910,888 |
Operating Expenses | ||
Selling and marketing | 9,103,136 | 8,531,622 |
General and administrative | 4,004,682 | 4,124,214 |
Research and development | 6,417,619 | 6,260,406 |
Total Operating Expenses | 19,525,437 | 18,916,242 |
Loss From Operations | (1,968,293) | (2,005,354) |
Other Income (Expense) | ||
Interest income | 268,290 | 139,278 |
Interest expense | (156,685) | |
Other Income (Expense), net | 268,290 | (17,407) |
Net Loss | $ (1,700,003) | $ (2,022,761) |
Net Loss per share - basic and diluted | $ (0.1) | $ (0.14) |
Weighted average number of shares used in computing net loss per share - basic and diluted | 16,232,748 | 14,115,757 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total |
Balance beginning at Dec. 31, 2017 | $ 135,221 | $ 23,181,641 | $ (133,816) | $ (11,502,771) | $ 11,680,275 |
Balance beginning (in shares) at Dec. 31, 2017 | 13,522,168 | (33,454) | |||
Issuance of common stock for cash, net of offering cost | $ 25,638 | 15,822,021 | 15,847,659 | ||
Issuance of common stock for cash, net of offering cost (in shares) | 2,563,764 | ||||
Stock based compensation | $ 500 | 982,124 | 982,624 | ||
Stock based compensation (in shares) | 50,000 | ||||
Surrender of shares for tax withholding on stock compensation | $ (193) | (118,455) | (118,648) | ||
Surrender of shares for tax withholding on stock compensation (in shares) | (19,305) | ||||
Exercise of warrants | $ 293 | 90,574 | 90,867 | ||
Exercise of warrants (in shares) | 29,288 | ||||
Net loss | (2,022,761) | (2,022,761) | |||
Balance end at Dec. 31, 2018 | $ 161,459 | 39,957,905 | $ (133,816) | (13,525,532) | 26,460,016 |
Balance end (in shares) at Dec. 31, 2018 | 16,145,915 | (33,454) | |||
Stock based compensation | 620,925 | 620,925 | |||
Stock based compensation (in shares) | |||||
Surrender of shares for tax withholding on stock compensation | $ (118,754) | (118,754) | |||
Surrender of shares for tax withholding on stock compensation (in shares) | (21,244) | ||||
Forfeiture of common stock | $ (113) | 113 | |||
Forfeiture of common stock (in shares) | (11,250) | ||||
Exercise of warrants | $ 4,058 | 2,735,180 | 2,739,238 | ||
Exercise of warrants (in shares) | 405,813 | ||||
Net loss | (1,700,003) | (1,700,003) | |||
Balance end at Dec. 31, 2019 | $ 165,404 | $ 43,314,123 | $ (252,570) | $ (15,225,535) | $ 28,001,422 |
Balance end (in shares) at Dec. 31, 2019 | 16,540,478 | (54,698) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows From Operating Activities | ||
Net loss | $ (1,700,003) | $ (2,022,761) |
Adjustments to reconcile net income (loss) to net cash and cash equivalents used in operating activities: | ||
Bad debt expense (recoveries) | 350,086 | (13,280) |
Depreciation and amortization | 545,717 | 658,255 |
Inventory write-down | 90,083 | |
Provision for product warranties | 288,746 | 121,807 |
Stock based compensation | 620,925 | 982,624 |
Decrease (increase) in: | ||
Accounts receivable | (1,215,332) | (8,174,399) |
Inventories | (1,698,523) | (661,419) |
Prepaid and other current assets | 483,306 | (1,184,023) |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | (676,564) | 1,098,344 |
Deferred revenue | 1,042,426 | 763,432 |
Product warranties | (237,509) | (132,311) |
Total Adjustments | (406,639) | (6,540,970) |
Net Cash Used In Operating Activities | (2,106,642) | (8,563,731) |
Cash Flows from Investing Activities | ||
Acquisition of property and equipment | (400,593) | (854,834) |
Investment in debt securities - held to maturity | (7,797,217) | (2,892,190) |
Investments matured | 3,300,000 | 1,104,635 |
Net Cash Provided By (Used In) Investing Activities | (4,897,810) | (2,642,389) |
Cash Flows from Financing Activities | ||
Offering of common stock | 17,249,995 | |
Revolving credit facility, net | (2,214,970) | |
Offering costs | (1,402,336) | |
Withholding taxes on stock compensation | (118,754) | (118,648) |
Exercise of warrants | 2,739,238 | 90,867 |
Net Cash Provided By Financing Activities | 2,620,484 | 13,604,908 |
Net Increase (Decrease) in Cash and Cash Equivalents | (4,383,968) | 2,398,788 |
Cash and Cash Equivalents - Beginning | 12,484,256 | 10,085,468 |
Cash and Cash Equivalents - Ending | 8,100,288 | 12,484,256 |
Supplemental Disclosure of Cash Flow Information | ||
Interest Paid | 156,685 | |
Non Cash Investing and Financing Activities | ||
Transfer of inventory to property and equipment | 240,137 | 203,987 |
Lease liabilities arising from obtaining right-of-use-assets | $ 1,714,814 |
Organization and Summary Of Sig
Organization and Summary Of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1 — Organization and Summary of Significant Accounting Policies Description of the Business Sensus Healthcare, Inc. (the "Company") is a manufacturer of superficial radiation therapy devices and has established a distribution and marketing network to sell the devices to healthcare providers globally. The Company was organized on May 7, 2010 as Sensus Healthcare, LLC, a limited liability company. On January 1, 2016, the Company completed a corporate conversion pursuant to which Sensus Healthcare, Inc. succeeded to the business of Sensus Healthcare, LLC. In February 2018, the Company opened a subsidiary in Israel. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida. Principles of consolidation The accompanying consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary in Israel. All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates to which it is reasonably possible that a change could occur in the near term include, revenue recognition, inventory reserves, receivable allowances, recoverability of long lived assets and estimation of the Company's product warranties. Actual results could differ from those estimates. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" using the modified retrospective method for all contracts as of the date of adoption. The adoption of this standard did not result in a significant change to the Company's historical revenue recognition policies and there were no necessary adjustments required to retained earnings upon adoption. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services, which is generally upon shipment of the goods and performance of the service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract's transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether they are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company's revenue consists of sales of the Company's devices and services related to maintaining and repairing the devices. The agreement for the sale of the devices and the service contract are usually signed at the same time and in some instances a service contract is signed on a stand-alone basis. Revenue for service contracts is recognized over the service contract period on a straight-line basis. The Company determined that in practice no significant discount is given on the service contract when it is offered with the device purchase as compared to when it is sold on a stand-alone basis, by comparing the median selling price of the service contract as stand-alone and the median selling price of the service contract when sold together with the device. The service level provided is identical when the service contract is purchased stand-alone or together with the device. There is no termination provision in the service contract nor any penalties in practice for cancellation of the service contract. The service contract is not considered a performance obligation until it is paid, and it does not provide a material right for a significant discount when purchased with the device. The service portion of a sales contract or a stand-alone service contract is accounted for over the period of time of the service contract only when the customer exercises the option by paying for the service contract. Disaggregated revenue for the year ended December 31, 2019 and 2018 was as follows: For the Years Ended 2019 2018 Product Revenue $ 25,109,303 $ 24,651,212 Service Revenue 2,153,945 1,775,978 Total Revenue $ 27,263,248 $ 26,427,190 The Company operates in a highly-regulated environment in which state regulatory approval is sometimes required prior to the customer being able to use the product, primarily in the U.S. dermatology market. In these cases, where regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained. Deferred revenue as of December 31, 2019 was as follows: Service Product Total Balance, beginning of period $ 1,455,757 $ 33,000 $ 1,488,757 Revenue recognized (1,743,817 ) (33,000 ) (1,598,159 ) Amounts invoiced 2,819,243 — 2,640,585 Balance, end of period $ 2,531,183 $ — $ 2,531,183 Deferred revenue increased due to new service contracts during the year ended December 31, 2019. The Company does not disclose information about remaining performance obligations of deposits for products that have original expected durations of one year or less. Estimated service revenue to be recognized in the future related to the performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2019 is as follows: Year Service 2020 $ 1,191,898 2021 895,548 2022 384,236 2023 39,667 2024 19,834 Total $ 2,531,183 The Company provides warranties, generally for one year, in conjunction with the sale of its product. These warranties entitle the customer to repair, replacement, or modification of the defective product subject to the terms of the respective warranty. The Company records an estimate of future warranty claims at the time the Company recognizes revenue from the sale of the product based upon management's estimate of the future claims rate. Shipping and handling costs are expensed as incurred and are included in cost of sales. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable and investments in debt securities. Segment and Geographical Information The Company's revenue is generated primarily from customers in the United States, which represented approximately 92% and 96% of revenue for the years ended December 31, 2019 and 2018, respectively. A single customer in the U.S. accounted for approximately 68% and 71% of revenue for the years ended December 31, 2019 and 2018, respectively, and 79% and 87% of the accounts receivable as of December 31, 2019 and 2018, respectively. Fair Value of Financial Instruments Carrying amounts of cash equivalents, accounts receivable, accounts payable and revolving credit facility approximate fair value due to their relative short maturities. Foreign Currency The Company's foreign operation functional currency is the U.S. dollar. The Company considers the Israel subsidiary an extension of the parent company operations in the United States. The cash flow in the foreign operation depends primarily on the funding of the parent company. Cash and Cash Equivalents The Company maintains its cash and cash equivalents with financial institutions which balances exceed the federally insured limits. Federally insured limits are $250,000 for deposits. As of December 31, 2019 and 2018, the Company had approximately $7,740,000 and $11,726,000, respectively in excess of federally insured limits. For purposes of the statement of cash flows, the Company considers all highly liquid financial instruments with a maturity of three months or less when purchased to be a cash equivalent. Investments Short-term investments consist of investments which the Company expects to convert into cash within one year and long-term investments after one year. The Company classifies its investments in debt securities at the time of purchase as held-to-maturity and re-evaluates such classification on a quarterly basis. Held-to-maturity investments consist of securities that the Company has the intent and ability to retain until maturity. These securities are carried at amortized cost plus accrued interest and consist of the following: Amortized Cost Gross Gross Fair Short Term: Corporate bonds $ 2,892,190 $ — $ 623 $ 2,891,567 Total Short Term: 2,892,190 — 623 2,891,567 Total Investments December 31, 2018 $ 2,892,190 $ — $ 623 $ 2,891,567 Short Term: Corporate bonds $ 6,690,678 $ 4,251 $ — $ 6,694,929 United States Treasury bonds 698,729 1,302 — 700,031 Total Short Term: 7,389,407 5,553 — 7,394,960 Total Investments December 31, 2019 $ 7,389,407 $ 5,553 $ — $ 7,394,960 Accounts Receivable The Company does business and extends credit based on an evaluation of each customer's financial condition, generally without requiring collateral. Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The allowance for doubtful accounts was approximately $80,000 and $0 as of December 31, 2019 and 2018, respectively. Bad debt expense for the year ended December 31, 2019 was approximately $350,000 and recoveries for the year ended December 31, 2018 were approximately $13,000. Inventories Inventories consist of finished product and components and are stated at the lower of cost and net realizable value, determined using the first-in-first-out method. Property and Equipment Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful life of each asset. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of property or extend their useful lives are capitalized. When assets are sold or returned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income. Inventory units designated for customer demonstrations, as part of the sales process, are reclassified to property and equipment and the depreciation is recorded to selling and marketing expense. The inventory for demonstrations and other programs that was reclassified to property and equipment for the years ended December 31, 2019 and 2018 was approximately $240,000 and $204,000, respectively. Intangible Assets Intangible assets are comprised of the Company's patent rights and are amortized over the patents' estimated useful life of approximately 13 years. As of December 31, 2019, the remaining useful life was 42 months. Long-Lived Assets The Company evaluates its long-lived assets, including intangible assets, for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows in accordance with accounting guidance. If circumstances suggest the recorded amounts cannot be recovered, based upon estimated future undiscounted cash flows, the carrying values of such assets are reduced to fair value. No impairment charges were recorded for long-lived assets for the years ended December 31, 2019 and 2018. Research and Development Research and development costs related to products under development by the Company and quality and regulatory costs and are expensed as incurred. Earnings Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period using the treasury stock method for options and warrants. The diluted net income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period. In periods when the Company has incurred a net loss, options and warrants to purchase common shares are considered common share equivalents but have been excluded from the calculation of diluted net loss per share as their effect is antidilutive. Shares excluded were computed under the treasury stock method as follows: For the Years Ended 2019 2018 Stock options 15,776 31,694 Restricted shares 11,186 17,365 Equity-Based Compensation Pursuant to relevant accounting guidance related to accounting for equity-based compensation, the Company is required to recognize all share-based payments to non-employees and employees in the financial statements based on fair values on the grant date. The Company has accounted for issuance of shares, options, and warrants in accordance with the guidance, which requires the recognition of expense, based on grant-date fair values, over the service period, generally periods over which the shares, options and warrants vest. Advertising Costs Advertising and promotion expenses are charged to expense as incurred. Advertising and promotion expense included in selling and marketing expense in the accompanying statements of operations amounted to approximately $1,321,000 and $1,462,000 for the years ended December 31, 2019 and 2018, respectively. Leases The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. Operating lease assets represent the Company's right to control an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses an incremental borrowing rate that the Company would expect to incur for a fully collateralized loan over a similar term under similar economic conditions to determine the present value of the lease payments. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. The lease payments used to determine the Company's operating lease assets may include lease incentives and stated rent increases and are recognized in the Company's operating lease assets in the Company's consolidated balance sheets. Operating lease assets are amortized to rent expense over the lease term and included in operating expenses in the consolidated statements of operations. Recently issued and adopted accounting standards In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 1, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the amendments in the update is permitted. The Company adopted this standard in the first quarter of 2019 using the modified retrospective approach. The adoption of this standard resulted in the recognition of operating lease right-of-use assets and associated lease liabilities on our balance sheet of approximately $805,000 and $805,000, respectively, as of January 1, 2019. Additional required disclosures have been included within Note 6 – Commitments and Contingencies. Such adoption did not have a material impact on our liquidity, results of operations or our compliance with the revolving credit facility covenants. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 2 — Property and Equipment As of December 31, Estimated 2019 2018 Lives Operations and rental equipment $ 1,280,209 $ 852,273 3 years Tradeshow and demo equipment 914,891 784,244 3 years Computer equipment 117,596 112,521 3 years 2,312,696 1,749,038 Less accumulated depreciation (1,230,268 ) (858,009 ) Property and Equipment, Net $ 1,082,428 $ 891,029 Depreciation expense was approximately $449,000 and $562,000 for the years ended December 31, 2019 and 2018, respectively. Accumulated depreciation on asset disposals and assets moved to inventory were approximately $49,000 and $28,000, respectively, for the year ended December 31, 2019. |
Patent Rights
Patent Rights | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENT RIGHTS | Note 3 — Patent Rights As of December 31, 2019 2018 Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (915,667 ) (819,281 ) Patent Rights, Net $ 337,351 $ 433,737 Amortization expense was approximately $96,000 for the years ended December 31, 2019 and 2018. As of December 31, 2019, future remaining amortization expense is as follows: For the Year Ending December 31, 2020 $ 96,386 2021 96,386 2022 96,386 2023 48,193 Total $ 337,351 |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
REVOLVING CREDIT FACILITY | Note 4 — Revolving Credit Facility On October 31, 2017, the Company amended its revolving credit facility to extend the maturity to October 31, 2019 and to amend the financial covenants. The availability under the amended facility equals the lesser of the $5 million commitment amount or the borrowing base plus the $2.5 million non-formula sublimit. The borrowing base consists of 80% of eligible accounts receivable, as defined in the agreement. On October 28, 2019, the Company signed an amendment to extend the maturity date of the credit facility term through January 29, 2020. On January 31, 2020, the Company signed an amendment to further extend the maturity date of the credit facility term through April 28, 2020. Interest, at Prime plus 0.75% (5.50% at December 31, 2019) and Prime plus 1.50% on non-formula borrowings (6.25% at December 31, 2019), is payable monthly, and the outstanding principal and interest are due on the maturity date. The facility is secured by all of the Company's assets and limits the amount of additional indebtedness, restricts the sale, disposition or transfer of assets of the Company and requires the maintenance of a certain monthly adjusted quick ratio restrictive covenant, as defined in the agreement. The Company was in compliance with its financial covenants as of December 31, 2019 and December 31, 2018. There were no borrowings outstanding under the revolving credit facility at December 31, 2019 and December 31, 2018. The Company pays commitment fees of 0.25% per annum on the average unused portion of the line of credit. |
Product Warranties
Product Warranties | 12 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTIES | Note 5 — Product Warranties Changes in product warranty liability were as follows for the year ended December 31, 2019: Balance, beginning of period $ 136,217 Warranties accrued during the period 288,746 Payments on warranty claims (237,509 ) Balance, end of period $ 187,454 |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT AND CONTINGENCIES | Note 6 — Commitment and Contingencies Operating Lease Agreements In July 2016, the Company renewed its lease with an unrelated third party for its headquarters office. The renewal was effective September 1, 2016 and expanded the office space being occupied. The lease expires in September 2022 and lease payments increase by 3% annually. In February 2017 and January 2018, the Company signed amendments to expand further the leased office space. The Company's Israeli subsidiary entered into a two-year lease for office space starting in September 2018. The lease includes an option to extend with prior notice and with terms to be negotiated. On March 19, 2019, the Company's Israeli subsidiary signed a 10-year lease for a manufacturing facility, effective April 1, 2019, for approximately 5,800 square feet. The landlord has provided a four-month grace period rent free from April to July 2019, after which the 10-year lease will begin. The monthly rental payment starts at approximately $5,300 and will be subject to periodic escalations at amounts specified in the lease plus the consumer price index. In addition, the Company is responsible for maintenance fees covering its portion of the expenses of common areas. After 2, 4, 6 and 8 years, and with 180 days prior notice, the Company has the right to terminate the lease at its sole discretion without penalty. The Company currently does not have any lease with a term under 12 months. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company's operating leases as of December 31, 2019. Maturity of Operating Lease Liabilities Amount 2020 $ 358,787 2021 348,122 2022 284,578 2023 104,343 2024 105,843 Thereafter 494,731 Total undiscounted operating leases payments $ 1,696,404 Less: Imputed interest (271,351 ) Present Value of Operating Lease Liabilities $ 1,425,053 Other Information Weighted-average remaining lease term 6.4 years Weighted-average discount rate 5.0 % An initial ROU asset of approximately $805,000 was recognized as a non-cash assets addition with the adoption of the new lease accounting standard. The ROU assets were reduced by approximately $330,000 during the year ended December 31, 2019. Cash paid for amounts included in the present value of operating lease liabilities was approximately $310,000 for the year ended December 31, 2019 and is included in cash flows from operating activities in the accompanying consolidated statement of cash flows. Operating lease cost was approximately $351,000 for the year ended December 31, 2019. Manufacturing Agreement In 2010, the Company entered into a three-year contract manufacturing agreement with an unrelated third party for the production and manufacture of the Company's main product in accordance with the Company's product specifications. The agreement renews for successive years unless either party notifies the other party in writing, at least 60 days prior to the anniversary date of this agreement that it will not renew the agreement. The Company or the manufacturer has the option to terminate the agreement with 90 days written notice. Purchases from this manufacturer totaled approximately $5,786,000 and $4,185,000 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, approximately $1,104,000 and $1,041,000, respectively, was due to this manufacturer, which is presented in accounts payable and accrued expenses in the accompanying balance sheets. Legal contingencies The Company is party to certain legal proceedings in the ordinary course of business. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and related contingencies. In November 2015, the Company learned that the Department of Justice (the "Department") had commenced an investigation of the billing to Medicare by a physician who had treated patients with the Company's SRT-100. The Company has received two Civil Investigative Demands from the Department seeking documents and written responses in connection with that investigation. The Company has fully cooperated with the investigation. The Department has advised the Company that it was considering expanding the investigation to determine whether the Company had any involvement in the physician's use of certain reimbursement codes. The Company disputes that it has engaged in any wrongdoing with respect to such reimbursement claims; among other things, the Company does not submit claims for reimbursement or provide coding or billing advice to physicians. To the Company's knowledge, the Department has made no determination as to whether the Company engaged in any wrongdoing, or whether to pursue any legal action against the Company. Should the Department decide to pursue legal action, the Company believes it has strong and meritorious defenses and will vigorously defend itself. At this time, the Company is unable to estimate the cost associated with this matter. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | Note 7 — Employee Benefit Plans We sponsor a 401(k) defined contribution retirement plan that allows eligible employees to contribute a portion of their compensation through payroll deductions in accordance with specified plan guidelines. We make contributions to the plans that include matching a percentage of the employees' contributions up to certain limits. Expenses related to this plan totaled approximately $123,000 and $107,000 for the years ended December 31, 2019 and 2018, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Note 8 — Stockholders' Equity The Company has authorized 50,000,000 shares of common stock, of which 16,540,478 were issued and 16,485,780 outstanding at December 31, 2019; 16,145,915 shares were issued and 16,112,461 outstanding as of December 31, 2018, respectively. Stock Issuances On September 17, 2018, the Company completed a public offering of 2,205,882 shares of its common stock, par value $0.01 per share, at a public offering price of $6.80 per share. On September 21, 2018 the Company issued an additional 330,882 shares of its common stock pursuant to the exercise in full of the underwriters' option received in connection with the public offering of its common stock. After giving effect to the full exercise of the option, Sensus sold an aggregate of 2,536,764 shares of its common stock at a price of $6.80 per share with total gross proceeds of approximately $17.25 million, and net proceeds of $15.85 million after deducting underwriting discounts and commissions and other offering expenses. Warrants In April 2013, the closing date of the Company's second common offering, the Company's placement agent received five year warrants to purchase 86,376 common shares of the Company at an exercise price of $4.55 per unit, in each case adjusted to give effect to the Company's corporate conversion in 2016, which was equal to 110% of the offering price. During the first quarter of 2018, 73,309 of the warrants were exercised, and 13,067 warrants expired. In June 2016, from the Company's IPO, the investors received three-year warrants to purchase 2,300,000 shares of common stock at an exercise price of $6.75 per share; the warrants were exercisable through June 8, 2019. Following the first anniversary of the date of issuance, if certain conditions are met, the Company may redeem any and all of the outstanding warrants at a price equal to $0.01 per warrant. On June 4, 2019, the Company entered into an amendment to the Warrant Agreement to extend the expiration date of the investor warrants from June 8, 2019 until June 8, 2020. During the year ended December 31, 2019, warrants for 405,813 shares were exercised. In addition, the underwriters' representatives for the IPO received four-year warrants to purchase up to 138,000 units, consisting of one share of common stock and one warrant to purchase one share of common stock. The warrants for the units are exercisable between June 2, 2017 and June 2, 2021 at an exercise price of $6.75 per unit. As of December 31, 2019, none of the unit warrants have been exercised. The following table summarizes the Company's warrant activity: Warrants Number of Weighted Weighted Outstanding – December 31, 2018 2,438,000 $ 6.75 0.55 Granted — — — Exercised (405,813 ) 6.75 — Expired — — — Outstanding – December 31, 2019 2,032,187 $ 6.75 0.51 Exercisable – December 31, 2019 2,032,187 $ 6.75 0.51 The intrinsic value of the common stock warrants was approximately $0 as of December 31, 2019, and $1,609,000 as of December 31, 2018. 2016 and 2017 Equity Incentive Plans The Company has limited the aggregate number of shares of common stock to be awarded under the 2016 Equity Incentive Plan to 397,473 shares and no more than 397,473 shares of common stock in the aggregate may be granted in connection with incentive stock options. The Company has limited the aggregate number of shares of common stock to be awarded under the 2017 Equity Incentive Plan to 500,000 shares and no more than 500,000 shares of common stock in the aggregate may be granted in connection with incentive stock options. In addition, unless the Compensation Committee specifically determines otherwise, the maximum number of shares available under the 2016 and 2017 Plans and the awards granted under those plans will be subject to appropriate adjustment in the case of any stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, exchanges or other changes in capitalization affecting our common stock. On June 2, 2016, 307,666 shares of restricted stock were issued to employees and were recorded at the fair value of $5.25 as per the initial offering price. In addition, on January 20, 2017, 10,000 shares of restricted stock were issued to one employee and were recorded at the fair value of $4.99 per share and on October 1, 2018, 30,000 shares of restricted stock were issued to employees and were recorded at the fair value of $8.58 per share. The restricted shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards. On January 25, 2018, 80,000 fully vested shares were granted to the nonemployee directors, and 229,334 stock options with a four-year vesting period were granted to certain employees. The shares were recorded at the fair value of $5.55 per share for a total of $444,000 and the stock options were valued using a Black Scholes model at $3.52 per option using the assumptions noted in the following table: Expected volatility 67.8 % Risk-free interest rate 2.5 % Expected life 6.25 years Dividend yield 0.0 % Expected Volatility Risk-Free Interest Rate Expected Term or Life The stock options had an intrinsic value of approximately $0 and $427,000 as of December 31, 2019 and December 31, 2018, respectively. The Company recognizes forfeitures as they occur rather than estimating a forfeiture rate. The reduction of stock compensation expense related to the forfeitures was approximately $8,000 and $39,000 for the years ended December 31, 2019 and 2018, respectively. Unrecognized stock compensation expense was approximately $670,000 as of December 31, 2019, which will be recognized over a weighted average period of 1.79 years. A summary of the restricted stock activity is presented as follows: Shares Weighted Unvested balance at December 31, 2018 165,834 $ 5.84 Granted — — Vested (74,167 ) 5.58 Forfeited (11,250 ) 8.58 Unvested balance at September 30, 2019 80,417 $ 5.70 The following table summarizes the Company's stock option activity: Number of Weighted Weighted Outstanding – December 31, 2018 229,334 $ 5.55 9.08 Granted — — — Exercised — — — Expired — — — Outstanding – December 31, 2019 229,334 $ 5.55 8.07 Exercisable – December 31, 2019 229,334 5.55 8.07 Treasury Stock The Company accounts for purchases of treasury stock under the cost method with the cost of such share purchases reflected in treasury stock in the accompanying consolidated balance sheet. As of December 31, 2019 and 2018, the Company had 54,698 and 33,454 treasury shares, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 9 — Income Taxes The income tax provision (benefit) consisted of the following: For The Years Ended December 31, 2019 2018 Current – federal — — Current – state — — Deferred – federal (601,575 ) (707,725 ) Deferred – international (494,982 ) (40,038 ) Deferred – state (43,303 ) (246,766 ) (1,139,860 ) (994,529 ) Change in valuation allowance 1,139,860 994,529 Income tax provision (benefit) $ — $ — For the years ended December 31, 2019 and December 31, 2018, the expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) as follows: For The Years Ended December 31, 2019 2018 U.S. federal statutory rate (21.0 )% (21.0 )% State taxes, net of federal benefit (6.1 )% (4.8 )% Foreign rate differential (0.2 )% (0.2 ) Permanent differences 3.2 % 2.4 % Change in tax rates (1.9 )% (4.0 )% Return-to-provision adjustments (4.0 )% (2.2 ) Tax credits (37.1 )% (19.3 )% Other — % — % Change in valuation allowance 67.1 % 49.2 % Income tax provision (benefit) 0.0 % 0.0 % As of December 31, 2019 and December 31, 2018, the Company's net deferred tax asset consisted of the effects of temporary differences attributable to the following: December 31, 2019 2018 Net operating losses $ 1,701,503 $ 1,458,744 Stock-based compensation 183,911 122,239 Depreciation and amortization (94,400 ) (97,700 Accrued expenses and reserves 195,321 45,106 Prepaid expenses (3,893 ) (1,256 ) Customer deposits 60,759 16,401 Tax credit 1,176,852 546,592 Charitable contributions 37,468 23,945 Other, net 204 3,795 Deferred tax asset, net 3,257,725 2,117,866 Valuation allowance (3,257,725 ) (2,117,866 ) Deferred tax asset, net of valuation allowance — — The Company has federal tax net operating loss carryforwards of approximately $5,587,000 as of December 31, 2019 and state net operating loss carryforwards spread across various jurisdictions with a combined total of approximately $7,057,000 as of December 31, 2019. The net operating loss carryforwards generated prior to January 1, 2018, if not used to reduce taxable income in future periods, will begin to expire in 2029, for both federal and state tax purposes. The net operating loss carryforward generated after December 31, 2018 will never expire for federal purposes but can only reduce 80% of taxable income in future years. Additionally, the Company also has tax credit carryforwards of approximately $1,177,000 as of December 31, 2019. These credit carryforwards, if not used in future periods, will begin to expire in 2029. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the future generation of taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxing strategies in making this assessment. Based on this assessment, management has established a full valuation allowance against all of the net deferred tax assets for each period, since it is more likely than not that all of the deferred tax assets will not be realized. The valuation allowance for the years ended December 31, 2019 and 2018 increased by approximately $1,140,000 and $995,000, respectively. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company's consolidated financial statements as of December 31, 2019 and 2018. The Company does not expect any significant changes in its unrecognized tax benefits within 12 months of the reporting date. The Company has U.S. federal and certain state tax returns subject to examination by tax authorities beginning with those filed for the year ended December 31, 2015. The Company's policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 10 — Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued for potential recognition or disclosure. On January 31, 2020, the Company signed an amendment to further extend the maturity date of the credit facility term through April 28, 2020. |
Organization and Summary Of S_2
Organization and Summary Of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS | Description of the Business Sensus Healthcare, Inc. (the “Company”) is a manufacturer of superficial radiation therapy devices and has established a distribution and marketing network to sell the devices to healthcare providers globally. The Company was organized on May 7, 2010 as Sensus Healthcare, LLC, a limited liability company. On January 1, 2016, the Company completed a corporate conversion pursuant to which Sensus Healthcare, Inc. succeeded to the business of Sensus Healthcare, LLC. In February 2018, the Company opened a subsidiary in Israel. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida. |
PRINCIPLES OF CONSOLIDATION | Principles of consolidation The accompanying consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary in Israel. All inter-company balances and transactions have been eliminated. |
USE OF ESTIMATES | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates to which it is reasonably possible that a change could occur in the near term include, revenue recognition, inventory reserves, receivable allowances, recoverability of long lived assets and estimation of the Company’s product warranties. Actual results could differ from those estimates. |
REVENUE RECOGNITION | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” using the modified retrospective method for all contracts as of the date of adoption. The adoption of this standard did not result in a significant change to the Company’s historical revenue recognition policies and there were no necessary adjustments required to retained earnings upon adoption. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services, which is generally upon shipment of the goods and performance of the service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether they are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenue consists of sales of the Company’s devices and services related to maintaining and repairing the devices. The agreement for the sale of the devices and the service contract are usually signed at the same time and in some instances a service contract is signed on a stand-alone basis. Revenue for service contracts is recognized over the service contract period on a straight-line basis. The Company determined that in practice no significant discount is given on the service contract when it is offered with the device purchase as compared to when it is sold on a stand-alone basis, by comparing the median selling price of the service contract as stand-alone and the median selling price of the service contract when sold together with the device. The service level provided is identical when the service contract is purchased stand-alone or together with the device. There is no termination provision in the service contract nor any penalties in practice for cancellation of the service contract. The service contract is not considered a performance obligation until it is paid, and it does not provide a material right for a significant discount when purchased with the device. The service portion of a sales contract or a stand-alone service contract is accounted for over the period of time of the service contract only when the customer exercises the option by paying for the service contract. Disaggregated revenue for the year ended December 31, 2019 and 2018 was as follows: For the Years Ended 2019 2018 Product Revenue $ 25,109,303 $ 24,651,212 Service Revenue 2,153,945 1,775,978 Total Revenue $ 27,263,248 $ 26,427,190 The Company operates in a highly-regulated environment in which state regulatory approval is sometimes required prior to the customer being able to use the product, primarily in the U.S. dermatology market. In these cases, where regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained. Deferred revenue as of December 31, 2019 was as follows: Service Product Total Balance, beginning of period $ 1,455,757 $ 33,000 $ 1,488,757 Revenue recognized (1,743,817 ) (33,000 ) (1,598,159 ) Amounts invoiced 2,819,243 — 2,640,585 Balance, end of period $ 2,531,183 $ — $ 2,531,183 Deferred revenue increased due to new service contracts during the year ended December 31, 2019. The Company does not disclose information about remaining performance obligations of deposits for products that have original expected durations of one year or less. Estimated service revenue to be recognized in the future related to the performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2019 is as follows: Year Service 2020 $ 1,191,898 2021 895,548 2022 384,236 2023 39,667 2024 19,834 Total $ 2,531,183 The Company provides warranties, generally for one year, in conjunction with the sale of its product. These warranties entitle the customer to repair, replacement, or modification of the defective product subject to the terms of the respective warranty. The Company records an estimate of future warranty claims at the time the Company recognizes revenue from the sale of the product based upon management’s estimate of the future claims rate. Shipping and handling costs are expensed as incurred and are included in cost of sales. |
CONCENTRATION OF CREDIT RISK | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable and investments in debt securities. |
SEGMENT AND GEOGRAPHICAL INFORMATION | Segment and Geographical Information The Company’s revenue is generated primarily from customers in the United States, which represented approximately 92% and 96% of revenue for the years ended December 31, 2019 and 2018, respectively. A single customer in the U.S. accounted for approximately 68% and 71% of revenue for the years ended December 31, 2019 and 2018, respectively, and 79% and 87% of the accounts receivable as of December 31, 2019 and 2018, respectively. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Fair Value of Financial Instruments Carrying amounts of cash equivalents, accounts receivable, accounts payable and revolving credit facility approximate fair value due to their relative short maturities. |
FOREIGN CURRENCY | Foreign Currency The Company’s foreign operation functional currency is the U.S. dollar. The Company considers the Israel subsidiary an extension of the parent company operations in the United States. The cash flow in the foreign operation depends primarily on the funding of the parent company. |
CASH AND CASH EQUIVALENTS | Cash and Cash Equivalents The Company maintains its cash and cash equivalents with financial institutions which balances exceed the federally insured limits. Federally insured limits are $250,000 for deposits. As of December 31, 2019 and 2018, the Company had approximately $7,740,000 and $11,726,000, respectively in excess of federally insured limits. For purposes of the statement of cash flows, the Company considers all highly liquid financial instruments with a maturity of three months or less when purchased to be a cash equivalent. |
INVESTMENTS | Investments Short-term investments consist of investments which the Company expects to convert into cash within one year and long-term investments after one year. The Company classifies its investments in debt securities at the time of purchase as held-to-maturity and re-evaluates such classification on a quarterly basis. Held-to-maturity investments consist of securities that the Company has the intent and ability to retain until maturity. These securities are carried at amortized cost plus accrued interest and consist of the following: Amortized Cost Gross Gross Fair Short Term: Corporate bonds $ 2,892,190 $ — $ 623 $ 2,891,567 Total Short Term: 2,892,190 — 623 2,891,567 Total Investments December 31, 2018 $ 2,892,190 $ — $ 623 $ 2,891,567 Short Term: Corporate bonds $ 6,690,678 $ 4,251 $ — $ 6,694,929 United States Treasury bonds 698,729 1,302 — 700,031 Total Short Term: 7,389,407 5,553 — 7,394,960 Total Investments December 31, 2019 $ 7,389,407 $ 5,553 $ — $ 7,394,960 |
ACCOUNTS RECEIVABLE | Accounts Receivable The Company does business and extends credit based on an evaluation of each customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The allowance for doubtful accounts was approximately $80,000 and $0 as of December 31, 2019 and 2018, respectively. Bad debt expense for the year ended December 31, 2019 was approximately $350,000 and recoveries for the year ended December 31, 2018 were approximately $13,000. |
INVENTORIES | Inventories Inventories consist of finished product and components and are stated at the lower of cost and net realizable value, determined using the first-in-first-out method. |
PROPERTY AND EQUIPMENT | Property and Equipment Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful life of each asset. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of property or extend their useful lives are capitalized. When assets are sold or returned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income. Inventory units designated for customer demonstrations, as part of the sales process, are reclassified to property and equipment and the depreciation is recorded to selling and marketing expense. The inventory for demonstrations and other programs that was reclassified to property and equipment for the years ended December 31, 2019 and 2018 was approximately $240,000 and $204,000, respectively. |
INTANGIBLE ASSETS | Intangible Assets Intangible assets are comprised of the Company's patent rights and are amortized over the patents' estimated useful life of approximately 13 years. As of December 31, 2019, the remaining useful life was 42 months. |
LONG-LIVED ASSETS | Long-Lived Assets The Company evaluates its long-lived assets, including intangible assets, for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows in accordance with accounting guidance. If circumstances suggest the recorded amounts cannot be recovered, based upon estimated future undiscounted cash flows, the carrying values of such assets are reduced to fair value. No impairment charges were recorded for long-lived assets for the years ended December 31, 2019 and 2018. |
RESEARCH AND DEVELOPMENT | Research and Development Research and development costs related to products under development by the Company and quality and regulatory costs and are expensed as incurred. |
EARNINGS PER SHARE | Earnings Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period using the treasury stock method for options and warrants. The diluted net income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period. In periods when the Company has incurred a net loss, options and warrants to purchase common shares are considered common share equivalents but have been excluded from the calculation of diluted net loss per share as their effect is antidilutive. Shares excluded were computed under the treasury stock method as follows: For the Years Ended 2019 2018 Stock options 15,776 31,694 Restricted shares 11,186 17,365 |
EQUITY - BASED COMPENSATION | Equity-Based Compensation Pursuant to relevant accounting guidance related to accounting for equity-based compensation, the Company is required to recognize all share-based payments to non-employees and employees in the financial statements based on fair values on the grant date. The Company has accounted for issuance of shares, options, and warrants in accordance with the guidance, which requires the recognition of expense, based on grant-date fair values, over the service period, generally periods over which the shares, options and warrants vest. |
ADVERTISING COSTS | Advertising Costs Advertising and promotion expenses are charged to expense as incurred. Advertising and promotion expense included in selling and marketing expense in the accompanying statements of operations amounted to approximately $1,321,000 and $1,462,000 for the years ended December 31, 2019 and 2018, respectively. |
OPERATING LEASES | Leases The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. Operating lease assets represent the Company's right to control an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses an incremental borrowing rate that the Company would expect to incur for a fully collateralized loan over a similar term under similar economic conditions to determine the present value of the lease payments. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. The lease payments used to determine the Company's operating lease assets may include lease incentives and stated rent increases and are recognized in the Company's operating lease assets in the Company's consolidated balance sheets. Operating lease assets are amortized to rent expense over the lease term and included in operating expenses in the consolidated statements of operations. |
RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS | Recently issued and adopted accounting standards In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 1, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the amendments in the update is permitted. The Company adopted this standard in the first quarter of 2019 using the modified retrospective approach. The adoption of this standard resulted in the recognition of operating lease right-of-use assets and associated lease liabilities on our balance sheet of approximately $805,000 and $805,000, respectively, as of January 1, 2019. Additional required disclosures have been included within Note 6 – Commitments and Contingencies. Such adoption did not have a material impact on our liquidity, results of operations or our compliance with the revolving credit facility covenants. |
Organization and Summary Of S_3
Organization and Summary Of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Disaggregation of Revenue | For the Years Ended 2019 2018 Product Revenue $ 25,109,303 $ 24,651,212 Service Revenue 2,153,945 1,775,978 Total Revenue $ 27,263,248 $ 26,427,190 |
Schedule of deferred revenue | Service Product Total Balance, beginning of period $ 1,455,757 $ 33,000 $ 1,488,757 Revenue recognized (1,743,817 ) (33,000 ) (1,598,159 ) Amounts invoiced 2,819,243 — 2,640,585 Balance, end of period $ 2,531,183 $ — $ 2,531,183 |
Schedule of estimated service revenue recognised | Year Service 2020 $ 1,191,898 2021 895,548 2022 384,236 2023 39,667 2024 19,834 Total $ 2,531,183 |
Schedule of investment | Amortized Cost Gross Gross Fair Short Term: Corporate bonds $ 2,892,190 $ — $ 623 $ 2,891,567 Total Short Term: 2,892,190 — 623 2,891,567 Total Investments December 31, 2018 $ 2,892,190 $ — $ 623 $ 2,891,567 Short Term: Corporate bonds $ 6,690,678 $ 4,251 $ — $ 6,694,929 United States Treasury bonds 698,729 1,302 — 700,031 Total Short Term: 7,389,407 5,553 — 7,394,960 Total Investments December 31, 2019 $ 7,389,407 $ 5,553 $ — $ 7,394,960 |
Schedule of antidilutive | For the Years Ended 2019 2018 Stock options 15,776 31,694 Restricted shares 11,186 17,365 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | As of December 31, Estimated 2019 2018 Lives Operations and rental equipment $ 1,280,209 $ 852,273 3 years Tradeshow and demo equipment 914,891 784,244 3 years Computer equipment 117,596 112,521 3 years 2,312,696 1,749,038 Less accumulated depreciation (1,230,268 ) (858,009 ) Property and Equipment, Net $ 1,082,428 $ 891,029 |
Patent Rights (Tables)
Patent Rights (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | As of December 31, 2019 2018 Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (915,667 ) (819,281 ) Patent Rights, Net $ 337,351 $ 433,737 |
Schedule of amortization expense | For the Year Ending December 31, 2020 $ 96,386 2021 96,386 2022 96,386 2023 48,193 Total $ 337,351 |
Product Warranties (Tables)
Product Warranties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of changes in product warranty liability | Balance, beginning of period $ 136,217 Warranties accrued during the period 288,746 Payments on warranty claims (237,509 ) Balance, end of period $ 187,454 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments for operating leases | Maturity of Operating Lease Liabilities Amount 2020 $ 358,787 2021 348,122 2022 284,578 2023 104,343 2024 105,843 Thereafter 494,731 Total undiscounted operating leases payments $ 1,696,404 Less: Imputed interest (271,351 ) Present Value of Operating Lease Liabilities $ 1,425,053 Other Information Weighted-average remaining lease term 6.4 years Weighted-average discount rate 5.0 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of warrant activity | Warrants Number of Weighted Weighted Outstanding – December 31, 2018 2,438,000 $ 6.75 0.55 Granted — — — Exercised (405,813 ) 6.75 — Expired — — — Outstanding – December 31, 2019 2,032,187 $ 6.75 0.51 Exercisable – December 31, 2019 2,032,187 $ 6.75 0.51 |
Schedule of Stock Options, Valuation Assumptions | Expected volatility 67.8 % Risk-free interest rate 2.5 % Expected life 6.25 years Dividend yield 0.0 % |
Schedule of restricted activity | Shares Weighted Unvested balance at December 31, 2018 165,834 $ 5.84 Granted — — Vested (74,167 ) 5.58 Forfeited (11,250 ) 8.58 Unvested balance at September 30, 2019 80,417 $ 5.70 |
Schedule of option activity | Number of Weighted Weighted Outstanding – December 31, 2018 229,334 $ 5.55 9.08 Granted — — — Exercised — — — Expired — — — Outstanding – December 31, 2019 229,334 $ 5.55 8.07 Exercisable – December 31, 2019 229,334 5.55 8.07 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision (benefit) | For The Years Ended December 31, 2019 2018 Current – federal — — Current – state — — Deferred – federal (601,575 ) (707,725 ) Deferred – international (494,982 ) (40,038 ) Deferred – state (43,303 ) (246,766 ) (1,139,860 ) (994,529 ) Change in valuation allowance 1,139,860 994,529 Income tax provision (benefit) $ — $ — |
Schedule of expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) | For The Years Ended December 31, 2019 2018 U.S. federal statutory rate (21.0 )% (21.0 )% State taxes, net of federal benefit (6.1 )% (4.8 )% Foreign rate differential (0.2 )% (0.2 ) Permanent differences 3.2 % 2.4 % Change in tax rates (1.9 )% (4.0 )% Return-to-provision adjustments (4.0 )% (2.2 ) Tax credits (37.1 )% (19.3 )% Other — % — % Change in valuation allowance 67.1 % 49.2 % Income tax provision (benefit) 0.0 % 0.0 % |
Schedule of company's net deferred tax asset | December 31, 2019 2018 Net operating losses $ 1,701,503 $ 1,458,744 Stock-based compensation 183,911 122,239 Depreciation and amortization (94,400 ) (97,700 Accrued expenses and reserves 195,321 45,106 Prepaid expenses (3,893 ) (1,256 ) Customer deposits 60,759 16,401 Tax credit 1,176,852 546,592 Charitable contributions 37,468 23,945 Other, net 204 3,795 Deferred tax asset, net 3,257,725 2,117,866 Valuation allowance (3,257,725 ) (2,117,866 ) Deferred tax asset, net of valuation allowance — — |
Organization and Summary Of S_4
Organization and Summary Of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenue | $ 27,263,248 | $ 26,427,190 |
Product Revenue [Member] | ||
Total Revenue | 25,109,303 | 24,651,212 |
Service Revenue [Member] | ||
Total Revenue | $ 2,153,945 | $ 1,775,978 |
Organization and Summary Of S_5
Organization and Summary Of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Deferred Revenue Arrangement [Line Items] | |
Balance, beginning of period | $ 1,488,757 |
Revenue recognized | (1,598,159) |
Amounts invoiced | 2,640,585 |
Balance, end of period | 2,531,183 |
Service [Member] | |
Deferred Revenue Arrangement [Line Items] | |
Balance, beginning of period | 1,455,757 |
Revenue recognized | (1,743,817) |
Amounts invoiced | 2,819,243 |
Balance, end of period | 2,531,183 |
Product [Member] | |
Deferred Revenue Arrangement [Line Items] | |
Balance, beginning of period | 33,000 |
Revenue recognized | (33,000) |
Amounts invoiced | |
Balance, end of period |
Organization and Summary Of S_6
Organization and Summary Of Significant Accounting Policies (Details 2) | Dec. 31, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2020 | $ 1,191,898 |
2021 | 895,548 |
2022 | 384,236 |
2023 | 39,667 |
2024 | 19,834 |
Total | $ 2,531,183 |
Organization and Summary Of S_7
Organization and Summary Of Significant Accounting Policies (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Amortized Cost | $ 698,729 | $ 2,892,190 |
Gross Unrealized Gain | 5,553 | |
Gross Unrealized Loss | 623 | |
Fair Value | 700,031 | 2,891,567 |
Short Term [Member] | ||
Amortized Cost | 2,892,190 | |
Gross Unrealized Gain | 1,302 | |
Gross Unrealized Loss | 623 | |
Fair Value | 2,891,567 | |
Short Term [Member] | Corporate Bonds [Member] | ||
Amortized Cost | 6,690,678 | 2,892,190 |
Gross Unrealized Gain | 4,251 | |
Gross Unrealized Loss | 623 | |
Fair Value | $ 6,694,929 | $ 2,891,567 |
Organization and Summary Of S_8
Organization and Summary Of Significant Accounting Policies (Details 4) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 15,776 | 31,694 |
Restricted shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 11,186 | 17,365 |
Organization and Summary Of S_9
Organization and Summary Of Significant Accounting Policies (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)Segment | |
Number of operating segments | Segment | 1 | |
Cash, FDIC insured amount | $ 250,000 | |
Cash uninsured amount | 7,740,000 | $ 11,726,000 |
Allowance for doubtful accounts receivable, current | 80,000 | 0 |
Bad debt expense (recoveries) | 350,086 | (13,280) |
Inventory units designated for customer demonstrations | 240,000 | 204,000 |
Advertising and promotion expense | 1,321,000 | $ 1,462,000 |
Product warranty term | 1 year | |
Operating lease right-of-use assets | $ 1,400,037 | |
UNITED STATES | ||
Reveune percent | 92.00% | 96.00% |
Patents [Member] | ||
Useful life | 13 years | |
Remaining amortization period | 42 months | |
Customer [Member] | Accounts Receivable [Member] | UNITED STATES | ||
Reveune percent | 79.00% | 87.00% |
UNITED STATES | Customer [Member] | Revenue [Member] | ||
Reveune percent | 68.00% | 71.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,312,696 | $ 1,749,038 |
Less accumulated depreciation | (1,230,268) | (858,009) |
Property and Equipment, Net | 1,082,428 | 891,029 |
Operations and Rental Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,280,209 | 852,273 |
Property, plant and equipment, useful Life | 3 years | |
Tradeshow and Demo Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 914,891 | 784,244 |
Property, plant and equipment, useful Life | 3 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 117,596 | $ 112,521 |
Property, plant and equipment, useful Life | 3 years |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 449,000 | $ 562,000 |
Accumulated depreciation on asset disposals | $ 49,000 | $ 218,000 |
Patent Rights (Details)
Patent Rights (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 1,253,018 | $ 1,253,018 |
Less accumulated amortization | (915,667) | (819,281) |
Patent Rights, Net | $ 337,351 | $ 433,737 |
Patent Rights (Details 1)
Patent Rights (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 96,386 | |
2021 | 96,386 | |
2022 | 96,386 | |
2023 | 48,193 | |
Total | $ 337,351 | $ 433,737 |
Patent Rights (Details Textual)
Patent Rights (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 96,000 | $ 96,000 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt instrument, basis spread on variable rate | 0.75% |
Debt instrument, interest rate, effective percentage | 5.50% |
Revolving credit facility, outstanding | |
Line of credit facility, unused capacity, commitment fee percentage | 0.25% |
Line of credit description | The Company amended its revolving credit facility to extend the maturity to October 31, 2019 and to amend the financial covenants. The availability under the amended facility equals the lesser of the $5 million commitment amount or the borrowing base plus the $2.5 million non-formula sublimit. The borrowing base consists of 80% of eligible accounts receivable, as defined in the agreement. On October 28, 2019, the Company signed an amendment to extend the maturity date of the credit facility term through January 29, 2020. On January 31, 2020, the Company signed an amendment to further extend the maturity date of the credit facility term through April 28, 2020. |
Borrowings [Member] | |
Debt instrument, basis spread on variable rate | 1.50% |
Debt instrument, interest rate, effective percentage | 6.25% |
Product Warranties (Details)
Product Warranties (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |
Balance, beginning of period | $ 136,217 |
Warranties accrued during the period | 288,746 |
Payments on warranty claims | (237,509) |
Balance, end of period | $ 187,454 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 358,787 |
2021 | 348,122 |
2022 | 284,578 |
2023 | 104,343 |
2024 | 105,843 |
Thereafter | 494,731 |
Total undiscounted operating leases payments | 1,696,404 |
Less: Imputed interest | (271,351) |
Present Value of Operating Lease Liabilities | $ 1,425,053 |
Other Information | |
Weighted-average remaining lease term | 6 years 4 months 24 days |
Weighted-average discount rate | 5.00% |
Commitment and Contingencies _2
Commitment and Contingencies (Details Textual) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2010 | Mar. 19, 2019ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Lease expiration date | Sep. 30, 2022 | |||
Percentage of increase in lease payments | 3.00% | |||
Manufacturing agreement contract term | 3 years | |||
ROU asset | $ 1,400,037 | |||
ROU assets reduced value | 330,000 | |||
Operating lease liabilities | 1,425,053 | |||
Operating lease cost | 351,000 | |||
Payments to suppliers | 5,786,000 | 4,185,000 | ||
Accounts payable and accrued expenses | $ 1,104,000 | $ 1,041,000 | ||
Israeli Subsidiary [Member] | ||||
Manufacturing agreement contract term | 10 years | |||
Area of land | ft² | 5,800 | |||
Lease, description | The landlord has provided a four-month grace period rent free from April to July 2019, after which the 10 -year lease will begin. The monthly rental payment starts at approximately $5,300 and will be subject to periodic escalations at amounts specified in the lease plus the consumer price index. In addition, the Company is responsible for maintenance fees covering its portion of the expenses of common areas. After 2, 4, 6 and 8 years, and with 180 days prior notice, the Company has the right to terminate the lease at its sole discretion without penalty. |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Expenses related to employee benefit plan | $ 123,000 | $ 107,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Common Warrants [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Outstanding at beginning | shares | 2,438,000 |
Granted | shares | |
Exercised | shares | (405,813) |
Expired | shares | |
Outstanding at ending | shares | 2,032,187 |
Exercisable at end | shares | 2,032,187 |
Outstanding at beginning | $ / shares | $ 6.75 |
Granted | $ / shares | |
Exercised | $ / shares | 6.75 |
Expired | $ / shares | |
Outstanding at ending | $ / shares | 6.75 |
Exercisable at ending | $ / shares | $ 6.75 |
Outstanding at beginning | 6 months 18 days |
Granted | 0 years |
Exercised | 0 years |
Expired | 0 years |
Outstanding at ending | 6 months 3 days |
Exercisable at ending | 6 months 3 days |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Expected volatility | 67.80% |
Risk-free interest rate | 2.50% |
Expected life | 6 years 2 months 30 days |
Dividend yield | 0.00% |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares | |
Unvested balance at beginning | shares | 165,834 |
Granted | shares | |
Vested | shares | (74,167) |
Forfeited | shares | (11,250) |
Unvested balance at end | shares | 80,417 |
Weighted Average Grant Date Fair Value | |
Unvested balance at beginning | $ / shares | $ 5.84 |
Granted | $ / shares | |
Vested | $ / shares | 5.58 |
Forfeited | $ / shares | 8.58 |
Unvested balance at end | $ / shares | $ 5.70 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Options | |
Outstanding at beginning shares | 229,334 |
Granted | |
Exercised | |
Expired | |
Outstanding at end shares | 229,334 |
Exercisable | 229,334 |
Weighted Average Exercise | |
Outstanding at beginning | $ / shares | $ 5.55 |
Granted | $ / shares | |
Exercised | $ / shares | |
Expired | $ / shares | |
Outstanding at end | $ / shares | $ 5.55 |
Outstanding at beginning | 9 years 29 days |
Outstanding at end | 8 years 26 days |
Exercisable at end | 8 years 26 days |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Jun. 04, 2019 | Oct. 01, 2018 | Jan. 20, 2017 | Jun. 02, 2016 | Sep. 21, 2018 | Sep. 17, 2018 | Jan. 25, 2018 | Dec. 31, 2016 | Jun. 30, 2016 | Apr. 30, 2013 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity (Textual) | |||||||||||||
Common stock, authorized | 50,000,000 | 50,000,000 | |||||||||||
Common stock, issued | 16,540,478 | 16,145,915 | |||||||||||
Common stock,outstanding | 16,485,780 | 16,112,461 | |||||||||||
Common stock, par value | $ 0.01 | $ 0.01 | |||||||||||
Proceeds from offering of common stock | |||||||||||||
Weighted average grant date fair value (in dollars per share) | |||||||||||||
Intrinsic value of common stock warrants | $ 0 | $ 1,609,000 | |||||||||||
Common stock, description | On June 2, 2016, 307,666 shares of restricted stock were issued to employees and were recorded at the fair value of $5.25 as per the initial offering price. In addition, on January 20, 2017, 10,000 shares of restricted stock were issued to one employee and were recorded at the fair value of $4.99 per share and on October 1, 2018, 30,000 shares of restricted stock were issued to employees and were recorded at the fair value of $8.58 per share. The restricted shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards. | ||||||||||||
Number of restricted stock granted | |||||||||||||
Stock option Granted | |||||||||||||
Weighted Average Exercise Price Stock option Granted (in dollars per share) | $ 5.55 | ||||||||||||
Options, Vested in Period, Fair Value | $ 444,000 | ||||||||||||
Stock options fair value | $ 3.52 | ||||||||||||
Stock options unvested | 229,334 | 229,334 | |||||||||||
Intrinsic value of Stock options | $ 0 | $ 427,000 | |||||||||||
Unrecognized stock compensation expense | 670,000 | ||||||||||||
Reduction of stock compensation expense value forfeited | $ 8,000 | $ 39,000 | |||||||||||
Treasury stock | 54,698 | 33,454 | |||||||||||
Recognized over weighted average | 1 year 9 months 14 days | ||||||||||||
2016 Equity Incentive Plan [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Number of authorized shares under the plan | 397,473 | ||||||||||||
Common stock, description | 397,473 shares and no more than 397,473 shares of common stock in the aggregate may be granted in connection with incentive stock options. | ||||||||||||
2016 Equity Incentive Plan [Member] | Unvested Restricted Stock [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Vesting period | 4 years | ||||||||||||
Number of restricted stock granted | 30,000 | 10,000 | 397,473 | ||||||||||
Initial offering price (in dollars per share) | $ 5.25 | ||||||||||||
Vesting percentage | 25.00% | ||||||||||||
Description of vesting rights | The restricted shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards. | ||||||||||||
2017 Equity Incentive Plan [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Number of authorized shares under the plan | 500,000 | ||||||||||||
Common stock, description | 500,000 shares and no more than 500,000 shares of common stock in the aggregate may be granted in connection with incentive stock options. | ||||||||||||
Common Unit Warrants [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Number of warrant outstanding | 2,032,187 | 2,438,000 | |||||||||||
Warrant exercise price (in dollars per share) | $ 6.75 | $ 6.75 | |||||||||||
Exercised | (405,813) | ||||||||||||
Number of warrant granted | |||||||||||||
Warrant granted exercise price (in dollars per share) | |||||||||||||
Common Warrants [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Exercised | 73,309 | ||||||||||||
Forfeited | 13,067 | ||||||||||||
Public Offering [member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Number of common stock issued in public offering | 2,205,882 | ||||||||||||
Common stock, par value | $ 0.01 | ||||||||||||
Public offering price | $ 6.80 | ||||||||||||
Proceeds from offering | $ 1,585,000 | ||||||||||||
Number of additional common stock issued in public offering | 330,882 | ||||||||||||
Number of common stock sold | 2,536,764 | ||||||||||||
Common stock sale price | $ 6.80 | ||||||||||||
Proceeds from offering of common stock | $ 17,250,000 | ||||||||||||
Employees [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Stock option Granted | 229,334 | ||||||||||||
Nonemployee Directors [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Stock option Granted | 80,000 | ||||||||||||
Investor [Member] | Placement Agent [Member] | Common Unit Warrants [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Warrant term | 5 years | ||||||||||||
Number of warrant outstanding | 86,376 | ||||||||||||
Warrant exercise price (in dollars per share) | $ 4.55 | ||||||||||||
Percentage of offering price | 110.00% | ||||||||||||
Investor [Member] | IPO [Member] | Common Unit Warrants [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Warrant term | 3 years | ||||||||||||
Exercised | 405,813 | ||||||||||||
Number of warrant granted | 2,300,000 | ||||||||||||
Warrant granted exercise price (in dollars per share) | $ 6.75 | ||||||||||||
Date of warrants exercisable | Jun. 8, 2019 | ||||||||||||
Warrant redemption price (in dollars per warrant) | $ 0.01 | ||||||||||||
Description of Warrants | On June 4, 2019, the Company entered into an amendment to the Warrant Agreement to extend the expiration date of the investor warrants from June 8, 2019 until June 8, 2020. | ||||||||||||
Underwriter's Representatives [Member] | IPO [Member] | Common Unit Warrants [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Warrant term | 4 years | ||||||||||||
Number of warrant granted | 138,000 | ||||||||||||
Warrant granted exercise price (in dollars per share) | $ 6.75 | ||||||||||||
Underwriter's Representatives [Member] | IPO [Member] | Common Unit Warrants [Member] | Maximum [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Date of warrants exercisable | Jun. 2, 2021 | ||||||||||||
Underwriter's Representatives [Member] | IPO [Member] | Common Unit Warrants [Member] | Minimum [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Date of warrants exercisable | Jun. 2, 2017 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current - federal | ||
Current - state | ||
Deferred - federal | (601,575) | (707,725) |
Deferred - international | (494,982) | (40,038) |
Deferred - state | (43,303) | (246,766) |
Total | (1,139,860) | (994,529) |
Change in valuation allowance | 1,139,860 | 994,529 |
Income tax provision (benefit) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | (21.00%) | (21.00%) |
State taxes, net of federal benefit | (6.10%) | (4.80%) |
Foreign rate differential | (0.20%) | (0.20%) |
Permanent differences | 3.20% | 2.40% |
Change in tax rates | (1.90%) | (4.00%) |
Return-to-provision adjustments | (4.00%) | (2.20%) |
Tax credits | (37.10%) | (19.30%) |
Other | ||
Change in valuation allowance | 67.10% | 49.20% |
Income tax provision (benefit) | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 1,701,503 | $ 1,458,744 |
Stock-based compensation | 183,911 | 122,239 |
Depreciation and amortization | (94,400) | (97,700) |
Accrued expenses and reserves | 195,321 | 45,106 |
Prepaid expenses | (3,893) | (1,256) |
Customer deposits | 60,759 | 16,401 |
Tax credit | 1,176,852 | 546,592 |
Charitable contributions | 37,468 | 23,945 |
Other, net | 204 | 3,795 |
Deferred tax asset, net | 3,257,725 | 2,117,866 |
Valuation allowance | (3,257,725) | (2,117,866) |
Deferred tax asset, net of valuation allowance |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes (Textual) | ||
Federal tax net operating loss carryforwards | $ 5,587,000 | |
State net operating loss carryforwards | 7,057,000 | |
Federal Research and Development tax credit carryforwards | $ 1,177,000 | |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2029 | |
Change in valuation allowance | $ 1,140,000 | $ 995,000 |
Operating loss carryforward, description | The net operating loss carryforward generated after December 31, 2018 will never expire for federal purposes but can only reduce 80% of taxable income in future years. |