Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Sensus Healthcare, Inc. | |
Entity Central Index Key | 0001494891 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 Common Stock, Shares Outstanding | 16,515,038 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 001-37714 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 12,097,617 | $ 8,100,288 |
Investment in debt securities | 3,688,015 | 7,389,407 |
Accounts receivable, net | 7,838,638 | 14,011,180 |
Inventories | 3,959,670 | 2,997,120 |
Prepaid and other current assets | 1,952,406 | 1,505,175 |
Total Current Assets | 29,536,346 | 34,003,170 |
Property and Equipment, Net | 1,088,470 | 1,082,428 |
Patent Rights, Net | 313,254 | 337,351 |
Deposits | 99,198 | 101,561 |
Operating Lease Right-of-Use Assets, Net | 1,316,796 | 1,400,037 |
Total Assets | 32,354,064 | 36,924,547 |
Current Liabilities | ||
Accounts payable and accrued expenses | 3,919,742 | 4,779,435 |
Deferred revenue, current portion | 1,270,247 | 1,191,898 |
Operating lease liabilities, current portion | 305,396 | 309,524 |
Product warranties | 137,736 | 187,454 |
Total Current Liabilities | 5,633,121 | 6,468,311 |
Operating Lease Liabilities | 1,041,091 | 1,115,529 |
Deferred Revenue, Net of Current Portion | 1,112,896 | 1,339,285 |
Total Liabilities | 7,787,108 | 8,923,125 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred stock, 5,000,000 shares authorized and none issued and outstanding | ||
Common stock, $0.01 par value - 50,000,000 authorized; 16,570,478 issued and 16,515,038 outstanding at March 31, 2020; 16,540,478 issued and 16,485,780 outstanding at December 31, 2019 | 165,704 | 165,404 |
Additional paid-in capital | 43,469,602 | 43,314,123 |
Treasury stock, 55,440 and 54,698 shares at cost, at March 31, 2020 and December 31, 2019, respectively | (255,709) | (252,570) |
Accumulated deficit | (18,812,641) | (15,225,535) |
Total Stockholders' Equity | 24,566,956 | 28,001,422 |
Total Liabilities and Stockholders' Equity | $ 32,354,064 | $ 36,924,547 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
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 | $ 0.01 | $ 0.01 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 16,570,478 | 16,540,478 |
Common Stock, outstanding | 16,515,038 | 16,485,780 |
Treasury stock, shares | 55,440 | 54,698 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 1,679,445 | $ 5,436,599 |
Cost of Sales | 970,944 | 2,120,621 |
Gross Profit | 708,501 | 3,315,978 |
Operating Expenses | ||
Selling and marketing | 1,790,970 | 2,530,346 |
General and administrative | 1,329,557 | 1,013,162 |
Research and development | 1,225,182 | 1,965,507 |
Total Operating Expenses | 4,345,709 | 5,509,015 |
Loss From Operations | (3,637,208) | (2,193,037) |
Other Income (Expense) | ||
Interest income | 50,102 | 72,019 |
Other Income (Expense), net | 50,102 | 72,019 |
Net Loss | $ (3,587,106) | $ (2,121,018) |
Net Loss per share - basic and diluted | $ (0.22) | $ (0.13) |
Weighted average number of shares used in computing net loss per share - basic and diluted | 16,407,102 | 16,119,726 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total |
Balance beginning at Dec. 31, 2018 | $ 161,459 | $ 39,957,905 | $ (133,816) | $ (13,525,532) | $ 26,460,016 |
Balance beginning, shares at Dec. 31, 2018 | 16,145,915 | (33,454) | |||
Stock based compensation | 154,535 | 154,535 | |||
Exercise of warrants | $ 4,002 | 2,697,895 | 2,701,897 | ||
Exercise of warrants, shares | 400,281 | ||||
Net loss | (2,121,018) | (2,121,018) | |||
Balance end at Mar. 31, 2019 | $ 165,461 | 42,810,335 | $ (133,816) | (15,646,550) | 27,195,430 |
Balance end, shares at Mar. 31, 2019 | 16,546,196 | (33,454) | |||
Balance beginning at Dec. 31, 2019 | $ 165,404 | 43,314,123 | $ (252,570) | (15,225,535) | 28,001,422 |
Balance beginning, shares at Dec. 31, 2019 | 16,540,478 | (54,698) | |||
Stock based compensation | $ 300 | 155,479 | 155,779 | ||
Stock based compensation, shares | 30,000 | ||||
Surrender of shares for tax withholding on stock compensation | $ (3,139) | (3,139) | |||
Surrender of shares for tax withholding on stock compensation, shares | (742) | ||||
Net loss | (3,587,106) | (3,587,106) | |||
Balance end at Mar. 31, 2020 | $ 165,704 | $ 43,469,602 | $ (255,709) | $ (18,812,641) | $ 24,566,956 |
Balance end, shares at Mar. 31, 2020 | 16,570,478 | (55,440) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities | ||
Net loss | $ (3,587,106) | $ (2,121,018) |
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | ||
Depreciation and amortization | 152,742 | 128,435 |
Provision for product warranties | 23,373 | 59,638 |
Stock based compensation | 155,779 | 154,535 |
Decrease (increase) in: | ||
Accounts receivable | 6,172,542 | (3,735,738) |
Inventories | (962,550) | (26,299) |
Prepaid and other current assets | (361,626) | (445,874) |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | (938,260) | (1,144,269) |
Deferred revenue | (148,040) | 71,402 |
Product warranties | (73,091) | (57,913) |
Total Adjustments | 4,020,869 | (4,996,083) |
Net Cash Provided By (Used In) Operating Activities | 433,763 | (7,117,101) |
Cash Flows from Investing Activities | ||
Acquisition of property and equipment | (134,687) | (9,404) |
Investment in debt securities - held to maturity | (3,007,764) | |
Investments matured | 3,701,392 | 1,200,000 |
Net Cash Provided By (Used In) Investing Activities | 3,566,705 | (1,817,168) |
Cash Flows from Financing Activities | ||
Withholding taxes on stock compensation | (3,139) | |
Exercise of warrants | 2,701,897 | |
Net Cash Provided By (Used In) Financing Activities | (3,139) | 2,701,897 |
Net Increase (Decrease) in Cash and Cash Equivalents | 3,997,329 | (6,232,372) |
Cash and Cash Equivalents - Beginning | 8,100,288 | 12,484,256 |
Cash and Cash Equivalents - Ending | 12,097,617 | 6,251,884 |
Non-Cash Investing and Financing Activities | ||
Transfer of inventory to property and equipment | 103,697 | |
Lease liabilities arising from obtaining right-of-use-assets | $ 805,000 |
Organization and Summary Of Sig
Organization and Summary Of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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 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 a limited liability corporation. 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 formed a subsidiary in Israel. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida. Basis of Presentation The accompanying unaudited condensed financial statements in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial statements. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2019 included in the Company's Form 10-K, filed with the SEC. The results for the three months ended March 31, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period. Principles of consolidation The accompanying condensed 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 including 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, inventory reserves, receivable allowances, recoverability of long-lived assets and 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. 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 three months ended March 31, 2020 and 2019 was as follows: For the Three Months Ended 2020 2019 Product Revenue $ 1,076,002 $ 4,930,924 Service Revenue 603,443 505,675 Total Revenue $ 1,679,445 $ 5,436,599 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 March 31, 2020 was as follows: Service Balance, beginning of period $ 2,531,183 Revenue recognized (459,861 ) Amounts invoiced 311,821 Balance, end of period $ 2,383,143 The Company does not disclose information about remaining performance obligations with respect to 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 March 31, 2020 was as follows: Year Service Revenue 2020 (April 1 – December 31, 2020) $ 990,846 2021 943,562 2022 389,235 2023 39,667 2024 19,833 Total $ 2,383,143 The Company provides warranties in conjunction with the sale of its products. 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. Segment and Geographical Information The Company's revenue is generated primarily from customers in the United States, which represented approximately 99% and 81% of total revenue for the three months ended March 31, 2020 and 2019, respectively. A single customer in the U.S. accounted for approximately 11% and 53% of revenues for the three months ended March 31, 2020 and 2019, respectively, and approximately 75% and 79% of the accounts receivable as of March 31, 2020 and December 31, 2019, respectively. 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 March 31, 2020 and December 31, 2019, the Company had approximately $11,819,000 and $7,740,000, 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 reevaluates 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 Gross Gross Fair 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 Short-Term: Corporate bonds $ 2,985,788 $ — $ 4,809 $ 2,980,979 United States Treasury bonds 702,228 3,300 — 705,528 Total Short Term: 3,688,016 3,300 4,809 3,686,507 Total Investments March 31, 2020 $ 3,688,016 $ 3,300 $ 4,809 $ 3,686,507 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 $0 and $80,000 as of March 31, 2020 and December 31, 2019. Inventories Inventories consist of finished product and components and are stated at the lower of cost or net realizable value, determined using the first-in-first-out method. 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. The diluted net income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period, using the treasury stock method for options and warrants, as well as unvested restricted shares. In periods when the Company has incurred a net loss, options, warrants and unvested 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 were excluded as follows: For the Three Months Ended 2020 2019 Warrants — 256,035 Stock options — 64,463 Shares 36,048 70,951 Advertising Costs Advertising and promotion expenses are charged to expense as incurred. Advertising and promotion expense included in selling expense in the accompanying statements of operations amounted to approximately $270,000 and $539,000 for the three months ended March 31, 2020 and 2019, 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 use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. 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 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 condensed consolidated balance sheets. Operating lease assets are amortized to rent expense over the lease term and included in operating expenses in the condensed consolidated statements of operations. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 2 — Property and Equipment As of As of Estimated (unaudited) Operations equipment $ 1,411,666 $ 1,280,209 3 years Tradeshow and demo equipment 914,415 914,891 3 years Computer equipment 120,815 117,596 3 years 2,446,896 2,312,696 Less accumulated depreciation (1,358,426 ) (1,230,268 ) Property and Equipment, Net $ 1,088,470 $ 1,082,428 Depreciation expense was approximately $129,000 and $104,000, for the three months ended March 31, 2020 and 2019, respectively. |
Patent Rights
Patent Rights | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENT RIGHTS | Note 3 — Patent Rights As of As of 2020 2019 (unaudited) Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (939,764 ) (915,667 ) Patent Rights, Net $ 313,254 $ 337,351 Amortization expense was approximately $24,000 for the three months ended March 31, 2020 and 2019. As of March 31, 2020, future remaining amortization expense is as follows: Year 2020 (April 1 – December 31, 2020) $ 72,289 2021 96,386 2022 96,386 2023 48,193 Total $ 313,254 |
Revolving Credit Facility
Revolving Credit Facility | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
REVOLVING CREDIT FACILITY | Note 4 — Revolving Credit Facility The Company has a revolving credit facility that, through April 2020, provided for maximum borrowings equal to the lesser of (a) the $5 million commitment amount or (b) a borrowing base equal to 80% of eligible accounts receivable plus a $2.5 million non-formula sublimit. In October 2019, the term of the facility was extended through January 29, 2020, in January 2020; the term was further extended through April 28, 2020, and in April 2020, the term was further extended to April 1, 2022 and the maximum borrowings were increased to the lesser of (a) the $10 million commitment amount or (b) the borrowing base plus a $3 million non-formula sublimit. Interest on any borrowings, at Prime plus 0.75% (4.00% at March 31, 2020) and Prime plus 1.50% on non-formula borrowings (4.75% at March 31, 2020), 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 monthly adjusted quick ratio restrictive covenant, as defined in the agreement. The Company was in compliance with its financial covenants as of March 31, 2020 and December 31, 2019. There were no borrowings outstanding under the revolving credit facility at March 31, 2020 and December 31, 2019. The Company pays commitment fees of 0.25% per annum on the average unused portion of the line of credit. |
Product Warranties
Product Warranties | 3 Months Ended |
Mar. 31, 2020 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTIES | Note 5 — Product Warranties Changes in product warranty liability were as follows for the three months ended March 31, 2020: Balance, beginning of period $ 187,454 Warranties accrued during the period 23,373 Payments on warranty claims (73,091 ) Balance, end of period $ 137,736 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | Note 6 — Leases 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 leases include an option to extend with prior notice and with terms to be negotiated. The Company currently does not have any lease with a term under 12 months. 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 following table presents information about the amount, timing and uncertainty of cash flows arising from the Company's operating leases as of March 31, 2020. Maturity of Operating Lease Liabilities Amount 2020 (April 1 – December 31, 2020) $ 267,409 2021 348,122 2022 284,578 2023 104,343 2024 105,843 Thereafter 494,731 Total undiscounted operating leases payments $ 1,605,026 Less: Imputed interest (258,539 ) Present Value of Operating Lease Liabilities $ 1,346,487 Other Information Weighted-average remaining lease term 6.3 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 asset was reduced by approximately $83,000 and $330,000 for the three months ended March 31, 2020 and the year ended December 31, 2019, respectively. Cash paid for amounts included in the present value of operating lease liabilities was approximately $91,000 and $310,000 for the three months ended March 31, 2020 and the year ended December 31, 2019, respectively, is included in operating cash flows. Operating lease cost was approximately $96,000 and $65,000 for the three months ended March 31, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 7 — Commitments and Contingencies 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 SRT-100 (and subsequently the SRT-100 Vision and the SRT-100 Plus), in accordance with the Company's product specifications. The agreement renews for successive one-year periods 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 upon 90 days written notice. Purchases from this manufacturer totaled approximately $1,578,000 and $1,911,000 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, and December 31, 2019 approximately $927,000 and $1,104,000, 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 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 | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | Note 8 — Employee Benefit Plans The Company sponsors 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. The Company makes contributions to the plans that include matching a percentage of the employees' contributions up to certain limits. Expenses related to this plan totaled approximately $31,000 and $28,000 for the three months ended March 31, 2020 and 2019, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Note 9 — Stockholders' Equity The Company has authorized 50,000,000 shares of common stock, of which 16,570,478 were issued and 16,515,038 outstanding at March 31, 2020; 16,540,478 shares were issued and 16,485,780 were outstanding as of December 31, 2019. Warrants The following table summarizes the Company's warrant activity: Warrants Number of Weighted Weighted Outstanding – December 31, 2019 2,032,187 $ 6.75 0.51 Granted — — — Exercised — — — Expired — — — Outstanding – March 31, 2020 2,032,187 $ 6.75 0.26 Exercisable – March 31, 2020 2,032,187 $ 6.75 0.26 The intrinsic value of the common stock warrants was approximately $0 as of March 31, 2020, and December 31, 2019, respectively. 2016 and 2017 Equity Incentive Plans On January 25, 2018, 80,000 fully vested shares were granted to the nonemployee directors, and stock options covering 229,334 shares 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 $0 as of March 31, 2020 and December 31, 2019, 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 $0 for the three months ended March 31, 2020 and 2019, respectively. Unrecognized stock compensation expense was approximately $638,000 as of March 31, 2020, which will be recognized over the remaining vesting period. A summary of restricted stock activity is presented as follows: Shares Weighted Unvested balance at December 31, 2019 80,417 $ 5.70 Granted 30,000 4.11 Vested (2,500 ) 4.99 Forfeited — — Unvested balance at March 31, 2020 107,917 $ 5.27 The following table summarizes the Company's stock option activity: Number of Weighted Weighted Outstanding – December 31, 2019 229,334 $ 5.55 8.07 Granted — — — Exercised — — — Expired — — — Outstanding – March 31, 2020 229,334 $ 5.55 7.82 Exercisable – March 31, 2020 229,334 $ 5.55 7.82 Treasury Stock The Company accounts for purchases of treasury stock under the cost method with the cost of such purchases reflected in treasury stock in the accompanying condensed balance sheet. As of March 31, 2020 and December 31, 2019, the Company had 55,440 and 54,698 treasury shares, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 10 — Income Taxes Book income before taxes was negative for the three months ended March 31, 2020. Tax expense for the three months ended March 31, 2020 and 2019 was $0. There are no uncertain tax positions that would require recognition in the financial statements. If the Company incurs an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as income taxes. The Company's conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. As of March 31, 2020, the Company has U.S. federal and certain state tax returns subject to examination, beginning with those filed for the year 2016. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 11 — 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. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. The outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies and created uncertainty regarding potential impacts to the Company's employees, operations, and customer demand. The Company, which provides medical devices, is considered an "essential business" and has been able to continue to operate. However, the COVID-19 pandemic has significantly impacted the Company's sales and could further impact the Company's operations and the operations of the Company's customers, suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company's business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company's customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local, state and federal governments, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time. In light of the COVID-19 pandemic, the Company has taken steps to manage its costs and bolster its liquidity. We increased our borrowing availability as a precautionary measure to preserve financial flexibility due to the current uncertainty in the global markets resulting from the COVID-19 pandemic. Specifically, on April 13, 2020, the Company amended its revolving credit facility to extend the maturity from April 28, 2020 to April 1, 2022 and to increase the amount available under the facility from the lesser of $5 million or the borrowing base, equal to 80% of eligible accounts receivable, plus the $2.5 million sublimit to the $10 million commitment amount or the borrowing base plus a $3 million sublimit. On April 20, 2020, the Company received a loan under the Small Business Administration Paycheck Protection Program enabled by the CARES Act of 2020 in the amount of $1,022,785 to be used for employee compensation and facilities costs. The loan has a six-month deferral period during which no payments will be due; however, interest will accrue. The loan matures in April 2022 and provides for interest at the rate of 1% per annum. The loan is subject to forgiveness for principal that is used for the limited purposes that expressly qualify for forgiveness under SBA requirements; however, the Company has no assurance that the loan will be forgiven. |
Organization and Summary Of S_2
Organization and Summary Of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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 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 a limited liability corporation. 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 formed a subsidiary in Israel. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida. |
BASIS OF PRESENTATION | Basis of Presentation The accompanying unaudited condensed financial statements in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial statements. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2019 included in the Company's Form 10-K, filed with the SEC. The results for the three months ended March 31, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period. |
PRINCIPLES OF CONSOLIDATION | Principles of consolidation The accompanying condensed 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 including 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, inventory reserves, receivable allowances, recoverability of long-lived assets and 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. 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 three months ended March 31, 2020 and 2019 was as follows: For the Three Months Ended 2020 2019 Product Revenue $ 1,076,002 $ 4,930,924 Service Revenue 603,443 505,675 Total Revenue $ 1,679,445 $ 5,436,599 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 March 31, 2020 was as follows: Service Balance, beginning of period $ 2,531,183 Revenue recognized (459,861 ) Amounts invoiced 311,821 Balance, end of period $ 2,383,143 The Company does not disclose information about remaining performance obligations with respect to 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 March 31, 2020 was as follows: Year Service Revenue 2020 (April 1 – December 31, 2020) $ 990,846 2021 943,562 2022 389,235 2023 39,667 2024 19,833 Total $ 2,383,143 The Company provides warranties in conjunction with the sale of its products. 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. |
SEGMENT AND GEOGRAPHICAL INFORMATION | Segment and Geographical Information The Company's revenue is generated primarily from customers in the United States, which represented approximately 99% and 81% of total revenue for the three months ended March 31, 2020 and 2019, respectively. A single customer in the U.S. accounted for approximately 11% and 53% of revenues for the three months ended March 31, 2020 and 2019, respectively, and approximately 75% and 79% of the accounts receivable as of March 31, 2020 and December 31, 2019, respectively. |
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 March 31, 2020 and December 31, 2019, the Company had approximately $11,819,000 and $7,740,000, 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 reevaluates 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 Gross Gross Fair 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 Short-Term: Corporate bonds $ 2,985,788 $ — $ 4,809 $ 2,980,979 United States Treasury bonds 702,228 3,300 — 705,528 Total Short Term: 3,688,016 3,300 4,809 3,686,507 Total Investments March 31, 2020 $ 3,688,016 $ 3,300 $ 4,809 $ 3,686,507 |
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 $0 and $80,000 as of March 31, 2020 and December 31, 2019. |
INVENTORIES | Inventories Inventories consist of finished product and components and are stated at the lower of cost or net realizable value, determined using the first-in-first-out method. |
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. The diluted net income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period, using the treasury stock method for options and warrants, as well as unvested restricted shares. In periods when the Company has incurred a net loss, options, warrants and unvested 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 were excluded as follows: For the Three Months Ended 2020 2019 Warrants — 256,035 Stock options — 64,463 Shares 36,048 70,951 |
ADVERTISING COSTS | Advertising Costs Advertising and promotion expenses are charged to expense as incurred. Advertising and promotion expense included in selling expense in the accompanying statements of operations amounted to approximately $270,000 and $539,000 for the three months ended March 31, 2020 and 2019, respectively. |
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 use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. 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 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 condensed consolidated balance sheets. Operating lease assets are amortized to rent expense over the lease term and included in operating expenses in the condensed consolidated statements of operations. |
Organization and Summary Of S_3
Organization and Summary Of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Disaggregation of Revenue | For the Three Months Ended 2020 2019 Product Revenue $ 1,076,002 $ 4,930,924 Service Revenue 603,443 505,675 Total Revenue $ 1,679,445 $ 5,436,599 |
Schedule of deferred revenue | Service Balance, beginning of period $ 2,531,183 Revenue recognized (459,861 ) Amounts invoiced 311,821 Balance, end of period $ 2,383,143 |
Schedule of estimated service revenue recognised | Year Service Revenue 2020 (April 1 – December 31, 2020) $ 990,846 2021 943,562 2022 389,235 2023 39,667 2024 19,833 Total $ 2,383,143 |
Schedule of investment | Amortized Gross Gross Fair 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 Short-Term: Corporate bonds $ 2,985,788 $ — $ 4,809 $ 2,980,979 United States Treasury bonds 702,228 3,300 — 705,528 Total Short Term: 3,688,016 3,300 4,809 3,686,507 Total Investments March 31, 2020 $ 3,688,016 $ 3,300 $ 4,809 $ 3,686,507 |
Schedule of antidilutive | For the Three Months Ended 2020 2019 Warrants — 256,035 Stock options — 64,463 Shares 36,048 70,951 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | As of As of Estimated (unaudited) Operations equipment $ 1,411,666 $ 1,280,209 3 years Tradeshow and demo equipment 914,415 914,891 3 years Computer equipment 120,815 117,596 3 years 2,446,896 2,312,696 Less accumulated depreciation (1,358,426 ) (1,230,268 ) Property and Equipment, Net $ 1,088,470 $ 1,082,428 |
Patent Rights (Tables)
Patent Rights (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | As of As of 2020 2019 (unaudited) Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (939,764 ) (915,667 ) Patent Rights, Net $ 313,254 $ 337,351 |
Schedule of amortization expense | Year 2020 (April 1 – December 31, 2020) $ 72,289 2021 96,386 2022 96,386 2023 48,193 Total $ 313,254 |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Product Warranties Disclosures [Abstract] | |
Schedule of changes in product warranty liability | Balance, beginning of period $ 187,454 Warranties accrued during the period 23,373 Payments on warranty claims (73,091 ) Balance, end of period $ 137,736 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of future minimum lease payments for operating leases | Maturity of Operating Lease Liabilities Amount 2020 (April 1 – December 31, 2020) $ 267,409 2021 348,122 2022 284,578 2023 104,343 2024 105,843 Thereafter 494,731 Total undiscounted operating leases payments $ 1,605,026 Less: Imputed interest (258,539 ) Present Value of Operating Lease Liabilities $ 1,346,487 Other Information Weighted-average remaining lease term 6.3 years Weighted-average discount rate 5.0 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of warrant activity | Warrants Number of Weighted Weighted Outstanding – December 31, 2019 2,032,187 $ 6.75 0.51 Granted — — — Exercised — — — Expired — — — Outstanding – March 31, 2020 2,032,187 $ 6.75 0.26 Exercisable – March 31, 2020 2,032,187 $ 6.75 0.26 |
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, 2019 80,417 $ 5.70 Granted 30,000 4.11 Vested (2,500 ) 4.99 Forfeited — — Unvested balance at March 31, 2020 107,917 $ 5.27 |
Schedule of option activity | Number of Weighted Weighted Outstanding – December 31, 2019 229,334 $ 5.55 8.07 Granted — — — Exercised — — — Expired — — — Outstanding – March 31, 2020 229,334 $ 5.55 7.82 Exercisable – March 31, 2020 229,334 $ 5.55 7.82 |
Organization and Summary Of S_4
Organization and Summary Of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total Revenue | $ 1,679,445 | $ 5,436,599 |
Product Revenue [Member] | ||
Total Revenue | 1,076,002 | 4,930,924 |
Service Revenue [Member] | ||
Total Revenue | $ 603,443 | $ 505,675 |
Organization and Summary Of S_5
Organization and Summary Of Significant Accounting Policies (Details 1) - Service [Member] | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Deferred Revenue Arrangement [Line Items] | |
Balance, beginning of period | $ 2,531,183 |
Revenue recognized | (459,861) |
Amounts invoiced | 311,821 |
Balance, end of period | $ 2,383,143 |
Organization and Summary Of S_6
Organization and Summary Of Significant Accounting Policies (Details 2) | Mar. 31, 2020USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2020 (April 1 – December 31, 2020) | $ 990,846 |
2021 | 943,562 |
2022 | 389,235 |
2023 | 39,667 |
2024 | 19,833 |
Total | $ 2,383,143 |
Organization and Summary Of S_7
Organization and Summary Of Significant Accounting Policies (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Amortized Cost | $ 3,688,016 | $ 7,389,407 |
Gross Unrealized Gain | 3,300 | 5,553 |
Gross Unrealized Loss | 4,809 | |
Fair Value | 3,686,507 | 7,394,960 |
Short Term [Member] | ||
Amortized Cost | 3,688,016 | 7,389,407 |
Gross Unrealized Gain | 3,300 | 5,553 |
Gross Unrealized Loss | 4,809 | |
Fair Value | 3,686,507 | 7,394,960 |
Short Term [Member] | Corporate Bonds [Member] | ||
Amortized Cost | 2,985,788 | 6,690,678 |
Gross Unrealized Gain | 4,251 | |
Gross Unrealized Loss | 4,809 | |
Fair Value | 2,980,979 | 6,694,929 |
Short Term [Member] | United States Treasury Bonds [Member] | ||
Amortized Cost | 702,228 | 698,729 |
Gross Unrealized Gain | 3,300 | 1,302 |
Gross Unrealized Loss | ||
Fair Value | $ 705,528 | $ 700,031 |
Organization and Summary Of S_8
Organization and Summary Of Significant Accounting Policies (Details 4) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 256,035 | |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 64,463 | |
Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 36,048 | 70,951 |
Organization and Summary Of S_9
Organization and Summary Of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Cash, FDIC insured amount | $ 250,000 | ||
Cash uninsured amount | 11,819,000 | $ 7,740,000 | |
Allowance for doubtful accounts receivable, current | 0 | $ 80,000 | |
Advertising and promotion expense | $ 270,000 | $ 539,000 | |
UNITED STATES | |||
Reveune percent | 99.00% | 81.00% | |
Customer [Member] | Accounts Receivable [Member] | UNITED STATES | |||
Reveune percent | 75.00% | 79.00% | |
UNITED STATES | Customer [Member] | Revenue [Member] | |||
Reveune percent | 11.00% | 53.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,446,896 | $ 2,312,696 |
Less accumulated depreciation | (1,358,426) | (1,230,268) |
Property and Equipment, Net | 1,088,470 | 1,082,428 |
Operations Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,411,666 | 1,280,209 |
Property, plant and equipment, useful Life | 3 years | |
Tradeshow and Demo Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 914,415 | 914,891 |
Property, plant and equipment, useful Life | 3 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 120,815 | $ 117,596 |
Property, plant and equipment, useful Life | 3 years |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 129,000 | $ 104,000 |
Patent Rights (Details)
Patent Rights (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 1,253,018 | $ 1,253,018 |
Less accumulated amortization | (939,764) | (915,667) |
Patent Rights, Net | $ 313,254 | $ 337,351 |
Patent Rights (Details 1)
Patent Rights (Details 1) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 (April 1 – December 31, 2020) | $ 72,289 | |
2021 | 96,386 | |
2022 | 96,386 | |
2023 | 48,193 | |
Total | $ 313,254 | $ 337,351 |
Patent Rights (Details Textual)
Patent Rights (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 24,000 | $ 24,000 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revolving Credit Facility (Textual) | ||
Revolving credit facility, outstanding | ||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | |
Revolving credit facility, description | The Company has a revolving credit facility that, through April 2020, provided for maximum borrowings equal to the lesser of (a) the $5 million commitment amount or (b) a borrowing base equal to 80% of eligible accounts receivable plus a $2.5 million non-formula sublimit. In October 2019, the term of the facility was extended through January 29, 2020, in January 2020; the term was further extended through April 28, 2020, and in April 2020, the term was further extended to April 1, 2022 and the maximum borrowings were increased to the lesser of (a) the $10 million commitment amount or (b) the borrowing base plus a $3 million non-formula sublimit. | |
Interest on borrowing, description | Interest on any borrowings, at Prime plus 0.75% (4.00% at March 31, 2020) and Prime plus 1.50% on non-formula borrowings (4.75% at March 31, 2020), is payable monthly, and the outstanding principal and interest are due on the maturity date. |
Product Warranties (Details)
Product Warranties (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Product Warranties Disclosures [Abstract] | |
Balance, beginning of period | $ 187,454 |
Warranties accrued during the period | 23,373 |
Payments on warranty claims | (73,091) |
Balance, end of period | $ 137,736 |
Leases (Details)
Leases (Details) | Mar. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 (April 1 – December 31, 2020) | $ 267,409 |
2021 | 348,122 |
2022 | 284,578 |
2023 | 104,343 |
2024 | 105,843 |
Thereafter | 494,731 |
Total undiscounted operating leases payments | 1,605,026 |
Less: Imputed interest | (258,539) |
Present Value of Operating Lease Liabilities | $ 1,346,487 |
Other Information | |
Weighted-average remaining lease term | 6 years 3 months 19 days |
Weighted-average discount rate | 5.00% |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 19, 2019 | Jul. 31, 2016 | Mar. 31, 2020 | Dec. 31, 2019 | |
Leases (Textual) | ||||
Decrease in ROU asset | $ 83,000 | $ 330,000 | ||
Cash paid for amounts included in present value of operating lease liabilities | 91,000 | 310,000 | ||
Operating lease cost | 96,000 | $ 65,000 | ||
Leases, description | 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 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 leases include an option to extend with prior notice and with terms to be negotiated. The Company currently does not have any lease with a term under 12 months. | ||
Right-of-Use Assets | $ 805,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2010 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Commitment and Contingencies (Textual) | ||||
Manufacturing agreement contract term | 3 years | |||
Payments to suppliers | $ 1,578,000 | $ 1,911,000 | ||
Accounts payable and accrued expenses | $ 927,000 | $ 1,104,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Expenses related to employee benefit plan | $ 31,000 | $ 28,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Warrants | |
Outstanding at beginning | shares | 2,032,187 |
Granted | shares | |
Exercised | shares | |
Expired | shares | |
Outstanding at ending | shares | 2,032,187 |
Exercisable at end | shares | 2,032,187 |
Weighted Average Exercise Price | |
Outstanding at beginning | $ / shares | $ 6.75 |
Granted | $ / shares | |
Exercised | $ / shares | |
Expired | $ / shares | |
Outstanding at ending | $ / shares | 6.75 |
Exercisable at ending | $ / shares | $ 6.75 |
Weighted Average Remainning Contractual Term (In Years) | |
Outstanding at beginning | 6 months 3 days |
Outstanding at ending | 3 months 4 days |
Exercisable at ending | 3 months 4 days |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | 3 Months Ended |
Mar. 31, 2020 | |
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) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Unvested balance at beginning | shares | 80,417 |
Granted | shares | 30,000 |
Vested | shares | (2,500) |
Forfeited | shares | |
Unvested balance at end | shares | 107,917 |
Weighted Average Grant Date Fair Value | |
Unvested balance at beginning | $ / shares | $ 5.70 |
Granted | $ / shares | 4.11 |
Vested | $ / shares | 4.99 |
Forfeited | $ / shares | |
Unvested balance at end | $ / shares | $ 5.27 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Options | |
Outstanding at beginning shares | shares | 229,334 |
Granted | shares | |
Exercised | shares | |
Expired | shares | |
Outstanding at end shares | shares | 229,334 |
Exercisable | shares | 229,334 |
Weighted Average Exercise | |
Outstanding at beginning | $ / shares | $ 5.55 |
Granted | $ / shares | |
Exercised | $ / shares | |
Expired | $ / shares | |
Outstanding at end | $ / shares | 5.55 |
Exercisable | $ / shares | $ 5.55 |
Weighted Average Remainning Contractual Term (In Years) | |
Outstanding at beginning | 8 years 26 days |
Outstanding at end | 7 years 9 months 25 days |
Exercisable at end | 7 years 9 months 25 days |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 25, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity (Textual) | |||
Common stock, authorized | 50,000,000 | 50,000,000 | |
Common stock, issued | 16,570,478 | 16,540,478 | |
Common stock,outstanding | 16,515,038 | 16,485,780 | |
Intrinsic value of common stock warrants | $ 0 | $ 0 | |
Stock option Granted | |||
Weighted average exercise price stock option granted | $ 5.55 | ||
Options, vested in period, fair value | $ 444,000 | ||
Stock options fair value | $ 3.52 | ||
Intrinsic value of Stock options | $ 0 | $ 0 | |
Unrecognized stock compensation expense | $ 638,000 | ||
Treasury stock | 55,440 | 54,698 | |
Employees [Member] | |||
Stockholders' Equity (Textual) | |||
Description of vesting rights | 80,000 fully vested shares were granted to the nonemployee directors, and stock options covering 229,334 shares with a four-year vesting period were granted to certain employees. | ||
Stock option Granted | 229,334 | ||
Nonemployee Directors [Member] | |||
Stockholders' Equity (Textual) | |||
Stock option Granted | 80,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Taxes (Textual) | ||
Tax expense | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Apr. 13, 2020 | Apr. 20, 2020 |
Subsequent Events (Textual) | ||
Revolving credit facility, description | The Company amended its revolving credit facility to extend the maturity from April 28, 2020 to April 1, 2022 and to increase the amount available under the facility from the lesser of $5 million or the borrowing base, equal to 80% of eligible accounts receivable, plus the $2.5 million sublimit to the $10 million commitment amount or the borrowing base plus a $3 million sublimit. | |
Subsequent events, description | The Company received a loan under the Small Business Administration Paycheck Protection Program enabled by the CARES Act of 2020 in the amount of $1,022,785 to be used for employee compensation and facilities costs. The loan has a six-month deferral period during which no payments will be due; however interest will accrue. The loan matures in April 2022 and provides for interest at the rate of 1% per annum. |