Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 04, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | Sensus Healthcare, Inc. | |
Trading Symbol | SRTS | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 16,396,766 | |
Amendment Flag | false | |
Entity Central Index Key | 0001494891 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37714 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-1647271 | |
Entity Address, Address Line One | 851 Broken Sound Pkwy | |
Entity Address, Address Line Two | NW #215, Boca Raton | |
Entity Address, State or Province | FL | |
Entity Address, City or Town | Florida | |
Entity Address, Postal Zip Code | 33487 | |
City Area Code | (561) | |
Local Phone Number | 922-5808 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 19,340 | $ 25,520 |
Accounts receivable, net | 12,733 | 17,299 |
Inventories | 6,342 | 3,501 |
Prepaid and other current assets | 10,654 | 6,921 |
Total current assets | 49,069 | 53,241 |
Property and equipment, net | 397 | 243 |
Intangibles, net | 25 | 50 |
Deposits | 24 | 24 |
Deferred tax asset | 2,515 | 1,713 |
Operating lease right-of-use asset, net | 949 | 996 |
Other noncurrent asset | 419 | 468 |
Total assets | 53,398 | 56,735 |
Current liabilities | ||
Accounts payable and accrued expenses | 4,928 | 5,521 |
Product warranties | 375 | 403 |
Operating lease liabilities, current portion | 192 | 190 |
Income tax payable | 890 | |
Deferred revenue, current portion | 671 | 693 |
Total current liabilities | 6,166 | 7,697 |
Operating lease liabilities | 782 | 830 |
Deferred revenue, net of current portion | 126 | 139 |
Total liabilities | 7,074 | 8,666 |
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; 16,913,595 issued and 16,396,766 outstanding at March 31, 2023; 16,902,761 issued and 16,390,419 outstanding at December 31, 2022 | 169 | 169 |
Additional paid-in capital | 45,220 | 45,031 |
Treasury stock, 516,829 and 512,342 shares at cost, at March 31, 2023 and December 31, 2022, respectively | (3,473) | (3,433) |
Retained earnings | 4,408 | 6,302 |
Total stockholders’ equity | 46,324 | 48,069 |
Total liabilities and stockholders’ equity | $ 53,398 | $ 56,735 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock share issued | 16,913,595 | 16,902,761 |
Common stock shares outstanding | 16,396,766 | 16,390,419 |
Treasury stock, shares | 516,829 | 512,342 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 3,414 | $ 10,338 |
Cost of sales | 1,792 | 3,189 |
Gross profit | 1,622 | 7,149 |
Operating expenses | ||
Selling and marketing | 2,099 | 1,218 |
General and administrative | 1,364 | 1,273 |
Research and development | 1,098 | 728 |
Total operating expenses | 4,561 | 3,219 |
Income (loss) from operations | (2,939) | 3,930 |
Other income: | ||
Gain on sale of assets | 12,779 | |
Interest income | 243 | 1 |
Other income | 243 | 12,780 |
Income (loss) before income tax | (2,696) | 16,710 |
Provision for (benefit from) income taxes | (802) | 648 |
Net income (loss) | $ (1,894) | $ 16,062 |
Net income (loss) per share – basic (in Dollars per share) | $ (0.12) | $ 0.97 |
Net income (loss) per share – diluted (in Dollars per share) | $ (0.12) | $ 0.97 |
Weighted average number of shares used in computing net income (loss) per share – basic (in Shares) | 16,245,343 | 16,497,801 |
Weighted average number of shares used in computing net income (loss) per share – diluted (in Shares) | 16,245,343 | 16,641,654 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | Total |
Balance at Dec. 31, 2021 | $ 167 | $ 44,115 | $ (325) | $ (17,942) | $ 26,015 |
Balance (in Shares) at Dec. 31, 2021 | 16,694,311 | (77,037) | |||
Stock-based compensation | 57 | 57 | |||
Exercise of stock options | $ 1 | 346 | 347 | ||
Exercise of stock options (in Shares) | 62,500 | ||||
Surrender of shares for tax withholding on stock-based compensation | $ (23) | (23) | |||
Surrender of shares for tax withholding on stock-based compensation (in Shares) | (2,226) | ||||
Net income (loss) | 16,062 | 16,062 | |||
Balance at Mar. 31, 2022 | $ 168 | 44,518 | $ (348) | (1,880) | 42,458 |
Balance (in Shares) at Mar. 31, 2022 | 16,756,811 | (79,263) | |||
Balance at Dec. 31, 2022 | $ 169 | 45,031 | $ (3,433) | 6,302 | 48,069 |
Balance (in Shares) at Dec. 31, 2022 | 16,902,761 | (512,342) | |||
Stock-based compensation | 161 | 161 | |||
Stock-based compensation (in Shares) | 10,000 | ||||
Exercise of stock options | 46 | 46 | |||
Exercise of stock options (in Shares) | 8,334 | ||||
Forfeiture of restricted stock units | (18) | (18) | |||
Forfeiture of restricted stock units (in Shares) | (7,500) | ||||
Surrender of shares for tax withholding on stock-based compensation | $ (40) | (40) | |||
Surrender of shares for tax withholding on stock-based compensation (in Shares) | (4,487) | ||||
Net income (loss) | (1,894) | (1,894) | |||
Balance at Mar. 31, 2023 | $ 169 | $ 45,220 | $ (3,473) | $ 4,408 | $ 46,324 |
Balance (in Shares) at Mar. 31, 2023 | 16,913,595 | (516,829) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ (1,894) | $ 16,062 |
Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities: | ||
Depreciation and amortization | 73 | 92 |
Gain on sale of assets | (12,779) | |
Provision for product warranties | 163 | (25) |
Stock-based compensation | 143 | 57 |
Deferred income taxes | (802) | (3,744) |
Decrease (increase) in: | ||
Accounts receivable | 4,566 | 1,590 |
Inventories | (2,855) | (1,969) |
Prepaid and other current assets | (3,685) | 186 |
Other noncurrent asset | 49 | |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | (593) | (366) |
Operating lease liability | (46) | |
Income tax payable | (890) | 4,392 |
Deferred revenue | (35) | (259) |
Product warranties | (191) | (155) |
Total adjustments | (4,103) | (12,980) |
Net cash provided by (used in) operating activities | (5,997) | 3,082 |
Cash flows from investing activities | ||
Acquisition of property and equipment | (189) | (44) |
Proceeds from sale of assets | 15,000 | |
Net cash provided by (used in) investing activities | (189) | 14,956 |
Cash flows from financing activities | ||
Withholding taxes on stock-based compensation | (40) | (23) |
Repayment of loan payable | (51) | |
Exercise of stock options | 46 | 347 |
Net cash provided by financing activities | 6 | 273 |
Net increase (decrease) in cash and cash equivalents | (6,180) | 18,311 |
Cash and cash equivalents – beginning of period | 25,520 | 14,519 |
Cash and cash equivalents – end of period | 19,340 | 32,830 |
Supplemental disclosure of cash flow information: | ||
Interest paid | ||
Income tax paid | 1,200 | |
Supplemental schedule of noncash investing and financing transactions: | ||
Operating lease right-of-use asset and lease liability increase from lease modification | 1,045 | |
Transfer of inventory to property and equipment | $ 14 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1 — Organization and Summary of Significant Accounting Policies Description of the Business Sensus Healthcare, Inc. (together, with its subsidiary, unless the context otherwise indicates, “Sensus” or the “Company”) is primarily a manufacturer of radiation therapy devices sold to healthcare providers and distributors globally through its distribution network. The Company operates in one segment from its corporate headquarters located in Boca Raton, Florida. Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its subsidiary. Accounts and transactions between consolidated entities have been eliminated. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other period. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). Revenue Recognition The Company’s revenue derives primarily from sales of the Company’s devices and services related to maintaining and repairing the devices as part of a service contract or on an ad-hoc basis without a service contract. The Company provides warranties, generally for one year, 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 relevant warranty. The Company has determined that these warranties do not represent separate performance obligations, as the customer does not have the option to purchase the warranty separately and the warranty does not provide the customer with a service, only the assurance that the product complies with agreed-upon specifications. The Company records an estimate of future warranty claims at the time it recognizes revenue from the sale of the device based upon management’s estimate of the future claims rate. Revenue is recognized upon transfer of control of promised goods or services to customers when the product is shipped or the service is rendered, based on the amount the Company expects to receive in exchange for those goods or services. The Company enters into contracts that can include multiple services, which are accounted for separately if they are determined to be distinct. To determine the transaction price for contracts under which a customer promises consideration in a form other than cash, the Company measures the estimated fair value of the noncash consideration at contract inception. If the Company cannot reasonably estimate the fair value of the noncash consideration, it measures the consideration indirectly by reference to the standalone selling price of the products promised to the customer or class of customer in exchange for the consideration. The revenues from service contracts are recognized over the service contract period on a straight-line basis. In the event that a customer does not sign a service contract but requests maintenance or repair services after the warranty expires, the Company recognizes revenue when the service is rendered. The Company has 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 whether the service contract is purchased on a stand-alone basis or together with the device. There is no termination provision in the service contract or any penalties in practice for cancellation of the service contract. Disaggregated revenue for the three months ended March 31, 2023 and 2022 was as follows: For the Three Months Ended March 31, (in thousands) 2023 2022 Product Revenue - recognized at a point in time $ 2,469 $ 9,228 Service Revenue - recognized at a point in time 341 321 Service Revenue - recognized over time 604 789 Total Revenue $ 3,414 $ 10,338 The Company operates in a highly regulated environment, primarily in the U.S. dermatology market, in which state regulatory approval is sometimes required before the customer is able to use the product. In cases where such regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained. Deferred revenue as of March 31, 2023 was as follows: (in thousands) Product Service Total December 31, 2022 $ 45 $ 787 $ 832 Revenue recognized (9 ) (604 ) (613 ) Amounts invoiced - 578 578 March 31, 2023 $ 36 $ 761 $ 797 The Company does not disclose information about remaining performance obligations with original expected durations of one year or less in connection with deposits for products. Estimated service revenue to be recognized in the future related to performance obligations fully or partially unsatisfied as of March 31, 2023 is as follows: Year Service Revenue 2023 (April 1 - December 31, 2023) $ 582 2024 131 2025 28 2026 20 Total $ 761 The Company pays commissions for equipment sales. Because the recovery of commissions is expected to occur from product revenue within one year, the Company charges commissions to expense as incurred. Shipping and handling costs are expensed as incurred and are included in cost of sales. Concentration Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, and accounts receivable. On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (the “FDIC”) was appointed receiver. On March 13, 2023, the FDIC transferred all deposits, both insured and uninsured, and substantially all assets of SVB to a newly created, full-service FDIC-operated “bridge bank”, Silicon Valley Bridge Bank, N.A. (“SVBB”), chartered by the Office of the Comptroller of the Currency as a national bank. Subsequently, on March 27, 2023, the FDIC entered into a purchase and assumption agreement for all deposits and loans, as well as certain other assets, of SVBB, with First-Citizens Bank & Trust Company (“FCB”), a subsidiary of First Citizens BancShares, Inc. ("First Citizens"). As a result of this transaction, SVB became a wholly owned subsidiary of FCB. Based upon information available to us, we believe that FCB assumed all contracts SVB entered into prior to its failure, and that FCB will continue to perform under those contracts. See Note 4, Debt, for additional information. As of March 31, 2023, at another financial institution, the Company’s deposit balance exceeded the federally insured limit. The Company has not incurred losses related to the deposit and does not believe it is exposed to unusual credit risk beyond the normal risk associated with commercial banking relationships. One customer in the U.S. accounted for approximately 60% and 81% of revenue for the three months ended March 31, 2023 and 2022, respectively, and 93% and 91% of the accounts receivable as of March 31, 2023 and December 31, 2022, respectively. Segment and Geographical Information The following table illustrates total revenue for the three months ended March 31, 2023 and 2022 by geographic region. For the Three Months Ended March 31, (in thousands) 2023 2022 United States $ 3,274 96 % $ 10,147 98 % China 130 4 % 179 2 % Other 10 0 % 12 0 % Total Revenue $ 3,414 100 % $ 10,338 100 % Fair Value of Financial Instruments Carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to their relatively short maturities. Fair Value Measurements The Company uses a fair value hierarchy that prioritizes inputs to valuation approaches used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 Inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. ● Level 1 assets may include listed mutual funds, ETFs and listed equities Level 2 Inputs: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; quotes from pricing services or brokers when the Company can determine that orderly transactions took place at the quoted price or that the inputs used to arrive at the price are observable; and inputs other than quoted prices that are observable, such as models or other valuation methodologies. ● Level 2 assets may include debt securities and foreign currency exchange contracts that have inputs to the valuations that generally can be corroborated by observable market data. Level 3 Inputs: Unobservable inputs for the valuation of the asset or liability, which may include nonbinding broker quotes. ● Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation. Significance of Inputs: The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. Cash and Cash Equivalents The Company considers all highly liquid financial instruments with maturities of three months or less when purchased to be cash equivalents. 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 varies by customer, primarily due to the customer’s financial condition. The Company estimates future credit losses based on the age of customer receivable balances, collection history and forecasted economic trends. Future collections can be significantly different from historical collection trends or current estimates. The allowance for expected credit losses was $107 thousand as of March 31, 2023 and December 31, 2022. No bad debt expense was incurred for the three months ended March 31, 2023 or 2022. 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. The Company periodically reviews the value of items in inventory for obsolescence based on its assessment of market conditions and writes down any obsolete inventory to its net realizable value through a charge to costs of goods sold. The provision for inventory obsolescence was $18 thousand as of both March 31, 2023 and December 31, 2022. Earnings Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. 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 unvested restricted shares. In periods when the Company has incurred a net loss, options 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 excluded were as follows: For the Three Months Ended March 31, 2023 2022 Stock Options 20,933 - Restricted Stock 54,122 - Total 75,055 - The factors used in the earnings per share computation are as follows: For the Three Months Ended March 31, (in thousands) 2023 2022 Basic Net income (loss) $ (1,894 ) $ 16,062 Weighted average common shares outstanding 16,245 16,498 Basic earnings per share $ (0.12 ) $ 0.97 Diluted Net income (loss) $ (1,894 ) $ 16,062 Weighted average common shares outstanding 16,245 16,498 Dilutive effects of: Assumed exercise of stock options - 66 Restricted stock awards - 78 Dilutive shares 16,245 16,642 Diluted earnings per share $ (0.12 ) $ 0.97 Leases The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. The operating lease right-of-use asset (the “ROU asset”) 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. The ROU asset and operating lease liability 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 the options. To determine the present value of the lease payment, 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. In addition, the Company has elected available practical expedients to not separate lease and non-lease components for all leased assets and to exclude leases with initial terms of 12 months or less. The lease payments used to determine the Company’s operating lease asset may include lease incentives, and stated rent increases are recognized in the ROU asset in the Company’s consolidated balance sheets. The ROU asset is amortized to rent expense over the lease term and included in operating expenses in the consolidated statements of income (loss). Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Uncertain tax positions are recognized in the financial statements only if that position is more likely than not to be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. In November 2019, the FASB issued ASU 2019-10, which provides a one-year deferral of the effective dates of ASU No. 2016-13. Accordingly, the guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted this update in January 2023. This update did not have a significant impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 2 — Property and Equipment As of As of March 31, December 31, Estimated (in thousands) 2023 2022 Useful Lives Operations equipment $ 1,217 $ 1,222 3 years Tradeshow and demo equipment 1,181 990 3 years Computer equipment 170 162 3 years Subtotal 2,568 2,374 Less accumulated depreciation (2,171 ) (2,131 ) Property and Equipment, Net $ 397 $ 243 Depreciation expense was $48 thousand and $68 thousand for the three months ended March 31, 2023 and 2022, respectively. |
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2023 | |
Intangibles [Abstract] | |
INTANGIBLES | Note 3 — Intangibles Patent Customer (in thousands) Rights Relationships Total December 31, 2022 $ 49 $ 1 $ 50 Amortization expense (25 ) - (25 ) March 31, 2023 $ 24 $ 1 $ 25 Accumulated amortization was $1,249 thousand and $1,224 thousand as of March 31, 2023 and December 31, 2022, respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | Note 4 — Debt As of December 31, 2022, the Company had a revolving credit facility with SVB that provided for maximum borrowings equal to the lesser of (a) the $15 million commitment amount or (b) the borrowing base plus a $7.5 million non-formula sublimit. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (the “FDIC”) was appointed receiver. On March 13, 2023, the FDIC transferred all deposits, both insured and uninsured, and substantially all assets of SVB to a newly created, full-service FDIC-operated “bridge bank”, Silicon Valley Bridge Bank, N.A. (“SVBB”), chartered by the Office of the Comptroller of the Currency as a national bank. Subsequently, on March 27, 2023, the FDIC entered into a purchase and assumption agreement for all deposits and loans, as well as certain other assets, of SVBB, with First-Citizens Bank & Trust Company (“FCB”), a subsidiary of First Citizens BancShares, Inc. ("First Citizens"). As a result of this transaction, SVB became a wholly owned subsidiary of FCB. At March 31, 2023, the available borrowing was $15 million. Interest on any borrowings, at Prime plus 0.75% (8.75% at March 31, 2023) and Prime plus 1.50% on non-formula borrowings (9.5% at March 31, 2023), is payable monthly, and the outstanding principal and interest are due on the maturity date. The revolving credit facility is secured by all of the Company’s assets. The Company was in compliance with its financial covenants under the revolving credit facility as of March 31, 2023 and December 31, 2022. There were no borrowings outstanding under the revolving credit facility at March 31, 2023 or December 31, 2022. |
Product Warranties
Product Warranties | 3 Months Ended |
Mar. 31, 2023 | |
Product Warranties [Abstract] | |
PRODUCT WARRANTIES | Note 5 — Product Warranties Changes in product warranty liability were as follows for the three months ended March 31, 2023: (in thousands) Balance, December 31, 2022 $ 403 Warranties accrued during the period 163 Payments on warranty claims (191 ) Balance, March 31, 2023 $ 375 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 6 — Leases Operating Lease Agreements The Company leases its headquarters office from an unrelated third party. In April 2022, the Company renewed the lease through September 2027. The amortization of the ROU asset was $48 thousand and $52 thousand for the three months ended March 31, 2023 and 2022, respectively. 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, 2023. Maturity of Operating Lease Liabilities Amount 2023 (April 1 - December 31, 2023) $ 162 2024 238 2025 245 2026 253 2027 194 Total undiscounted operating leases payments $ 1,092 Less: Imputed interest (118 ) Present Value of Operating Lease Liabilities $ 974 Other Information Weighted-average remaining lease term 4.5 years Weighted-average discount rate 5 % Cash paid for amounts included in the measurement of operating lease liabilities was $46 thousand and $66 thousand for the three months ended March 31, 2023 and 2022, respectively, and is included in cash flows from operating activities in the accompanying consolidated statement of cash flows. Operating lease cost recognized as expense was $60 thousand and $63 thousand for the three months ended March 31, 2023 and 2022, respectively. The financing component for operating lease obligations represents the effect of discounting the operating lease payments to their present value. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies [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 the agreement, that it will not renew the agreement. The Company or the manufacturer may also terminate the agreement upon 90 days’ prior written notice. Purchases from this manufacturer totaled approximately $6.6 million and $3.3 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, approximately $1.4 million and $1.5 million, respectively, was due to this manufacturer, which is presented in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets. Legal Contingencies The Company is a 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 Department subsequently advised the Company that it was considering expanding the investigation to determine whether the Company had any involvements in physician’s use of certain reimbursements codes. The Company has received two Civil Investigative Demands from the Department seeking documents and written responses in connection with its investigation. The Company has fully cooperated with the Department. The Company disputes that it has engaged in any wrongdoing with respect to such reimbursement claims; among other considerations, 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. As of March 31, 2023, the Company is unable to estimate the cost associated with this matter. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 8 — Stockholders’ Equity Preferred Stock The Company has authorized 5 million shares of preferred stock. No shares of preferred stock were issued or outstanding at March 31, 2023 or December 31, 2022. Treasury stock Treasury stock includes shares surrendered by employees for tax withholding on the vesting of restricted stock awards and shares repurchased in open market transactions. During the three months ended March 31, 2023, 4,487 shares were surrendered by employees for tax withholding, and the Company did not repurchase any shares in open market transactions. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Stock-Based Compensation [Abstract] | |
STOCK-BASED COMPENSATION | Note 9 – Stock-Based Compensation 2016 and 2017 Equity Incentive Plans The 2016 Equity Incentive Plan and the 2017 Incentive Plan (collectively, the “Plans”) provide for the issuance of up to 397,473 shares and 500,000 shares, respectively. In addition, unless the Compensation Committee specifically determines otherwise, the maximum number of shares available under the Plans and the awards granted under them are subject to appropriate adjustment in the case of any stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, exchanges or other changes in capitalization affecting the Company’s common stock. The awards may be made in the form of restricted stock awards or stock options, among other forms. As of March 31, 2023, 48,973 shares are available for grant under the Plans. On February 1, 2020, a total of 35,000 shares of restricted stock were issued to employees. The restricted shares vest 25% per year over a four-year period. The grant date fair value of $4.11 per share is being recognized as expense on a straight-line basis over the vesting period. During the three months ended March 31, 2023, 7,500 shares of unvested common stock were forfeited due to the termination of employment for two employees with the Company. On July 21, 2021, a total of 130,000 shares of restricted stock were issued to employees and board members. The restricted shares vest 25% at grant date and 25% per year over a three-year period. The grant date fair value of $3.84 per share is being recognized as expense on a straight-line basis over the vesting period. On December 19, 2022, a total of 77,000 shares of restricted stock were issued to employees. The restricted shares vest 25% per year over a four-year period. The fair value of $6.40 per share, the stock price on grant date, is being recognized as expense on a straight-line basis over the vesting period. On January 26, 2023, 10,000 shares of common stock were issued to an employee and were recorded at the fair value of $8.96 per share, the stock price on the grant date. The shares vested at grant date. Restricted Stock Restricted stock activity for the three months ended March 31, 2023 is summarized below: Weighted- Average Grant Restricted Date Fair Outstanding at Stock Value December 31, 2022 159,500 $ 5.11 Granted 10,000 8.96 Vested (15,000 ) 7.34 Forfeited (7,500 ) $ 4.11 March 31, 2023 147,000 $ 5.19 The Company recognizes forfeitures as they occur rather than estimating a forfeiture rate. The reduction of stock compensation expense related to the forfeitures was $18 thousand and $0 for the three months ended March 31, 2023 and 2022, respectively. Unrecognized stock compensation expense was $631 thousand as of March 31, 2023, which will be recognized over a weighted average period of 3 years. Stock Options Stock options expire 10 years after the grant date. Options that have been granted are exercisable and vest based on the terms on the related agreements. The following table summarizes the Company’s stock option activity: Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Options Price (In Years) Outstanding - December 31, 2022 97,884 $ 5.55 5.08 Granted - - - Exercised (8,334 ) 5.55 - Expired - - - Outstanding - March 31, 2023 89,550 $ 5.55 4.83 Exercisable – March 31, 2023 89,550 $ 5.55 4.83 The stock options outstanding had an intrinsic value of $0 and $183 thousand as of March 31, 2023 and December 31, 2022, respectively. Stock compensation expense related to restricted stock and stock options was $161 thousand and $60 thousand for the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023, the Company issued 8,334 shares of common stock upon the exercise of stock options with an exercise price of $5.55 per share. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 — Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, (“ASC 740”), 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 periods, disclosure and transition. Effective income tax rates for interim periods are based upon the Company’s current estimated annual rate, which varies based upon the Company’s estimate of taxable earnings or loss and the mix of taxable earnings or loss in the various states in which the Company operates. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior period as discrete items in the interim period in which the event occurs. As of December 31, 2022, deferred tax assets were primarily the result of state and foreign net operating loss, state tax credit carryforwards and accrued expenses. A valuation allowance of $185 thousand was recorded against the deferred tax asset balance attributed to foreign net operation losses as of December 31, 2022. For the quarter ended March 31, 2022, the Company recorded a net valuation allowance release of $3.7 million on the basis of management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of March 31, 2023, management determined there continues to be sufficient positive evidence that it is more likely than not that the net deferred tax asset (other than foreign net operation losses) is realizable. Income tax (benefit) expense was ($802) thousand and $648 thousand for the three months ended March 31, 2023 and 2022, respectively. The effective tax rates for the three months ended March 31, 2023 and 2022 were 29.7% and 3.9%, respectively. The tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income the Company earns in those jurisdictions, which are expected to be fairly consistent in the near term. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. The item that had the most significant impact on the difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the three months ended March 31, 2023 was state income taxes. The items that had the most significant impact on the difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the three months ended March 31, 2022 were state income taxes, exercises of stock options, the favorable impact of credits, the release of the valuation allowance during the first quarter of 2022, and the difference in statutory rates in foreign jurisdictions. As of March 31, 2023, the Company’s U.S. federal and certain state tax returns remain subject to examination, beginning with those filed for the year ended December 31, 2017. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
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. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of the Business | Description of the Business Sensus Healthcare, Inc. (together, with its subsidiary, unless the context otherwise indicates, “Sensus” or the “Company”) is primarily a manufacturer of radiation therapy devices sold to healthcare providers and distributors globally through its distribution network. The Company operates in one segment from its corporate headquarters located in Boca Raton, Florida. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its subsidiary. Accounts and transactions between consolidated entities have been eliminated. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other period. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). |
Revenue Recognition | Revenue Recognition The Company’s revenue derives primarily from sales of the Company’s devices and services related to maintaining and repairing the devices as part of a service contract or on an ad-hoc basis without a service contract. The Company provides warranties, generally for one year, 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 relevant warranty. The Company has determined that these warranties do not represent separate performance obligations, as the customer does not have the option to purchase the warranty separately and the warranty does not provide the customer with a service, only the assurance that the product complies with agreed-upon specifications. The Company records an estimate of future warranty claims at the time it recognizes revenue from the sale of the device based upon management’s estimate of the future claims rate. Revenue is recognized upon transfer of control of promised goods or services to customers when the product is shipped or the service is rendered, based on the amount the Company expects to receive in exchange for those goods or services. The Company enters into contracts that can include multiple services, which are accounted for separately if they are determined to be distinct. To determine the transaction price for contracts under which a customer promises consideration in a form other than cash, the Company measures the estimated fair value of the noncash consideration at contract inception. If the Company cannot reasonably estimate the fair value of the noncash consideration, it measures the consideration indirectly by reference to the standalone selling price of the products promised to the customer or class of customer in exchange for the consideration. The revenues from service contracts are recognized over the service contract period on a straight-line basis. In the event that a customer does not sign a service contract but requests maintenance or repair services after the warranty expires, the Company recognizes revenue when the service is rendered. The Company has 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 whether the service contract is purchased on a stand-alone basis or together with the device. There is no termination provision in the service contract or any penalties in practice for cancellation of the service contract. Disaggregated revenue for the three months ended March 31, 2023 and 2022 was as follows: For the Three Months Ended March 31, (in thousands) 2023 2022 Product Revenue - recognized at a point in time $ 2,469 $ 9,228 Service Revenue - recognized at a point in time 341 321 Service Revenue - recognized over time 604 789 Total Revenue $ 3,414 $ 10,338 The Company operates in a highly regulated environment, primarily in the U.S. dermatology market, in which state regulatory approval is sometimes required before the customer is able to use the product. In cases where such regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained. Deferred revenue as of March 31, 2023 was as follows: (in thousands) Product Service Total December 31, 2022 $ 45 $ 787 $ 832 Revenue recognized (9 ) (604 ) (613 ) Amounts invoiced - 578 578 March 31, 2023 $ 36 $ 761 $ 797 The Company does not disclose information about remaining performance obligations with original expected durations of one year or less in connection with deposits for products. Estimated service revenue to be recognized in the future related to performance obligations fully or partially unsatisfied as of March 31, 2023 is as follows: Year Service Revenue 2023 (April 1 - December 31, 2023) $ 582 2024 131 2025 28 2026 20 Total $ 761 The Company pays commissions for equipment sales. Because the recovery of commissions is expected to occur from product revenue within one year, the Company charges commissions to expense as incurred. Shipping and handling costs are expensed as incurred and are included in cost of sales. |
Concentration | Concentration Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, and accounts receivable. On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (the “FDIC”) was appointed receiver. On March 13, 2023, the FDIC transferred all deposits, both insured and uninsured, and substantially all assets of SVB to a newly created, full-service FDIC-operated “bridge bank”, Silicon Valley Bridge Bank, N.A. (“SVBB”), chartered by the Office of the Comptroller of the Currency as a national bank. Subsequently, on March 27, 2023, the FDIC entered into a purchase and assumption agreement for all deposits and loans, as well as certain other assets, of SVBB, with First-Citizens Bank & Trust Company (“FCB”), a subsidiary of First Citizens BancShares, Inc. ("First Citizens"). As a result of this transaction, SVB became a wholly owned subsidiary of FCB. Based upon information available to us, we believe that FCB assumed all contracts SVB entered into prior to its failure, and that FCB will continue to perform under those contracts. See Note 4, Debt, for additional information. As of March 31, 2023, at another financial institution, the Company’s deposit balance exceeded the federally insured limit. The Company has not incurred losses related to the deposit and does not believe it is exposed to unusual credit risk beyond the normal risk associated with commercial banking relationships. One customer in the U.S. accounted for approximately 60% and 81% of revenue for the three months ended March 31, 2023 and 2022, respectively, and 93% and 91% of the accounts receivable as of March 31, 2023 and December 31, 2022, respectively. |
Segment and Geographical Information | Segment and Geographical Information The following table illustrates total revenue for the three months ended March 31, 2023 and 2022 by geographic region. For the Three Months Ended March 31, (in thousands) 2023 2022 United States $ 3,274 96 % $ 10,147 98 % China 130 4 % 179 2 % Other 10 0 % 12 0 % Total Revenue $ 3,414 100 % $ 10,338 100 % |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to their relatively short maturities. |
Fair Value Measurements | Fair Value Measurements The Company uses a fair value hierarchy that prioritizes inputs to valuation approaches used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 Inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. ● Level 1 assets may include listed mutual funds, ETFs and listed equities Level 2 Inputs: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; quotes from pricing services or brokers when the Company can determine that orderly transactions took place at the quoted price or that the inputs used to arrive at the price are observable; and inputs other than quoted prices that are observable, such as models or other valuation methodologies. ● Level 2 assets may include debt securities and foreign currency exchange contracts that have inputs to the valuations that generally can be corroborated by observable market data. Level 3 Inputs: Unobservable inputs for the valuation of the asset or liability, which may include nonbinding broker quotes. ● Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation. Significance of Inputs: The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid financial instruments with maturities of three months or less when purchased to be cash equivalents. |
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 varies by customer, primarily due to the customer’s financial condition. The Company estimates future credit losses based on the age of customer receivable balances, collection history and forecasted economic trends. Future collections can be significantly different from historical collection trends or current estimates. The allowance for expected credit losses was $107 thousand as of March 31, 2023 and December 31, 2022. No bad debt expense was incurred for the three months ended March 31, 2023 or 2022. |
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. The Company periodically reviews the value of items in inventory for obsolescence based on its assessment of market conditions and writes down any obsolete inventory to its net realizable value through a charge to costs of goods sold. The provision for inventory obsolescence was $18 thousand as of both March 31, 2023 and December 31, 2022. |
Earnings Per Share | Earnings Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. 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 unvested restricted shares. In periods when the Company has incurred a net loss, options 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 excluded were as follows: For the Three Months Ended March 31, 2023 2022 Stock Options 20,933 - Restricted Stock 54,122 - Total 75,055 - The factors used in the earnings per share computation are as follows: For the Three Months Ended March 31, (in thousands) 2023 2022 Basic Net income (loss) $ (1,894 ) $ 16,062 Weighted average common shares outstanding 16,245 16,498 Basic earnings per share $ (0.12 ) $ 0.97 Diluted Net income (loss) $ (1,894 ) $ 16,062 Weighted average common shares outstanding 16,245 16,498 Dilutive effects of: Assumed exercise of stock options - 66 Restricted stock awards - 78 Dilutive shares 16,245 16,642 Diluted earnings per share $ (0.12 ) $ 0.97 |
Leases | Leases The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. The operating lease right-of-use asset (the “ROU asset”) 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. The ROU asset and operating lease liability 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 the options. To determine the present value of the lease payment, 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. In addition, the Company has elected available practical expedients to not separate lease and non-lease components for all leased assets and to exclude leases with initial terms of 12 months or less. The lease payments used to determine the Company’s operating lease asset may include lease incentives, and stated rent increases are recognized in the ROU asset in the Company’s consolidated balance sheets. The ROU asset is amortized to rent expense over the lease term and included in operating expenses in the consolidated statements of income (loss). |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Uncertain tax positions are recognized in the financial statements only if that position is more likely than not to be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. In November 2019, the FASB issued ASU 2019-10, which provides a one-year deferral of the effective dates of ASU No. 2016-13. Accordingly, the guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted this update in January 2023. This update did not have a significant impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated revenue | For the Three Months Ended March 31, (in thousands) 2023 2022 Product Revenue - recognized at a point in time $ 2,469 $ 9,228 Service Revenue - recognized at a point in time 341 321 Service Revenue - recognized over time 604 789 Total Revenue $ 3,414 $ 10,338 |
Schedule of deferred revenue | (in thousands) Product Service Total December 31, 2022 $ 45 $ 787 $ 832 Revenue recognized (9 ) (604 ) (613 ) Amounts invoiced - 578 578 March 31, 2023 $ 36 $ 761 $ 797 |
Schedule of estimated service revenue to be recognized | Year Service Revenue 2023 (April 1 - December 31, 2023) $ 582 2024 131 2025 28 2026 20 Total $ 761 |
Schedule of illustrates total revenue | For the Three Months Ended March 31, (in thousands) 2023 2022 United States $ 3,274 96 % $ 10,147 98 % China 130 4 % 179 2 % Other 10 0 % 12 0 % Total Revenue $ 3,414 100 % $ 10,338 100 % |
Schedule of basic net income (loss) per share | For the Three Months Ended March 31, 2023 2022 Stock Options 20,933 - Restricted Stock 54,122 - Total 75,055 - |
Schedule of basic net income (loss) per share | For the Three Months Ended March 31, (in thousands) 2023 2022 Basic Net income (loss) $ (1,894 ) $ 16,062 Weighted average common shares outstanding 16,245 16,498 Basic earnings per share $ (0.12 ) $ 0.97 Diluted Net income (loss) $ (1,894 ) $ 16,062 Weighted average common shares outstanding 16,245 16,498 Dilutive effects of: Assumed exercise of stock options - 66 Restricted stock awards - 78 Dilutive shares 16,245 16,642 Diluted earnings per share $ (0.12 ) $ 0.97 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property and Equipment [Abstract] | |
Schedule of property and equipment | As of As of March 31, December 31, Estimated (in thousands) 2023 2022 Useful Lives Operations equipment $ 1,217 $ 1,222 3 years Tradeshow and demo equipment 1,181 990 3 years Computer equipment 170 162 3 years Subtotal 2,568 2,374 Less accumulated depreciation (2,171 ) (2,131 ) Property and Equipment, Net $ 397 $ 243 |
Intangibles (Tables)
Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangibles [Abstract] | |
Schedule of intangible assets | Patent Customer (in thousands) Rights Relationships Total December 31, 2022 $ 49 $ 1 $ 50 Amortization expense (25 ) - (25 ) March 31, 2023 $ 24 $ 1 $ 25 |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Product Warranties [Abstract] | |
Schedule of changes in product warranty liability | (in thousands) Balance, December 31, 2022 $ 403 Warranties accrued during the period 163 Payments on warranty claims (191 ) Balance, March 31, 2023 $ 375 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of operating leases | Maturity of Operating Lease Liabilities Amount 2023 (April 1 - December 31, 2023) $ 162 2024 238 2025 245 2026 253 2027 194 Total undiscounted operating leases payments $ 1,092 Less: Imputed interest (118 ) Present Value of Operating Lease Liabilities $ 974 Other Information Weighted-average remaining lease term 4.5 years Weighted-average discount rate 5 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of restricted stock activity | Weighted- Average Grant Restricted Date Fair Outstanding at Stock Value December 31, 2022 159,500 $ 5.11 Granted 10,000 8.96 Vested (15,000 ) 7.34 Forfeited (7,500 ) $ 4.11 March 31, 2023 147,000 $ 5.19 |
Schedule of stock option activity | Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Options Price (In Years) Outstanding - December 31, 2022 97,884 $ 5.55 5.08 Granted - - - Exercised (8,334 ) 5.55 - Expired - - - Outstanding - March 31, 2023 89,550 $ 5.55 4.83 Exercisable – March 31, 2023 89,550 $ 5.55 4.83 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Organization and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Allowance for doubtful accounts receivable, current | $ 107 | $ 107 | |
Reserve for inventory obsolescence | $ 18 | $ 18 | |
Customer [Member] | U.S. [Member] | |||
Organization and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Total revenue, percentage | 60% | 81% | |
Accounts receivable, percentage | 93% | 91% |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue - Revenue [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Organization and Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue [Line Items] | ||
Total Revenue | $ 3,414 | $ 10,338 |
Product Revenue - recognized at a point in time [Member] | ||
Organization and Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue [Line Items] | ||
Total Revenue | 2,469 | 9,228 |
Service Revenue - recognized at a point in time [Member] | ||
Organization and Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue [Line Items] | ||
Total Revenue | 341 | 321 |
Service Revenue - recognized over time [Member] | ||
Organization and Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue [Line Items] | ||
Total Revenue | $ 604 | $ 789 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies (Details) - Schedule of deferred revenue $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Organization and Summary of Significant Accounting Policies (Details) - Schedule of deferred revenue [Line Items] | |
Balance, beginning of period | $ 832 |
Revenue recognized | (613) |
Amounts invoiced | 578 |
Balance, end of period | 797 |
Product [Member] | |
Organization and Summary of Significant Accounting Policies (Details) - Schedule of deferred revenue [Line Items] | |
Balance, beginning of period | 45 |
Revenue recognized | (9) |
Amounts invoiced | |
Balance, end of period | 36 |
Service [Member] | |
Organization and Summary of Significant Accounting Policies (Details) - Schedule of deferred revenue [Line Items] | |
Balance, beginning of period | 787 |
Revenue recognized | (604) |
Amounts invoiced | 578 |
Balance, end of period | $ 761 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies (Details) - Schedule of estimated service revenue to be recognized $ in Thousands | Mar. 31, 2023 USD ($) |
Schedule Of Estimated Service Revenue To Be Recognized [Abstract] | |
2023 (April 1 - December 31, 2023) | $ 582 |
2024 | 131 |
2025 | 28 |
2026 | 20 |
Total | $ 761 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies (Details) - Schedule of illustrates total revenue - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 3,414 | $ 10,338 |
Total revenue, percentage | 100% | 100% |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 3,274 | $ 10,147 |
Total revenue, percentage | 96% | 98% |
China [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 130 | $ 179 |
Total revenue, percentage | 4% | 2% |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 10 | $ 12 |
Total revenue, percentage | 0% | 0% |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies (Details) - Schedule of basic net income (loss) per share - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule Of Basic Net Income Loss Per Share Abstract | ||
Stock Options | $ 20,933 | |
Restricted Stock | 54,122 | |
Total | $ 75,055 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies (Details) - Schedule of earnings per share computation - Earnings Per Share [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Basic | ||
Net income (in Dollars) | $ (1,894) | $ 16,062 |
Weighted average common shares outstanding | 16,245 | 16,498 |
Basic earnings per share (in Dollars per share) | $ (0.12) | $ 0.97 |
Diluted | ||
Net income (in Dollars) | $ (1,894) | $ 16,062 |
Weighted average common shares outstanding | 16,245 | 16,498 |
Dilutive effects of: | ||
Assumed exercise of stock options | 66 | |
Restricted stock awards | 78 | |
Dilutive shares | 16,245 | 16,642 |
Diluted earnings per share (in Dollars per share) | $ (0.12) | $ 0.97 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property and Equipment [Abstract] | ||
Depreciation expense | $ 48 | $ 68 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,568 | $ 2,374 |
Less accumulated depreciation | (2,171) | (2,131) |
Property and Equipment, Net | 397 | 243 |
Operations equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,217 | 1,222 |
Property, plant and equipment, estimated useful Life | 3 years | |
Tradeshow and demo equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,181 | 990 |
Property, plant and equipment, estimated useful Life | 3 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 170 | $ 162 |
Property, plant and equipment, estimated useful Life | 3 years |
Intangibles (Details)
Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Intangibles [Abstract] | ||
Accumulated amortization | $ 1,249 | $ 1,224 |
Intangibles (Details) - Schedul
Intangibles (Details) - Schedule of intangible assets $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning balance | $ 50 |
Amortization expense | (25) |
Ending balance | 25 |
Patent Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning balance | 49 |
Amortization expense | (25) |
Ending balance | 24 |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning balance | 1 |
Amortization expense | |
Ending balance | $ 1 |
Debt (Details)
Debt (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Debt Disclosure [Abstract] | |
Revolving credit facility, description | the Company had a revolving credit facility with SVB that provided for maximum borrowings equal to the lesser of (a) the $15 million commitment amount or (b) the borrowing base plus a $7.5 million non-formula sublimit. |
Borrowing | $ 15 |
Interest on borrowing, description | Interest on any borrowings, at Prime plus 0.75% (8.75% at March 31, 2023) and Prime plus 1.50% on non-formula borrowings (9.5% at March 31, 2023), is payable monthly, and the outstanding principal and interest are due on the maturity date |
Product Warranties (Details) -
Product Warranties (Details) - Schedule of changes in product warranty liability $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Schedule Of Changes In Product Warranty Liability [Abstract] | |
Balance, beginning of period | $ 403 |
Warranties accrued during the period | 163 |
Payments on warranty claims | (191) |
Balance, end of period | $ 375 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Amortization | $ 48 | $ 52 |
Operating lease liability renewal | 46 | |
Borrowing rate interest | 66% | |
Operating lease liabilities | $ 60 | $ 63 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating leases $ in Thousands | Mar. 31, 2023 USD ($) |
Schedule Of Operating Leases Abstract | |
2023 (April 1 - December 31, 2023) | $ 162 |
2024 | 238 |
2025 | 245 |
2026 | 253 |
2027 | 194 |
Total undiscounted operating leases payments | 1,092 |
Less: Imputed interest | (118) |
Present Value of Operating Lease Liabilities | $ 974 |
Other Information | |
Weighted-average remaining lease term | 4 years 6 months |
Weighted-average discount rate | 5% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Commitments and Contingencies [Abstract] | |||
Purchases from this manufacturer totaled | $ 6.6 | $ 3.3 | |
Accounts payable and accrued expenses | $ 1.4 | $ 1.5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Stockholders' Equity (Details) [Line Items] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common Stock [Member] | ||
Stockholders' Equity (Details) [Line Items] | ||
Exercise of stock options | 4,487 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jan. 26, 2023 | Dec. 19, 2022 | Feb. 01, 2020 | Jul. 21, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Stock-Based Compensation (Details) [Line Items] | |||||||
Shares available, granted | 48,973 | ||||||
Restricted stock issued | 10,000 | 77,000 | 35,000 | 130,000 | |||
Restricted vest percentage | 25% | 25% | 25% | ||||
Fair value of per share (in Dollars per share) | $ 8.96 | $ 6.4 | $ 4.11 | $ 3.84 | |||
Unvested common stock | 7,500 | ||||||
Restricted grant percentage | 25% | ||||||
Reduction of stock compensation expense value forfeited (in Dollars) | $ 18 | $ 0 | |||||
Unrecognized stock compensation expense (in Dollars) | $ 631 | ||||||
Recognized over weighted average | 3 years | ||||||
Stock options expire grant date | 10 years | ||||||
Stock options intrinsic value (in Dollars) | $ 0 | $ 183 | |||||
Restricted stock and option expense (in Dollars) | $ 161 | $ 60 | |||||
Common stock | 8,334 | ||||||
Exercise price (in Dollars per share) | $ 5.55 | ||||||
2016 Equity Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Number of authorized shares under the plan | 397,473 | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Stock-Based Compensation (Details) [Line Items] | |||||||
Number of authorized shares under the plan | 500,000 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of restricted stock activity | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Schedule of restricted stock activity [Abstract] | |
Restricted Stock, balance at beginning | shares | 159,500 |
Weighted-Average Grant Date Fair Value, balance at beginning | $ / shares | $ 5.11 |
Restricted Stock, Granted | shares | 10,000 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | $ 8.96 |
Restricted Stock, Vested | shares | (15,000) |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | $ 7.34 |
Restricted Stock, Forfeited | shares | (7,500) |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | $ 4.11 |
Restricted Stock, balance at ending | shares | 147,000 |
Weighted-Average Grant Date Fair Value, balance at ending | $ / shares | $ 5.19 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of stock option activity | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Schedule of stock option activity [Abstract] | |
Number of Options, Outstanding at beginning | shares | 97,884 |
Weighted- Average Exercise Price, Outstanding at beginning | $ / shares | $ 5.55 |
Weighted- Average Remaining Contractual Term (In Years), Outstanding at beginning | 5 years 29 days |
Number of Options, Exercisable – March 31, 2023 | shares | 89,550 |
Weighted- Average Exercise Price, Exercisable – March 31, 2023 | $ / shares | $ 5.55 |
Weighted- Average Remaining Contractual Term (In Years), Exercisable – March 31, 2023 | 4 years 9 months 29 days |
Number of Options, Granted | shares | |
Weighted- Average Exercise Price, Granted | $ / shares | |
Weighted- Average Remaining Contractual Term (In Years), Granted | |
Number of Options, Exercised | shares | (8,334) |
Weighted- Average Exercise Price, Exercised | $ / shares | $ 5.55 |
Weighted- Average Remaining Contractual Term (In Years), Exercised | |
Number of Options, Expired | shares | |
Weighted- Average Exercise Price, Expired | $ / shares | |
Weighted- Average Remaining Contractual Term (In Years), Expired | |
Number of Options, Outstanding at ending | shares | 89,550 |
Weighted- Average Exercise Price, Outstanding at ending | $ / shares | $ 5.55 |
Weighted- Average Remaining Contractual Term (In Years), Outstanding at ending | 4 years 9 months 29 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $3.7 | $185 | |
Income tax expense (in Dollars) | $ (802) | $ 648 | |
Effective tax rate | 29.70% | 3.90% | |
Statutory U.S. federal income tax rate | 21% | 21% |