Sensus Healthcare (SRTS) 10-Q 7 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document And Entity Information
Entity Registrant Name	Sensus Healthcare, Inc.
Entity Central Index Key	1,494,891
Document Type	10-Q
Trading Symbol	SRTS
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		13,546,170
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

CONDENSED BALANCE SHEETS (unaud

CONDENSED BALANCE SHEETS (unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents	$ 4,607,689	$ 5,065,068
Accounts receivable, net	3,926,715	2,071,572
Inventories	1,263,441	998,861
Investment in debt securities	4,848,278
Prepaids and other current assets	639,799	432,787
Total Current Assets	15,285,922	8,568,288
Property and Equipment, Net	470,114	320,699
Patent Rights, Net	650,605	722,895
Investment in debt securities	1,729,245
Deposits	24,272	24,272
Total Assets	18,160,158	9,636,154
Current Liabilities
Accounts payable and accrued expenses	1,903,640	2,307,465
Product warranties	115,701	48,363
Revolving credit facility		422,702
Deferred revenue, current portion	990,796	890,234
Total Current Liabilities	3,010,137	3,668,764
Deferred Revenue, Net of Current Portion	9,979	45,786
Total Liabilities	3,020,116	3,714,550
Commitments and Contingencies
Stockholders' Equity
Preferred stock, 5,000,000 shares authorized and non-issued and outstanding at September 30, 2016 and December 31, 2015.
Common stock, $0.01 par value - 50,000,000 authorized and 13,546,170 and 10,367,883 issued and outstanding at September 30, 2016 and December 31, 2015, respectively.	135,461	103,678
Additional paid-in capital	22,830,022	13,263,735
Accumulated deficit	(7,825,441)	(7,445,809)
Total Stockholders' Equity	15,140,042	5,921,604
Total Liabilities and Stockholders' Equity	$ 18,160,158	$ 9,636,154

CONDENSED BALANCE SHEETS (unau3

CONDENSED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued
Preferred stock, outstanding
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	50,000,000	50,000,000
Common stock, issued	13,546,170	10,367,883
Common Stock, outstanding	13,546,170	10,367,883

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenues	$ 3,327,830	$ 2,107,520	$ 9,933,977	$ 6,432,553
Cost of Sales	1,076,821	691,356	3,429,967	2,263,181
Gross Profit	2,251,009	1,416,164	6,504,010	4,169,372
Operating Expenses
Selling and marketing	1,115,752	752,348	3,244,364	2,600,594
General and administrative	789,718	379,640	2,546,262	1,078,812
Research and development	389,759	358,490	1,096,789	1,132,419
Total Operating Expenses	2,295,229	1,490,478	6,887,415	4,811,825
Loss From Operations	(44,220)	(74,314)	(383,405)	(642,453)
Other Income (Expense)
Interest income	14,778	463	20,598	1,184
Interest expense	(972)	(4,222)	(16,825)	(10,813)
Other Income (Expense), net	13,806	(3,759)	3,773	(9,629)
Loss Before Income Taxes	(30,414)	(78,073)	(379,632)	(652,082)
Provision for income taxes
Net Loss	(30,414)	(78,073)	(379,632)	(652,082)
Preferential distribution		(128,333)		(384,999)
Net Loss Attributable to Common Stockholders	$ (30,414)	$ (206,406)	$ (379,632)	$ (1,037,081)
Net Loss Attributable to Common Stockholders per share - basic and diluted (in dollars per share)	$ 0	$ (0.02)	$ (0.03)	$ (0.10)
Weighted average number of shares used in computing net loss per share - basic and diluted (in shares)	13,236,724	9,880,028	11,622,134	9,880,028

CONDENSED STATEMENTS OF STOCKHO

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - 9 months ended Sep. 30, 2016 - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance beginning at Dec. 31, 2015	$ 103,678	$ 13,263,735	$ (7,445,809)	$ 5,921,604
Balance beginning (in shares) at Dec. 31, 2015	10,367,883
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	$ 3,077	622,347		625,424
Stock based compensation (in shares)	307,666
Initial public offering of units, net of offering costs	$ 23,000	10,369,809		10,392,809
Initial public offering of units, net of offering costs (in shares)	2,300,000
Exercise of warrants and options	$ 5,475	1,127,063		1,132,538
Exercise of warrants and options (in shares)	547,483
Preferred dividend	$ 231	(2,552,932)		(2,552,701)
Preferred dividend (in shares)	23,138
Net loss			(379,632)	(379,632)
Balance end at Sep. 30, 2016	$ 135,461	$ 22,830,022	$ (7,825,441)	$ 15,140,042
Balance end (in shares) at Sep. 30, 2016	13,546,170

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows From Operating Activities
Net loss	$ (379,632)	$ (652,082)
Adjustments to reconcile net income (loss) to net cash and cash equivalents used in operating activities:
Depreciation and amortization	253,219	247,033
Provision for product warranties	97,990	34,500
Stock based compensation	625,424	4,857
(Increase) decrease in:
Accounts receivable	(1,855,143)	(761,695)
Inventories	(332,488)	(54,114)
Prepaids and other current assets	(516,691)	(640,624)
Increase (decrease) in:
Accounts payable and accrued expenses	(266,452)	844,993
Deferred revenue	64,755	(271,083)
Product warranties	(30,652)	(5,430)
Total Adjustments	(1,960,038)	(601,563)
Net Cash Used In Operating Activities	(2,339,670)	(1,253,645)
Cash Flows from Investing Activities
Acquisition of property and equipment	(262,437)	(83,037)
Investment in debt securities - held to maturity	(6,577,522)
Net Cash Used In Investing Activities	(6,839,959)	(83,037)
Cash Flows from Financing Activities
Initial public offering of units	12,650,000
Revolving credit facility, net	(422,702)	225,000
Exercise of warrants	1,132,538
Initial public offering costs	(2,126,562)
Cash dividends on preferred stock	(2,511,024)
Net Cash Provided By Financing Activities	8,722,250	225,000
Net Decrease in Cash and Cash Equivalents	(457,379)	(1,111,682)
Cash and Cash Equivalents - Beginning	5,065,068	4,538,713
Cash and Cash Equivalents - Ending	4,607,689	3,427,031
Supplemental Disclosure of Cash Flow Information
Interest Paid	18,781	7,003
Non Cash Investing and Financing Activities
Reclassification of Prepaid Offering Costs to APIC	130,629
Transfer of inventory units to property and equipment	$ 67,908	$ 83,224

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 1 — Organization and Summary of Significant Accounting Policies Description of the Business Sensus Healthcare, Inc. (the “Company”) is a manufacturer of superficial radiation therapy devices and has established a distribution and marketing network to sell the devices to healthcare providers globally. The Company was organized on May 7, 2010 as 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. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida. Initial Public Offering In June 2016, the Company issued 2,300,000 units in its initial public offering (“IPO”) at a price of $5.50 per unit ($5.25 attributable to the common stock and $0.25 attributable to the warrant), for net proceeds of approximately $10,393,000 after deducting underwriting discounts and commissions of $886,000 and expenses of $1,371,000. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock. Immediately prior to the IPO, all shares of stock then outstanding converted into an aggregate of 10,367,883 shares of common stock following a 241.95-for-one forward stock split approved by the Company’s board of directors. On July 25, 2016, the common stock and warrants included in the units issued in the IPO commenced trading separately under the symbols “SRTS” and “SRTSW,” respectively, and trading of the units under the symbol “SRTSU” was suspended. 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 financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2015 included in the Company’s final prospectus dated June 2, 2016, filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to the Company’s Registration Statement on Form S-1 (File No. 333-209451), filed with the SEC. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016, any other interim periods, or any future year or period. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates to which it is reasonably possible that a change could occur in the near term include, revenue recognition, inventory reserves, receivable allowances, recoverability of long lived assets and estimation of the Company’s product warranties. Actual results could differ from those estimates. Revenue Recognition The Company’s sales primarily relate to sales of the Company’s devices. The Company recognizes product revenue upon shipment provided that there is persuasive evidence of an arrangement, there are no uncertainties regarding customer acceptance, the sales price is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company does not provide a right of return related to product sales. Revenues for service contracts are recognized over the service contract period on a straight-line basis. Revenue for rentals of equipment is recognized over the lease term on a straight-line basis. The Company sells products and services under multiple-element arrangements with separate units of accounting; in these situations, total consideration is allocated to the identified units of accounting based on their relative selling prices and revenue is then recognized for each unit based on its specific characteristics. A deliverable in an arrangement qualifies as a separate unit of accounting if the delivered item has value to the customer on a stand-alone basis. The principal deliverables in our multiple deliverable arrangements that qualify as separate units of accounting consist of (i) sales of medical devices and accessories and (ii) service contracts. Performance obligations, including installation and customer training, are considered inconsequential and are combined with the product as one unit of accounting. Selling prices are established using vendor-specific objective evidence (VSOE). If VSOE does not exist, the Company uses its best estimate of the selling prices for the deliverables. The Company operates in a highly regulated environment and is continually entering into new markets in which regulatory approval is sometimes required prior to the customer being able to use the product. In these cases, where regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained and customer acceptance becomes certain. Deferred revenue consists of payments from customers for long term separately priced service contracts, sales pending regulatory approval and deposits on products. Deferred revenue as of September 30, 2016 and December 31, 2015 was as follows: As of September 30, As of December 31, 2016 2015 (unaudited) Service contracts $ 764,600 $ 669,717 Sales pending regulatory approval 155,517 155,517 Deposits on products 70,679 65,000 Total deferred revenue, current portion $ 990,796 $ 890,234 Service contracts, net of current portion 9,979 45,786 Total deferred revenue $ 1,000,775 $ 936,020 The Company provides warranties, generally one year, in conjunction with the sale of its product. These warranties are short term in nature and 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 100% and 85% of its net revenues for the three months ended September 30, 2016 and 2015, respectively, and approximately 74% and 85% for the nine months ended September 30, 2016 and 2015, respectively. Customers in China accounted for approximately 0% and 14% of revenues for the three months ended September 30, 2016 and 2015 and approximately 15% and 14% for the nine months ended September 30, 2016 and 2015, 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 September 30, 2016 and December 31, 2015, the Company had approximately $4,357,000 and $4,815,000, 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 h eld-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 ar e carried at amortized cost plus accrued interest and consist of the following: As of September 30, 2016 (unaudited) Amortized Gross Gross Fair Value Short Term: Corporate bonds $ 4,848,278 322 1,697 4,846,903 Total Short Term: 4,848,278 322 1,697 4,846,903 Long Term: United States Treasury bonds 502,493 208 — 502,701 Corporate bonds 1,226,752 624 1,226,128 Total Long Term: 1,729,245 208 624 1,728,829 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 $27,000 as of September 30, 2016 and approximately $27,000 as of December 31, 2015. To date, the Company has not experienced significant credit-related losses. Property and Equipment Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of property or extend their useful lives are capitalized. When assets are sold or returned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income. Inventory units designated for customer demonstrations, as part of the sales process, are reclassified to property and equipment and the depreciation is recorded to selling and marketing expense. The inventory used for demonstrations that was reclassified to property and equipment for the nine months ended September 30, 2016 and 2015 was approximately $68,000 and $44,000, respectively. Inventory units designated for customer rental agreements are reclassified to property and equipment and the depreciation is recorded to cost of sales. Inventory reclassified for the nine months ended September 30, 2016 and 2015 was approximately $0 and $39,000, respectively. Intangible Assets Intangible assets are comprised of the Company’s patent rights and are amortized over the patents’ estimated useful life of approximately 13 years. As of September 30, 2016 the remaining useful life was 81 months. Long-Lived Assets The Company evaluates its long-lived assets, including intangible assets, for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows in accordance with accounting guidance. If circumstances suggest the recorded amounts cannot be recovered, based upon estimated future undiscounted cash flows, the carrying values of such assets are reduced to fair value. No impairment charges were recorded for long-lived assets for the nine months ended September 30, 2016 and 2015. Earnings Per Share Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period using the treasury stock method for options and warrants. The diluted net income per share attributable to common stockholders is computed by giving effect to all potential dilutive common share equivalents outstanding for the period. In periods when the Company has incurred a net loss, options and warrants to purchase common shares are considered common share equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Shares excluded were computed under the treasury stock method as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Warrants 23,644 288,474 23,644 288,474 Unvested restricted stock 71,142 — 71,142 — Options — 950 — 950 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 $168,000 and $70,000 for the three months ended September 30, 2016 and 2015, respectively, and $687,000 and $455,000 for the nine months ended September 30, 2016 and 2015, respectively. Deferred Initial Public Offering Costs Deferred offering costs, which consist of direct incremental legal, accounting and other fees relating to the IPO, are capitalized. The deferred offering costs were offset against IPO proceeds upon the consummation of the offering. As of December 31, 2015, approximately $310,000 of deferred offering costs were capitalized and included in deferred offering costs and other prepaids on the balance sheet.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Note 2 — Property and Equipment As of September 30, As of December 31, Estimated 2016 2015 Useful Lives (unaudited) Operations and rental equipment $ 620,694 $ 504,786 3 years Tradeshow and demo equipment 574,166 397,325 3 years Computer equipment 119,818 88,451 3 years 1,314,678 990,562 Less accumulated depreciation (844,564 ) (669,863 ) Property and Equipment, Net $ 470,114 $ 320,699 Depreciation expense was approximately $60,000 and $55,000 for the three months ended September 30, 2016 and 2015, respectively, and $181,000 and $175,000, for the nine months ended September 30, 2016 and 2015, respectively.

PATENT RIGHTS

PATENT RIGHTS	9 Months Ended
	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
PATENT RIGHTS	Note 3 — Patent Rights As to September 30, As of December 31, 2016 2015 (unaudited) Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (602,413 ) (530,123 ) Patent Rights, Net 650,605 722,895 Amortization expense was approximately $24,000 for both the three months ended September 30, 2016 and 2015, and $72,000 for both the nine months ended September 30, 2016 and 2015. As of September 30, 2016 and December 31, 2015, future remaining amortization expense is as follows: For the Year Ending December 31, As of September 30, 2016 As of December 31, 2015 2016 24,096 $ 96,386 2017 96,386 96,386 2018 96,386 96,386 2019 96,386 96,386 2020 96,386 96,386 Thereafter 240,965 240,965 Total $ 650,605 $ 722,895

REVOLVING CREDIT FACILITY

REVOLVING CREDIT FACILITY	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
REVOLVING CREDIT FACILITY	Note 4 — Revolving Credit Facility On March 12, 2013, the Company entered into a 2-year $3 million revolving credit facility. The credit facility was amended and extended effective March 12, 2015 through May 12, 2017. The maximum borrowing was reduced to $1,500,000 and was limited by the Company’s eligible borrowing base of 80% of eligible accounts receivable. On September 21, 2016, a second amendment to the credit facility extended the facility through September 21, 2017, increased the maximum borrowing to $2,000,000 and expanded the eligible accounts receivables to include certain international receivables. Interest, at Prime plus 0.75% (4.25% at September 30, 2016), is payable monthly with outstanding principal and interest due on the maturity date. The facility is secured by all of the Company’s assets and limits the amount of additional indebtedness, restricts the sale, disposition or transfer of assets of the Company and requires the maintenance of a certain monthly adjusted quick ratio restrictive covenant and minimum quarterly EBITDA restrictive covenant, as defined in the agreement. Approximately $423,000 was outstanding under the revolving credit facility at December 31, 2015 and $0 at September 30, 2016. The Company pays commitment fees of 0.25% per annum on the average unused portion of the line of credit.

PRODUCT WARRANTIES

PRODUCT WARRANTIES	9 Months Ended
	Sep. 30, 2016
Product Warranties Disclosures [Abstract]
PRODUCT WARRANTIES	Note 5 — Product Warranties Changes in product warranty liability were as follows for the nine-month period ended September 30, 2016 (unaudited). Balance, beginning of period $ 48,363 Warranties accrued during the period 97,990 Payments on warranty claims (30,652 ) Balance, end of period 115,701

COMMITMENT AND CONTINGENCIES

COMMITMENT AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENT AND CONTINGENCIES	Note 6 — Commitment and Contingencies Operating Lease Agreements In July 2016, the Company renewed a commercial lease requiring monthly payments to 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. Future minimum lease payments as of September 30, 2016 and December 31, 2015 are as follows: As of September 30, As of December 31, Year (unaudited) 2016 $ 41,000 101,000 2017 166,000 60,000 2018 172,000 — 2019 178,000 — 2020 183,000 — Thereafter 332,000 — Total $ 1,072,000 161,000 Rental expense for the three months ended September 30, 2016 and 2015 was approximately $24,000 and for the nine months ended September 30, 2016 and 2015 was approximately $74,000 and $73,000, respectively. Manufacturing Agreement In July 2010, the Company entered into a three-year contract manufacturing agreement with an unrelated third party for the production and manufacture of the Company’s main product in accordance with the Company’s product specifications. The Company continues to do business with the contract manufacturer in accordance with the agreement. The Company or the manufacturer has the option to terminate the agreement with 90 days written notice. Any change in the relationship with the manufacturer could have an adverse effect on the Company’s business. Purchases from this manufacturer totaled approximately $713,000 and $888,000 for the three months ended September 30, 2016 and 2015, respectively and $2,998,000 and $1,855,000 for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016 and December 31, 2015 approximately $566,000 and $283,000, respectively, was due to this manufacturer, which is presented in accounts payable and accrued expenses in the accompanying unaudited condensed 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. The Company does not believe that any legal proceedings are likely to have a material effect on the business, financial condition, or results of operations.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
STOCKHOLDERS' EQUITY	Note 7 — Stockholders’ Equity The Company has authorized 50,000,000 shares of common stock, of which 13,546,170 and 10,367,883 shares were issued and outstanding as of September 30, 2016 and December 31, 2015, respectively. Stock Issuances On January 1, 2016, Sensus Healthcare, LLC converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Sensus Healthcare, Inc. As a result of the corporate conversion, the holders of the different classes of units of Sensus Healthcare, LLC became holders of common stock of Sensus Healthcare, Inc. Holders of warrants and options, respectively, to purchase membership interests of Sensus Healthcare, LLC became holders of warrants and options to purchase common stock of Sensus Healthcare, Inc., respectively. Each membership interest converted to one share of common stock. During 2011, the Company offered to a limited number of investors (the “investor members”) preferred membership interests (the “interests”) consisting of (i) cumulative, non-compounded, 8% per annum preferential return, payable annually, if and when such distributions are made by the Company’s board of directors and (ii) participation in the Company’s net profits, net losses and distributions of the Company’s assets pursuant to the operating agreement. The offering raised approximately $6.4 million in gross proceeds ($6.0 million net of offering costs), utilizing a private placement memorandum. As of December 31, 2015, accumulated unpaid preferential distributions were approximately $2,674,000 ($0.87 per share). Preferential distributions no longer accrued after December 31, 2015. In June 2016, after the completion of the IPO, the accumulated unpaid distribution as of December 31, 2015 was payable in cash or shares, at the option of each stockholder with a preferential distribution. On July 15, 2016, the Company paid the accrued dividends in the amount of approximately $2,553,000 representing the amount for which former holders of membership units with a preferred return elected to receive dividends in cash. In addition, 23,138 shares valued at approximately $122,000 of common stock were issued to those that elected to receive the dividends in shares. During 2014, the Company granted a 1% ownership interest in the Company to an executive which was to vest upon a change in control of the Company. During 2015, the terms were amended such that the ownership interest will vest in the event of involuntary termination or a liquidity event, as defined. In accordance with accounting principles generally accepted in the United States, compensation cost for awards with performance conditions should be recorded in the Company’s financial statements at which time that it is probable the performance condition is achieved. As of December 31, 2015, the achievement of the performance condition was not probable and accordingly no compensation cost was recorded. Following the IPO in June 2016, the performance condition was met and accordingly, stock compensation expense of approximately $465,000 was recorded during the three months ended June 30, 2016. The grant date fair value of the equity award was estimated using both an income and market approach. Under the income approach, the Company used a discounted cash flow method based on Company projections, historical financial information and guideline company/industry growth and margin indicators. The discount rate applied was based on the weighted average cost of capital of guideline public companies and was estimated at approximately 21%. The Company also used a market approach to estimate its enterprise value based on a multiple of revenue and earnings of guideline public companies. Using both of these approaches, management was able to estimate the fair value per share on the grant date which was approximately $4.42 per share or approximately $465,000. Warrants In March 2011, the closing date of the preferred offering, the Company’s placement agent was granted investor rights to five year warrants to purchase preferred units, which following the conversion were exercisable into 544,387 common shares of the Company at an exercise price of $2.08 per share. The expiration of the warrants was extended and the warrants were exercised on June 10, 2016. One of the Company’s directors is a managing partner of and has voting and dispositive authority in the entity that exercised the warrants. In April 2013, the closing date of the second common offering, the placement agent received investor rights to 5 year warrants to purchase 86,376 common shares of the Company at an exercise price of $4.55 per unit, which was equal to 110% of the offering price. In June 2016, from the IPO, the investors received three-year warrants to purchase 2,300,000 shares of common stock at an exercise price of $6.75 per share; the warrants are exercisable through June 2, 2019. Following the first anniversary of the date of issuance, if certain conditions are met, the Company may redeem any and all of the outstanding warrants at a price equal to $0.01 per warrant. In addition, the underwriter’s representatives received four-year warrants to purchase up to 138,000 units, consisting of one share of common stock and one warrant to purchase one share of common stock. The warrants for the units are exercisable between June 2, 2017 and June 2, 2021 at an exercise price of $6.75 per unit. All warrants reflect the 241.05-for-one forward stock split and were fully vested as of September 30, 2016 and December 31, 2015. The following table summarizes the Company’s warrant activity: Preferred Unit Warrants Common Unit Warrants Number of Weighted Weighted Number of Weighted Weighted Outstanding – December 31, 2015 544,387 $ 2.08 0.17 86,376 $ 4.55 1.5 Granted — — — 2,438,000 6.75 2.80 Exercised (544,387 ) (2.08 ) — — — — Cancelled (forfeited) — — — — — — Outstanding – September 30, 2016 — — — 2,524,376 $ 6.67 2.76 Exercisable – September 30, 2016 — — — 2,524,376 $ 6.67 2.76 The intrinsic value of the common stock warrants was approximately $148,000 as of September 30, 2016, and approximately $0 as of December 31, 2015. 2013 Option Plan The Company’s 2013 option plan (the “Plan”) permitted the grant of 90,731 options to purchase shares of common stock to its employees. Option awards were generally granted with an exercise price equal to the fair value of the Company’s common shares at the date of grant and those option awards generally vested based on five years of continuous service. The awards provided for accelerated vesting if there was a change in control as defined in the Plan. On November 1, 2013, the Company granted two employees, options to purchase 7,258 shares of common stock at an exercise price of $4.13 per unit. In lieu of cash exercise, the options also contained certain cashless exercise provisions however the net settlement amount remained fixed. The options were to expire 10 years from the grant date and vest five years from the grant date. The fair value of each option was estimated on the date of grant using the Black-Scholes Option Pricing Model (“Black-Scholes Model). Upon the closing of the IPO, all options issued under the Plan were automatically exercised using a cashless exercise feature and converted to 3,096 shares of common stock, and the Option Plan was terminated. All options amounts reflect the 241.05-for-one forward stock split. A summary of option activity under the Plan is as follows: Number of Options Weighted Average Exercise Weighted Average Remaining Outstanding – December 31, 2015 14,516 $ 4.13 7.83 Granted — — — Exercised (14,516 ) (4.13 ) — Cancelled (forfeited) — — — Outstanding – September 30, 2016 — $ — — Exercisable – September 30, 2016 — $ — — The Company recognized approximately $22,000 and $2,000 of stock based compensation related to the grant of the options to its employees for nine months ended September 30, 2016 and 2015, and approximately $25,000 and $5,000 for the nine months ended September 30, 2016 and 2015. 2016 equity incentive Plan In February 2016, with stockholder approval, the Company adopted the Sensus Healthcare, Inc. 2016 Equity Incentive Plan (the “2016 Plan”). Pursuant to the 2016 Plan, our directors, officers and other key employees who have been selected as participants are eligible to receive awards of various forms of equity-based incentive compensation, including incentive and nonqualified stock options, stock appreciation rights, restricted stock awards, performance shares and phantom stock, and awards consisting of combinations of such incentives. The 2016 Plan is administered by the Compensation Committee of the Board of Directors. Under the 2016 Plan, the Compensation Committee has the authority to establish, adopt, revise or rescind such rules and regulations and to make all such determinations relating to the 2016 Plan as it may deem necessary or advisable for the administration of the 2016 Plan. Subject to the provisions of the 2016 Plan, the Compensation Committee has sole discretionary authority to interpret the 2016 Plan and to determine the type of awards to grant, when, if, and to whom awards are granted, the number of shares covered by each award and the terms and conditions of the award. The term of the 2016 Plan is 10 years from the effective date, after which no further awards may be granted thereunder. The Company has limited the aggregate number of shares of common stock to be awarded under the 2016 Plan to 397,473 shares and no more than 397,473 shares of common stock in the aggregate may be granted in connection with incentive stock options. In addition, unless the Compensation Committee specifically determines otherwise, the maximum number of shares available under the 2016 Plan and the awards granted under the 2016 Plan will be subject to appropriate adjustment in the case of any stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, exchanges or other changes in capitalization affecting our common stock. Any shares granted in connection with options and stock appreciation rights shall be counted against this limit as one share for every one share allotted in connection with the awarded option or stock appreciation right. Any shares granted in connection with awards other than options and stock appreciation rights shall be counted against this limit as two shares for every one share granted in connection with such award or by which the award is valued by reference. On June 2, 2016, 307,666 shares of restricted stock were issued to employees and were recorded at the fair value of $5.25 as per the initial offering price. The shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards. Stock compensation expense of approximately $101,000 was recognized for the three months ended September 30, 2016 and $135,000 for the nine months ended September 30, 2016. Unrecognized stock compensation expense was approximately $1,481,000 as of September 30, 2016, which will be recognized over the remaining vesting period.

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	Note 8 — Income Taxes Through December 31, 2015, the Company was not subject to income taxes in any jurisdiction because it was a limited liability company taxed as a partnership. Each member of the Company was responsible for the tax liability, if any, related to their proportionate share of the Company’s taxable income. Effective January 1, 2016, the Company converted to a C-corporation and is subject to corporate income taxes. The Company did not recognize income tax expense for the three and nine months ended September 30, 2016 since it does not expect to have taxable income in 2016. 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 September 30, 2016, the tax years 2013, 2014 and 2015 were subject to examination.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Note 9 — 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.

ORGANIZATION AND SUMMARY OF S16

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF THE BUSINESS	Description of the Business Sensus Healthcare, Inc. (the “Company”) is a manufacturer of superficial radiation therapy devices and has established a distribution and marketing network to sell the devices to healthcare providers globally. The Company was organized on May 7, 2010 as 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. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida.
INITIAL PUBLIC OFFERING	Initial Public Offering In June 2016, the Company issued 2,300,000 units in its initial public offering (“IPO”) at a price of $5.50 per unit ($5.25 attributable to the common stock and $0.25 attributable to the warrant), for net proceeds of approximately $10,393,000 after deducting underwriting discounts and commissions of $886,000 and expenses of $1,371,000. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock. Immediately prior to the IPO, all shares of stock then outstanding converted into an aggregate of 10,367,883 shares of common stock following a 241.95-for-one forward stock split approved by the Company’s board of directors. On July 25, 2016, the common stock and warrants included in the units issued in the IPO commenced trading separately under the symbols “SRTS” and “SRTSW,” respectively, and trading of the units under the symbol “SRTSU” was suspended.
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 financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2015 included in the Company’s final prospectus dated June 2, 2016, filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to the Company’s Registration Statement on Form S-1 (File No. 333-209451), filed with the SEC. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016, any other interim periods, or any future year or period.
USE OF ESTIMATES	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates to which it is reasonably possible that a change could occur in the near term include, revenue recognition, inventory reserves, receivable allowances, recoverability of long lived assets and estimation of the Company’s product warranties. Actual results could differ from those estimates.
REVENUE RECOGNITION	Revenue Recognition The Company’s sales primarily relate to sales of the Company’s devices. The Company recognizes product revenue upon shipment provided that there is persuasive evidence of an arrangement, there are no uncertainties regarding customer acceptance, the sales price is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company does not provide a right of return related to product sales. Revenues for service contracts are recognized over the service contract period on a straight-line basis. Revenue for rentals of equipment is recognized over the lease term on a straight-line basis. The Company sells products and services under multiple-element arrangements with separate units of accounting; in these situations, total consideration is allocated to the identified units of accounting based on their relative selling prices and revenue is then recognized for each unit based on its specific characteristics. A deliverable in an arrangement qualifies as a separate unit of accounting if the delivered item has value to the customer on a stand-alone basis. The principal deliverables in our multiple deliverable arrangements that qualify as separate units of accounting consist of (i) sales of medical devices and accessories and (ii) service contracts. Performance obligations, including installation and customer training, are considered inconsequential and are combined with the product as one unit of accounting. Selling prices are established using vendor-specific objective evidence (VSOE). If VSOE does not exist, the Company uses its best estimate of the selling prices for the deliverables. The Company operates in a highly regulated environment and is continually entering into new markets in which regulatory approval is sometimes required prior to the customer being able to use the product. In these cases, where regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained and customer acceptance becomes certain. Deferred revenue consists of payments from customers for long term separately priced service contracts, sales pending regulatory approval and deposits on products. Deferred revenue as of September 30, 2016 and December 31, 2015 was as follows: As of September 30, As of December 31, 2016 2015 (unaudited) Service contracts $ 764,600 $ 669,717 Sales pending regulatory approval 155,517 155,517 Deposits on products 70,679 65,000 Total deferred revenue, current portion $ 990,796 $ 890,234 Service contracts, net of current portion 9,979 45,786 Total deferred revenue $ 1,000,775 $ 936,020 The Company provides warranties, generally one year, in conjunction with the sale of its product. These warranties are short term in nature and 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 100% and 85% of its net revenues for the three months ended September 30, 2016 and 2015, respectively, and approximately 74% and 85% for the nine months ended September 30, 2016 and 2015, respectively. Customers in China accounted for approximately 0% and 14% of revenues for the three months ended September 30, 2016 and 2015 and approximately 15% and 14% for the nine months ended September 30, 2016 and 2015, 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 September 30, 2016 and December 31, 2015, the Company had approximately $4,357,000 and $4,815,000, 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 h eld-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 ar e carried at amortized cost plus accrued interest and consist of the following: As of September 30, 2016 (unaudited) Amortized Gross Gross Fair Value Short Term: Corporate bonds $ 4,848,278 322 1,697 4,846,903 Total Short Term: 4,848,278 322 1,697 4,846,903 Long Term: United States Treasury bonds 502,493 208 — 502,701 Corporate bonds 1,226,752 624 1,226,128 Total Long Term: 1,729,245 208 624 1,728,829
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 $27,000 as of September 30, 2016 and approximately $27,000 as of December 31, 2015. To date, the Company has not experienced significant credit-related losses.
PROPERTY AND EQUIPMENT	Property and Equipment Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of property or extend their useful lives are capitalized. When assets are sold or returned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income. Inventory units designated for customer demonstrations, as part of the sales process, are reclassified to property and equipment and the depreciation is recorded to selling and marketing expense. The inventory used for demonstrations that was reclassified to property and equipment for the nine months ended September 30, 2016 and 2015 was approximately $68,000 and $44,000, respectively. Inventory units designated for customer rental agreements are reclassified to property and equipment and the depreciation is recorded to cost of sales. Inventory reclassified for the nine months ended September 30, 2016 and 2015 was approximately $0 and $39,000, respectively.
INTANGIBLE ASSETS	Intangible Assets Intangible assets are comprised of the Company’s patent rights and are amortized over the patents’ estimated useful life of approximately 13 years. As of September 30, 2016 the remaining useful life was 81 months.
LONG-LIVED ASSETS	Long-Lived Assets The Company evaluates its long-lived assets, including intangible assets, for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows in accordance with accounting guidance. If circumstances suggest the recorded amounts cannot be recovered, based upon estimated future undiscounted cash flows, the carrying values of such assets are reduced to fair value. No impairment charges were recorded for long-lived assets for the nine months ended September 30, 2016 and 2015.
EARNINGS PER SHARE	Earnings Per Share Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period using the treasury stock method for options and warrants. The diluted net income per share attributable to common stockholders is computed by giving effect to all potential dilutive common share equivalents outstanding for the period. In periods when the Company has incurred a net loss, options and warrants to purchase common shares are considered common share equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Shares excluded were computed under the treasury stock method as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Warrants 23,644 288,474 23,644 288,474 Unvested restricted stock 71,142 — 71,142 — Options — 950 — 950
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 $168,000 and $70,000 for the three months ended September 30, 2016 and 2015, respectively, and $687,000 and $455,000 for the nine months ended September 30, 2016 and 2015, respectively.
DEFERRED INITIAL PUBLIC OFFERING COSTS	Deferred Initial Public Offering Costs Deferred offering costs, which consist of direct incremental legal, accounting and other fees relating to the IPO, are capitalized. The deferred offering costs were offset against IPO proceeds upon the consummation of the offering. As of December 31, 2015, approximately $310,000 of deferred offering costs were capitalized and included in deferred offering costs and other prepaids on the balance sheet.

ORGANIZATION AND SUMMARY OF S17

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of deferred revenue	Deferred revenue consists of payments from customers for long term separately priced service contracts, sales pending regulatory approval and deposits on products. Deferred revenue as of September 30, 2016 and December 31, 2015 was as follows: As of September 30, As of December 31, 2016 2015 (unaudited) Service contracts $ 764,600 $ 669,717 Sales pending regulatory approval 155,517 155,517 Deposits on products 70,679 65,000 Total deferred revenue, current portion $ 990,796 $ 890,234 Service contracts, net of current portion 9,979 45,786 Total deferred revenue $ 1,000,775 $ 936,020
Schedule of investment	These securities ar e carried at amortized cost plus accrued interest and consist of the following: As of September 30, 2016 (unaudited) Amortized Gross Gross Fair Value Short Term: Corporate bonds $ 4,848,278 322 1,697 4,846,903 Total Short Term: 4,848,278 322 1,697 4,846,903 Long Term: United States Treasury bonds 502,493 208 — 502,701 Corporate bonds 1,226,752 624 1,226,128 Total Long Term: 1,729,245 208 624 1,728,829
Schedule of antidilutive	Shares excluded were computed under the treasury stock method as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Warrants 23,644 288,474 23,644 288,474 Unvested restricted stock 71,142 — 71,142 — Options — 950 — 950

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	As of September 30, As of December 31, Estimated 2016 2015 Useful Lives (unaudited) Operations and rental equipment $ 620,694 $ 504,786 3 years Tradeshow and demo equipment 574,166 397,325 3 years Computer equipment 119,818 88,451 3 years 1,314,678 990,562 Less accumulated depreciation (844,564 ) (669,863 ) Property and Equipment, Net $ 470,114 $ 320,699

PATENT RIGHTS (Tables)

PATENT RIGHTS (Tables)	9 Months Ended
	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets	As to September 30, As of December 31, 2016 2015 (unaudited) Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (602,413 ) (530,123 ) Patent Rights, Net 650,605 722,89 5
Schedule of amortization expense	As of September 30, 2016 and December 31, 2015, future remaining amortization expense is as follows: For the Year Ending December 31, As of September 30, As of December 31, 2016 24,096 $ 96,386 2017 96,386 96,386 2018 96,386 96,386 2019 96,386 96,386 2020 96,386 96,386 Thereafter 240,965 240,965 Total $ 650,605 $ 722,895

PRODUCT WARRANTIES (Tables)

PRODUCT WARRANTIES (Tables)	9 Months Ended
	Sep. 30, 2016
Product Warranties Disclosures [Abstract]
Schedule of changes in product warranty liability	Changes in product warranty liability were as follows for the nine-month period ended September 30, 2016 (unaudited). Balance, beginning of period $ 48,363 Warranties accrued during the period 97,990 Payments on warranty claims (30,652 ) Balance, end of period 115,701

COMMITMENT AND CONTINGENCIES (T

COMMITMENT AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum lease payments for operating leases	Future minimum lease payments as of September 30, 2016 and December 31, 2015 are as follows: As of September 30, As of December 31, Year (unaudited) 2016 $ 41,000 101,000 2017 166,000 60,000 2018 172,000 — 2019 178,000 — 2020 183,000 — Thereafter 332,000 — Tota $ 1,072,000 161,000

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Schedule of warrant activity	The following table summarizes the Company’s warrant activity: Preferred Unit Warrants Common Unit Warrants Number of Weighted Weighted Number of Weighted Weighted Outstanding – December 31, 2015 544,387 $ 2.08 0.17 86,376 $ 4.55 1.5 Granted — — — 2,438,000 6.75 2.80 Exercised (544,387 ) (2.08 ) — — — — Cancelled (forfeited) — — — — — — Outstanding – September 30, 2016 — — — 2,524,376 $ 6.67 2.76 Exercisable – September 30, 2016 — — — 2,524,376 $ 6.67 2.76
Schedule of option activity	A summary of option activity under the Plan is as follows: Number of Options Weighted Average Exercise Weighted Average Remaining Outstanding – December 31, 2015 14,516 $ 4.13 7.83 Granted — — — Exercised (14,516 ) (4.13 ) — Cancelled (forfeited) — — — Outstanding – September 30, 2016 — $ — — Exercisable – September 30, 2016 — $ — —

ORGANIZATION AND SUMMARY OF S23

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Deferred Revenue Arrangement [Line Items]
Deferred revenue current	$ 990,796	$ 890,234
Service contracts, net of current portion	9,979	45,786
Total deferred revenue	1,000,775	936,020
Service Contracts [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue current	764,600	669,717
Sales Pending Regulatory Approval [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue current	155,517	155,517
Deposits on Products [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue current	$ 70,679	$ 65,000

ORGANIZATION AND SUMMARY OF S24

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1)	9 Months Ended
	Sep. 30, 2016USD ($)
Short Term [Member]
Amortized Cost	$ 4,848,278
Gross Unrealized Gain	322
Gross Unrealized Loss	1,697
Fair Value	4,846,903
Short Term [Member] | Corporate Bonds [Member]
Amortized Cost	4,848,278
Gross Unrealized Gain	322
Gross Unrealized Loss	1,697
Fair Value	4,846,903
Long Term [Member]
Amortized Cost	1,729,245
Gross Unrealized Gain	208
Gross Unrealized Loss	624
Fair Value	1,728,829
Long Term [Member] | Corporate Bonds [Member]
Amortized Cost	1,226,752
Gross Unrealized Gain
Gross Unrealized Loss	624
Fair Value	1,226,128
Long Term [Member] | United States Treasury Bonds [Member]
Amortized Cost	502,493
Gross Unrealized Gain	208
Gross Unrealized Loss
Fair Value	$ 502,701

ORGANIZATION AND SUMMARY OF S25

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	23,644	288,474	23,644	288,474
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	71,142		71,142
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		950		950

ORGANIZATION AND SUMMARY OF S26

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2016USD ($)$ / sharesshares	Sep. 30, 2016USD ($)shares	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)shares	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of units issued upon transaction, value				$ 10,392,809
Stockholders' equity note, stock split, conversion ratio				241.95
Cash, FDIC insured amount		$ 250,000		$ 250,000
Cash uninsured amount		4,357,000		4,357,000		$ 4,815,000
Allowance for doubtful accounts receivable, current		27,000		27,000		27,000
Inventory units designated for customer demonstrations				67,908	$ 83,224
Inventory units designated for customer rental agreements				0	39,000
Advertising and promotion expense		$ 168,000	$ 70,000	$ 687,000	$ 455,000
Deferred offering costs						$ 310,000
Product warranty term				1 year
Patents [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Useful life				13 years
Remaining amortization period				81 months
IPO [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of units issued upon transaction | shares	2,300,000
Unit price (in dollars per unit) | $ / shares	$ 5.50
Number of units issued upon transaction, value	$ 10,393,000
Underwriting discounts and commissions	886,000
Stock issued expenses	$ 1,371,000
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of units issued upon transaction | shares	1			2,300,000
Unit price (in dollars per unit) | $ / shares	$ 5.25
Number of units issued upon transaction, value				$ 23,000
Shares outstanding | shares		13,546,170		13,546,170		10,367,883
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of units issued upon transaction | shares	1
Unit price (in dollars per unit) | $ / shares	$ 0.25
UNITED STATES
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Reveune percent		100.00%	85.00%	74.00%	85.00%
CHINA
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Reveune percent		0.00%	14.00%	15.00%	14.00%

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 1,314,678	$ 990,562
Less accumulated depreciation	(844,564)	(669,863)
Property and Equipment, Net	470,114	320,699
Operations and Rental Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 620,694	504,786
Property, plant and equipment, useful Life	3 years
Tradeshow and Demo Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 574,166	397,325
Property, plant and equipment, useful Life	3 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 119,818	$ 88,451
Property, plant and equipment, useful Life	3 years

PROPERTY AND EQUIPMENT (Detai28

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 60,000	$ 55,000	$ 181,000	$ 175,000

PATENT RIGHTS (Details)

PATENT RIGHTS (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Gross carrying amount	$ 1,253,018	$ 1,253,018
Less accumulated amortization	(602,413)	(530,123)
Patent Rights, Net	$ 650,605	$ 722,895

PATENT RIGHTS (Details 1)

PATENT RIGHTS (Details 1) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2,016	$ 24,096	$ 96,386
2,017	96,386	96,386
2,018	96,386	96,386
2,019	96,386	96,386
2,020	96,386	96,386
Thereafter	240,965	240,965
Total	$ 650,605	$ 722,895

PATENT RIGHTS (Details Narrativ

PATENT RIGHTS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 24,000	$ 24,000	$ 72,000	$ 72,000

REVOLVING CREDIT FACILITY (Deta

REVOLVING CREDIT FACILITY (Details Narrative) - USD ($)	Mar. 12, 2013	Sep. 30, 2016	Sep. 21, 2016	Dec. 31, 2015	Mar. 12, 2015
Debt Disclosure [Abstract]
Debt instrument, term	2 years
Line of credit facility, maximum borrowing capacity	$ 3,000,000		$ 2,000,000		$ 1,500,000
Line of credit percentage of borrowing base to accounts receivables	80.00%
Debt instrument, basis spread on variable rate		0.75%
Debt instrument, interest rate, effective percentage		4.25%
Line of credit, current				$ 422,702
Line of credit facility, unused capacity, commitment fee percentage		0.25%

PRODUCT WARRANTIES (Details)

PRODUCT WARRANTIES (Details)	9 Months Ended
	Sep. 30, 2016USD ($)
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance, beginning of period	$ 48,363
Warranties accrued during the period	97,990
Payments on warranty claims	(30,652)
Balance, end of period	$ 115,701

COMMITMENT AND CONTINGENCIES (D

COMMITMENT AND CONTINGENCIES (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
2,016	$ 41,000	$ 101,000
2,017	166,000	60,000
2,018	172,000
2,019	178,000
2,020	183,000
Thereafter	332,000
Total	$ 1,072,000	$ 161,000

COMMITMENT AND CONTINGENCIES 35

COMMITMENT AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2010	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Payments to suppliers		$ 713,000	$ 888,000	$ 2,998,000	$ 1,855,000
Accounts payable and accrued expenses		566,000		$ 566,000		$ 283,000
Lease expiration date				Sep. 30, 2022
Percentage of increase in lease payments				3.00%
Rental expense		$ 24,000	$ 24,000	$ 73,000	$ 74,000
Manufacturing agreement contract term	3 years

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Preferred Unit Warrants [Member]
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding beginning | shares	544,387
Granted | shares
Exercised | shares	(544,387)
Cancelled (forfeited) | shares
Outstanding ending | shares
Exercisable | shares
Class of Warrant or Right, Exercise Price of Warrants or Rights [Roll Forward]
Outstanding beginning | $ / shares	$ 2.08
Granted | $ / shares
Exercised | $ / shares	(2.08)
Cancelled (forfeited) | $ / shares
Outstanding ending | $ / shares
Exercisable | $ / shares
Class Of Warrant Or Right Weighted Average Remaining Contract Term Of Warrants Or Rights [Roll Forward]
Outstanding beginning	2 months 1 day
Common Unit Warrants [Member]
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding beginning | shares	86,376
Granted | shares	2,438,000
Exercised | shares
Cancelled (forfeited) | shares
Outstanding ending | shares	2,524,376
Exercisable | shares	2,524,376
Class of Warrant or Right, Exercise Price of Warrants or Rights [Roll Forward]
Outstanding beginning | $ / shares	$ 4.55
Granted | $ / shares	6.75
Exercised | $ / shares
Cancelled (forfeited) | $ / shares
Outstanding ending | $ / shares	6.67
Exercisable | $ / shares	$ 6.67
Class Of Warrant Or Right Weighted Average Remaining Contract Term Of Warrants Or Rights [Roll Forward]
Outstanding beginning	1 year 6 months
Granted	2 years 9 months 18 days
Outstanding ending	2 years 9 months 4 days
Exercisable	2 years 9 months 4 days

STOCKHOLDERS' EQUITY (Details 1

STOCKHOLDERS' EQUITY (Details 1)	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding beginning | shares	14,516
Granted | shares
Exercised | shares	(14,516)
Cancelled (forfeited) | shares
Outstanding ending | shares
Exercisable | shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding beginning | $ / shares	$ 4.13
Granted | $ / shares
Exercised | $ / shares	(4.13)
Cancelled (forfeited) | $ / shares
Outstanding ending | $ / shares
Exercisable | $ / shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contract Term [Roll Forward]
Outstanding	7 years 9 months 29 days

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	Jul. 15, 2016	Jun. 30, 2016	Jun. 02, 2016	Sep. 30, 2016	Nov. 01, 2013	Apr. 30, 2013	Mar. 31, 2011	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2011	Dec. 31, 2015
Common stock, authorized		50,000,000		50,000,000				50,000,000	50,000,000		50,000,000				50,000,000
Common stock, issued		13,546,170		13,546,170				13,546,170	13,546,170		13,546,170				10,367,883
Common stock,outstanding		13,546,170		13,546,170				13,546,170	13,546,170		13,546,170				10,367,883
Description of membership interest											Each membership interest converted to one share of common stock.
Accrued dividend paid											$ 2,511,024
Stock compensation expense											$ 625,424	4,857
Discount rate											21.00%
Weighted average grant date fair value (in dollars per share)											$ 4.42
Description of forward stock split											All warrants reflect the 241.05-for-one forward stock split.
Number of option granted each employee
Weighted average exercise price granted (in dollars per UNIT)
Number of option exercises											14,516
2013 Option Plan [Member]
Stock compensation expense								$ 22,000		$ 2,000	$ 25,000	$ 5,000
Description of forward stock split											All options amounts reflect the 241.05-for-one forward stock split.
Number of authorized shares under the plan				90,731				90,731			90,731
Vesting period											5 years
Number of option exercises											3,096
2016 equity incentive Plan [Member]
Number of authorized shares under the plan				397,473				397,473			397,473
Expiration period											10 years
2016 equity incentive Plan [Member] | Restricted Stock [Member]
Stock compensation expense								$ 101,000			$ 135,000
Vesting period			4 years
Number of restricted stock granted			307,666
Initial offering price (in dollars per share)			$ 5.25
Vesting percentage			25.00%
Description of vesting rights			The shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards.
Unrecognized stock compensation expense				$ 1,481,000				$ 1,481,000			$ 1,481,000
Preferred Unit Warrants [Member]
Number of warrant outstanding															544,387
Warrant exercise price (in dollars per share)															$ 2.08
Number of warrant granted
Warrant granted exercise price (in dollars per share)
Common Unit Warrants [Member]
Number of warrant outstanding				2,524,376				2,524,376			2,524,376				86,376
Warrant exercise price (in dollars per share)				$ 6.67				$ 6.67			$ 6.67				$ 4.55
Number of warrant granted											2,438,000
Warrant granted exercise price (in dollars per share)											$ 6.75
Intrinsic value of common stock warrants				$ 148,000				$ 148,000			$ 148,000				$ 0
Executive Officer [Member]
Percentage of ownership interest granted													1.00%
Stock compensation expense									$ 465,000
Two Employees [Member] | 2013 Option Plan [Member]
Vesting period					5 years
Expiration period					10 years
Number of option granted each employee					7,258
Weighted average exercise price granted (in dollars per UNIT)					$ 4.13
Investor [Member]
Percentage cumulative, non-compounded annual preferential return														8.00%
Proceeds from issuance preference stock, gross														$ 6,400,000
Proceeds from issuance preference stock, net														$ 6,000,000
Accumulated unpaid preferential distributions															$ 2,674,000
Accumulated unpaid preferential distributions (in dollars per share)															$ 0.87
Accrued dividend paid	$ 2,553,000
Value of shares issued upon dividend	$ 122,000
Number of shares issued upon dividend	23,138
Investor [Member] | Common Unit Warrants [Member] | IPO [Member]
Warrant term		3 years
Number of warrant granted		2,300,000
Warrant granted exercise price (in dollars per share)		$ 6.75
Date of warrants exercisable		Jun. 2, 2019
Warrant redemption price (in dollars per warrant)		$ 0.01
Investor [Member] | Placement Agent [Member] | Preferred Unit Warrants [Member]
Warrant term							5 years
Number of warrant outstanding							544,387
Warrant exercise price (in dollars per share)							$ 2.08
Investor [Member] | Placement Agent [Member] | Common Unit Warrants [Member]
Warrant term						5 years
Number of warrant outstanding						86,376
Warrant exercise price (in dollars per share)						$ 4.55
Percentage of offering price						110.00%
Underwriter's Representatives [Member] | Common Unit Warrants [Member] | IPO [Member]
Warrant term				4 years
Number of warrant granted				138,000
Warrant granted exercise price (in dollars per share)				$ 6.75
Underwriter's Representatives [Member] | Common Unit Warrants [Member] | IPO [Member] | Minimum [Member]
Date of warrants exercisable				Jun. 2, 2017
Underwriter's Representatives [Member] | Common Unit Warrants [Member] | IPO [Member] | Maximum [Member]
Date of warrants exercisable				Jun. 2, 2021