Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Feb. 28, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Sensus Healthcare, Inc. | |
Entity Central Index Key | 1,494,891 | |
Document Type | 10-K | |
Trading Symbol | SRTS | |
Document Period End Date | Dec. 31, 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 Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 13,527,168 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 5,042,477 | $ 5,065,068 |
Accounts receivable, net | 3,098,635 | 2,071,572 |
Inventories | 1,254,915 | 998,861 |
Investment in debt securities | 6,462,369 | |
Prepaids and other current assets | 900,722 | 432,787 |
Total Current Assets | 16,759,118 | 8,568,288 |
Property and Equipment, Net | 433,408 | 320,699 |
Patent Rights, Net | 626,509 | 722,895 |
Investment in Debt Securities | 1,103,773 | |
Deposits | 24,272 | 24,272 |
Total Assets | 18,947,080 | 9,636,154 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,762,371 | 2,307,465 |
Product warranties | 40,481 | 48,363 |
Revolving credit facility | 422,702 | |
Deferred revenue, current portion | 853,798 | 890,234 |
Total Current Liabilities | 3,656,650 | 3,668,764 |
Deferred Revenue, Net of Current Portion | 16,251 | 45,786 |
Total Liabilities | 3,672,901 | 3,714,550 |
Stockholders' Equity | ||
Preferred stock, 5,000,000 shares authorized and none issued and outstanding. | ||
Common stock, $0.01 par value - 50,000,000 authorized and 13,546,171 and 10,367,883 issued and outstanding at December 31, 2016 and December 31, 2015, respectively. | 135,461 | 103,678 |
Additional paid-in capital | 22,930,975 | 13,263,735 |
Accumulated deficit | (7,792,257) | (7,445,809) |
Total Stockholders' Equity | 15,274,179 | 5,921,604 |
Total Liabilities and Stockholders' Equity | $ 18,947,080 | $ 9,636,154 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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 | 13,546,171 | 10,367,883 |
Common Stock, outstanding | 13,546,171 | 10,367,883 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 14,811,175 | $ 10,273,094 |
Cost of Sales | 4,965,372 | 3,692,829 |
Gross Profit | 9,845,803 | 6,580,265 |
Operating Expenses | ||
Selling and marketing | 4,915,440 | 3,748,391 |
General and administrative | 3,469,332 | 1,586,403 |
Research and development | 1,824,150 | 1,466,728 |
Total Operating Expenses | 10,208,922 | 6,801,522 |
Loss From Operations | (363,119) | (221,257) |
Other Income (Expense) | ||
Interest income | 38,538 | 1,776 |
Interest expense | (21,867) | (17,786) |
Other Income (Expense), net | 16,671 | (16,010) |
Loss Before Income Taxes | (346,448) | (237,267) |
Provision for income taxes | ||
Net Loss | (346,448) | (237,267) |
Preferential distribution | (513,332) | |
Net Loss Attributable to Common Stockholders | $ (346,448) | $ (750,599) |
Net Loss Attributable to Common Stockholders per share - basic and diluted (in dollars per share) | $ (0.03) | $ (0.08) |
Weighted average number of shares used in computing net loss per share - basic and diluted (in shares) | 12,028,435 | 9,885,218 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance beginning at Dec. 31, 2014 | $ 98,798 | $ 11,247,952 | $ (7,208,542) | $ 4,138,208 |
Balance beginning (in shares) at Dec. 31, 2014 | 9,879,870 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock based compensation | 6,477 | 6,477 | ||
Issuance of common stock for cash, net of offering costs | $ 4,880 | 2,009,306 | 2,014,186 | |
Issuance of common stock for cash, net of offering costs (in shares) | 488,013 | |||
Net loss | (237,267) | (237,267) | ||
Balance end at Dec. 31, 2015 | $ 103,678 | 13,263,735 | (7,445,809) | 5,921,604 |
Balance end (in shares) at Dec. 31, 2015 | 10,367,883 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock based compensation | $ 3,077 | 723,300 | 726,377 | |
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) | 547,484 | |||
Preferred dividend | $ 231 | (2,552,932) | (2,552,701) | |
Preferred dividend (in shares) | 23,138 | |||
Net loss | (346,448) | (346,448) | ||
Balance end at Dec. 31, 2016 | $ 135,461 | $ 22,930,975 | $ (7,792,257) | $ 15,274,179 |
Balance end (in shares) at Dec. 31, 2016 | 13,546,171 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows From Operating Activities | ||
Net loss | $ (346,448) | $ (237,267) |
Adjustments to reconcile net income (loss) to net cash and cash equivalents used in operating activities: | ||
Depreciation and amortization | 337,583 | 315,599 |
Provision for product warranties | 32,877 | 34,500 |
Stock based compensation | 726,377 | 6,477 |
(Increase) decrease in: | ||
Accounts receivable | (1,027,063) | (1,663,980) |
Inventories | (323,962) | (288,391) |
Prepaids and other current assets | (777,614) | (334,095) |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 633,956 | 1,226,425 |
Deferred revenue | (65,971) | (364,860) |
Product warranties | (40,759) | (33,751) |
Total Adjustments | (504,576) | (1,102,076) |
Net Cash Used In Operating Activities | (851,024) | (1,339,343) |
Cash Flows from Investing Activities | ||
Acquisition of property and equipment | (285,998) | (196,190) |
Investment in debt securities - held to maturity | (7,865,675) | |
Investments matured during the year | 299,533 | |
Net Cash Used In Investing Activities | (7,852,140) | (196,190) |
Cash Flows from Financing Activities | ||
Offering of shares | 12,650,000 | 2,200,000 |
Revolving credit facility, net | (422,702) | 47,702 |
Exercise of warrants and options | 1,132,538 | |
Offering costs | (2,126,562) | (185,814) |
Cash dividends on preferred stock | (2,552,701) | |
Net Cash Provided By Financing Activities | 8,680,573 | 2,061,888 |
Net Decrease in Cash and Cash Equivalents | (22,591) | 526,355 |
Cash and Cash Equivalents - Beginning | 5,065,068 | 4,538,713 |
Cash and Cash Equivalents - Ending | 5,042,477 | 5,065,068 |
Supplemental Disclosure of Cash Flow Information | ||
Interest Paid | 23,773 | 17,814 |
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 | 12 Months Ended |
Dec. 31, 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 $10,525,000 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. 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 December 31, 2016 and 2015 was as follows: As of December 31, 2016 2015 Service contracts $ 613,374 $ 669,717 Sales pending regulatory approval 155,517 155,517 Deposits on products 84,907 65,000 Total deferred revenue, current portion $ 853,798 $ 890,234 Service contracts, net of current portion 16,251 45,786 Total deferred revenue $ 870,049 $ 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. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, investments in debt securities and accounts receivable. Segment and Geographical Information The Company’s revenue is generated primarily from customers in the United States, which represented approximately 81% and 82% for the years ended December 31, 2016 and 2015, respectively. Customers in China accounted for approximately 10% and 14% for the years ended December 31, 2016 and 2015, respectively. Fair Value of Financial Instruments Carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued liabilities and revolving credit facility approximate fair value due to their relative short maturities. Cash and Cash Equivalents The Company maintains its cash and cash equivalents with financial institutions which balances exceed the federally insured limits. Federally insured limits are $250,000 for deposits. As of December 31, 2016 and 2015, the Company had approximately $4,792,000 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 December 31, 2016 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Short Term: Corporate bonds $ 6,462,369 167 7,243 6,455,293 Total Short Term: 6,462,369 167 7,243 6,455,293 Long Term: United States Treasury bonds 502,063 — 1,174 500,890 Corporate bonds 601,710 — 2,618 599,091 Total Long Term: 1,103,773 — 3,792 1,099,981 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 $29,000 and $27,000 as of December 31, 2016 and 2015. To date, the Company has not experienced significant credit-related losses. Inventories Inventories consist of finished product and components and are stated at the lower of cost and net realizable value, determined using the first-in-first-out method. Property and Equipment Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful 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 years ended December 31, 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 year ended December 31, 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 December 31, 2016 the remaining useful life was 78 months. Long-Lived Assets The Company evaluates its long-lived assets, including intangible assets, for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows in accordance with accounting guidance. If circumstances suggest the recorded amounts cannot be recovered, based upon estimated future undiscounted cash flows, the carrying values of such assets are reduced to fair value. No impairment charges were recorded for long-lived assets for the years ended December 31, 2016 and 2015. Research and Development Research and development costs relate to products under development by the Company and quality and regulatory costs and are expensed as incurred. Earnings Per Share Basic net income (loss) per share 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 Years Ended December 31, 2016 2015 Warrants 19,489 288,474 Unvested Restricted Stock 72,670 — Options — 950 Equity-Based Compensation Pursuant to accounting guidance related to accounting for equity-based compensation, the Company is required to recognize all share-based payments to non-employees and employees in the financial statements based on fair values on the grant date. The Company has accounted for issuance of shares, options, and warrants in accordance with the guidance, which requires the recognition of expense, based on grant-date fair values, over the service period, generally periods over which the shares, options and warrants vest. Advertising Costs Advertising and promotion expenses are charged to expense as incurred. Advertising and promotion expense included in selling expense in the accompanying statements of operations amounted to approximately $1,051,000 and $773,000 for the years ended December 31, 2016 and 2015, respectively. Operating Leases Rent expense for operating leases which contain escalating rental clauses is recorded on a straight-line basis over the lease term. Deferred Initial Public Offering Costs Deferred offering costs, which consist of direct incremental legal, accounting and other fees relating to the IPO, were 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 prepaids and other current assets.on the balance sheet. Recently issued accounting pronouncements In August 2014, the FASB issued new guidance related to the disclosures around going concern. The new standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The Company adopted this standard during the year ended December 31, 2016. The adoption of this standard did not have an impact on the Company's financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In April 2016, the FASB also issued ASU 2016-10, Identifying Performance Obligations and Licensing, implementation guidance on principal versus agent, identifying performance obligations, and licensing. ASU 2016-10 is effective for reporting periods beginning after December 15, 2017. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. For Sensus the ASU is effective January 1, 2018. The Company is continuing to evaluate the standard’s impact on the results of operations and financial condition. The Company has conducted initial analyses and is currently completing detailed contract reviews to determine if any adjustments are necessary to the existing accounting policies and to support the evaluation of the standard’s impact to the results of operations and financial condition. For the majority of the Company’s revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU, and generally consist of obligations to transfer goods and services. The Company currently anticipates utilizing the modified retrospective method of adoption on January 1, 2018. In June 2014, the FASB has issued ASU 2014-12, Compensation — Stock Compensation (Topic 718): Accounting for Shared-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company adopted this standard in 2016 and it did not have an impact on its financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and is effective for years beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The Company adopted this standard in 2016 and it did not have a material impact on its financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740). Under the new guidance, companies are required to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. In addition, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances will also be classified as noncurrent. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016. The Company does not expect the adoption to have a material effect on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for lease s In April 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718), which requires that the income tax effect of share-based awards be recognized in the income statement when the awards vest or are settled. The guidance will also allow an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The guidance is effective for years beginning after December 15, 2016 and interim periods within those years. The Company does not expect the adoption to have a material effect on its financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 2 — Property and Equipment As of December 31, Estimated 2016 2015 Useful Lives Operations and rental equipment $ 630,886 $ 504,786 3 years Tradeshow and demo equipment 294,475 397,325 3 years Computer equipment 95,218 88,451 3 years 1,020,579 990,562 Less accumulated depreciation (587,171 ) (669,863 ) Property and Equipment, Net $ 433,408 $ 320,699 Depreciation expense was approximately $241,000 and $219,000, for the years ended December 31, 2016 and 2015, respectively. |
PATENT RIGHTS
PATENT RIGHTS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENT RIGHTS | Note 3 — Patent Rights As to December 31, 2016 2015 Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (626,509 ) (530,123 ) Patent Rights, Net $ 626,509 $ 722,895 Amortization expense was approximately $96,000 for both years ended December 31, 2016 and 2015. As of December 31, 2016, future remaining amortization expense is as follows: For the Year Ending December 31, 2016 2017 $ 96,386 2018 96,386 2019 96,386 2020 96,386 2021 96,386 Thereafter 144,579 Total $ 626,509 |
REVOLVING CREDIT FACILITY
REVOLVING CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
REVOLVING CREDIT FACILITY | Note 4 — Revolving Credit Facility On March 12, 2013, the Company entered into a two-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% (4.50% at December 31, 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 December 31, 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 | 12 Months Ended |
Dec. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTIES | Note 5 — Product Warranties Changes in product warranty liability were as follows for the years ended December 31, 2016 and 2015. As of December 31, 2016 2015 Balance, beginning of period $ 48,363 $ 47,614 Warranties accrued during the period 32,877 7,189 Payments on warranty claims (40,759 ) (6,440 ) Balance, end of period 40,481 48,363 |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT AND CONTINGENCIES | Note 6 — Commitment and Contingencies Operating Lease Agreements In July 2016, the Company renewed a lease with an unrelated third party for its headquarters office. The renewal was effective September 1, 2016 and expanded the office space being occupied. The lease expires in September 2022 and lease payments increase by 3% annually. Future minimum lease payments as of December 31, 2016 are as follows: Year Minimum Lease Payment 2017 184,000 2018 190,000 2019 196,000 2020 202,000 2021 208,000 Thereafter 160,000 Total $ 1,140,000 Rental expense for the years ended December 31, 2016 and 2015 was approximately $100,000 and $98,000, 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 agreement shall automatically be renewed for successive years unless either party notifies the other party in writing, at least 60 days prior to the anniversary date of this agreement that it will not renew the agreement. The Company or the manufacturer has the option to terminate the agreement with 90 days written notice. Any change in the relationship with the manufacturer could have an adverse effect on the Company’s business. Purchases from this manufacturer totaled approximately $3,917,000 and $2,871,000 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015 approximately $563,000 and $338,000, respectively, was due to this manufacturer, which is presented in accounts payable and accrued expenses in the accompanying balance sheets. Legal contingencies The Company is party to certain legal proceedings in the ordinary course of business. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and related contingencies. 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 | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Note 7 — Stockholders’ Equity The Company has authorized 50,000,000 shares of common stock, of which 13,546,171 and 10,367,883 shares were issued and outstanding as of December 31, 2016 and 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 in 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 December 31, 2016 and 2015. The following table summarizes the Company’s warrant activity: Former Preferred Warrants Common Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Outstanding – December 31, 2015 544,388 $ 2.08 0.17 86,376 $ 4.55 1.25 Granted — — — 2,438,000 6.75 2.55 Exercised (544,388 ) (2.08 ) — — — — Cancelled (forfeited) — — — — — — Outstanding – December 31, 2016 — — — 2,524,376 $ 6.67 2.50 Exercisable – December 31, 2016 — — — 2,386,376 $ 6.67 2.50 The intrinsic value of the common stock warrants was approximately $114,000 as of December 31, 2016, and $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 Price Weighted Average Remaining Contractual Term (In Years) Outstanding – December 31, 2015 14,516 $ 4.13 7.83 Granted — — — Exercised (14,516 ) (4.13 ) — Cancelled (forfeited) — — — Outstanding – December 31, 2016 — $ — — Exercisable – December 31, 2016 — $ — — The Company recognized approximately $25,000 and $6,000 of expense related to the options for the years ended December 31, 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 $236,000 was recognized for the year ended December 31, 2016. Unrecognized stock compensation expense was approximately $1,380,000 as of December 31, 2016, which will be recognized over the remaining vesting period of 41 months. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 8 — Income Taxes The income tax provision (benefit) consisted of the following: For The Years Ended December 31, 2016 2015 Current – federal - - Current – state - - Deferred – federal (137,616 ) (85,366 ) Deferred – state (11,666 ) (4,915 ) (149,282 ) (90,281 ) Change in valuation allowance 149,282 90,281 Income tax provision (benefit) $ - $ - For the years ended December 31, 2016 and December 31, 2015, the expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) as follows: For The Years Ended December 31, 2016 2015 U.S. federal statutory rate (35.0 )% (34.0 )% State taxes, net of federal benefit (3.4 )% (2.1 )% Permanent differences (4.7 )% (2.1 )% Change in valuation allowance 43.1 % 38.2 % Income tax provision (benefit) 0.0 % 0.0 % As of December 31, 2016 and December 31, 2015, the Company’s net deferred tax asset consisted of the effects of temporary differences attributable to the following: December 31, 2016 2015 Stock-based compensation $ 274,553 $ 4,920 Depreciation and amortization (56,926 ) (28,213 ) Accrued expenses and reserves 45,115 31,294 Prepaid expenses (33,259 ) (9,384 ) Customer deposits 5,696 86,455 Other, net 6,772 7,585 Deferred tax asset, net 241,951 92,657 Valuation allowance (241,951 ) (92,657 ) Deferred tax asset, net of valuation allowance - - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the future generation of taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxing strategies in making this assessment. Based on this assessment, management has established a full valuation allowance against all of the net deferred tax assets for each period, since it is more likely than not that all of the deferred tax assets will not be realized. The valuation allowance for the years ended December 31, 2016 and 2015 increased by approximately $149,000 and $90,000, respectively. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of December 31, 2016 and 2015. The Company does not expect any significant changes in its unrecognized tax benefits within 12 months of the reporting date. The Company has U.S. federal and certain state tax returns subject to examination by tax authorities beginning with those filed for the year ended December 31, 2012. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 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) | 12 Months Ended |
Dec. 31, 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 $10,525,000 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. |
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 December 31, 2016 and 2015 was as follows: As of December 31, 2016 2015 Service contracts $ 613,374 $ 669,717 Sales pending regulatory approval 155,517 155,517 Deposits on products 84,907 65,000 Total deferred revenue, current portion $ 853,798 $ 890,234 Service contracts, net of current portion 16,251 45,786 Total deferred revenue $ 870,049 $ 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. |
CONCENTRATION OF CREDIT RISK | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, investments in debt securities and accounts receivable. |
SEGMENT AND GEOGRAPHICAL INFORMATION | Segment and Geographical Information The Company’s revenue is generated primarily from customers in the United States, which represented approximately 81% and 82% for the years ended December 31, 2016 and 2015, respectively. Customers in China accounted for approximately 10% and 14% for the years ended December 31, 2016 and 2015, respectively. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Fair Value of Financial Instruments Carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued liabilities and revolving credit facility approximate fair value due to their relative short maturities. |
CASH AND CASH EQUIVALENTS | Cash and Cash Equivalents The Company maintains its cash and cash equivalents with financial institutions which balances exceed the federally insured limits. Federally insured limits are $250,000 for deposits. As of December 31, 2016 and 2015, the Company had approximately $4,792,000 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 December 31, 2016 Amortized Gross Gross Fair Value Short Term: Corporate bonds $ 6,462,369 167 7,243 6,455,293 Total Short Term: 6,462,369 167 7,243 6,455,293 Long Term: United States Treasury bonds 502,063 — 1,174 500,890 Corporate bonds 601,710 — 2,618 599,091 Total Long Term: 1,103,773 — 3,792 1,099,981 |
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 $29,000 and $27,000 as of December 31, 2016 and 2015. To date, the Company has not experienced significant credit-related losses. |
INVENTORIES | Inventories Inventories consist of finished product and components and are stated at the lower of cost and net realizable value, determined using the first-in-first-out method. |
PROPERTY AND EQUIPMENT | Property and Equipment Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful 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 years ended December 31, 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 year ended December 31, 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 December 31, 2016 the remaining useful life was 78 months. |
LONG-LIVED ASSETS | Long-Lived Assets The Company evaluates its long-lived assets, including intangible assets, for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows in accordance with accounting guidance. If circumstances suggest the recorded amounts cannot be recovered, based upon estimated future undiscounted cash flows, the carrying values of such assets are reduced to fair value. No impairment charges were recorded for long-lived assets for the years ended December 31, 2016 and 2015. |
RESEARCH AND DEVELOPMENT | Research and Development Research and development costs relate to products under development by the Company and quality and regulatory costs and are expensed as incurred. |
EARNINGS PER SHARE | Earnings Per Share Basic net income (loss) per share 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: F or the Years Ended December 31, 2016 2015 Warrants 19,489 288,474 Unvested Restricted Stock 72,670 — Options — 950 |
EQUITY - BASED COMPENSATION | Equity-Based Compensation Pursuant to accounting guidance related to accounting for equity-based compensation, the Company is required to recognize all share-based payments to non-employees and employees in the financial statements based on fair values on the grant date. The Company has accounted for issuance of shares, options, and warrants in accordance with the guidance, which requires the recognition of expense, based on grant-date fair values, over the service period, generally periods over which the shares, options and warrants vest. |
ADVERTISING COSTS | Advertising Costs Advertising and promotion expenses are charged to expense as incurred. Advertising and promotion expense included in selling expense in the accompanying statements of operations amounted to approximately $1,051,000 and $773,000 for the years ended December 31, 2016 and 2015, respectively. |
OPERATING LEASES | Operating Leases Rent expense for operating leases which contain escalating rental clauses is recorded on a straight-line basis over the lease term. |
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, were 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 prepaids and other current assets.on the balance sheet. |
RECENTLY ISUED ACCOUNTING PRONOUNCEMENT | Recently issued accounting pronouncements In August 2014, the FASB issued new guidance related to the disclosures around going concern. The new standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The Company adopted this standard during the year ended December 31, 2016. The adoption of this standard did not have an impact on the Company's financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In April 2016, the FASB also issued ASU 2016-10, Identifying Performance Obligations and Licensing, implementation guidance on principal versus agent, identifying performance obligations, and licensing. ASU 2016-10 is effective for reporting periods beginning after December 15, 2017. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. For Sensus the ASU is effective January 1, 2018. The Company is continuing to evaluate the standard’s impact on the results of operations and financial condition. The Company has conducted initial analyses and is currently completing detailed contract reviews to determine if any adjustments are necessary to the existing accounting policies and to support the evaluation of the standard’s impact to the results of operations and financial condition. For the majority of the Company’s revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU, and generally consist of obligations to transfer goods and services. The Company currently anticipates utilizing the modified retrospective method of adoption on January 1, 2018. In June 2014, the FASB has issued ASU 2014-12, Compensation — Stock Compensation (Topic 718): Accounting for Shared-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company adopted this standard in 2016 and it did not have an impact on its financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and is effective for years beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The Company adopted this standard in 2016 and it did not have a material impact on its financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740). Under the new guidance, companies are required to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. In addition, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances will also be classified as noncurrent. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016. The Company does not expect the adoption to have a material effect on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for lease s In April 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718), which requires that the income tax effect of share-based awards be recognized in the income statement when the awards vest or are settled. The guidance will also allow an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The guidance is effective for years beginning after December 15, 2016 and interim periods within those years. The Company does not expect the adoption to have a material effect on its financial statements. |
ORGANIZATION AND SUMMARY OF S17
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of deferred revenue | Deferred revenue as of December 31, 2016 and 2015 was as follows: As of December 31, 2016 2015 Service contracts $ 613,374 $ 669,717 Sales pending regulatory approval 155,517 155,517 Deposits on products 84,907 65,000 Total deferred revenue, current portion $ 853,798 $ 890,234 Service contracts, net of current portion 16,251 45,786 Total deferred revenue $ 870,049 $ 936,020 |
Schedule of investment | These securities ar e carried at amortized cost plus accrued interest and consist of the following: As of December 31, 2016 Amortized Gross Gross Fair Value Short Term: Corporate bonds $ 6,462,369 167 7,243 6,455,293 Total Short Term: 6,462,369 167 7,243 6,455,293 Long Term: United States Treasury bonds 502,063 — 1,174 500,890 Corporate bonds 601,710 — 2,618 599,091 Total Long Term: 1,103,773 — 3,792 1,099,981 |
Schedule of antidilutive | Shares excluded were computed under the treasury stock method as follows: For the Years Ended December 31, 2016 2015 Warrants 19,489 288,474 Unvested Restricted Stock 72,670 — Options — 950 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | As of December 31, Estimated 2016 2015 Useful Lives Operations and rental equipment $ 630,886 $ 504,786 3 years Tradeshow and demo equipment 294,475 397,325 3 years Computer equipment 95,218 88,451 3 years 1,020,579 990,562 Less accumulated depreciation (587,171 ) (669,863 ) Property and Equipment, Net $ 433,408 $ 320,699 |
PATENT RIGHTS (Tables)
PATENT RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | As to December 31, 2016 2015 Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (626,509 ) (530,123 ) Patent Rights, Net $ 626,509 $ 722,895 |
Schedule of amortization expense | As of December 31, 2016, future remaining amortization expense is as follows: For the Year Ending December 31, 2016 2017 $ 96,386 2018 96,386 2019 96,386 2020 96,386 2021 96,386 Thereafter 144,579 Total $ 626,509 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Schedule of changes in product warranty liability | Changes in product warranty liability were as follows for the years ended December 31, 2016 and 2015. As of December 31, 2016 2015 Balance, beginning of period $ 48,363 $ 47,614 Warranties accrued during the period 32,877 7,189 Payments on warranty claims (40,759 ) (6,440 ) Balance, end of period 40,481 48,363 |
COMMITMENT AND CONTINGENCIES (T
COMMITMENT AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments for operating leases | Future minimum lease payments as of December 31, 2016 are as follows: Year Minimum Lease 2017 184,000 2018 190,000 2019 196,000 2020 202,000 2021 208,000 Thereafter 160,000 Total $ 1,140,000 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of warrant activity | The following table summarizes the Company’s warrant activity: Former Preferred Warrants Common Warrants Number of Weighted Weighted Number of Weighted Weighted Outstanding – December 31, 2015 544,388 $ 2.08 0.17 86,376 $ 4.55 1.25 Granted — — — 2,438,000 6.75 2.55 Exercised (544,388 ) (2.08 ) — — — — Cancelled (forfeited) — — — — — — Outstanding – December 31, 2016 — — — 2,524,376 $ 6.67 2.50 Exercisable – December 31, 2016 — — — 2,386,376 $ 6.67 2.50 |
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 – December 31, 2016 — $ — — Exercisable – December 31, 2016 — $ — — |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision (benefit) | The income tax provision (benefit) consisted of the following: For The Years Ended December 31, 2016 2015 Current – federal - - Current – state - - Deferred – federal (137,616 ) (85,366 ) Deferred – state (11,666 ) (4,915 ) (149,282 ) (90,281 ) Change in valuation allowance 149,282 90,281 Income tax provision (benefit) $ - $ - |
Schedule of expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) | For the years ended December 31, 2016 and December 31, 2015, the expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) as follows: For The Years Ended December 31, 2016 2015 U.S. federal statutory rate (35.0 )% (34.0 )% State taxes, net of federal benefit (3.4 )% (2.1 )% Permanent differences (4.7 )% (2.1 )% Change in valuation allowance 43.1 % 38.2 % Income tax provision (benefit) 0.0 % 0.0 % |
Schedule of company's net deferred tax asset | As of December 31, 2016 and December 31, 2015, the Company’s net deferred tax asset consisted of the effects of temporary differences attributable to the following: December 31, 2016 2015 Stock-based compensation $ 274,553 $ 4,920 Depreciation and amortization (56,926 ) (28,213 ) Accrued expenses and reserves 45,115 31,294 Prepaid expenses (33,259 ) (9,384 ) Customer deposits 5,696 86,455 Other, net 6,772 7,585 Deferred tax asset, net 241,951 92,657 Valuation allowance (241,951 ) (92,657 ) Deferred tax asset, net of valuation allowance - - |
ORGANIZATION AND SUMMARY OF S24
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | $ 853,798 | $ 890,234 |
Service contracts, net of current portion | 16,251 | 45,786 |
Total deferred revenue | 870,049 | 936,020 |
Service Contracts [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | 613,374 | 669,717 |
Sales Pending Regulatory Approval [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | 155,517 | 155,517 |
Deposits on Products [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | $ 84,907 | $ 65,000 |
ORGANIZATION AND SUMMARY OF S25
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Short Term [Member] | |
Amortized Cost | $ 6,462,369 |
Gross Unrealized Gain | 167 |
Gross Unrealized Loss | 7,243 |
Fair Value | 6,455,293 |
Short Term [Member] | Corporate Bonds [Member] | |
Amortized Cost | 6,462,369 |
Gross Unrealized Gain | 167 |
Gross Unrealized Loss | 7,243 |
Fair Value | 6,455,293 |
Long Term [Member] | |
Amortized Cost | 1,103,773 |
Gross Unrealized Gain | |
Gross Unrealized Loss | 3,792 |
Fair Value | 1,099,981 |
Long Term [Member] | Corporate Bonds [Member] | |
Amortized Cost | 601,710 |
Gross Unrealized Gain | |
Gross Unrealized Loss | 2,618 |
Fair Value | 599,091 |
Long Term [Member] | United States Treasury Bonds [Member] | |
Amortized Cost | 502,063 |
Gross Unrealized Gain | |
Gross Unrealized Loss | 1,174 |
Fair Value | $ 500,890 |
ORGANIZATION AND SUMMARY OF S26
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 19,489 | 288,474 |
Unvested Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 72,670 | |
Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 950 |
ORGANIZATION AND SUMMARY OF S27
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014shares | |
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 | |||
Cash uninsured amount | 4,792,000 | $ 4,815,000 | ||
Allowance for doubtful accounts receivable, current | 29,000 | 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 | $ 1,051,000 | 773,000 | ||
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 | 78 months | |||
UNITED STATES | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Reveune percent | 81.00% | 82.00% | ||
CHINA | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Reveune percent | 10.00% | 14.00% | ||
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 | 13,546,171 | 10,367,883 | 9,879,870 | |
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 | |||
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 | $ 10,525,000 | |||
Underwriting discounts and commissions | 886,000 | |||
Stock issued expenses | $ 1,371,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,020,579 | $ 990,562 |
Less accumulated depreciation | (587,171) | (669,863) |
Property and Equipment, Net | 433,408 | 320,699 |
Operations and Rental Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 630,886 | 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 | $ 294,475 | 397,325 |
Property, plant and equipment, useful Life | 3 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 95,218 | $ 88,451 |
Property, plant and equipment, useful Life | 3 years |
PROPERTY AND EQUIPMENT (Detai29
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 241,000 | $ 219,000 |
PATENT RIGHTS (Details)
PATENT RIGHTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 1,253,018 | $ 1,253,018 |
Less accumulated amortization | (626,509) | (530,123) |
Patent Rights, Net | $ 626,509 | $ 722,895 |
PATENT RIGHTS (Details 1)
PATENT RIGHTS (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 96,386 | |
2,018 | 96,386 | |
2,019 | 96,386 | |
2,020 | 96,386 | |
2,021 | 96,386 | |
Thereafter | 144,579 | |
Patent Rights, Net | $ 626,509 | $ 722,895 |
PATENT RIGHTS (Details Narrativ
PATENT RIGHTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 96,000 | $ 96,000 |
REVOLVING CREDIT FACILITY (Deta
REVOLVING CREDIT FACILITY (Details Narrative) - USD ($) | Mar. 12, 2013 | Dec. 31, 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 | 4.50% | ||||
Line of credit, current | $ 422,702 | ||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% |
PRODUCT WARRANTIES (Details)
PRODUCT WARRANTIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 48,363 | $ 47,614 |
Warranties accrued during the period | 32,877 | 7,189 |
Payments on warranty claims | (40,759) | (6,440) |
Balance, end of period | $ 40,481 | $ 48,363 |
COMMITMENT AND CONTINGENCIES (D
COMMITMENT AND CONTINGENCIES (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 184,000 |
2,018 | 190,000 |
2,019 | 196,000 |
2,020 | 202,000 |
2,021 | 208,000 |
Thereafter | 160,000 |
Total | $ 1,140,000 |
COMMITMENT AND CONTINGENCIES 36
COMMITMENT AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Payments to suppliers | $ 3,917,000 | $ 2,871,000 | |
Accounts payable and accrued expenses | $ 563,000 | 338,000 | |
Lease expiration date | Sep. 30, 2022 | ||
Percentage of increase in lease payments | 3.00% | ||
Rental expense | $ 100,000 | $ 98,000 | |
Manufacturing agreement contract term | 3 years |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Former Preferred Warrants [Member] | |
Class of Warrant or Right, Outstanding [Roll Forward] | |
Outstanding beginning | shares | 544,388 |
Granted | shares | |
Exercised | shares | (544,388) |
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 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 | 2,386,376 |
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 3 months |
Granted | 2 years 6 months 18 days |
Outstanding ending | 2 years 6 months |
Exercisable | 2 years 6 months |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) | 12 Months Ended |
Dec. 31, 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 | Nov. 01, 2013 | Apr. 30, 2013 | Mar. 31, 2011 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2011 |
Common stock, authorized | 50,000,000 | 50,000,000 | |||||||||
Common stock, issued | 13,546,171 | 10,367,883 | |||||||||
Common stock,outstanding | 13,546,171 | 10,367,883 | |||||||||
Description of membership interest | Each membership interest converted to one share of common stock. | ||||||||||
Accrued dividend paid | $ 2,552,701 | ||||||||||
Stock compensation expense | $ 726,377 | 6,477 | |||||||||
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 | $ 25,000 | $ 6,000 | |||||||||
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 | ||||||||||
Vesting period | 5 years | ||||||||||
Number of option exercises | 3,096 | ||||||||||
2016 equity incentive Plan [Member] | |||||||||||
Number of authorized shares under the plan | 397,473 | ||||||||||
Expiration period | 10 years | ||||||||||
2016 equity incentive Plan [Member] | Unvested Restricted Stock [Member] | |||||||||||
Stock compensation expense | $ 236,000 | ||||||||||
Vesting period | 4 years | 41 months | |||||||||
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 | $ 1,380,000 | ||||||||||
Former Preferred Warrants [Member] | |||||||||||
Number of warrant outstanding | 544,388 | ||||||||||
Warrant exercise price (in dollars per share) | $ 2.08 | ||||||||||
Number of warrant granted | |||||||||||
Warrant granted exercise price (in dollars per share) | |||||||||||
Common Warrants [Member] | |||||||||||
Number of warrant outstanding | 2,524,376 | 86,376 | |||||||||
Warrant exercise price (in dollars per share) | $ 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 | $ 114,000 | $ 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 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] | Former Preferred 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 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 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 Warrants [Member] | IPO [Member] | Minimum [Member] | |||||||||||
Date of warrants exercisable | Jun. 2, 2017 | ||||||||||
Underwriter's Representatives [Member] | Common Warrants [Member] | IPO [Member] | Maximum [Member] | |||||||||||
Date of warrants exercisable | Jun. 2, 2021 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current - federal | ||
Current - state | ||
Deferred - federal | (137,616) | (85,366) |
Deferred - state | (11,666) | (4,915) |
Total | (149,282) | (90,281) |
Change in valuation allowance | 149,282 | 90,281 |
Income tax provision (benefit) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | (35.00%) | (34.00%) |
State taxes, net of federal benefit | (3.40%) | (2.10%) |
Permanent differences | (4.70%) | (2.10%) |
Change in valuation allowance | 43.10% | 38.20% |
Income tax provision (benefit) | 0.00% | 0.00% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Stock-based compensation | $ 274,553 | $ 4,920 |
Depreciation and amortization | (56,926) | (28,213) |
Accrued expenses and reserves | 45,115 | 31,294 |
Prepaid expenses | (33,259) | (9,384) |
Customer deposits | 5,696 | 86,455 |
Other, net | 6,772 | 7,585 |
Deferred tax asset, net | 241,951 | 92,657 |
Valuation allowance | (241,951) | (92,657) |
Deferred tax asset, net of valuation allowance |