Sensus Healthcare (SRTS) 10-Q 14 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
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	Jun. 30, 2018
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		13,548,697
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 8,012,776	$ 10,085,468
Accounts receivable, net	8,048,367	4,958,255
Inventories	1,568,424	1,171,383
Investment in debt securities		1,104,635
Prepaid and other current assets	1,158,952	566,972
Total Current Assets	18,788,519	17,886,713
Property and Equipment, Net	823,528	394,078
Patent Rights, Net	481,930	530,123
Deposits	26,836	24,272
Total Assets	20,120,813	18,835,186
Current Liabilities
Accounts payable and accrued expenses	4,069,133	4,067,894
Product warranties	114,869	146,722
Deferred revenue, current portion	761,080	652,242
Total Current Liabilities	4,945,082	4,866,858
Revolving credit facility	4,215,633	2,214,970
Deferred Revenue, Net of Current Portion	293,714	73,083
Total Liabilities	9,454,429	7,154,911
Stockholders' Equity
Preferred stock, 5,000,000 shares authorized and none issued and outstanding
Common stock, $0.01 par value 50,000,000 authorized; 13,582,151 issued and 13,548,697 outstanding at June 30, 2018; 13,522,168 issued and 13,488,714 outstanding at December 31, 2017	135,821	135,221
Additional paid-in capital	23,833,713	23,181,641
Treasury stock, 33,454 shares at cost, at June 30, 2018 and December 31, 2017, respectively	(133,816)	(133,816)
Accumulated deficit	(13,169,334)	(11,502,771)
Total Stockholders' Equity	10,666,384	11,680,275
Total Liabilities and Stockholders' Equity	$ 20,120,813	$ 18,835,186

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	50,000,000	50,000,000
Common stock, issued	13,582,151	13,522,168
Common Stock, outstanding	13,548,697	13,488,714
Treasury stock, shares	33,454	33,454

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Revenues	$ 6,056,735	$ 4,968,165	$ 12,012,197	$ 9,322,514
Cost of Sales	2,116,108	1,553,932	4,131,308	3,053,633
Gross Profit	3,940,627	3,414,232	7,880,889	6,268,881
Operating Expenses
Selling and marketing	1,960,309	2,100,983	4,175,220	4,364,464
General and administrative	913,624	919,755	2,255,876	1,962,173
Research and development	1,565,424	1,159,322	3,063,042	2,294,747
Total Operating Expenses	4,439,357	4,180,060	9,494,138	8,621,384
Loss From Operations	(498,730)	(765,827)	(1,613,249)	(2,352,503)
Other Income (Expense)
Interest income	23,590	19,491	45,612	40,675
Interest expense	(65,511)	(17,774)	(98,926)	(24,415)
Other Income (Expense), net	(41,921)	1,717	(53,314)	16,260
Net Loss	$ (540,651)	$ (764,110)	$ (1,666,563)	$ (2,336,243)
Net loss per share - basic and diluted (in dollars per share)	$ (0.04)	$ (0.06)	$ (0.12)	$ (0.18)
Weighted average number of shares used in computing net loss per share - basic and diluted (in shares)	13,378,276	13,222,954	13,355,044	13,221,072

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($)	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Deficit	Total
Balance beginning at Dec. 31, 2017	$ 135,221	$ 23,181,641	$ (133,816)	$ (11,502,771)	$ 11,680,275
Balance beginning (in shares) at Dec. 31, 2017	13,522,168		(33,454)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	$ 500	683,524			684,024
Stock based compensation (in shares)	50,000
Surrender of shares for tax withholding on stock compensation	$ (193)	(122,026)			(122,219)
Surrender of shares for tax withholding on stock compensation (in shares)	(19,305)
Exercise of warrants	$ 293	90,574			90,867
Exercise of warrants (in shares)	29,288
Net loss				(1,666,563)	(1,666,563)
Balance end at Jun. 30, 2018	$ 135,821	$ 23,833,713	$ (133,816)	$ (13,169,334)	$ 10,666,384
Balance end (in shares) at Jun. 30, 2018	13,582,151		(33,454)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows From Operating Activities
Net loss	$ (1,666,563)	$ (2,336,243)
Adjustments to reconcile net (loss) to net cash and cash equivalents used in operating activities:
Bad debt expense (recovery)	(13,280)	175,615
Depreciation and amortization	233,503	191,523
Provision for product warranties	49,416	141,322
Stock based compensation	684,024	201,033
Decrease (increase) in:
Accounts receivable	(3,076,832)	(1,861,733)
Inventories	(555,056)	(267,094)
Prepaid and other current assets	(594,545)	101,339
Increase (decrease) in:
Accounts payable and accrued expenses	1,240	802,727
Deferred revenue	329,469	(1,761)
Product warranties	(81,269)	(83,507)
Total Adjustments	(3,023,330)	(600,536)
Net Cash Used In Operating Activities	(4,689,893)	(2,936,779)
Cash Flows from Investing Activities
Acquisition of property and equipment	(456,745)	(218,931)
Investment in debt securities - held to maturity		(2,120,632)
Investments matured	1,104,635	3,300,000
Net Cash Provided By Investing Activities	647,890	960,437
Cash Flows from Financing Activities
Exercise of warrants	90,867
Revolving credit facility, net	2,000,663	1,447,970
Withholding taxes on stock compensation	(122,219)	(289,285)
Net Cash Provided By Financing Activities	1,969,311	1,158,685
Net Decrease in Cash and Cash Equivalents	(2,072,692)	(817,657)
Cash and Cash Equivalents - Beginning	10,085,468	5,042,477
Cash and Cash Equivalents - Ending	8,012,776	4,224,820
Supplemental Disclosure of Cash Flow Information
Interest Paid	98,926	24,415
Non Cash Investing and Financing Activities
Transfer of inventory to property and equipment	158,016
Transfer of property and equipment to inventory		$ 35,393

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2018
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. In February 2018, the Company opened a wholly-owned subsidiary in Israel. The Company operates as one segment based at its corporate headquarters located in Boca Raton, Florida. Basis of Presentation The accompanying unaudited condensed financial statements in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial statements. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2017 included in the Company’s Form 10-K, filed with the SEC. The results for the six months ended June 30, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018, any other interim periods, or any future year or period. Principles of consolidation The accompanying condensed consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary in Israel. All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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, inventory reserves, receivable allowances, recoverability of long lived assets and estimation of the Company’s product warranties. Actual results could differ from those estimates. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” using the modified retrospective method. The adoption of this standard did not result in a significant change to the Company’s historical revenue recognition policies and there were no necessary adjustments required to retained earnings upon adoption. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether they are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenue consists of sales of the Company’s devices and services related to maintaining and repairing the devices. The agreement for the sale of the devices and the service contract are usually signed at the same time and in some instances a service contract is signed on a stand-alone basis. Revenue for service contracts is recognized over the service contract period on a straight-line basis. The Company determined that in practice no significant discount is given on the service contract when it is offered with the device purchase as compared to when it is sold on a stand-alone basis, by comparing the median selling price of the service contract as stand-alone and the median selling price of the service contract when sold together with the device. The service level provided is identical when the service contract is purchased stand-alone or together with the device. There is no termination provision in the service contract nor any penalties in practice for cancellation of the service contract. The service contract is not considered a performance obligation until it is paid, and it does not provide a material right for a significant discount when purchased with the device. The service portion of a sales contract or a stand-alone service contract is accounted for over the period of time of the service contract only when the customer exercises the option by paying for the service contract. For the three and six months ended June 30, 2018, service contract revenue was approximately 9.2% and 8.2% of total revenues, respectively. The Company operates in a highly-regulated environment in which regulatory approval is sometimes required prior to the customer being able to use the product, primarily in the U.S. dermatology market. In these cases, where regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained. Deferred revenue as of June 30, 2018 and December 31, 2017 was as follows: As of June 30, As of December 31, 2018 2017 (unaudited) Service contracts $ 622,662 $ 570,242 Deposits on products 138,418 82,000 Total deferred revenue, current portion $ 761,080 $ 652,242 Service contracts, net of current portion 293,714 73,083 Total deferred revenue $ 1,054,794 $ 725,325 The Company provides warranties, generally for one year, in conjunction with the sale of its product. These warranties entitle the customer to repair, replacement, or modification of the defective product subject to the terms of the respective warranty. The Company records an estimate of future warranty claims at the time the Company recognizes revenue from the sale of the product based upon management’s estimate of the future claims rate. Shipping and handling costs are expensed as incurred and are included in cost of sales. Segment and Geographical Information The Company’s revenue is generated primarily from customers in the United States, which represented approximately 94% and 99% for the three months ended June 30, 2018 and 2017, respectively, and approximately 97% and 99% for the six months ended June 30, 2018 and 2017, respectively. A customer in the US accounted for approximately 68% and 52% of revenues for the three months ended June 30, 2018 and 2017, respectively, and approximately 71% and 52% for the six months ended June 30, 2018 and 2017, respectively, and 94% and 87% of the accounts receivable as of June 30, 2018 and December 31, 2017, 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 June 30, 2018 and December 31, 2017, the Company had approximately $7,807,000 and $9,952,000, 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 e carried at amortized cost plus accrued interest and consist of the following: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Short-Term: Corporate bonds $ 602,599 $ — $ 256 $ 602,343 United States Treasury bonds 502,036 — 332 501,704 Total Short Term: 1,104,635 — 588 1,104,047 Total Investments December 31, 2017 $ 1,104,635 $ — $ 588 $ 1,104,047 There were no investments as of June 30, 2018. Accounts Receivable The Company does business and extends credit based on an evaluation of each customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The allowance for doubtful accounts was approximately $0 and $16,000 as of June 30, 2018 and December 31, 2017. Bad debt expense (recovery) for the three months ended June 30, 2018 and 2017 was approximately ($16,000) and $14,000, respectively, and for the six months ended June 30, 2018 and 2017 was approximately ($14,000) and $176,000, respectively. Inventories Inventories consist of finished product and components and are stated at the lower of cost or net realizable value, determined using the first-in-first-out method. Earnings Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. The diluted net income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period, using the treasury stock method for options and warrants, as well as unvested restricted shares. In periods when the Company has incurred a net loss, options, warrants and unvested shares are considered common share equivalents but have been excluded from the calculation of diluted net loss per share as their effect is antidilutive. Shares were excluded as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Shares 21,494 — 1,687 2,409 Stock options 33,962 — 19,991 — 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 $310,000 and $324,000 for the three months ended June 30, 2018 and 2017, respectively, and $832,000 and $1,057,000 for the six months ended June 30, 2018 and 2017, respectively. Recently issued and Adopted accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 eliminated transaction- and industry-specific revenue recognition guidance under current GAAP and replaced it with a principle based approach for determining revenue recognition. ASU 2014-09 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also requires 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. The Company adopted the new revenue recognition standard in the first quarter of 2018 using the full retrospective method. There was not a material impact to revenues as a result of applying ASC 606 for the six months ended June 30, 2018, and there have not been significant changes to the Company’s business processes, systems, or internal controls as a result of implementing the standard. 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 May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting. The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018 and it did not have a material impact on its financial statements.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	6 Months Ended
	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Note 2 — Property and Equipment As of June 30, As to December 31, Estimated 2018 2017 Useful Lives (unaudited) Operations and rental equipment $ 711,924 $ 542,639 3 years Tradeshow and demo equipment 704,061 271,275 3 years Computer equipment 106,987 94,298 3 years 1,522,972 908,212 Less accumulated depreciation (699,444 ) (514,134 ) Property and Equipment, Net $ 823,528 $ 394,078 Depreciation expense was approximately $109,000 and $73,000, for the three months ended June 30, 2018 and 2017, respectively, and approximately $185,000 and $143,000, for the six months ended June 30, 2018 and 2017, respectively.

PATENT RIGHTS

PATENT RIGHTS	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
PATENT RIGHTS	Note 3 — Patent Rights As of June 30, As of December 31, 2018 2017 (unaudited) Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (771,088 ) (722,895 ) Patent Rights, Net 481,930 530,123 Amortization expense was approximately $24,000 for the three months ended June 30, 2018 and 2017, and approximately $48,000 for the six months ended June 30, 2018 and 2017. As of June 30, 2018, future remaining amortization expense is as follows: Year 2018 (July 1 – December 31, 2018) $ 48,193 2019 96,386 2020 96,386 2021 96,386 2022 96,386 Thereafter 48,193 Total $ 481,930

REVOLVING CREDIT FACILITY

REVOLVING CREDIT FACILITY	6 Months Ended
	Jun. 30, 2018
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. The Company was not in compliance in April and May 2017 with one of its financial covenants. On June 27, 2017, the covenant defaults were waived and the agreement was amended to modify the financial covenants effective June 2017. An amendment signed on September 15, 2017 extended the maturity date of the credit line through November 19, 2017. On October 31, 2017, the Company amended its revolving credit facility to extend the maturity to October 31, 2019 and to amend the financial covenants. The availability under the amended facility will equal the lesser of the $5 million commitment amount or the borrowing base plus the $2.5 million non-formula sublimit. The borrowing base consists of 80% of eligible accounts receivable, as defined in the agreement. Interest, at Prime plus 0.75% (5.75% at June 30, 2018) and Prime plus 1.50% on non-formula borrowings (6.50% at June 30, 2018), is payable monthly, and the outstanding principal and interest are due on the maturity date. The facility is secured by all of the Company’s assets and limits the amount of additional indebtedness, restricts the sale, disposition or transfer of assets of the Company and requires the maintenance of a certain monthly adjusted quick ratio restrictive covenant, as defined in the agreement. The Company was in compliance with its financial covenants as of June 30, 2018 and December 31, 2017. Approximately $4,216,000 was outstanding under the revolving credit facility at June 30, 2018 and $2,215,000 at December 31, 2017. The Company pays commitment fees of 0.25% per annum on the average unused portion of the line of credit.

PRODUCT WARRANTIES

PRODUCT WARRANTIES	6 Months Ended
	Jun. 30, 2018
Product Warranties Disclosures [Abstract]
PRODUCT WARRANTIES	Note 5 — Product Warranties Changes in product warranty liability were as follows for the six months ended June 30, 2018: Balance, beginning of period $ 146,722 Warranties accrued during the period 49,416 Payments on warranty claims (81,269 ) Balance, end of period $ 114,869

COMMITMENT AND CONTINGENCIES

COMMITMENT AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENT AND CONTINGENCIES	Note 6 — Commitment and Contingencies Operating Lease Agreements In July 2016, the Company renewed its lease with an unrelated third party for its headquarters office. The renewal was effective September 1, 2016 and expanded the office space being occupied. The lease expires in September 2022 and lease payments increase by 3% annually. In February 2017 and January 2018, the Company signed amendments to expand further the leased office space. The Company’s Israeli subsidiary also leases office space starting in February 2018. Future minimum lease payments as of June 30, 2018 are as follows: Year Minimum Lease Payment 2018 106,000 2019 218,000 2020 224,000 2021 231,000 2022 177,000 Total $ 956,000 Rental expense for the three months ended June 30, 2018 and 2017 was approximately $56,000 and $46,000, respectively, and for the six months ended June 30, 2018 and 2017 was approximately $109,000 and $85,000, 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 renews for successive years unless either party notifies the other party in writing, at least 60 days prior to the anniversary date of this agreement that it will not renew the agreement. The Company or the manufacturer has the option to terminate the agreement with 90 days written notice. Any change in the relationship with the manufacturer could have an adverse effect on the Company’s business. Purchases from this manufacturer totaled approximately $687,000 and $216,000 for the three months ended June 30, 2018 and 2017, respectively, and approximately $1,825,000 and $1,492,000 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, and December 31, 2017 approximately $967,000 and $829,000, respectively, was due to this manufacturer, which is presented in accounts payable and accrued expenses in the accompanying balance sheets. Legal contingencies The Company is party to certain legal proceedings in the ordinary course of business. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and related contingencies. In November 2015, the Company learned that the Department of Justice (the “Department”) had commenced an investigation of the billing to Medicare by a physician who had treated patients with the Company’s SRT-100. The Company received a Civil Investigative Demand from the Department seeking documents and written responses in connection with that investigation. The Company has fully cooperated with the investigation. The Department has advised the Company that it was considering expanding the investigation to determine whether the Company had any involvement in the physician’s use of certain reimbursement codes. The Company disputes that it has engaged in any wrongdoing with respect to such reimbursement claims; among other things, the Company does not submit claims for reimbursement or provide coding or billing advice to physicians. To the Company’s knowledge, the Department has made no determination as to whether the Company engaged in any wrongdoing, or whether to pursue any legal action against the Company. Should the Department decide to pursue legal action, the Company believes it has strong and meritorious defenses and will vigorously defend itself. At this time, the Company is unable to estimate the cost associated with this matter.

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	6 Months Ended
	Jun. 30, 2018
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLANS	Note 7 — Employee Benefit Plans We sponsor a 401(k) defined contribution retirement plan that allows eligible employees to contribute a portion of their compensation through payroll deductions in accordance with specified plan guidelines. We make contributions to the plans that include matching a percentage of the employees’ contributions up to certain limits. Expenses related to this plan totaled approximately $24,000 and $0 for the three months ended June 30, 2018 and 2017, respectively, and approximately $48,000 and $0 for the six months ended June 30, 2018 and 2017, respectively.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
STOCKHOLDERS' EQUITY	Note 8 — Stockholders’ Equity The Company has authorized 50,000,000 shares of common stock, of which 13,582,151 were issued and 13,548,697 outstanding at June 30, 2018; 13,522,168 shares were issued and 13,488,714 were outstanding as of December 31, 2017. 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. Warrants In April 2013, the closing date of the second common offering, the Company’s 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. During the first quarter of 2018, 73,309 of the warrants were exercised, and 13,067 warrants expired. In June 2016, from the Company’s IPO, the investors received three-year warrants to purchase 2,300,000 shares of common stock at an exercise price of $6.75 per share; the warrants 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 for the IPO received four-year warrants to purchase up to 138,000 units, consisting of one share of common stock and one warrant to purchase one share of common stock. The warrants for the units are exercisable between June 2, 2017 and June 2, 2021 at an exercise price of $6.75 per unit. The following table summarizes the Company’s warrant activity: Common Unit Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Outstanding – December 31, 2017 2,524,376 $ 6.67 1.50 Granted — — — Exercised (73,309 ) 4.55 — Expired (13,067 ) 4.55 — Outstanding – June 30, 2018 2,438,000 $ 6.75 1.05 Exercisable – June 30, 2018 2,438,000 $ 6.75 1.05 The intrinsic value of the common stock warrants was approximately $1,243,000 and $19,000 as of June 30, 2018, and December 31, 2017, respectively. 2016 and 2017 equity incentive Plans The Company has limited the aggregate number of shares of common stock to be awarded under the 2016 Equity Incentive Plan to 397,473 shares and no more than 397,473 shares of common stock in the aggregate may be granted in connection with incentive stock options. The Company has limited the aggregate number of shares of common stock to be awarded under the 2017 Equity Incentive Plan to 500,000 shares and no more than 500,000 shares of common stock in the aggregate may be granted in connection with incentive stock options. In addition, unless the Compensation Committee specifically determines otherwise, the maximum number of shares available under the 2016 and 2017 Plans and the awards granted under those plans will be subject to appropriate adjustment in the case of any stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, exchanges or other changes in capitalization affecting our common stock. On June 2, 2016, 307,666 shares of restricted stock were issued to employees and were recorded at the fair value of $5.25 as per the initial offering price. In addition, on January 20, 2017, 10,000 shares of restricted stock were issued to one employee and were recorded at the fair value of $4.99 per share. The restricted shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards. On January 25, 2018, 80,000 fully vested shares were granted to the nonemployee directors, and 229,334 stock options with a four-year vesting period were granted to employees. The shares were recorded at the fair value of $5.55 per share for a total of $444,000 and the stock options were valued using a Black Scholes model at $3.52 per option using the assumptions noted in the following table. 2018 Expected volatility 67.8 % Risk-free interest rate 2.5 % Expected life 6.25 years Dividend yield 0.0 % The Company recognizes forfeitures as they occur rather than estimating a forfeiture rate. The reduction of stock compensation expense related to the forfeitures was approximately $39,000 and $7,000 for the six months ended June 30, 2018 and 2017, respectively. A summary of the restricted stock activity is presented as follows: Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2017 237,000 $ 5.24 Granted — — Vested (68,166 ) 5.24 Forfeited (30,000 ) 5.25 Unvested balance at June 30, 2018 138,834 $ 5.24 The following table summarizes the Company’s stock option activity: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Outstanding – December 31, 2017 — $ — — Granted 229,334 3.52 4.00 Exercised — — — Expired — — — Outstanding – June 30, 2018 229,334 $ 3.52 3.58 Exercisable – June 30, 2018 — — — The intrinsic value of the stock options was approximately $392,000 and $0 as of June 30, 2018, and December 31, 2017, respectively. Stock compensation expense of approximately $142,000 and $97,000 was recognized for the three months ended June 30, 2018 and 2017, respectively, and approximately $684,000 and $201,000 for the six months ended June 30, 2017, respectively. Unrecognized stock compensation expense was approximately $1,441,000 as of June 30, 2018, which will be recognized over the remaining vesting period. As of June 30, 2018, no shares were available to be granted under the 2016 Plan and 305,473 shares were available to be granted under the 2017 Plan. Treasury Stock The Company accounts for purchases of treasury stock under the cost method with the cost of such share purchases reflected in treasury stock in the accompanying condensed balance sheet. As of June 30, 2018, the Company had 33,454 treasury shares.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	Note 9 — Income Taxes Book income before taxes was negative for the three and six months ended June 30, 2018. Tax expense for the three and six months ended June 30, 2018 and 2017 was $0. There are no uncertain tax positions that would require recognition in the financial statements. If the Company incurs an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as income taxes. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. As of June 30, 2018, the Company has U.S. federal and certain state tax returns subject to examination, beginning with those filed for the year 2014.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Note 10 — Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued for potential recognition or disclosure. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

ORGANIZATION AND SUMMARY OF S17

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2018
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. In February 2018, the Company opened a wholly-owned subsidiary in Israel. The Company operates as one segment based at its corporate headquarters located in Boca Raton, Florida.
BASIS OF PRESENTATION	Basis of Presentation The accompanying unaudited condensed financial statements in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial statements. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2017 included in the Company’s Form 10-K, filed with the SEC. The results for the six months ended June 30, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018, any other interim periods, or any future year or period.
PRINCIPLES OF CONSOLIDATION	Principles of consolidation The accompanying condensed consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary in Israel. All inter-company balances and transactions have been eliminated.
USE OF ESTIMATES	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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, inventory reserves, receivable allowances, recoverability of long lived assets and estimation of the Company’s product warranties. Actual results could differ from those estimates.
REVENUE RECOGNITION	Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” using the modified retrospective method. The adoption of this standard did not result in a significant change to the Company’s historical revenue recognition policies and there were no necessary adjustments required to retained earnings upon adoption. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether they are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenue consists of sales of the Company’s devices and services related to maintaining and repairing the devices. The agreement for the sale of the devices and the service contract are usually signed at the same time and in some instances a service contract is signed on a stand-alone basis. Revenue for service contracts is recognized over the service contract period on a straight-line basis. The Company determined that in practice no significant discount is given on the service contract when it is offered with the device purchase as compared to when it is sold on a stand-alone basis, by comparing the median selling price of the service contract as stand-alone and the median selling price of the service contract when sold together with the device. The service level provided is identical when the service contract is purchased stand-alone or together with the device. There is no termination provision in the service contract nor any penalties in practice for cancellation of the service contract. The service contract is not considered a performance obligation until it is paid, and it does not provide a material right for a significant discount when purchased with the device. The service portion of a sales contract or a stand-alone service contract is accounted for over the period of time of the service contract only when the customer exercises the option by paying for the service contract. For the three and six months ended June 30, 2018, service contract revenue was approximately 9.2% and 8.2% of total revenues, respectively. The Company operates in a highly-regulated environment in which regulatory approval is sometimes required prior to the customer being able to use the product, primarily in the U.S. dermatology market. In these cases, where regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained. Deferred revenue as of June 30, 2018 and December 31, 2017 was as follows: As of June 30, As of December 31, 2018 2017 (unaudited) Service contracts $ 622,662 $ 570,242 Deposits on products 138,418 82,000 Total deferred revenue, current portion $ 761,080 $ 652,242 Service contracts, net of current portion 293,714 73,083 Total deferred revenue $ 1,054,794 $ 725,325 The Company provides warranties, generally for one year, in conjunction with the sale of its product. These warranties entitle the customer to repair, replacement, or modification of the defective product subject to the terms of the respective warranty. The Company records an estimate of future warranty claims at the time the Company recognizes revenue from the sale of the product based upon management’s estimate of the future claims rate. Shipping and handling costs are expensed as incurred and are included in cost of sales.
SEGMENT AND GEOGRAPHICAL INFORMATION	Segment and Geographical Information The Company’s revenue is generated primarily from customers in the United States, which represented approximately 94% and 99% for the three months ended June 30, 2018 and 2017, respectively, and approximately 97% and 99% for the six months ended June 30, 2018 and 2017, respectively. A customer in the US accounted for approximately 68% and 52% of revenues for the three months ended June 30, 2018 and 2017, respectively, and approximately 71% and 52% for the six months ended June 30, 2018 and 2017, respectively, and 94% and 87% of the accounts receivable as of June 30, 2018 and December 31, 2017, 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 June 30, 2018 and December 31, 2017, the Company had approximately $7,807,000 and $9,952,000, 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 e carried at amortized cost plus accrued interest and consist of the following: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Short-Term: Corporate bonds $ 602,599 $ — $ 256 $ 602,343 United States Treasury bonds 502,036 — 332 501,704 Total Short Term: 1,104,635 — 588 1,104,047 Total Investments December 31, 2017 $ 1,104,635 $ — $ 588 $ 1,104,047 There were no investments as of June 30, 2018.
ACCOUNTS RECEIVABLE	Accounts Receivable The Company does business and extends credit based on an evaluation of each customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The allowance for doubtful accounts was approximately $0 and $16,000 as of June 30, 2018 and December 31, 2017. Bad debt expense (recovery) for the three months ended June 30, 2018 and 2017 was approximately ($16,000) and $14,000, respectively, and for the six months ended June 30, 2018 and 2017 was approximately ($14,000) and $176,000, respectively.
INVENTORIES	Inventories Inventories consist of finished product and components and are stated at the lower of cost or net realizable value, determined using the first-in-first-out method.
EARNINGS PER SHARE	Earnings Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. The diluted net income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period, using the treasury stock method for options and warrants, as well as unvested restricted shares. In periods when the Company has incurred a net loss, options, warrants and unvested shares are considered common share equivalents but have been excluded from the calculation of diluted net loss per share as their effect is antidilutive. Shares were excluded as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Shares 21,494 — 1,687 2,409 Stock options 33,962 — 19,991 —
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 $310,000 and $324,000 for the three months ended June 30, 2018 and 2017, respectively, and $832,000 and $1,057,000 for the six months ended June 30, 2018 and 2017, respectively.
RECENTLY ISUED ACCOUNTING PRONOUNCEMENT	Recently issued and Adopted accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 eliminated transaction- and industry-specific revenue recognition guidance under current GAAP and replaced it with a principle based approach for determining revenue recognition. ASU 2014-09 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also requires 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. The Company adopted the new revenue recognition standard in the first quarter of 2018 using the full retrospective method. There was not a material impact to revenues as a result of applying ASC 606 for the six months ended June 30, 2018, and there have not been significant changes to the Company’s business processes, systems, or internal controls as a result of implementing the standard. 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 May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) – Scope of Modification Accounting. The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018 and it did not have a material impact on its financial statements.

ORGANIZATION AND SUMMARY OF S18

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of deferred revenue	Deferred revenue as of June 30, 2018 and December 31, 2017 was as follows: As of June 30, As of December 31, 2018 2017 (unaudited) Service contracts $ 622,662 $ 570,242 Deposits on products 138,418 82,000 Total deferred revenue, current portion $ 761,080 $ 652,242 Service contracts, net of current portion 293,714 73,083 Total deferred revenue $ 1,054,794 $ 725,325
Schedule of investment	These securities ar e carried at amortized cost plus accrued interest and consist of the following: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Short-Term: Corporate bonds $ 602,599 $ — $ 256 $ 602,343 United States Treasury bonds 502,036 — 332 501,704 Total Short Term: 1,104,635 — 588 1,104,047 Total Investments December 31, 2017 $ 1,104,635 $ — $ 588 $ 1,104,047
Schedule of antidilutive	Shares were excluded as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Shares 21,494 — 1,687 2,409 Stock options 33,962 — 19,991 —

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	As of June 30, As to December 31, Estimated 2018 2017 Useful Lives (unaudited) Operations and rental equipment $ 711,924 $ 542,639 3 years Tradeshow and demo equipment 704,061 271,275 3 years Computer equipment 106,987 94,298 3 years 1,522,972 908,212 Less accumulated depreciation (699,444 ) (514,134 ) Property and Equipment, Net $ 823,528 $ 394,078

PATENT RIGHTS (Tables)

PATENT RIGHTS (Tables)	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets	As of June 30, As of December 31, 2018 2017 (unaudited) Gross carrying amount $ 1,253,018 $ 1,253,018 Less accumulated amortization (771,088 ) (722,895 ) Patent Rights, Net 481,930 530,123
Schedule of amortization expense	As of June 30, 2018, future remaining amortization expense is as follows: Year 2018 (July 1 – December 31, 2018) $ 48,193 2019 96,386 2020 96,386 2021 96,386 2022 96,386 Thereafter 48,193 Total $ 481,930

PRODUCT WARRANTIES (Tables)

PRODUCT WARRANTIES (Tables)	6 Months Ended
	Jun. 30, 2018
Product Warranties Disclosures [Abstract]
Schedule of changes in product warranty liability	Changes in product warranty liability were as follows for the six months ended June 30, 2018: Balance, beginning of period $ 146,722 Warranties accrued during the period 49,416 Payments on warranty claims (81,269 ) Balance, end of period $ 114,869

COMMITMENT AND CONTINGENCIES (T

COMMITMENT AND CONTINGENCIES (Tables)	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum lease payments for operating leases	Future minimum lease payments as of June 30, 2018 are as follows: Year Minimum Lease Payment 2018 106,000 2019 218,000 2020 224,000 2021 231,000 2022 177,000 Total $ 956,000

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Schedule of warrant activity	The following table summarizes the Company’s warrant activity: Common Unit Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Outstanding – December 31, 2017 2,524,376 $ 6.67 1.50 Granted — — — Exercised (73,309 ) 4.55 — Expired (13,067 ) 4.55 — Outstanding – June 30, 2018 2,438,000 $ 6.75 1.05 Exercisable – June 30, 2018 2,438,000 $ 6.75 1.05
Schedule of Stock Options, Valuation Assumptions	The shares were recorded at the fair value of $5.55 per share for a total of $444,000 and the stock options were valued using a Black Scholes model at $3.52 per option using the assumptions noted in the following table. 2018 Expected volatility 67.8 % Risk-free interest rate 2.5 % Expected life 6.25 years Dividend yield 0.0 %
Summary of restricted stock activity	A summary of the restricted stock activity is presented as follows: Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2017 237,000 $ 5.24 Granted — — Vested (68,166 ) 5.24 Forfeited (30,000 ) 5.25 Unvested balance at June 30, 2018 138,834 $ 5.24
Schedule of option activity	The following table summarizes the Company’s stock option activity: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Outstanding – December 31, 2017 — $ — — Granted 229,334 3.52 4.00 Exercised — — — Expired — — — Outstanding – June 30, 2018 229,334 $ 3.52 3.58 Exercisable – June 30, 2018 — — —

ORGANIZATION AND SUMMARY OF S24

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Deferred Revenue Arrangement [Line Items]
Total deferred revenue, current portion	$ 761,080	$ 652,242
Service contracts, net of current portion	293,714	73,083
Total deferred revenue	1,054,794	725,325
Service Contracts [Member]
Deferred Revenue Arrangement [Line Items]
Total deferred revenue, current portion	622,662	570,242
Deposits on Products [Member]
Deferred Revenue Arrangement [Line Items]
Total deferred revenue, current portion	$ 138,418	$ 82,000

ORGANIZATION AND SUMMARY OF S25

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1)	12 Months Ended
	Dec. 31, 2017USD ($)
Amortized Cost	$ 1,104,635
Gross Unrealized Gain
Gross Unrealized Loss	588
Fair Value	1,104,047
Short Term [Member]
Amortized Cost	1,104,635
Gross Unrealized Gain
Gross Unrealized Loss	588
Fair Value	1,104,047
Short Term [Member] | Corporate Bonds [Member]
Amortized Cost	602,599
Gross Unrealized Gain
Gross Unrealized Loss	256
Fair Value	602,343
Short Term [Member] | United States Treasury Bonds [Member]
Amortized Cost	502,036
Gross Unrealized Gain
Gross Unrealized Loss	332
Fair Value	$ 501,704

ORGANIZATION AND SUMMARY OF S26

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	21,494		1,687	2,409
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	33,962		19,991

ORGANIZATION AND SUMMARY OF S27

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)Segment	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of operating segments | Segment			1
Cash, FDIC insured amount	$ 250,000		$ 250,000
Cash uninsured amount	7,807,000		7,807,000		$ 9,952,000
Allowance for doubtful accounts receivable, current	0		0		$ 16,000
Advertising and promotion expense	310,000	$ 324,000	$ 832,000	$ 1,057,000
Product warranty term			1 year
Bad debt expense (recovery)	$ (16,000)	$ 14,000	$ (13,280)	$ 175,615
UNITED STATES
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Reveune percent	94.00%	99.00%	97.00%	99.00%
UNITED STATES | Customer [Member] | Revenue [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Reveune percent	68.00%	52.00%	71.00%	52.00%
UNITED STATES | Customer [Member] | Accounts Receivable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Reveune percent			94.00%		87.00%

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 1,522,972	$ 908,212
Less accumulated depreciation	(699,444)	(514,134)
Property and Equipment, Net	823,528	394,078
Operations and Rental Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 711,924	542,639
Property, plant and equipment, useful Life	3 years
Tradeshow and Demo Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 704,061	271,275
Property, plant and equipment, useful Life	3 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 106,987	$ 94,298
Property, plant and equipment, useful Life	3 years

PROPERTY AND EQUIPMENT (Detai29

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 109,000	$ 73,000	$ 185,000	$ 143,000

PATENT RIGHTS (Details)

PATENT RIGHTS (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Gross carrying amount	$ 1,253,018	$ 1,253,018
Less accumulated amortization	(771,088)	(722,895)
Patent Rights, Net	$ 481,930	$ 530,123

PATENT RIGHTS (Details 1)

PATENT RIGHTS (Details 1) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets, Net [Abstract]
2018 (July 1- December 31, 2018)	$ 48,193
2,019	96,386
2,020	96,386
2,021	96,386
2,022	96,386
Thereafter	48,193
Patent Rights, Net	$ 481,930	$ 530,123

PATENT RIGHTS (Details Narrativ

PATENT RIGHTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 24,000	$ 24,000	$ 48,000	$ 48,000

REVOLVING CREDIT FACILITY (Deta

REVOLVING CREDIT FACILITY (Details Narrative) - USD ($)	Mar. 12, 2013	Jun. 30, 2018	Dec. 31, 2017	Sep. 21, 2016	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		5.75%
Line of credit, outstanding		$ 4,215,633	$ 2,214,970
Line of credit facility, unused capacity, commitment fee percentage		0.25%
Line of credit description		On June 27, 2017, the covenant defaults were waived and the agreement was amended to modify the financial covenants effective June 2017. An amendment signed on September 15, 2017 extended the maturity date of the credit line through November 19, 2017. On October 31, 2017, the Company amended its revolving credit facility to extend the maturity to October 31, 2019 and to amend the financial covenants. The availability under the amended facility will equal the lesser of the $5 million commitment amount or the borrowing base plus the $2.5 million non-formula sublimit. The borrowing base consists of 80% of eligible accounts receivable, as defined in the agreement.

PRODUCT WARRANTIES (Details)

PRODUCT WARRANTIES (Details)	6 Months Ended
	Jun. 30, 2018USD ($)
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance, beginning of period	$ 146,722
Warranties accrued during the period	49,416
Payments on warranty claims	(81,269)
Balance, end of period	$ 114,869

COMMITMENT AND CONTINGENCIES (D

COMMITMENT AND CONTINGENCIES (Details)	Jun. 30, 2018USD ($)
Operating Leases, Future Minimum Payments Due [Abstract]
2018 (July 1- December 31, 2018)	$ 106,000
2,019	218,000
2,020	224,000
2,021	231,000
2,022	177,000
Total	$ 956,000

COMMITMENT AND CONTINGENCIES 36

COMMITMENT AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 31, 2010	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Payments to suppliers		$ 687,000	$ 216,000	$ 1,825,000	$ 1,492,000
Accounts payable and accrued expenses		967,000		$ 967,000		$ 829,000
Lease expiration date				Sep. 30, 2022
Percentage of increase in lease payments				3.00%
Rental expense		$ 56,000	$ 46,000	$ 109,000	$ 85,000
Manufacturing agreement contract term	3 years

EMPLOYEE BENEFIT PLANS (Details

EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Retirement Benefits [Abstract]
Expenses related to employee benefit plan	$ 24,000	$ 0	$ 48,000	$ 0

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - Common Unit Warrants [Member] - $ / shares	3 Months Ended	6 Months Ended
	Mar. 31, 2018	Jun. 30, 2018
Class of Warrant or Right, Outstanding [Roll Forward]
Outstanding at beginning	2,524,376	2,524,376
Granted
Exercised	(73,309)	(73,309)
Forfeited	(13,067)	(13,067)
Outstanding at ending		2,438,000
Exercisable at end		2,438,000
Class of Warrant or Right, Exercise Price of Warrants or Rights [Roll Forward]
Outstanding at beginning	$ 6.67	$ 6.67
Granted
Exercised		4.55
Forfeited		4.55
Outstanding at ending		6.75
Exercisable at ending		$ 6.75
Class Of Warrant Or Right Weighted Average Remaining Contract Term Of Warrants Or Rights [Roll Forward]
Outstanding at beginning		1 year 6 months
Outstanding at ending		1 year 18 days
Exercisable at ending		1 year 18 days

STOCKHOLDERS' EQUITY (Details 1

STOCKHOLDERS' EQUITY (Details 1)	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Expected volatility	67.80%
Risk-free interest rate	2.50%
Expected life	6 years 2 months 30 days
Dividend yield	0.00%

STOCKHOLDERS' EQUITY (Details 2

STOCKHOLDERS' EQUITY (Details 2)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested balance at beginning | shares	237,000
Granted | shares
Vested | shares	(68,166)
Forfeited | shares	(30,000)
Unvested balance at end | shares	138,834
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Rollforward]
Unvested balance at beginning | $ / shares	$ 5.24
Granted | $ / shares
Vested | $ / shares	5.24
Forfeited | $ / shares	5.25
Unvested balance at end | $ / shares	$ 5.24

STOCKHOLDERS' EQUITY (Details 3

STOCKHOLDERS' EQUITY (Details 3)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Number of Options
Outstanding at beginning | shares
Granted | shares	229,334
Exercised | shares
Expired | shares
Outstanding at end | shares	229,334
Exercisable at end | shares
Weighted Average Exercise
Outstanding at beginning (in dollars per share) | $ / shares
Granted (in dollars per share) | $ / shares	3.52
Exercised | $ / shares
Expired | $ / shares
Outstanding at end (in dollars per share) | $ / shares	3.52
Exercisable at end (in dollars per share) | $ / shares
Granted	4 years
Outstanding at end	3 years 6 months 29 days

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	Jan. 20, 2017	Jun. 30, 2016	Jun. 02, 2016	Jun. 30, 2016	Apr. 30, 2013	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Common stock, authorized						50,000,000			50,000,000		50,000,000
Common stock, issued						13,582,151			13,582,151		13,522,168
Common stock,outstanding						13,548,697			13,548,697		13,488,714
Description of membership interest									Each membership interest converted to one share of common stock.
Stock compensation expense						$ 142,000		$ 97,000	$ 684,024	$ 201,033
Weighted average grant date fair value (in dollars per share)
Number of restricted stock granted
Unrecognized stock compensation expense											$ 1,441,000
Reduction of stock compensation expense value forfeited									$ 39,000	$ 7,000
Intrinsic value of the stock options						$ 392,000			$ 392,000		$ 0
Treasury stock						33,454			33,454		33,454
Common Unit Warrants [Member]
Number of warrant outstanding						2,438,000			2,438,000		2,524,376
Warrant exercise price (in dollars per share)						$ 6.75			$ 6.75		$ 6.67
Exercised							(73,309)		(73,309)
Forfeited							(13,067)		(13,067)
Number of warrant granted
Warrant granted exercise price (in dollars per share)
Intrinsic value of common stock warrants						$ 1,243,000			$ 1,243,000		$ 19,000
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
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
Minimum [Member] | Underwriter's Representatives [Member] | Common Unit Warrants [Member] | IPO [Member]
Date of warrants exercisable				Jun. 2, 2017
Maximum [Member] | Underwriter's Representatives [Member] | Common Unit Warrants [Member] | IPO [Member]
Date of warrants exercisable				Jun. 2, 2021
2016 Equity Incentive Plan [Member]
Number of authorized shares under the plan						397,473			397,473
Number of restricted stock granted									0
2017 Equity Incentive Plan [Member]
Number of authorized shares under the plan						500,000			500,000
Number of restricted stock granted									305,473
Unvested Restricted Stock [Member] | 2016 Equity Incentive Plan [Member]
Weighted average grant date fair value (in dollars per share)	$ 4.99
Vesting period			4 years
Number of restricted stock granted	10,000		307,666
Initial offering price (in dollars per share)			$ 5.25
Vesting percentage			25.00%
Description of vesting rights			The restricted shares vest 25% per year over a four-year vesting period and are being recognized as expense on a straight-line basis over the vesting period of the awards.
Placement Agent [Member] | Investor [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%

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Tax expense	$ 0	$ 0	$ 0	$ 0