Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 0-12305 | ||
Entity Registrant Name | REPRO MED SYSTEMS, INC. | ||
Entity Central Index Key | 0000704440 | ||
Entity Tax Identification Number | 13-3044880 | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Address, Address Line One | 24 CARPENTER ROAD | ||
Entity Address, City or Town | CHESTER | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10918 | ||
City Area Code | 845 | ||
Local Phone Number | 469-2042 | ||
Title of 12(b) Security | common stock, $0.01 par value | ||
Trading Symbol | KRMD | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 120,485,383 | ||
Entity Common Stock, Shares Outstanding | 44,671,160 | ||
Treasury stock, common, shares | 3,420,502 | ||
Auditor Firm ID | 256 | ||
Auditor Name | McGrail Merkel Quinn & Associates, P.C. | ||
Auditor Location | Scranton, Pennsylvania |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 25,334,889 | $ 27,315,286 |
Accounts receivable less allowance for doubtful accounts of $24,271 and $24,469 for December 31, 2021, and December 31, 2020, respectively | 3,592,886 | 2,572,954 |
Inventory | 6,106,338 | 6,829,772 |
Other receivables | 718,220 | |
Prepaid expenses and other | 1,568,821 | 807,780 |
TOTAL CURRENT ASSETS | 37,321,154 | 37,525,792 |
Property and equipment, net | 1,106,445 | 1,167,623 |
Intangible assets, net of accumulated amortization of $263,729 and $199,899 at December 31, 2021 and December 31, 2020, respectively | 808,813 | 843,587 |
Operating lease right-of-use assets | 95,553 | 236,846 |
Deferred income tax assets, net | 1,941,254 | 125,274 |
Other assets | 19,812 | 19,812 |
TOTAL ASSETS | 41,293,031 | 39,918,934 |
CURRENT LIABILITIES | ||
Accounts payable | 1,227,533 | 624,920 |
Accrued expenses | 2,709,704 | 2,610,413 |
Note Payable | 508,583 | |
Deferred Revenue | 90,000 | |
Accrued payroll and related taxes | 160,603 | 287,130 |
Finance lease liability – current | 2,646 | |
Operating lease liability – current | 95,553 | 141,293 |
TOTAL CURRENT LIABILITIES | 4,791,976 | 3,666,402 |
Operating lease liability, net of current portion | 95,553 | |
TOTAL LIABILITIES | 4,791,976 | 3,761,955 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.01 par value, 75,000,000 shares authorized, 48,044,162 and 46,680,119 shares issued; 44,623,660 and 43,259,617 shares outstanding at December 31, 2021, and December 31, 2020, respectively | 480,441 | 466,801 |
Additional paid-in capital | 40,774,245 | 35,880,986 |
Treasury stock, 3,420,502 shares at December 31, 2021 and December 31, 2020, at cost | (3,843,562) | (3,843,562) |
Retained (deficit)/earnings | (910,069) | 3,652,754 |
TOTAL STOCKHOLDERS’ EQUITY | 36,501,055 | 36,156,979 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 41,293,031 | $ 39,918,934 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 24,271 | $ 24,469 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 263,729 | $ 199,899 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares, issued | 48,044,162 | 46,680,119 |
Common stock, shares, outstanding | 44,623,660 | 43,259,617 |
Treasury Stock, Shares | 3,420,502 | 3,420,502 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
NET REVENUES | $ 23,490,175 | $ 24,176,448 |
Cost of goods sold | 9,720,597 | 9,240,362 |
Gross Profit | 13,769,578 | 14,936,086 |
OPERATING EXPENSES | ||
Selling, general and administrative | 17,862,314 | 12,028,309 |
Litigation | 2,447,213 | |
Research and development | 2,473,669 | 1,296,754 |
Depreciation and amortization | 463,130 | 418,595 |
Total Operating Expenses | 20,799,113 | 16,190,871 |
Net Operating Loss | (7,029,535) | (1,254,785) |
Non-Operating Income | ||
Gain/(Loss) on foreign currency exchange | (28,905) | 1,536 |
Gain on disposal of fixed assets | 1,009 | 16,591 |
Other Income | 679,907 | |
Interest income, net | 13,083 | 42,395 |
TOTAL OTHER INCOME | 665,094 | 60,522 |
LOSS BEFORE TAXES | (6,364,441) | (1,194,263) |
Income tax benefit/(expense) | 1,801,618 | (17,800) |
NET LOSS | $ (4,562,823) | $ (1,212,063) |
NET LOSS PER SHARE | ||
Basic | $ (0.10) | $ (0.03) |
Diluted | $ (0.10) | $ (0.03) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic | 44,385,032 | 41,929,736 |
Diluted | 44,385,032 | 41,929,736 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 422,398 | $ 6,293,069 | $ 4,864,817 | $ (344,204) | $ 11,236,080 |
Balance beginning (in shares) at Dec. 31, 2019 | 42,239,788 | ||||
Issuance of stock-based compensation | $ 322 | 240,638 | 240,960 | ||
Issuance of stock-based compensation (in shares) | 32,181 | ||||
Compensation expense related to stock options | 1,377,772 | 1,377,772 | |||
Litigation settlement options | 347,008 | 347,008 | |||
Litigation settlement share issuance | $ 952 | 937,142 | 938,094 | ||
Litigation settlement share issuance (in shares) | 95,238 | ||||
Repurchases of shares | (3,499,358) | (3,499,358) | |||
Issuance upon options exercised | $ 7,191 | 88,689 | 95,880 | ||
Issuance upon options exercised (in shares) | 719,162 | ||||
Capital raise | $ 35,938 | 26,596,668 | 26,632,606 | ||
Capital raise (in shares) | 3,593,750 | ||||
Net loss | (1,212,063) | (1,212,063) | |||
Ending balance, value at Dec. 31, 2020 | $ 466,801 | 35,880,986 | 3,652,754 | (3,843,562) | 36,156,979 |
Balance ending (in shares) at Dec. 31, 2020 | 46,680,119 | ||||
Issuance of stock-based compensation | $ 958 | 432,696 | 433,654 | ||
Issuance of stock-based compensation (in shares) | 95,725 | ||||
Compensation expense related to stock options | 2,049,041 | 2,049,041 | |||
Litigation settlement share issuance | $ 952 | 937,142 | 938,094 | ||
Litigation settlement share issuance (in shares) | 95,238 | ||||
Issuance upon options exercised | $ 11,730 | 1,249,521 | 1,261,251 | ||
Issuance upon options exercised (in shares) | 1,173,080 | ||||
Net loss | (4,562,823) | (4,562,823) | |||
Issuance of Restricted Stock | 224,859 | 224,859 | |||
Ending balance, value at Dec. 31, 2021 | $ 480,441 | $ 40,774,245 | $ (910,069) | $ (3,843,562) | $ 36,501,055 |
Balance ending (in shares) at Dec. 31, 2021 | 48,044,162 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (4,562,823) | $ (1,212,063) |
Adjustments to reconcile net (loss) to net cash used in operating activities: | ||
Stock-based compensation expense | 2,707,554 | 1,618,732 |
Stock-based litigation settlement expense | 1,285,102 | |
Depreciation and amortization | 463,130 | 418,595 |
Gain on disposal of fixed assets | (1,009) | (16,591) |
Deferred income taxes | (1,815,980) | 62,967 |
Provision for doubtful accounts | (8,176) | |
Abandonment of intangible assets | 41,919 | |
Changes in operating assets and liabilities: | ||
(Increase)/Decrease in accounts receivable | (1,019,932) | 669,743 |
Decrease/(Increase) in inventory | 723,434 | (4,441,295) |
Increase in other receivables | (718,220) | |
Increase in prepaid expenses and other assets | (761,041) | (420,614) |
Increase in accounts payable | 602,613 | 52,264 |
(Decrease)/Increase in accrued payroll and related taxes | (126,527) | 96,865 |
Increase in deferred revenue | 90,000 | |
Increase in accrued expenses | 99,291 | 1,313,801 |
Decrease in accrued tax liability | (204,572) | |
NET CASH USED IN OPERATING ACTIVITIES | (4,319,510) | (743,323) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (346,178) | (920,604) |
Purchases of intangible assets | (29,056) | (140,548) |
Proceeds from disposal of property and equipment | 9,065 | 25,000 |
NET CASH USED IN INVESTING ACTIVITIES | (366,169) | (1,036,152) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of equity | 1,261,251 | 26,728,486 |
Common stock issuance settlement of litigation | 938,094 | |
Purchase of treasury stock | (3,499,358) | |
Borrowings from indebtedness | 924,389 | 4,976,508 |
Payments on indebtedness | (415,806) | (4,976,508) |
Payments on finance lease liability | (2,646) | (5,296) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,705,282 | 23,223,832 |
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (1,980,397) | 21,444,357 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 27,315,286 | 5,870,929 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 25,334,889 | 27,315,286 |
Cash paid during the years 5for: | ||
Interest | 13,241 | 27,736 |
Income taxes | 1,903 | 321,983 |
Schedule of Non-Cash Operating, Investing and Financing Activities: | ||
Issuance of common stock as compensation | 433,654 | 240,960 |
Issuance of common stock as settlement for litigation | $ 938,094 | $ 938,094 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS REPRO MED SYSTEMS, INC. (the “Company,” “KORU Medical,” “KORU,” “we,” “us” or “our”) designs, manufactures and markets proprietary portable and innovative medical devices primarily for the ambulatory infusion market as governed by the United States Food and Drug Administration (the “FDA”) quality and regulatory system and international standards for quality system management. The Company operates as one BASIS OF PRESENTATION We prepare our financial statements and accompanying notes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain prior year amounts have been reclassified to conform to the current year presentation in our Financial Statements. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company holds cash in excess of $ 250,000 I NVENTORY Inventories of raw materials are stated at the lower of standard cost, which approximates average cost, or market value including allocable overhead. Work-in-process and finished goods are stated at the lower of standard cost or market value and include direct labor and allocable overhead. We maintain reserves for excess and obsolete inventory resulting from the potential inability to sell certain products at prices in excess of current carrying costs. We make estimates regarding the future recoverability of the costs of these products and record provisions based on historical experience, expiration of sterilization dates and expected future trends. If actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write downs may be required, which could unfavorably affect future operating results. INTANGIBLE ASSETS Certain of our identifiable intangible assets, including patents and trademarks, are amortized using the straight-line method over their estimated useful lives which range from 6 20 63,830 62,177 The estimated amortization expense for the succeeding years for the intangible assets is approximately: Schedule of amortization expense Year Ending December 31, 2022 $ 60,617 2023 59,842 2024 59,842 2025 59,842 2026 59,842 Thereafter 508,828 Total amortization expense $ 808,813 INCOME TAXES Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. The Company believes that it has no uncertain tax positions requiring disclosure or adjustment. PROPERTY AND EQUIPMENT Property and equipment are stated at original acquisition cost less accumulated depreciation. Additions and improvements are capitalized which increase the value or extend the life of an asset, while maintenance and repair costs are expensed as incurred. When assets are retired or otherwise disposed, the cost and related accumulated depreciation or amortization is removed from the respective accounts and any resulting gain or loss is included in income. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the assets which generally range from 3 10 3 12 399,300 356,418 STOCK-BASED COMPENSATION The Company maintains a stock option plan under which it grants stock options to certain executives, key employees and consultants. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. All options are charged against income at their fair value. The entire compensation expense of the award is recognized over the vesting period. Shares of stock granted for director fees are recorded at the fair value of the shares at the grant date. The Company also maintains an omnibus equity incentive plan. To date the Company has only granted shares of stock for director fees under this plan and those shares of stock granted are recorded at the fair value of the shares at the grant date. The Company issues restricted stock awards. Restricted stock awards are equity classified and measured at the fair market value of the underlying stock at the grant date. The fair value of restricted stock awards vesting at certain market capitalization thresholds were estimated on the date of grant using the Brownian Motion Monte Carlo lattice model. The fair value of restricted stock awards with time-based vesting were estimated on the date of grant at the current stock price. We recognize restricted stock expense using the straight-line attribution method over the requisite service period and account for forfeitures as they occur. NET LOSS PER COMMON SHARE Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share includes only an increase in the weighted average shares by the common shares issuable upon exercise of stock options. Schedule of net income per common share Years Ended December 31, 2021 December 31, 2020 Net loss $ (4,562,823 ) $ (1,212,063 ) Weighted Average Outstanding Shares: Outstanding shares 44,385,032 41,929,736 Option shares includable — (a) — (a) 44,385,032 41,929,736 Net loss per share Basic $ (0.10 ) $ (0.03 ) Diluted $ (0.10 ) $ (0.03 ) __________ (a) Option shares of 273,110 239,935 USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Important estimates include but are not limited to asset lives, valuation allowances, inventory valuation, and accruals. REVENUE RECOGNITION The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers The Company’s revenues result from the sale of assembled products. We recognize revenues when shipment occurs, and at which point the customer obtains control and ownership of the goods. Shipping costs generally are billed to customers and are included in sales. The Company generally does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise. The Company warrants the syringe driver from defects in materials and workmanship under normal use and the warranty does not include a performance obligation. The costs under the warranty are expensed as incurred. Provisions for distributor pricing and annual customer growth rebates are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded or when it is probable the annual growth target will be achieved. Rebates are provided to distributors for the difference in selling price to distributor and pricing specified to select customers. The Company established an allowance for charging off uncollectible trade accounts receivable that have both of the following characteristics: (a) They have a contractual maturity of one year or less, (b) They arose from the sale of goods or services. The following table summarizes net revenues by geography for the years ended December 31, 2021 and 2020: Schedule of net sales by geography Years Ended December 31, 2021 2020 Net Revenues Domestic $ 19,488,685 $ 20,678,453 International 4,001,490 3,497,995 Total $ 23,490,175 $ 24,176,448 LEASES In February 2016, the FASB issued a standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by the Company for those leases classified as operating leases under current GAAP, while our accounting for capital leases remains substantially unchanged. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard became effective for us on January 1, 2019. The standard had a material impact on our balance sheets but did not have a material impact on our statements of operations. See “NOTE 5 — ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations. FAIR VALUE MEASUREMENTS Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and includes instruments for which the determination of fair value requires significant judgment or estimation. The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses are considered to be representative of their fair values because of the short-term nature of those instruments. There were no transfers between levels in the fair value hierarchy during the year ended December 31, 2021. IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. No impairment losses have been recorded through December 31, 2021. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2 — INVENTORY Inventory consists of: December 31, 2021 December 31, 2020 Raw materials and work-in-process $ 2,997,807 $ 2,279,054 Finished goods 3,176,836 4,562,315 Total 6,174,643 6,841,369 Less: reserve for obsolete inventory (68,305 ) (11,597 ) Inventory, net $ 6,106,338 $ 6,829,772 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 — PROPERTY AND EQUIPMENT Property and equipment consists of the following at: December 31, 2021 December 31, 2020 Furniture and office equipment $ 818,897 $ 753,536 Leasehold improvements 556,907 542,796 Manufacturing equipment and tooling 2,042,675 1,856,909 Total property and equipment 3,418,479 3,153,241 Less: accumulated depreciation and amortization (2,312,034 ) (1,985,618 ) Property and equipment, net $ 1,106,445 $ 1,167,623 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 4 — STOCK-BASED COMPENSATION The Company has two equity incentive plans: the 2015 Stock Option Plan, as amended (the “2015 Plan”) and the 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). As of December 31, 2021, there were options to purchase 3,672,500 2,000,000 6,000,000 1,000,000 59,658 Prior to January 1, 2021, each non-employee director of the Company was eligible to receive $ 50,000 10,000 50,000 Effective January 1, 2021, each non-employee director of the Company (other than the Chairman of the Board) and Board advisor were eligible to receive of $75,000 to be paid quarterly $12,500 in cash and $6,250 in common stock 100,000 110,000 to be paid quarterly $12,500 in cash and $15,000 in common stock 140,000 to be paid quarterly $12,500 in cash and $22,500 in common stock On May 20, 2020, the Company entered into a Settlement Agreement with EMED Technologies Corporation (“EMED”) to settle all claims in connection with all pending litigation matters between them. Pursuant to the Settlement Agreement, the Company issued to EMED (i) 95,238 restricted stock units, which vested on May 21, 2020, and 95,238 restricted stock units, which vested on January 1, 2021, and (ii) an option to purchase up to 400,000 shares of the Company’s common stock at an exercise price of $11.21 per share prior to February 1, 2021, which was not exercised. On April 12, 2021, pursuant to an employment agreement entered into on March 15, 2021, with Linda Tharby, the Company’s President and Chief Executive Officer, the Company issued three restricted stock awards for an aggregate 1,000,000 3,310,000 2015 STOCK OPTION PLAN, as amended Time-Based Stock Options The per share weighted average fair value of stock options granted during the years ended December 31, 2021, and December 31, 2020 was $ 2.85 6.53 We have recognized tax benefits associated with stock-based compensation of $ 175,257 62,393 Schedule of fair value of the stock options granted Black-Scholes option valuation model December 31, 2021 December 31, 2020 Dividend yield 0.00 0.00 Expected volatility 74.01 77.91 62.11 62.18 Weighted-average volatility — — Expected dividends — — Expected term (in years) 10 10 Risk-free rate 1.20 1.62 0.63 0.64 The following table summarizes the status of the Company’s stock option plan: Schedule of stock option plan December 31, 2021 December 31, 2020 Shares Weighted Shares Weighted Outstanding at January 1 2,922,494 $ 2.46 3,647,000 $ 1.32 Granted 2,000,000 $ 3.64 360,000 $ 9.54 Exercised 1,062,500 $ 1.19 884,506 $ 0.71 Forfeited 187,494 $ 3.36 200,000 $ 2.09 Outstanding at year end 3,672,500 $ 3.42 2,922,494 $ 2.46 Options exercisable 983,750 $ 2.73 906,244 $ 1.40 Weighted average fair value of options granted during the period — $ 2.85 — $ 6.53 Stock-based compensation expense — $ 2,457,788 — $ 874,869 Total stock-based compensation expense, net of forfeitures, for stock option awards totaled $ 2,457,788 874,869 1,261,251 95,880 The weighted-average grant-date fair value of options granted during the years ended December 31, 2021, and 2020, was $ 5,699,986 2,350,264, 697,920 397,962 The following table presents information pertaining to options outstanding as of December 31, 2021: Schedule of information pertaining to options outstanding Range of Exercise Price Number Weighted Weighted Number Weighted $1.57 - $9.76 3,672,500 8.5 $ 3.42 983,750 $ 2.73 As of December 31, 2021, there was $ 6,158,501 46 1,923,179 803,171 Performance-Based Stock Options There were no performance-based stock options granted during the twelve months ended December 31, 2021, and 2020. The following table summarizes the status of the 2015 Plan with respect to performance-based stock options as of December 31, 2021: Schedule of performance base options outstanding December 31, 2021 December 31, 2020 Shares Weighted Shares Weighted Outstanding at January 1 1,000,000 $ 1.70 1,000,000 $ 1.70 Granted — $ — — $ — Exercised — $ — — $ — Forfeited 1,000,000 $ 1.70 — $ — Outstanding at year end — $ — 1,000,000 $ 1.70 Options exercisable — $ — 333,333 $ 1.70 Weighted average fair value of options granted during the period — $ — — $ — Stock-based compensation expense — $ (408,747 ) — $ 502,904 Total performance stock-based compensation expense totaled $ (408,747) 502,904 no RESTRICTED STOCK AWARDS On April 12, 2021, pursuant to an employment agreement entered into on March 15, 2021, with Linda Tharby, the Company’s President and Chief Executive Officer and as an inducement to her employment, the Company issued three restricted stock awards for an aggregate 1,000,000 3,310,000 The following table summarizes the activities for our unvested restricted stock awards for the twelve months ended December 31, 2021, and 2020. Twelve Months Ended December 31, 2021 2020 Shares Weighted Shares Weighted Unvested at January 1 — $ — — $ — Granted 1,000,000 $ 3.01 — $ — Vested — $ — — $ — Forfeited/canceled — $ — — $ — Unvested at December 31 1,000,000 $ 3.01 — $ — As of December 31, 2021, there was $ 2,299,726 39 47,220 zero |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 5 — LEASES We have finance and operating leases for our corporate office and certain office and computer equipment. Our leases have remaining lease terms of 0.6 years, some of which include options to extend the leases annually and some with options to terminate the leases within 1 At contract inception, we evaluate whether an arrangement is or contains a lease for which we are the lessee (that is, arrangements which provide us with the right to control a physical asset for a period of time). Operating leases are accounted for on the balance sheets with ROU assets being recognized in “Operating lease right-of-use assets” and lease liabilities recognized in “Operating lease liability – current” and “Operating lease liability, net of current portion.” Finance leases are accounted for on the balance sheets recognized in “Property and equipment, net” and lease liabilities recognized in “Finance lease liability – current” and “Finance lease liability, net of current portion.” Operating lease expenses are recognized on a straight-line basis over the lease term. With respect to finance leases, amortization of the ROU asset is presented separately from interest expense related to the finance lease liability. We have elected to combine lease and non-lease components for all lease contracts where we are the lessee. Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred. ROU assets are measured for impairment when a triggering event occurs. The components of lease expense were as follows: Schedule of components of lease expense Years Ended December 31, 2021 2020 Operating lease cost $ 149,476 $ 151,686 Short-term lease cost 146,604 65,227 Total lease cost $ 296,080 $ 216,913 Finance lease cost: Amortization of right-of-use assets $ 2,586 $ 5,302 Interest on lease liabilities 60 237 Total finance lease cost $ 2,646 $ 5,539 Supplemental cash flow information related to leases was as follows: Schedule of cash flow information related to leases Years Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 141,293 $ 136,888 Financing cash flows from finance leases $ 2,646 $ 5,296 Supplemental balance sheet information related to leases was as follows: Schdeule of balance sheet information related to leases December 31, December 31, Operating Leases Operating lease right-of-use assets $ 95,553 $ 236,846 Operating lease liability - current 95,553 141,293 Operating lease liability, net of current portion — 95,553 Total operating lease liabilities $ 95,553 $ 236,846 Finance Leases Property and equipment, at cost $ 12,725 $ 12,725 Accumulated depreciation (12,725 ) (10,139 ) Property and equipment, net $ — $ 2,586 Finance lease liability – current — 2,646 Finance lease liability, net of current portion — — Total finance lease liabilities $ — $ 2,646 December 31, December 31, Weighted Average Remaining Lease Term Operating leases 0.6 1.4 Finance leases 0 0.7 Weighted Average Discount Rate Operating leases 4.75 4.75 Finance leases 4.75 4.75 Maturities of lease liabilities are as follows: Schedule of maturities of lease liabilities Year Ending December 31, Operating Leases Finance Leases 2022 97,256 — 2023 — — 2024 — — 2025 — — Thereafter — — Total undiscounted lease payments 97,256 Less: imputed interest (1,703 ) — Total lease liabilities $ 95,553 $ — |
FEDERAL AND STATE INCOME TAXES
FEDERAL AND STATE INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
FEDERAL AND STATE INCOME TAXES | NOTE 6 — FEDERAL AND STATE INCOME TAXES Income tax expense consisted of the following: Schedule of provision for income taxes Year Ended Year Ended State income tax: Current, net of refund $ (12,800 ) $ (17,800 ) Federal income tax: Deferred 1,814,418 (62,967 ) Current — 62,967 Income tax benefit/(expense) $ 1,801,618 $ (17,800 ) The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 21% for year 2021 and 2020 is as follows: Schedule of reconciliation of income taxes Year Ended Year Ended Loss before taxes $ (6,364,441 ) $ (1,194,263 ) Income taxes computed at the federal statutory rate $ 1,336,533 $ 250,795 State income and franchise tax (12,800 ) (17,800 ) Permanent differences and other 477,885 (250,795 ) Income tax benefit/(expense) $ 1,801,618 $ (17,800 ) The significant components of deferred income tax assets, net are as follows: Schedule of components of deferred tax assets December 31, December 31, Deferred compensation cost $ 389,981 $ 239,036 Depreciation and amortization (116,911 ) (135,092 ) R&D credit 142,538 NOL 1,507,982 Allowance for bad debts and other 17,664 21,330 Deferred income tax assets, net $ 1,941,254 $ 125,274 Our U.S. federal and state income tax returns remain open to examination for the tax years 2018 through 2021. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | NOTE 7 — MAJOR CUSTOMERS For the years ended December 31, 2021 and December 31, 2020, approximately 41 51 The largest customer in both years is a domestic medical products and supplies distributor. Although, a number of larger infusion customers have elected to consolidate their purchases through one or more distributors in recent years, we continue to maintain strong direct relationships with them. We do not believe that their continued purchase of FREEDOM System products and related supplies is contingent upon the distributor. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 — COMMITMENTS AND CONTINGENCIES LEGAL PROCEEDINGS The Company has been and may again become involved in legal proceedings, claims and litigation arising in the ordinary course of business. Except as described below, KORU Medical is not presently a party to any litigation or other legal proceeding that is believed to be material to its financial condition. Litigation From 2013 until May 2020, we were involved in several lawsuits with our principal competitor, EMED. EMED alleged that our needle sets infringed various patents controlled by EMED. Certain of these lawsuits also alleged antitrust violations, unfair business practices, and various other business tort claims. On May 26, 2020, the parties announced the settlement of all of the litigation between KORU Medical and EMED. The settlement agreement provides KORU Medical with freedom to operate under EMED’s existing patent portfolio, dismissal of all litigation with prejudice (including the claims against Andrew Sealfon, our former President and Chief Executive Officer), and an equity payment by KORU Medical to EMED. Refer to our Form 10-Q for the quarterly period ended June 30, 2020 regarding the dismissed case with our principal competitor, EMED. OTHER On November 11, 2020, the Company entered into a Manufacturing and Supply Agreement with Command Medical Products, Inc. (“Command”), pursuant to which Command has agreed to manufacture and supply the Company’s subassemblies, needle sets and tubing products pursuant to the Company’s specifications and purchase orders. The first binding purchase order pursuant to the Manufacturing and Supply Agreement was made on November 17, 2020 (the “Effective Date”). The Manufacturing and Supply Agreement provides for a term of five years from the Effective Date. Either party may terminate the Manufacturing and Supply Agreement upon a material breach by the other Party that has not been cured within 90 days, upon the bankruptcy or insolvency of the other Party or as expressly set forth elsewhere in the Agreement. If the Company terminates the Manufacturing and Supply Agreement other than for those reasons within the first three years from the Effective Date, the Company is obligated to pay an early termination fee to Command. The Manufacturing and Supply Agreement also includes customary provisions relating to, among other things, delivery, inspection procedures, warranties, quality management, business continuity plans, handling and transport, intellectual property, confidentiality and indemnification. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFITS | NOTE 9 — EMPLOYEE BENEFITS We provide a safe harbor 401(k) plan for our employees that allows for employee elective contributions, Company matching contributions and discretionary profit-sharing contributions. Employee elective contributions are funded through voluntary payroll deductions. The Company makes safe harbor matching contributions in an amount equal to 100% of the employee’s contribution, not to exceed 3% of employee’s compensation plus 50% of employee’s pay contributed between 3% and 5% of employee’s compensation 166,014 156,789 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | NOTE 10 — DEBT OBLIGATIONS On July 26, 2021, the Company entered into a commercial insurance premium finance and security agreement with AON Premium Finance, LLC in the aggregate principal amount of $ 0.9 million 4.17 On April 14, 2020, the Company issued a promissory note to KeyBank in the aggregate principal amount of $ 3.5 million 3.5 million Prime Rate announced by the Bank minus 0.75 Prime Rate announced by the Bank minus 1.50 June 1, 2022 any time prior to maturity with no prepayment penalties 3.5 million In connection with the Note, the Company entered into a Commercial Security Agreement with the Bank dated April 14, 2020 (the “Security Agreement”), pursuant to which the Company granted a security interest in substantially all assets of the Company to secure the obligations of the Company under the Note. The Security Agreement contains terms and conditions typical for the granting of security interests of this kind. The Company had no amount outstanding against the line of credit as of December 31, 2021. On April 27, 2020, the Company entered into a Progress Payment Loan and Security Agreement (“PPLSA”) and a Master Security Agreement (the “MSA”), each dated as of April 20, 2020, with Key Equipment Finance, a division of the Bank (“KEF”), to provide up to $ 2.5 million fixed rate of 4.07% per annum 84 equal consecutive monthly installments |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
EQUITY | NOTE 11 — EQUITY On June 18, 2020, the Company entered into a Purchase Agreement with Piper Sandler & Co. and Canaccord Genuity LLC, as representatives of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell 3,125,000 30 468,750 June 19, 2020 7.52 26.6 million On November 16, 2020, the Company announced that its Board of Directors had authorized a stock repurchase program under which the Company may purchase up to $ 10.0 million 683,271 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 12 — SUBSEQUENT EVENT We have entered into a lease for a new facility located at 100 Corporate Drive, Mahwah, New Jersey to serve as our headquarters and for our general operations. We expect to move out of our current building into this 43,975 square foot facility in June 2022. The new lease term commences March 1, 2022 and expires August 31, 2032. Our monthly base rent is approximately $38,000 in the first year 50,000 On February 16, 2022, we extended our current facility lease at 24 Carpenter Road, Chester, New York, which expires on August 31, 2022, to December 31, 2022 to ensure continuity as we transition to our new location in Mahwah, New Jersey. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS REPRO MED SYSTEMS, INC. (the “Company,” “KORU Medical,” “KORU,” “we,” “us” or “our”) designs, manufactures and markets proprietary portable and innovative medical devices primarily for the ambulatory infusion market as governed by the United States Food and Drug Administration (the “FDA”) quality and regulatory system and international standards for quality system management. The Company operates as one |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We prepare our financial statements and accompanying notes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain prior year amounts have been reclassified to conform to the current year presentation in our Financial Statements. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company holds cash in excess of $ 250,000 |
NVENTORY | I NVENTORY Inventories of raw materials are stated at the lower of standard cost, which approximates average cost, or market value including allocable overhead. Work-in-process and finished goods are stated at the lower of standard cost or market value and include direct labor and allocable overhead. We maintain reserves for excess and obsolete inventory resulting from the potential inability to sell certain products at prices in excess of current carrying costs. We make estimates regarding the future recoverability of the costs of these products and record provisions based on historical experience, expiration of sterilization dates and expected future trends. If actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write downs may be required, which could unfavorably affect future operating results. |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Certain of our identifiable intangible assets, including patents and trademarks, are amortized using the straight-line method over their estimated useful lives which range from 6 20 63,830 62,177 The estimated amortization expense for the succeeding years for the intangible assets is approximately: Schedule of amortization expense Year Ending December 31, 2022 $ 60,617 2023 59,842 2024 59,842 2025 59,842 2026 59,842 Thereafter 508,828 Total amortization expense $ 808,813 |
INCOME TAXES | INCOME TAXES Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. The Company believes that it has no uncertain tax positions requiring disclosure or adjustment. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment are stated at original acquisition cost less accumulated depreciation. Additions and improvements are capitalized which increase the value or extend the life of an asset, while maintenance and repair costs are expensed as incurred. When assets are retired or otherwise disposed, the cost and related accumulated depreciation or amortization is removed from the respective accounts and any resulting gain or loss is included in income. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the assets which generally range from 3 10 3 12 399,300 356,418 |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company maintains a stock option plan under which it grants stock options to certain executives, key employees and consultants. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. All options are charged against income at their fair value. The entire compensation expense of the award is recognized over the vesting period. Shares of stock granted for director fees are recorded at the fair value of the shares at the grant date. The Company also maintains an omnibus equity incentive plan. To date the Company has only granted shares of stock for director fees under this plan and those shares of stock granted are recorded at the fair value of the shares at the grant date. The Company issues restricted stock awards. Restricted stock awards are equity classified and measured at the fair market value of the underlying stock at the grant date. The fair value of restricted stock awards vesting at certain market capitalization thresholds were estimated on the date of grant using the Brownian Motion Monte Carlo lattice model. The fair value of restricted stock awards with time-based vesting were estimated on the date of grant at the current stock price. We recognize restricted stock expense using the straight-line attribution method over the requisite service period and account for forfeitures as they occur. |
NET LOSS PER COMMON SHARE | NET LOSS PER COMMON SHARE Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share includes only an increase in the weighted average shares by the common shares issuable upon exercise of stock options. Schedule of net income per common share Years Ended December 31, 2021 December 31, 2020 Net loss $ (4,562,823 ) $ (1,212,063 ) Weighted Average Outstanding Shares: Outstanding shares 44,385,032 41,929,736 Option shares includable — (a) — (a) 44,385,032 41,929,736 Net loss per share Basic $ (0.10 ) $ (0.03 ) Diluted $ (0.10 ) $ (0.03 ) __________ (a) Option shares of 273,110 239,935 |
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Important estimates include but are not limited to asset lives, valuation allowances, inventory valuation, and accruals. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers The Company’s revenues result from the sale of assembled products. We recognize revenues when shipment occurs, and at which point the customer obtains control and ownership of the goods. Shipping costs generally are billed to customers and are included in sales. The Company generally does not accept return of goods shipped unless it is a Company error. The only credits provided to customers are for defective merchandise. The Company warrants the syringe driver from defects in materials and workmanship under normal use and the warranty does not include a performance obligation. The costs under the warranty are expensed as incurred. Provisions for distributor pricing and annual customer growth rebates are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded or when it is probable the annual growth target will be achieved. Rebates are provided to distributors for the difference in selling price to distributor and pricing specified to select customers. The Company established an allowance for charging off uncollectible trade accounts receivable that have both of the following characteristics: (a) They have a contractual maturity of one year or less, (b) They arose from the sale of goods or services. The following table summarizes net revenues by geography for the years ended December 31, 2021 and 2020: Schedule of net sales by geography Years Ended December 31, 2021 2020 Net Revenues Domestic $ 19,488,685 $ 20,678,453 International 4,001,490 3,497,995 Total $ 23,490,175 $ 24,176,448 |
LEASES | LEASES In February 2016, the FASB issued a standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by the Company for those leases classified as operating leases under current GAAP, while our accounting for capital leases remains substantially unchanged. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard became effective for us on January 1, 2019. The standard had a material impact on our balance sheets but did not have a material impact on our statements of operations. See “NOTE 5 — |
ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED | ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and includes instruments for which the determination of fair value requires significant judgment or estimation. The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses are considered to be representative of their fair values because of the short-term nature of those instruments. There were no transfers between levels in the fair value hierarchy during the year ended December 31, 2021. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. No impairment losses have been recorded through December 31, 2021. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of amortization expense | The estimated amortization expense for the succeeding years for the intangible assets is approximately: Schedule of amortization expense Year Ending December 31, 2022 $ 60,617 2023 59,842 2024 59,842 2025 59,842 2026 59,842 Thereafter 508,828 Total amortization expense $ 808,813 |
Schedule of net income per common share | Basic earnings per share are computed on the weighted average of common shares outstanding during each year. Diluted earnings per share includes only an increase in the weighted average shares by the common shares issuable upon exercise of stock options. Schedule of net income per common share Years Ended December 31, 2021 December 31, 2020 Net loss $ (4,562,823 ) $ (1,212,063 ) Weighted Average Outstanding Shares: Outstanding shares 44,385,032 41,929,736 Option shares includable — (a) — (a) 44,385,032 41,929,736 Net loss per share Basic $ (0.10 ) $ (0.03 ) Diluted $ (0.10 ) $ (0.03 ) __________ (a) Option shares of 273,110 239,935 |
Schedule of net sales by geography | The following table summarizes net revenues by geography for the years ended December 31, 2021 and 2020: Schedule of net sales by geography Years Ended December 31, 2021 2020 Net Revenues Domestic $ 19,488,685 $ 20,678,453 International 4,001,490 3,497,995 Total $ 23,490,175 $ 24,176,448 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory consists of: | Inventory consists of: December 31, 2021 December 31, 2020 Raw materials and work-in-process $ 2,997,807 $ 2,279,054 Finished goods 3,176,836 4,562,315 Total 6,174,643 6,841,369 Less: reserve for obsolete inventory (68,305 ) (11,597 ) Inventory, net $ 6,106,338 $ 6,829,772 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment consists of the following at: | Property and equipment consists of the following at: December 31, 2021 December 31, 2020 Furniture and office equipment $ 818,897 $ 753,536 Leasehold improvements 556,907 542,796 Manufacturing equipment and tooling 2,042,675 1,856,909 Total property and equipment 3,418,479 3,153,241 Less: accumulated depreciation and amortization (2,312,034 ) (1,985,618 ) Property and equipment, net $ 1,106,445 $ 1,167,623 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of fair value of the stock options granted Black-Scholes option valuation model | The per share weighted average fair value of stock options granted during the years ended December 31, 2021, and December 31, 2020 was $ 2.85 6.53 We have recognized tax benefits associated with stock-based compensation of $ 175,257 62,393 Schedule of fair value of the stock options granted Black-Scholes option valuation model December 31, 2021 December 31, 2020 Dividend yield 0.00 0.00 Expected volatility 74.01 77.91 62.11 62.18 Weighted-average volatility — — Expected dividends — — Expected term (in years) 10 10 Risk-free rate 1.20 1.62 0.63 0.64 |
Schedule of stock option plan | The following table summarizes the status of the Company’s stock option plan: Schedule of stock option plan December 31, 2021 December 31, 2020 Shares Weighted Shares Weighted Outstanding at January 1 2,922,494 $ 2.46 3,647,000 $ 1.32 Granted 2,000,000 $ 3.64 360,000 $ 9.54 Exercised 1,062,500 $ 1.19 884,506 $ 0.71 Forfeited 187,494 $ 3.36 200,000 $ 2.09 Outstanding at year end 3,672,500 $ 3.42 2,922,494 $ 2.46 Options exercisable 983,750 $ 2.73 906,244 $ 1.40 Weighted average fair value of options granted during the period — $ 2.85 — $ 6.53 Stock-based compensation expense — $ 2,457,788 — $ 874,869 |
Schedule of information pertaining to options outstanding | The following table presents information pertaining to options outstanding as of December 31, 2021: Schedule of information pertaining to options outstanding Range of Exercise Price Number Weighted Weighted Number Weighted $1.57 - $9.76 3,672,500 8.5 $ 3.42 983,750 $ 2.73 |
Schedule of performance base options outstanding | The following table summarizes the status of the 2015 Plan with respect to performance-based stock options as of December 31, 2021: Schedule of performance base options outstanding December 31, 2021 December 31, 2020 Shares Weighted Shares Weighted Outstanding at January 1 1,000,000 $ 1.70 1,000,000 $ 1.70 Granted — $ — — $ — Exercised — $ — — $ — Forfeited 1,000,000 $ 1.70 — $ — Outstanding at year end — $ — 1,000,000 $ 1.70 Options exercisable — $ — 333,333 $ 1.70 Weighted average fair value of options granted during the period — $ — — $ — Stock-based compensation expense — $ (408,747 ) — $ 502,904 |
The following table summarizes the activities for our unvested restricted stock awards for the twelve months ended December 31, 2021, and 2020. | On April 12, 2021, pursuant to an employment agreement entered into on March 15, 2021, with Linda Tharby, the Company’s President and Chief Executive Officer and as an inducement to her employment, the Company issued three restricted stock awards for an aggregate 1,000,000 3,310,000 The following table summarizes the activities for our unvested restricted stock awards for the twelve months ended December 31, 2021, and 2020. Twelve Months Ended December 31, 2021 2020 Shares Weighted Shares Weighted Unvested at January 1 — $ — — $ — Granted 1,000,000 $ 3.01 — $ — Vested — $ — — $ — Forfeited/canceled — $ — — $ — Unvested at December 31 1,000,000 $ 3.01 — $ — |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of components of lease expense | The components of lease expense were as follows: Schedule of components of lease expense Years Ended December 31, 2021 2020 Operating lease cost $ 149,476 $ 151,686 Short-term lease cost 146,604 65,227 Total lease cost $ 296,080 $ 216,913 Finance lease cost: Amortization of right-of-use assets $ 2,586 $ 5,302 Interest on lease liabilities 60 237 Total finance lease cost $ 2,646 $ 5,539 |
Schedule of cash flow information related to leases | Supplemental cash flow information related to leases was as follows: Schedule of cash flow information related to leases Years Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 141,293 $ 136,888 Financing cash flows from finance leases $ 2,646 $ 5,296 |
Schdeule of balance sheet information related to leases | Supplemental balance sheet information related to leases was as follows: Schdeule of balance sheet information related to leases December 31, December 31, Operating Leases Operating lease right-of-use assets $ 95,553 $ 236,846 Operating lease liability - current 95,553 141,293 Operating lease liability, net of current portion — 95,553 Total operating lease liabilities $ 95,553 $ 236,846 Finance Leases Property and equipment, at cost $ 12,725 $ 12,725 Accumulated depreciation (12,725 ) (10,139 ) Property and equipment, net $ — $ 2,586 Finance lease liability – current — 2,646 Finance lease liability, net of current portion — — Total finance lease liabilities $ — $ 2,646 December 31, December 31, Weighted Average Remaining Lease Term Operating leases 0.6 1.4 Finance leases 0 0.7 Weighted Average Discount Rate Operating leases 4.75 4.75 Finance leases 4.75 4.75 |
Schedule of maturities of lease liabilities | Maturities of lease liabilities are as follows: Schedule of maturities of lease liabilities Year Ending December 31, Operating Leases Finance Leases 2022 97,256 — 2023 — — 2024 — — 2025 — — Thereafter — — Total undiscounted lease payments 97,256 Less: imputed interest (1,703 ) — Total lease liabilities $ 95,553 $ — |
FEDERAL AND STATE INCOME TAXES
FEDERAL AND STATE INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | Income tax expense consisted of the following: Schedule of provision for income taxes Year Ended Year Ended State income tax: Current, net of refund $ (12,800 ) $ (17,800 ) Federal income tax: Deferred 1,814,418 (62,967 ) Current — 62,967 Income tax benefit/(expense) $ 1,801,618 $ (17,800 ) |
Schedule of reconciliation of income taxes | The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 21% for year 2021 and 2020 is as follows: Schedule of reconciliation of income taxes Year Ended Year Ended Loss before taxes $ (6,364,441 ) $ (1,194,263 ) Income taxes computed at the federal statutory rate $ 1,336,533 $ 250,795 State income and franchise tax (12,800 ) (17,800 ) Permanent differences and other 477,885 (250,795 ) Income tax benefit/(expense) $ 1,801,618 $ (17,800 ) |
Schedule of components of deferred tax assets | The significant components of deferred income tax assets, net are as follows: Schedule of components of deferred tax assets December 31, December 31, Deferred compensation cost $ 389,981 $ 239,036 Depreciation and amortization (116,911 ) (135,092 ) R&D credit 142,538 NOL 1,507,982 Allowance for bad debts and other 17,664 21,330 Deferred income tax assets, net $ 1,941,254 $ 125,274 |
Schedule of amortization expens
Schedule of amortization expense (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
2022 | $ 60,617 | |
2023 | 59,842 | |
2024 | 59,842 | |
2025 | 59,842 | |
2026 | 59,842 | |
Thereafter | 508,828 | |
Total amortization expense | $ 808,813 | $ 843,587 |
Schedule of net income per comm
Schedule of net income per common share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||
Net loss | $ (4,562,823) | $ (1,212,063) |
Weighted Average Outstanding Shares: | ||
Outstanding shares | 44,385,032 | 41,929,736 |
44,385,032 | 41,929,736 | |
Net loss per share | ||
Basic | $ (0.10) | $ (0.03) |
Diluted | $ (0.10) | $ (0.03) |
Employee Stock [Member] | ||
Net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 273,110 | 239,935 |
Schedule of net sales by geogra
Schedule of net sales by geography (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 23,490,175 | $ 24,176,448 |
UNITED STATES | ||
Revenues | 19,488,685 | 20,678,453 |
Non-US [Member] | ||
Revenues | $ 4,001,490 | $ 3,497,995 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Property, Plant and Equipment [Line Items] | ||
Number of segments | Segment | 1 | |
Cash, Uninsured Amount | $ 250,000 | |
Abandonment of intangible assets | $ 41,919 | |
Depreciation and amortization expense | $ 463,130 | $ 418,595 |
Minimum [Member] | Furniture And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives of property and equipment | 3 years | |
Minimum [Member] | Equipment And Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives of property and equipment | 3 years | |
Maximum [Member] | Furniture And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives of property and equipment | 10 years | |
Maximum [Member] | Equipment And Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives of property and equipment | 12 years | |
Patents And Trademarks [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 6 years | |
Patents And Trademarks [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 20 years |
Inventory consists of_ (Details
Inventory consists of: (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and work-in-process | $ 2,997,807 | $ 2,279,054 |
Finished goods | 3,176,836 | 4,562,315 |
Total | 6,174,643 | 6,841,369 |
Less: reserve for obsolete inventory | (68,305) | (11,597) |
Inventory, net | $ 6,106,338 | $ 6,829,772 |
Property and equipment consists
Property and equipment consists of the following at: (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,418,479 | $ 3,153,241 |
Less: accumulated depreciation and amortization | (2,312,034) | (1,985,618) |
Property and equipment, net | 1,106,445 | 1,167,623 |
Furniture And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 818,897 | 753,536 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 556,907 | 542,796 |
Manufacturing Equipment And Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,042,675 | $ 1,856,909 |
Schedule of fair value of the s
Schedule of fair value of the stock options granted Black-Scholes option valuation model (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average volatility | 0.00% | 0.00% |
Stock Option Plan 2015 [Member] | Time Based Shares Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected dividends | $ 0 | $ 0 |
Expected term (in years) | 10 years | 10 years |
Stock Option Plan 2015 [Member] | Time Based Shares Options [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 74.01% | 62.11% |
Risk-free rate | 1.20% | 0.63% |
Stock Option Plan 2015 [Member] | Time Based Shares Options [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 77.91% | 62.18% |
Risk-free rate | 1.62% | 0.64% |
Schedule of stock option plan (
Schedule of stock option plan (Details) - Stock Option Plan 2015 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning | 2,922,494 | 3,647,000 |
Outstanding at beginning | $ 2.46 | $ 1.32 |
Granted | 2,000,000 | 360,000 |
Granted | $ 3.64 | $ 9.54 |
Exercised | 1,062,500 | 884,506 |
Exercised | $ 1.19 | $ 0.71 |
Forfeited | 187,494 | 200,000 |
Forfeited | $ 3.36 | $ 2.09 |
Outstanding at ending | 3,672,500 | 2,922,494 |
Outstanding at ending | $ 3.42 | $ 2.46 |
Options exercisable at ending | 983,750 | 906,244 |
Options exercisable | $ 2.73 | $ 1.40 |
Weighted average fair value of options granted during the period | $ 2.85 | $ 6.53 |
Total performance stock-based compensation expense | $ 2,457,788 | $ 874,869 |
Schedule of information pertain
Schedule of information pertaining to options outstanding (Details) - Stock Option Plan 2015 [Member] - Time Based Shares Options [Member] - Exercise Price 1 [Member] | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding | shares | 3,672,500 |
Weighted average remaining contractual term | 8 years 6 months |
Weighted average exercise price | $ / shares | $ 3.42 |
Number exercisable | shares | 983,750 |
Weighted average exercise price | $ / shares | $ 2.73 |
Schedule of performance base op
Schedule of performance base options outstanding (Details) - Stock Option Plan 2015 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning | 2,922,494 | 3,647,000 |
Outstanding at beginning | $ 2.46 | $ 1.32 |
Weighted average fair value of options granted during the period | 2,000,000 | 360,000 |
Granted | $ 3.64 | $ 9.54 |
Exercised | 1,062,500 | 884,506 |
Exercised | $ 1.19 | $ 0.71 |
Forfeited | 187,494 | 200,000 |
Forfeited | $ 3.36 | $ 2.09 |
Outstanding at ending | 3,672,500 | 2,922,494 |
Outstanding at ending | $ 3.42 | $ 2.46 |
Options exercisable at ending | 983,750 | 906,244 |
Options exercisable | $ 2.73 | $ 1.40 |
Weighted average fair value of options granted during the period | $ 2.85 | $ 6.53 |
Stock-based compensation expense | $ 2,457,788 | $ 874,869 |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning | 1,000,000 | 1,000,000 |
Outstanding at beginning | $ 1.70 | $ 1.70 |
Weighted average fair value of options granted during the period | 0 | 0 |
Granted | $ 0 | $ 0 |
Exercised | 0 | 0 |
Exercised | $ 0 | $ 0 |
Forfeited | 1,000,000 | 0 |
Forfeited | $ 1.70 | $ 0 |
Outstanding at ending | 0 | 1,000,000 |
Outstanding at ending | $ 1.70 | |
Options exercisable at ending | 0 | 333,333 |
Options exercisable | $ 0 | $ 1.70 |
Weighted average fair value of options granted during the period | ||
Stock-based compensation expense | $ (408,747) | $ 502,904 |
The following table summarizes
The following table summarizes the activities for our unvested restricted stock awards for the twelve months ended December 31, 2021, and 2020. (Details) - Stock Option Plan 2015 [Member] - Restricted Stock Awards [Member] - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning | 0 | 0 |
Outstanding at beginning | 0 | 0 |
Granted | 1,000,000 | 0 |
Granted | 3.01 | 0 |
Vested | 0 | 0 |
Vested | 0 | 0 |
Forfeited/canceled | 0 | 0 |
Forfeited/canceled | 0 | 0 |
Outstanding at ending | 1,000,000 | 0 |
Outstanding at ending | 3.01 | 0 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Apr. 12, 2021 | Jan. 02, 2021 | May 20, 2020 | Oct. 01, 2019 | Jan. 02, 2019 | Dec. 31, 2021 | May 18, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock outstanding | 44,623,660 | 43,259,617 | ||||||
Stock issued during period | 2,000,000 | |||||||
Chief Executive Officer Linda Tharby [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock issued during period | 1,000,000 | |||||||
Number of stock option shares issued, value | $ 3,310,000 | |||||||
Settlement Agreement [Member] | E M E D Technologies Corporation [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Description of vesting rights | the Company issued to EMED (i) 95,238 restricted stock units, which vested on May 21, 2020, and 95,238 restricted stock units, which vested on January 1, 2021, and (ii) an option to purchase up to 400,000 shares of the Company’s common stock at an exercise price of $11.21 per share prior to February 1, 2021, which was not exercised. | |||||||
Non Employee Director [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonemployee services transaction cost | 50,000 | |||||||
Amount for chairing board committee | $ 10,000 | |||||||
Board of Directors Chairman [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonemployee services transaction cost | 100,000 | 50,000 | 140,000 | |||||
Share-based Goods and Nonemployee Services Transaction | to be paid quarterly $12,500 in cash and $22,500 in common stock | |||||||
Non Employee Director And Board Advisor [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonemployee services transaction cost | 75,000 | 110,000 | ||||||
Share-based Goods and Nonemployee Services Transaction | to be paid quarterly $12,500 in cash and $6,250 in common stock | to be paid quarterly $12,500 in cash and $15,000 in common stock | ||||||
Stock Option Plan 2015 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock issued during period | 1,000,000 | |||||||
Available for issuance | 6,000,000 | |||||||
Allocated stock-based compensation expense | $ 2,457,788 | $ 874,869 | ||||||
Stock Option Plan 2015 [Member] | Time Based Shares Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | 2,457,788 | 874,869 | ||||||
Cash received from option exercises | $ 1,261,251 | $ 95,880 | ||||||
Weighted-average grant-date fair value options granted | 5,699,986 | 2,350,264 | ||||||
[custom:StockIssuedDuringPeriodSharesStockOptionsExercised1] | 697,920 | 397,962 | ||||||
Total unrecognized compensation cost | $ 6,158,501 | |||||||
weighted-average period (in years) | 46 months | |||||||
Total fair value of shares vested | $ 1,923,179 | $ 803,171 | ||||||
Stock Option Plan 2015 [Member] | Performance Shares [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized compensation cost | 0 | |||||||
Allocated stock-based compensation expense | (408,747) | 502,904 | ||||||
Stock Option Plan 2015 [Member] | Restricted Stock Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized compensation cost | $ 2,299,726 | |||||||
weighted-average period (in years) | 39 months | |||||||
Recognized tax benefits | $ 47,220 | $ 0 | ||||||
Stock Option Plan 2015 [Member] | Executiveskey Employees And Consultants [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock outstanding | 3,672,500 | |||||||
Stock Option Plan 2021 [Member] | Director [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock issued during period | 59,658 |
Schedule of components of lease
Schedule of components of lease expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 149,476 | $ 151,686 |
Short-term lease cost | 146,604 | 65,227 |
Total lease cost | 296,080 | 216,913 |
Finance lease cost: | ||
Amortization of right-of-use assets | 2,586 | 5,302 |
Interest on lease liabilities | 60 | 237 |
Total finance lease cost | $ 2,646 | $ 5,539 |
Schedule of cash flow informati
Schedule of cash flow information related to leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 141,293 | $ 136,888 |
Financing cash flows from finance leases | $ 2,646 | $ 5,296 |
Schdeule of balance sheet infor
Schdeule of balance sheet information related to leases (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
Operating lease right-of-use assets | $ 95,553 | $ 236,846 |
Operating lease liability - current | 95,553 | 141,293 |
Operating lease liability, net of current portion | 95,553 | |
Total operating lease liabilities | 95,553 | 236,846 |
Finance Leases | ||
Property and equipment, at cost | 12,725 | 12,725 |
Accumulated depreciation | (12,725) | (10,139) |
Property and equipment, net | 2,586 | |
Finance lease liability – current | 2,646 | |
Finance lease liability, net of current portion | ||
Total finance lease liabilities | $ 2,646 | |
Lessee, Operating Lease, Renewal Term | 7 months 6 days | 1 year 4 months 24 days |
Finance leases | 0 years | 8 months 12 days |
Operating leases | 4.75% | 4.75% |
Finance leases | 4.75% | 4.75% |
Schedule of maturities of lease
Schedule of maturities of lease liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 97,256 | |
2022 | 0 | |
2023 | 0 | |
2023 | 0 | |
2024 | 0 | |
2024 | 0 | |
2025 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Thereafter | 0 | |
Total undiscounted operating lease payments | 97,256 | |
Less: imputed interest | (1,703) | |
Less: imputed interest | 0 | |
Total operating lease liabilities | 95,553 | $ 236,846 |
Total finance lease liabilities | $ 2,646 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating lease, options to terminate | 1 year |
Schedule of provision for incom
Schedule of provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
State income tax: | ||
Current, net of refund | $ (12,800) | $ (17,800) |
Federal income tax: | ||
Deferred | 1,814,418 | (62,967) |
Current | 62,967 | |
Income tax benefit/(expense) | $ 1,801,618 | $ (17,800) |
Schedule of reconciliation of i
Schedule of reconciliation of income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Loss before taxes | $ (6,364,441) | $ (1,194,263) |
Income taxes computed at the federal statutory rate | 1,336,533 | 250,795 |
State income and franchise tax | (12,800) | (17,800) |
Permanent differences and other | 477,885 | (250,795) |
Income tax benefit/(expense) | $ 1,801,618 | $ (17,800) |
Schedule of components of defer
Schedule of components of deferred tax assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Deferred compensation cost | $ 389,981 | $ 239,036 |
Depreciation and amortization | (116,911) | (135,092) |
R&D credit | 142,538 | |
NOL | 1,507,982 | |
Allowance for bad debts and other | 17,664 | 21,330 |
Deferred income tax assets, net | $ 1,941,254 | $ 125,274 |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 41.00% | 51.00% |
EMPLOYEE BENEFITS (Details Narr
EMPLOYEE BENEFITS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Description of matching contribution | The Company makes safe harbor matching contributions in an amount equal to 100% of the employee’s contribution, not to exceed 3% of employee’s compensation plus 50% of employee’s pay contributed between 3% and 5% of employee’s compensation | |
Matching expense | $ 166,014 | $ 156,789 |
DEBT OBLIGATIONS (Details Narra
DEBT OBLIGATIONS (Details Narrative) - USD ($) | Jul. 26, 2021 | Jun. 24, 2021 | Apr. 27, 2020 | Apr. 14, 2020 | Jun. 30, 2021 |
Key Equipment Finance [Member] | Progress Payment Loan And Security Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate terms | fixed rate of 4.07% per annum | ||||
Loans, principal amount | $ 2,500,000 | ||||
principal and interest payment terms | 84 equal consecutive monthly installments | ||||
Promissory Note [Member] | Key Bank National Association [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Face amount | $ 3,500,000 | ||||
Promissory Note [Member] | Line of Credit [Member] | Key Bank National Association [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Face amount | $ 3,500,000 | ||||
Interest rate terms | Prime Rate announced by the Bank minus 1.50 | Prime Rate announced by the Bank minus 0.75 | |||
Debt instrument, principal and unpaid interest due | Jun. 1, 2022 | ||||
Debt instrument period iteam | any time prior to maturity with no prepayment penalties | ||||
Promissory Note [Member] | Revolving Credit Facility [Member] | Key Bank National Association [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Face amount | $ 3,500,000 | ||||
A O N Premium Finance L L C [Member] | Promissory Note [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Notes Payable | $ 900,000 | ||||
A O N Premium Finance L L C [Member] | Promissory Note [Member] | Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
[custom:NotePayableTerms] | 4.17% |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 18, 2020 | Dec. 31, 2020 | Nov. 16, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Number of shares issued (in shares) | 683,271 | ||
Maximum amount of stock repurchase program | $ 10,000,000 | ||
Purchase Agreement [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Number of shares issued (in shares) | 3,125,000 | ||
Purchase Agreement [Member] | Piper Sandler Co And Canaccord Genuity L L C [Member] | Common Stock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 30 days | ||
[custom:AdditionalNumberOfSharesIssued] | 468,750 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Jun. 19, 2020 | ||
Share Price | $ 7.52 | ||
Proceeds from Issuance of Debt | $ 26,600,000 |
SUBSEQUENT EVENT (Details Narra
SUBSEQUENT EVENT (Details Narrative) - Subsequent Event [Member] | Mar. 02, 2022USD ($) |
Subsequent Event [Line Items] | |
Description of lease term | The new lease term commences March 1, 2022 and expires August 31, 2032. Our monthly base rent is approximately $38,000 in the first year |
Annual increases up | $ 50,000 |