Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 27, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | APYX MEDICAL CORP | ||
Entity Central Index Key | 0000719135 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Common Stock, Shares Outstanding | 34,174,314 | ||
Entity Public Float | $ 226.5 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 58,812 | $ 16,596 |
Short term investments | 0 | 61,678 |
Trade accounts receivable, net of allowance of $273 and $428 | 7,987 | 3,721 |
Other receivables | 1,233 | 1,359 |
Inventories, net of provision for obsolescence of $392 and $439 | 5,068 | 3,146 |
Prepaid expenses and other current assets | 3,633 | 3,335 |
Total current assets | 76,733 | 89,835 |
Property and equipment, net | 6,618 | 5,788 |
Operating lease right-of-use assets | 350 | |
Finance lease right-of-use assets | 653 | |
Other assets | 391 | 305 |
Total assets | 84,745 | 95,928 |
Current liabilities: | ||
Accounts payable | 2,438 | 1,423 |
Accrued taxes and other liabilities | 9,396 | 7,188 |
Current portion of operating lease liabilities | 108 | |
Current portion of finance lease liabilities | 229 | |
Related party note payable | 140 | 0 |
Total current liabilities | 12,311 | 8,611 |
Related party note payable | 0 | 140 |
Long-term operating lease liabilities | 235 | |
Long-term finance lease liabilities | 421 | |
Other liabilities | 519 | 0 |
Liabilities | 13,486 | 8,751 |
COMMITMENTS AND CONTINGENCIES (NOTE 18) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,312,527 issued and 34,169,952 outstanding as of December 31, 2019, and 33,847,100 issued and 33,704,525 outstanding as of December 31, 2018 | 34 | 34 |
Additional paid-in capital | 56,708 | 52,920 |
Retained earnings | 14,517 | 34,223 |
Total stockholders’ equity | 71,259 | 87,177 |
Total liabilities and stockholders’ equity | $ 84,745 | $ 95,928 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 273 | $ 428 |
Provision for obsolescence | $ 392 | $ 439 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 34,312,527 | 33,847,100 |
Common stock, shares outstanding (in shares) | 34,169,952 | 33,704,525 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | Aug. 30, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement [Abstract] | |||||||||||||||
Sales | $ 8,382 | $ 7,575 | $ 6,649 | $ 5,629 | $ 5,845 | $ 3,672 | $ 3,691 | $ 3,397 | $ 12,278 | $ 19,853 | $ 10,760 | $ 28,235 | $ 16,605 | $ 10,234 | |
Cost of sales | 2,281 | 1,975 | 2,066 | 1,151 | 4,041 | 6,322 | 3,490 | 9,141 | 5,779 | 3,276 | |||||
Gross profit | 5,563 | 5,294 | 4,674 | 3,563 | 3,556 | 2,521 | 2,537 | 2,212 | 8,237 | 13,531 | 7,270 | 19,094 | 10,826 | 6,958 | |
Other costs and expenses: | |||||||||||||||
Research and development | 1,016 | 730 | 613 | 1,618 | 2,634 | 1,890 | 3,731 | 2,549 | 1,941 | ||||||
Professional services | 2,039 | 1,661 | 2,118 | 628 | 3,779 | 5,818 | 1,815 | 8,507 | 3,133 | 1,769 | |||||
Salaries and related costs | 3,159 | 3,510 | 3,488 | 2,170 | 6,998 | 10,157 | 5,785 | 14,025 | 9,272 | 6,920 | |||||
Selling, general and administrative | 3,836 | 3,037 | 2,957 | 1,898 | 5,994 | 9,830 | 6,221 | 13,700 | 9,407 | 8,689 | |||||
Severance and related expense | 700 | 0 | 741 | 1,524 | |||||||||||
Total other costs and expenses | 9,293 | 5,309 | 15,711 | 39,963 | 25,102 | 20,843 | |||||||||
Loss from operations | (5,730) | (2,788) | (8,441) | (20,869) | (14,276) | (13,885) | |||||||||
Interest income | 423 | 1,392 | 616 | 0 | |||||||||||
Interest expense | (8) | (104) | (136) | ||||||||||||
Other losses, net | (295) | (868) | $ (495) | $ (265) | (868) | (351) | (947) | 0 | |||||||
Change in fair value of derivative liabilities | 20 | 0 | 20 | 183 | |||||||||||
Total other income, net | 128 | (763) | (815) | 1,033 | (415) | 47 | |||||||||
Loss from continuing operations before income taxes | (5,602) | (3,551) | (9,256) | (19,836) | (14,691) | (13,838) | |||||||||
Income tax benefit | 6 | (2,408) | (2,384) | (130) | (3,907) | (156) | |||||||||
Net loss from continuing operations | $ (5,433) | $ (4,370) | $ (4,295) | $ (5,608) | $ (3,912) | (1,143) | $ (2,938) | $ (2,791) | (6,872) | (19,706) | (10,784) | (13,682) | |||
Income from discontinued operations, net of tax | 540 | 5,062 | 0 | 5,099 | 8,620 | ||||||||||
Gain on sale of the Core Business, net of tax | $ 68,404 | 69,072 | 69,072 | 0 | 68,404 | 0 | |||||||||
Total income from discontinued operations, net of tax | 69,612 | 74,134 | 0 | 73,503 | 8,620 | ||||||||||
Net income (loss) | $ 68,469 | $ 67,262 | $ (19,706) | $ 62,719 | $ (5,062) | ||||||||||
Loss per share from continuing operations | |||||||||||||||
Basic and diluted (in dollars per share) | $ (0.03) | $ (0.21) | $ (0.58) | $ (0.32) | $ (0.44) | ||||||||||
Income per share from discontinued operations | |||||||||||||||
Basic (in dollars per share) | 2.09 | 2.25 | 0 | 2.21 | 0.27 | ||||||||||
Diluted (in dollars per share) | 1.99 | 2.19 | 0 | 2.14 | 0.27 | ||||||||||
Income (loss) per share from all operations | |||||||||||||||
Basic (in dollars per share) | 2.06 | 2.04 | (0.58) | 1.89 | (0.16) | ||||||||||
Diluted (in dollars per share) | $ 1.96 | $ 1.98 | $ (0.58) | $ 1.83 | $ (0.17) | ||||||||||
Weighted average number of shares outstanding basic (in shares) | 33,275 | 33,014 | 34,069 | 33,185 | 31,420 | ||||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,934 | 33,952 | 34,069 | 34,366 | 31,427 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Beginning balance (in shares) at Dec. 31, 2016 | 976,000 | 30,860,000 | |||
Beginning balance, amount at Dec. 31, 2016 | $ 26,223 | $ 1 | $ 31 | $ 49,625 | $ (23,434) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Conversion of Series B convertible preferred to common stock (in shares) | (976,000) | 1,951,000 | |||
Conversion of Series B convertible preferred to common stock | 0 | $ (1) | $ 2 | (1) | |
Stock based compensation | $ 871 | 871 | |||
Shares issued on net settlement of stock options (in shares) | 19,688 | 47,000 | |||
Shares issued on net settlement of warrants (in shares) | 20,000 | ||||
Net income (loss) | $ (5,062) | (5,062) | |||
Ending balance (in shares) at Dec. 31, 2017 | 0 | 32,878,000 | |||
Ending balance, amount at Dec. 31, 2017 | 22,032 | $ 0 | $ 33 | 50,495 | (28,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 67,262 | ||||
Ending balance, amount at Sep. 30, 2018 | 90,597 | ||||
Beginning balance (in shares) at Dec. 31, 2017 | 0 | 32,878,000 | |||
Beginning balance, amount at Dec. 31, 2017 | 22,032 | $ 0 | $ 33 | 50,495 | (28,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Options exercised for cash (in shares) | 88,000 | ||||
Options exercised for cash | 202 | 202 | |||
Stock based compensation | $ 2,224 | 2,224 | |||
Shares issued on net settlement of stock options (in shares) | 17,289 | 721,000 | |||
Shares issued on net settlement of stock options | $ 0 | $ 1 | (1) | ||
Shares issued on net settlement of warrants (in shares) | 18,000 | ||||
Net income (loss) | 62,719 | 62,719 | |||
Ending balance (in shares) at Dec. 31, 2018 | 0 | 33,705,000 | |||
Ending balance, amount at Dec. 31, 2018 | 87,177 | $ 0 | $ 34 | 52,920 | 34,223 |
Ending balance, amount at Mar. 31, 2019 | 82,831 | ||||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 33,705,000 | |||
Beginning balance, amount at Dec. 31, 2018 | 87,177 | $ 0 | $ 34 | 52,920 | 34,223 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Options exercised for cash (in shares) | 61,000 | ||||
Options exercised for cash | 207 | 207 | |||
Stock based compensation | 3,581 | 3,581 | |||
Shares issued on net settlement of stock options (in shares) | 223,000 | ||||
Vested restricted stock issued (in shares) | 181,000 | ||||
Net income (loss) | (19,706) | (19,706) | |||
Ending balance (in shares) at Dec. 31, 2019 | 0 | 34,170,000 | |||
Ending balance, amount at Dec. 31, 2019 | $ 71,259 | $ 0 | $ 34 | $ 56,708 | $ 14,517 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income (loss) | $ (19,706) | $ 62,719 | $ (5,062) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Gain on sale of the Core Business, net of tax | 0 | (68,404) | 0 |
Depreciation and amortization | 754 | 669 | 696 |
Provision for inventory obsolescence | 132 | 0 | 0 |
Provision for product warranties | 321 | 0 | 0 |
Loss on disposal of property and equipment | 89 | 0 | 5 |
Stock based compensation | 3,581 | 2,224 | 871 |
Change in fair value of derivative liabilities | 0 | (20) | (183) |
Realized and unrealized gains on short term investments | (164) | (247) | 0 |
Provision (benefit) for allowance for doubtful accounts | (163) | 224 | 179 |
Benefit of deferred taxes | 0 | (368) | (196) |
Changes in current assets and liabilities, net of effect of disposition: | |||
Receivables | (3,970) | (447) | (303) |
Prepaid expenses and other assets | (406) | (2,851) | (30) |
Inventories | (2,367) | 1,185 | (368) |
Accounts payable | 1,054 | (224) | (23) |
Accrued expenses and other liabilities | 2,370 | (15,341) | 710 |
Net cash used in operating activities | (18,475) | (20,881) | (3,704) |
Cash flows from investing activities | |||
Cash flows from investing activities | (1,301) | (363) | (624) |
Proceeds from the disposition of Core business | 0 | 91,095 | 0 |
Purchases of marketable securities | (18,884) | (87,189) | 0 |
Proceeds of marketable securities | 80,726 | 25,758 | 0 |
Net cash provided by (used in) investing activities | 60,541 | 29,301 | (624) |
Cash flows from financing activities | |||
Proceeds from stock option exercises | 207 | 202 | 0 |
Repayment of finance lease liabilities | (60) | 0 | 0 |
Repayment of mortgage note payable | 0 | (2,694) | (239) |
Net cash provided by (used in) financing activities | 147 | (2,492) | (239) |
Effect of exchange rates on cash | 3 | 0 | 0 |
Net change in cash, cash equivalents and restricted cash | 42,216 | 5,928 | (4,567) |
Cash, cash equivalents and restricted cash, beginning of period | 16,596 | 10,668 | 15,235 |
Cash, cash equivalents and restricted cash, end of period | 58,812 | 16,596 | 10,668 |
Cash paid for: | |||
Interest expense | 8 | 104 | 136 |
Income taxes | 325 | 13,283 | 32 |
Non cash operating activities: | |||
Transfer of other assets to fixed assets | 42 | 0 | 0 |
Transfer of inventory to fixed assets | 277 | 0 | 0 |
Non cash financing activities: | |||
Cashless exercise of stock options/warrants | $ 612 | $ 3,237 | $ 557 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Apyx Medical Corporation (“Company”, “Apyx Medical”, “we”, “us”, or “our”), formerly known as Bovie Medical Corporation, was incorporated in 1982, under the laws of the State of Delaware and has its principal executive office at 5115 Ulmerton Road, Clearwater, FL 33760. We are an advanced energy technology company with a passion for elevating people’s lives through innovative products in the cosmetic and surgical markets. Known for our innovative Helium Plasma Technology, Apyx is solely focused on bringing transformative solutions to the physicians and patients we serve. Our Helium Plasma Technology is marketed and sold as Renuvion® in the cosmetic surgery market and J-Plasma® in the hospital surgical market. Renuvion® offers plastic surgeons, fascial plastic surgeons and cosmetic physicians a unique ability to provide controlled heat to the tissue to achieve their desired results. The J-Plasma® system allows surgeons to operate with a high level of precision and virtually eliminating unintended tissue trauma. We also leverage our deep expertise and decades of experience in unique waveforms through original equipment manufacturing (OEM) agreements with other medical device manufacturers. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Apyx and its wholly owned subsidiary, Apyx Bulgaria, EOOD, (collectively, the “Company” or “we”, “our” or “us”). All intercompany transactions and balances have been eliminated in consolidation. On August 30 th , 2018, we sold our Core business and discontinued those operations. The Company concluded that the divestiture of the Core business on August 30 th , 2018 met the criteria for discontinued operations set forth in FASB ASC Topic No. 205, " Presentation of Financial Statements. " The Company reclassified its discontinued operations for all periods presented and has excluded the results of its discontinued operations from continuing operations and from segment results for all periods presented. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions we are required to make. Cash and Cash Equivalents Holdings of highly liquid investments with original maturities of three months or less from the date of purchase are considered to be cash equivalents. Short-term Investments Our short-term investments principally consisted of US Treasury Bills, which are classified available-for-sale and are carried at their fair value as of the balance sheet date. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. Short-term investments generally mature between three months and one year from the purchase date. Marketable securities less than or equal to three months are identified as cash equivalents while marketable securities with a maturity duration over three months are considered short term investments. Currently all of our US Treasury Bills have original maturities of three months or less and are included in cash and cash equivalents. The Treasury Bill investments accrue interest monthly, which is treated as interest income. Realized gains or losses are determined on the specific identification method and are reflected in other income. Net unrealized gains and losses are recorded on a quarterly basis in interest income. Fair Values of Financial Instruments and Concentration of Credit Risk The carrying amounts of our financial instruments included in current assets and liabilities approximate fair value due to their short term nature. Financial instruments, which potentially subject us to significant concentrations of credit risk, consists primarily of short term investments and trade accounts receivable. With respect to cash, we frequently maintain cash and cash equivalent balances in excess of federally insured limits. We have not experienced any losses in such accounts. Accounts Receivable and Allowance for Doubtful Accounts Our standard credit terms for our billings range from net 10 days to net 90 days , depending on the customer agreement. Accounts receivable are determined to be past due if payments are not made in accordance with such agreements and an allowance is generally recorded for accounts that become three months past due, or sooner if there are other indicators that the receivables may not be recovered. Customary collection efforts are initiated, and receivables are written off when we determine they are not collectible and abandon these collection efforts. We evaluate the allowance for doubtful accounts on a regular basis for adequacy based upon our periodic review of the collectability of the receivables in light of historical experience, adverse situations that may affect our customers’ ability to pay and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Management believes that the allowances for doubtful accounts of approximately $0.3 million and $0.4 million at December 31, 2019 and 2018 , respectively, are, or were, adequate to provide for possible bad debts. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours. We monitor usage reports to determine if the carrying value of any items should be adjusted due to lack of demand for the item and adjust the inventory for estimated obsolescence or unusable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the assets. The amortization of leasehold improvements is based on the shorter of the lease term or the life of the improvement. Betterments and major improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and routine improvements are expensed as incurred. The estimated useful lives are: machinery and equipment, 3 - 10 years ; buildings, 39 years ; molds, 7 - 15 years ; furniture and fixtures, 5 - 10 years ; and computer equipment and software, 3 - 5 years . Goodwill Goodwill of $0.2 million resulted from our acquisition of Apyx Bulgaria, EOOD and is included in other assets in the Company's consolidated balance sheets. Valuation of Long-Lived Assets We review long-lived assets for recoverability if events or changes in circumstances indicate that the assets may have been impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. In those cases an impairment loss is recognized to the extent that the assets’ carrying amount exceeds its fair value. Any impairment losses are not restored in the future if the fair value increases. At December 31, 2019 , we believe the remaining carrying values of our long-lived assets are recoverable. Product Warranties We provide a four years limited warranty on end-user sales of our Renuvion®/J-Plasma® generators, a two years warranty on mounting fixtures, and a one year warranty on some accessories. We estimate and provide for future costs for product warranties in cost of sales at the time revenue is recognized. We base product warranty costs on related material costs, repair labor costs and shipping costs. We estimate the future cost of product warranties by considering historical material, repair labor, and shipping costs, and applying the experience rates to the outstanding warranty period for products sold. It is reasonably possible that actual results could differ from those estimates. Revenue Recognition ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning with the first quarter of 2018, and we adopted the new accounting standard using the modified retrospective transition approach. The modified retrospective transition approach recognized any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. Management performed an evaluation to determine the effects of adopting ASC 606 and we determined that the adoption and the application of the transition requirements of the new standard presented no material impact on our consolidated financial statements, and no entry was recorded to opening retained earnings. We have disaggregated revenue by segment and geography in Note 20 Geographic and Segment Information. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that we expect to receive for those goods or services. To recognize revenue, we (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy the performance obligation(s). For sales of our Advanced Energy products (Renuvion®/J-Plasma®), this is at a point in time when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. For sales of products under our OEM agreements, the Company recognizes revenue over time when no alternative use exists for the manufactured goods and the Company has rights to payment. Presently, the Company does not stock any significant completed goods under our OEM agreements, accordingly, the recognition of revenue under these agreements approximates point in time recognition. The following policies apply to our major categories of revenue transactions: • The majority of our sales to customers are evidenced by firm purchase orders. Generally, title and the risks and rewards of ownership are transferred to the customer when the product is shipped. Payment by the customer is due under fixed payment terms. • Product returns are only accepted at our discretion and in accordance with our “Returned Goods Policy”. Historically, the level of product returns has not been significant. We accrue for sales returns, rebates and allowances as a reduction of revenue based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions. • Our terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are generally provided for sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data. • In connection with the execution of our OEM supply agreements, the Company may enter into an accompanying product development agreement. If the Company enters into a product development agreement, and development of the goods does not represent a performance obligation on a standalone basis, the Company defers the development fees billed to customers and the associated costs. Recognition of the revenues and cost of sales occurs as revenue is recognized on the accompanying supply agreement. At December 31, 2019, the Company had recorded approximately $0.4 million of contract liabilities and $0.1 million of contract assets related to the deferral of revenues and expenses under these agreements. Advertising Costs All advertising costs are expensed as incurred. The amounts of advertising costs, including trade shows, were approximately $1.5 million , $0.8 million and $1.1 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Stock-Based Compensation We account for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation . FASB ASC 718 requires recognizing compensation costs for all share-based payment awards made to employees, directors and non-employees based upon the awards’ grant date fair value. The Company currently accounts for forfeitures using the estimate method. The standard covers employee stock options, restricted stock and other equity awards. We currently utilize a Black-Scholes model and in prior years utilized a trinomial lattice option-pricing model to estimate the grant date fair value of stock option awards. For employee and director awards compensation cost is recognized on a straight-line basis over the awards’ vesting periods. For non-employee awards, compensation cost is recorded for non-forfeitable fully vested awards at the grant date. For other awards granted to non-employees, compensation cost is recognized as services are provided, which approximates a straight-line basis over the vesting period. Litigation Contingencies In accordance with authoritative guidance, we accrue a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded; actual results may differ from those estimates. Income (Loss) Per Share We compute basic (loss) earnings attributable to common shareholders per share by dividing net (loss) income attributable to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted (loss) earnings per share attributable to common shareholders gives effect to all potential dilutive shares outstanding during the period. The number of dilutive shares is calculated using the treasury stock method which reduces the effective number of shares by the amount of shares we could purchase with the proceeds of assumed exercises. Research and Development Costs Research and development expenses are charged to operations as incurred. We have expended approximately $3.7 million and $2.5 million and $1.9 million for the years ended 2019 , 2018 and 2017 respectively. Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, "Income Taxes". Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the basis difference. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income, the timing of reversals of temporary differences, and the availability of tax planning strategies. As of December 31, 2019 and 2018, the Company recorded a valuation allowance on the net deferred tax asset. The Company will reassess the realization of deferred tax assets each reporting period and will be able to reduce the valuation allowance to the extent the financial results of continuing operations improve and it becomes more likely than not that the deferred tax assets will be realizable. As Management expects the Company to continue to generate losses in the foreseeable future after 2019, the Company will continue to record a valuation allowance on the remaining deferred tax assets balance as of December 31, 2019. We assess the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. Foreign Currency Transactions The functional currency of Apyx Bulgaria is the U.S. dollar. The monetary assets and liabilities that are denominated in a currency other than U.S. dollar are remeasured into U.S. dollars at the exchange rate on the balance sheet date, while nonmonetary items are remeasured at historical rates. Revenue and expenses are remeasured at weighted average exchange rates during the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in selling, general and administrative expenses in the consolidated statements of operations and were not material for the years ended December 31, 2019, 2018 and 2017. Reclassifications We have reclassified certain amounts presented in prior years to conform to the current year presentation. These reclassifications had no impact on previously reported net income, retained earnings or operating cash flows for the periods presented. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Topic 842 establishes a new lease model, referred to as the right-of-use model that brings substantially all leases on the balance sheet. This standard requires lessees to recognize leased assets and lease liabilities on the balance sheet and disclose key information about the leasing arrangements in their financial statements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted Topic 842 effective January 1, 2019 using the modified retrospective transition approach that allows a reporting entity to use the effective date as its date of initial application and not restate the comparative periods in the period of adoption when transitioning to the new standard. Consequently, the requisite financial information and disclosures under the new standard are excluded for dates and periods prior to January 1, 2019. In addition, the Company elected to use a number of optional simplification and practical expedients permitted under the transition guidance within the new standard, including allowing the Company to combine fixed lease and non-lease components, apply the short-term lease exception to all leases of one year or less, and utilize the ‘package of practical expedients’, which permits the Company to not reassess prior accounting conclusions with respect to lease identification, lease classification and initial direct costs under Topic 842. Adoption of this new standard resulted in the recognition of approximately $212,000 of operating lease liabilities and right-of-user assets, which represents the present value of the remaining lease payments at the adoption date of approximately $221,000 , discounted using the Company’s incremental borrowing rate of 4.00% . Please see Note 9 for a full discussion of the impacts of adoption on the current year consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
RESTATEMENTS
RESTATEMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatements | RESTATEMENTS Throughout 2019, the Company has been making efforts to remediate its material weaknesses in internal control as of December 31, 2018, including investing in new personnel that have expertise in a broad array of accounting topics. As a result of these investments and remediation efforts, the Company reevaluated the accounting for a broad array of items and discovered numerous immaterial errors. On March 12, 2020, our Management and the Audit Committee of the Board of Directors, following discussion with our predecessor independent registered public accounting firm, concluded that the Company's previously filed financial statements for the twelve months ended December, 31 2018 and the quarterly statements for the three and nine months ended September 30, 2018 and three months ended March 31, 2019, were no longer able to be relied upon as the result of the aggregation of errors identified by Management and the Company’s new accounting personnel during 2019 related to the following: As identified during preparation of the fiscal year 2019 Form 10-K: • The Company reevaluated its subsidiary consolidation process and discovered an inaccuracy in its accounting for the elimination of markup on intercompany sales. This resulted in the Company incorrectly including the markup in US inventory purchased from Apyx Bulgaria and resulted in an overstatement of cost of sales and a corresponding understatement of other costs and expenses when the inventory was sold, which did not have any impact on net income (loss) or financial position. ◦ For the three months ended March 31, 2019, the total impact included increases to both gross profit and to operating expenses of approximately $113,000 . • During the first quarter of 2020, while reconciling the 2019 income tax provision back to the corresponding records, we determined that when employees exercised non-qualified stock options, we did not collect and remit the employee’s income and payroll taxes on the exercises and did not accrue and remit the employer portion of payroll taxes. Due to statutory requirements, we have joint and several liability on the amounts that we did not withhold from employees and remit to the proper taxing authorities. While further investigating the issue, we determined that during 2018 we did not report the correct amount of income to employees on their form W-2 for both non-qualified and incentive stock option exercises and misclassified some non-qualified stock option exercises as incentive stock option exercises. ◦ For the three and nine months ended September 30, 2018 and year ended December 31, 2018, the total aggregated impact included an increase of approximately $51,000 to operating expenses, an increase of approximately $713,000 to other losses and an increase to net loss of approximately $764,000 . ◦ For the three months ended March 31, 2019, the total aggregated impact included an increase to operating expenses of $16,000 , an increase of approximately $301,000 to other losses and an increase to net loss of approximately $317,000 . • Other minor items primarily related to the appropriate cutoff of transactions at the balance sheet date and the duplicate recording of a State income tax payment. ◦ For the three and nine months ended September 30, 2018, the total aggregated impact included an increase of approximately $59,000 to operating expenses, operating loss and net loss. ◦ For the year ended December 31, 2018, the total aggregated impact included a decrease to sales of $81,000 , an increase to gross profit of $33,000 , a decrease to operating income from continuing operations of $74,000 and a decrease to net loss from continuing operations of $56,000 . ◦ For the three months ended March 31, 2019, the total aggregated impact included a decrease to operating loss of $90,000 and an increase to net loss of $40,000 . As previously disclosed and adjusted in Form 10-Q for the three and nine months ended September 2019 filed on November 11, 2019: • The Company reevaluated its accounting for stock-based compensation expense and during the three months ended September 30, 2019, the Company discovered errors in its accounting for certain items included in stock-based compensation expense. These errors related to its accounting for forfeitures, the vesting periods over which the expense was recognized, modifications, fair value measurements, and other minor miscellaneous items, all of which relate to the prior year. Additionally, the Company identified an issue relating to grants in the first quarter of 2019, whereby compensation was not recognized over the correct vesting period. ◦ For the year ended December 31, 2018, the total impact included increases to operating expenses, operating loss and net loss of approximately $582,000 each. ◦ For the three months ended March 31, 2019, the total impact included increases to operating expenses, operating loss and net loss of approximately $453,000 each. • During the three months ended September 30, 2019, the Company reevaluated its accounting for pre-development activities on certain OEM contracts. In performing the review, the Company determined that the it has not completed its performance obligations on its pre-development activities in these contracts. Accordingly, the Company determined that it had prematurely recognized revenues during the first quarter relating to these activities and did not defer the accompanying costs. ◦ For the three months ended March 31, 2019, the total impact included decreases to sales of approximately $194,000 , decreases to operating expenses of approximately $77,000 and increases to both operating loss and net loss of approximately $117,000 . The Company has made all of the restatement adjustments as of and for the year ending December 31, 2018 in the accompanying consolidated financial statements presented here. The Company will file 10-Q/A's for the three and nine months ended September 30, 2018 and the three months ended March 31, 2019 as soon as practicable. A reconciliation of the originally reported amounts to the restated amounts for the adjustments noted above for each of the affected periods is presented below. Consolidated Balance Sheet as of September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 40,663 $ — $ 40,663 Short term investments 55,480 — 55,480 Trade accounts receivable, net 4,080 59 4,139 Inventories, net 6,037 — 6,037 Prepaid expenses and other current assets 627 — 627 Total current assets 106,887 59 106,946 Property and equipment, net 5,842 — 5,842 Other assets* 385 — 385 Total assets $ 113,114 $ 59 $ 113,173 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,348 $ — $ 2,348 Accrued expenses and other current liabilities 19,324 764 20,088 Total current liabilities 21,672 764 22,436 Related party note payable 140 — 140 Total liabilities 21,812 764 22,576 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,763,019 issued and 33,620,444 outstanding 33 — 33 Additional paid-in capital 51,798 — 51,798 Retained earnings 39,471 (705 ) 38,766 Total stockholders’ equity 91,302 (705 ) 90,597 Total liabilities and stockholders’ equity $ 113,114 $ 59 $ 113,173 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. Consolidated Statement of Operations for the three months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 3,672 $ — $ 3,672 Cost of sales 1,151 — 1,151 Gross profit 2,521 — 2,521 Other costs and expenses: Research and development 613 — 613 Professional services 628 — 628 Salaries and related costs 2,119 51 2,170 Selling, general and administrative 1,957 (59 ) 1,898 Total other costs and expenses 5,317 (8 ) 5,309 Loss from operations (2,796 ) 8 (2,788 ) Interest income (expense), net 105 — 105 Other losses (155 ) (713 ) (868 ) Total other losses, net (50 ) (713 ) (763 ) Loss from continuing operations before income taxes (2,846 ) (705 ) (3,551 ) Income tax benefit (2,408 ) — (2,408 ) Net loss from continuing operations (438 ) (705 ) (1,143 ) Income from discontinued operations, net of tax 540 — 540 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 69,612 — 69,612 Net income (loss) $ 69,174 $ (705 ) $ 68,469 Loss per share from continuing operations Basic and Diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) Income per share from discontinued operations Basic 2.09 — 2.09 Diluted 1.99 — 1.99 Income (loss) per share from all operations Basic 2.08 (0.02 ) 2.06 Diluted 1.98 (0.02 ) 1.96 Weighted average number of shares outstanding basic 33,275 33,275 33,275 Weighted average number of shares outstanding diluted 34,934 34,934 34,934 Consolidated Statement of Operations for the nine months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 10,760 $ — $ 10,760 Cost of sales 3,490 — 3,490 Gross profit 7,270 — 7,270 Other costs and expenses: Research and development 1,890 — 1,890 Professional services 1,815 — 1,815 Salaries and related costs 5,734 51 5,785 Selling, general and administrative 6,280 (59 ) 6,221 Total other costs and expenses 15,719 (8 ) 15,711 Loss from operations (8,449 ) 8 (8,441 ) Interest income (expense), net 33 — 33 Other losses (155 ) (713 ) (868 ) Change in fair value of derivative liabilities 20 — 20 Total other losses, net (102 ) (713 ) (815 ) Loss from continuing operations before income taxes (8,551 ) (705 ) (9,256 ) Income tax benefit (2,384 ) — (2,384 ) Net loss from continuing operations (6,167 ) (705 ) (6,872 ) Income from discontinued operations, net of tax 5,062 — 5,062 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 74,134 — 74,134 Net income (loss) $ 67,967 $ (705 ) $ 67,262 Loss per share from continuing operations Basic and Diluted $ (0.19 ) $ (0.02 ) $ (0.21 ) Income per share from discontinued operations Basic 2.25 — 2.25 Diluted 2.19 — 2.19 Income (loss) per share from all operations Basic 2.06 (0.02 ) 2.04 Diluted 2.00 (0.02 ) 1.98 Weighted average number of shares outstanding basic 33,014 33,014 33,014 Weighted average number of shares outstanding diluted 33,952 33,952 33,952 Consolidated Balance Sheet as of December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 16,466 $ 130 $ 16,596 Short term investments 61,678 — 61,678 Trade accounts receivable, net** 3,656 65 3,721 Other receivables** 1,359 — 1,359 Inventories, net** 3,061 85 3,146 Prepaid expenses and other current assets** 3,297 38 3,335 Total current assets 89,517 318 89,835 Property and equipment, net 5,788 — 5,788 Other assets* 305 — 305 Total assets $ 95,610 $ 318 $ 95,928 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,423 $ — $ 1,423 Accrued expenses and other current liabilities* 6,279 909 7,188 Total current liabilities 7,702 909 8,611 Related party note payable 140 — 140 Total liabilities 7,842 909 8,751 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,847,100 issued and 33,704,525 outstanding 34 — 34 Additional paid-in capital 52,221 699 52,920 Retained earnings 35,513 (1,290 ) 34,223 Total stockholders’ equity 87,768 (591 ) 87,177 Total liabilities and stockholders’ equity $ 95,610 $ 318 $ 95,928 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the year ended December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 16,686 $ (81 ) $ 16,605 Cost of sales 5,893 (114 ) 5,779 Gross profit 10,793 33 10,826 Other costs and expenses: Research and development 2,469 80 2,549 Professional services 3,072 61 3,133 Salaries and related costs 8,673 599 9,272 Selling, general and administrative 9,438 (31 ) 9,407 Severance and related expense 741 — 741 Total other costs and expenses 24,393 709 25,102 Loss from operations (13,600 ) (676 ) (14,276 ) Interest income 616 — 616 Interest expense (104 ) — (104 ) Other losses (203 ) (744 ) (947 ) Change in fair value of derivative liabilities 20 — 20 Total other income (losses), net 329 (744 ) (415 ) Loss from continuing operations before income taxes (13,271 ) (1,420 ) (14,691 ) Income tax benefit (3,777 ) (130 ) (3,907 ) Net loss from continuing operations (9,494 ) (1,290 ) (10,784 ) Income from discontinued operations, net of tax 5,099 — 5,099 Gain on sale of the Core Business, net of tax 68,404 — 68,404 Total income from discontinued operations, net of tax 73,503 — 73,503 Net income (loss) $ 64,009 $ (1,290 ) $ 62,719 Loss per share from continuing operations Basic and Diluted $ (0.29 ) $ (0.04 ) $ (0.32 ) Income per share from discontinued operations Basic 2.21 — 2.21 Diluted 2.14 — 2.14 Income (loss) per share from all operations Basic 1.93 (0.04 ) 1.89 Diluted 1.86 (0.04 ) 1.83 Weighted average number of shares outstanding basic 33,185 33,185 33,185 Weighted average number of shares outstanding diluted 34,366 34,366 34,366 Consolidated Balance Sheet as of March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 32,415 $ — $ 32,415 Short term investments 40,885 — 40,885 Trade accounts receivable, net** 4,006 38 4,044 Other receivables** 925 — 925 Inventories, net** 3,013 — 3,013 Prepaid expenses and other current assets** 3,996 38 4,034 Total current assets 85,240 76 85,316 Property and equipment, net** 6,015 — 6,015 Operating lease right-of-use assets** 178 — 178 Other assets* 270 77 347 Total assets $ 91,703 $ 153 $ 91,856 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,504 $ — $ 1,504 Accrued expenses and other current liabilities* 5,868 1,141 7,009 Current portion of operating lease liabilities** 103 — 103 Total current liabilities 7,475 1,141 8,616 Related party note payable 140 — 140 Long-term portion of operating lease liabilities 75 — 75 Other long-term liabilities — 194 194 Total liabilities 7,690 1,335 9,025 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 34,033,255 issued and 33,891,255 outstanding 34 — 34 Additional paid-in capital 53,147 1,035 54,182 Retained earnings 30,832 (2,217 ) 28,615 Total stockholders’ equity 84,013 (1,182 ) 82,831 Total liabilities and stockholders’ equity $ 91,703 $ 153 $ 91,856 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the three months ended March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated Sales $ 5,823 $ (194 ) $ 5,629 Cost of sales 2,103 (37 ) 2,066 Gross profit 3,720 (157 ) 3,563 Other costs and expenses: Research and development 810 (80 ) 730 Professional services 1,791 327 2,118 Salaries and related costs 3,221 267 3,488 Selling, general and administrative 3,101 (144 ) 2,957 Total other costs and expenses 8,923 370 9,293 Loss from operations (5,203 ) (527 ) (5,730 ) Interest income 423 — 423 Other losses (25 ) (270 ) (295 ) Total other losses, net 398 (270 ) 128 Loss from continuing operations before income taxes (4,805 ) (797 ) (5,602 ) Income tax (benefit) expense (124 ) 130 6 Net loss $ (4,681 ) $ (927 ) $ (5,608 ) Loss per share Basic and Diluted $ (0.14 ) $ (0.03 ) $ (0.17 ) Weighted average number of shares outstanding basic and diluted 33,343 33,343 33,343 REVISIONS As a part of the efforts discussed in Note 4, the Company discovered additional errors in the consolidated financial statements for the three and six months ended June 30, 2019 and the three and nine months ended September 30, 2019. The Company has determined that the aggregated effects of correcting these errors are immaterial to the financial statements for the three and six month periods ending June 30, 2019 and the three and nine months ended September 30, 2019 but would materially misstate the three month period ended December 31, 2019 if recorded then, and has accordingly corrected the errors by revising the previously reported amounts for the three and six month periods ended June 30, 2019 and the three and nine month period ended September 30, 2019 in the following tables. The revised amounts below will be disclosed in the next filing discussing the periods that were subject to the revision. A summary of the revisions as of each reporting period affected is as follows: For the three months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 6,568 $ 81 $ 6,649 [3] Cost of sales 2,096 (121 ) 1,975 [2],[3] Professional services 1,633 28 1,661 [2] Salaries and related costs 3,333 177 3,510 [2] Selling, general and administrative 3,083 (46 ) 3,037 [2] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [2],[3] Gross profit 4,472 202 4,674 [2] Gross profit % 68.1 % 2.2 % 70.3 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the six months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 12,197 $ 81 $ 12,278 [3] Cost of sales 4,199 (158 ) 4,041 [2],[3] Research and development 1,698 (80 ) 1,618 [2],[3] Professional services 3,760 19 3,779 [2],[3] Salaries and related costs 6,671 327 6,998 [1],[2] Selling, general and administrative 6,107 (113 ) 5,994 [2],[3] Other income (losses), net (225 ) (270 ) (495 ) [1],[3] Loss per share - all $ (0.29 ) $ (0.01 ) $ (0.30 ) [1],[3] Gross profit 7,998 239 8,237 [2],[3] Gross profit % 65.6 % 1.5 % 67.1 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the three months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Cost of sales $ 2,558 $ (277 ) $ 2,281 [2] Research and development 936 80 1,016 [2] Professional services 1,996 43 2,039 [2] Salaries and related costs 3,020 139 3,159 [2] Selling, general and administrative 3,762 74 3,836 [2],[3] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [3] Gross profit 5,017 277 5,294 [2] Gross profit % 66.2 % 3.7 % 69.9 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the nine months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Sales $ 19,772 $ 81 $ 19,853 [3] Cost of sales 6,757 (435 ) 6,322 [2],[3] Research and development 2,634 — 2,634 [2],[3] Professional services 5,756 62 5,818 [2],[3] Salaries and related costs 9,691 466 10,157 [1],[2] Selling, general and administrative 9,869 (39 ) 9,830 [2],[3] Other income (losses), net 5 (270 ) (265 ) [1],[3] Loss per share - all $ (0.41 ) $ (0.01 ) $ (0.42 ) [1], [3] Gross profit 13,015 516 13,531 [2],[3] Gross profit % 65.8 % 2.4 % 68.2 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff |
REVISIONS
REVISIONS | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Revisions | RESTATEMENTS Throughout 2019, the Company has been making efforts to remediate its material weaknesses in internal control as of December 31, 2018, including investing in new personnel that have expertise in a broad array of accounting topics. As a result of these investments and remediation efforts, the Company reevaluated the accounting for a broad array of items and discovered numerous immaterial errors. On March 12, 2020, our Management and the Audit Committee of the Board of Directors, following discussion with our predecessor independent registered public accounting firm, concluded that the Company's previously filed financial statements for the twelve months ended December, 31 2018 and the quarterly statements for the three and nine months ended September 30, 2018 and three months ended March 31, 2019, were no longer able to be relied upon as the result of the aggregation of errors identified by Management and the Company’s new accounting personnel during 2019 related to the following: As identified during preparation of the fiscal year 2019 Form 10-K: • The Company reevaluated its subsidiary consolidation process and discovered an inaccuracy in its accounting for the elimination of markup on intercompany sales. This resulted in the Company incorrectly including the markup in US inventory purchased from Apyx Bulgaria and resulted in an overstatement of cost of sales and a corresponding understatement of other costs and expenses when the inventory was sold, which did not have any impact on net income (loss) or financial position. ◦ For the three months ended March 31, 2019, the total impact included increases to both gross profit and to operating expenses of approximately $113,000 . • During the first quarter of 2020, while reconciling the 2019 income tax provision back to the corresponding records, we determined that when employees exercised non-qualified stock options, we did not collect and remit the employee’s income and payroll taxes on the exercises and did not accrue and remit the employer portion of payroll taxes. Due to statutory requirements, we have joint and several liability on the amounts that we did not withhold from employees and remit to the proper taxing authorities. While further investigating the issue, we determined that during 2018 we did not report the correct amount of income to employees on their form W-2 for both non-qualified and incentive stock option exercises and misclassified some non-qualified stock option exercises as incentive stock option exercises. ◦ For the three and nine months ended September 30, 2018 and year ended December 31, 2018, the total aggregated impact included an increase of approximately $51,000 to operating expenses, an increase of approximately $713,000 to other losses and an increase to net loss of approximately $764,000 . ◦ For the three months ended March 31, 2019, the total aggregated impact included an increase to operating expenses of $16,000 , an increase of approximately $301,000 to other losses and an increase to net loss of approximately $317,000 . • Other minor items primarily related to the appropriate cutoff of transactions at the balance sheet date and the duplicate recording of a State income tax payment. ◦ For the three and nine months ended September 30, 2018, the total aggregated impact included an increase of approximately $59,000 to operating expenses, operating loss and net loss. ◦ For the year ended December 31, 2018, the total aggregated impact included a decrease to sales of $81,000 , an increase to gross profit of $33,000 , a decrease to operating income from continuing operations of $74,000 and a decrease to net loss from continuing operations of $56,000 . ◦ For the three months ended March 31, 2019, the total aggregated impact included a decrease to operating loss of $90,000 and an increase to net loss of $40,000 . As previously disclosed and adjusted in Form 10-Q for the three and nine months ended September 2019 filed on November 11, 2019: • The Company reevaluated its accounting for stock-based compensation expense and during the three months ended September 30, 2019, the Company discovered errors in its accounting for certain items included in stock-based compensation expense. These errors related to its accounting for forfeitures, the vesting periods over which the expense was recognized, modifications, fair value measurements, and other minor miscellaneous items, all of which relate to the prior year. Additionally, the Company identified an issue relating to grants in the first quarter of 2019, whereby compensation was not recognized over the correct vesting period. ◦ For the year ended December 31, 2018, the total impact included increases to operating expenses, operating loss and net loss of approximately $582,000 each. ◦ For the three months ended March 31, 2019, the total impact included increases to operating expenses, operating loss and net loss of approximately $453,000 each. • During the three months ended September 30, 2019, the Company reevaluated its accounting for pre-development activities on certain OEM contracts. In performing the review, the Company determined that the it has not completed its performance obligations on its pre-development activities in these contracts. Accordingly, the Company determined that it had prematurely recognized revenues during the first quarter relating to these activities and did not defer the accompanying costs. ◦ For the three months ended March 31, 2019, the total impact included decreases to sales of approximately $194,000 , decreases to operating expenses of approximately $77,000 and increases to both operating loss and net loss of approximately $117,000 . The Company has made all of the restatement adjustments as of and for the year ending December 31, 2018 in the accompanying consolidated financial statements presented here. The Company will file 10-Q/A's for the three and nine months ended September 30, 2018 and the three months ended March 31, 2019 as soon as practicable. A reconciliation of the originally reported amounts to the restated amounts for the adjustments noted above for each of the affected periods is presented below. Consolidated Balance Sheet as of September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 40,663 $ — $ 40,663 Short term investments 55,480 — 55,480 Trade accounts receivable, net 4,080 59 4,139 Inventories, net 6,037 — 6,037 Prepaid expenses and other current assets 627 — 627 Total current assets 106,887 59 106,946 Property and equipment, net 5,842 — 5,842 Other assets* 385 — 385 Total assets $ 113,114 $ 59 $ 113,173 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,348 $ — $ 2,348 Accrued expenses and other current liabilities 19,324 764 20,088 Total current liabilities 21,672 764 22,436 Related party note payable 140 — 140 Total liabilities 21,812 764 22,576 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,763,019 issued and 33,620,444 outstanding 33 — 33 Additional paid-in capital 51,798 — 51,798 Retained earnings 39,471 (705 ) 38,766 Total stockholders’ equity 91,302 (705 ) 90,597 Total liabilities and stockholders’ equity $ 113,114 $ 59 $ 113,173 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. Consolidated Statement of Operations for the three months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 3,672 $ — $ 3,672 Cost of sales 1,151 — 1,151 Gross profit 2,521 — 2,521 Other costs and expenses: Research and development 613 — 613 Professional services 628 — 628 Salaries and related costs 2,119 51 2,170 Selling, general and administrative 1,957 (59 ) 1,898 Total other costs and expenses 5,317 (8 ) 5,309 Loss from operations (2,796 ) 8 (2,788 ) Interest income (expense), net 105 — 105 Other losses (155 ) (713 ) (868 ) Total other losses, net (50 ) (713 ) (763 ) Loss from continuing operations before income taxes (2,846 ) (705 ) (3,551 ) Income tax benefit (2,408 ) — (2,408 ) Net loss from continuing operations (438 ) (705 ) (1,143 ) Income from discontinued operations, net of tax 540 — 540 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 69,612 — 69,612 Net income (loss) $ 69,174 $ (705 ) $ 68,469 Loss per share from continuing operations Basic and Diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) Income per share from discontinued operations Basic 2.09 — 2.09 Diluted 1.99 — 1.99 Income (loss) per share from all operations Basic 2.08 (0.02 ) 2.06 Diluted 1.98 (0.02 ) 1.96 Weighted average number of shares outstanding basic 33,275 33,275 33,275 Weighted average number of shares outstanding diluted 34,934 34,934 34,934 Consolidated Statement of Operations for the nine months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 10,760 $ — $ 10,760 Cost of sales 3,490 — 3,490 Gross profit 7,270 — 7,270 Other costs and expenses: Research and development 1,890 — 1,890 Professional services 1,815 — 1,815 Salaries and related costs 5,734 51 5,785 Selling, general and administrative 6,280 (59 ) 6,221 Total other costs and expenses 15,719 (8 ) 15,711 Loss from operations (8,449 ) 8 (8,441 ) Interest income (expense), net 33 — 33 Other losses (155 ) (713 ) (868 ) Change in fair value of derivative liabilities 20 — 20 Total other losses, net (102 ) (713 ) (815 ) Loss from continuing operations before income taxes (8,551 ) (705 ) (9,256 ) Income tax benefit (2,384 ) — (2,384 ) Net loss from continuing operations (6,167 ) (705 ) (6,872 ) Income from discontinued operations, net of tax 5,062 — 5,062 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 74,134 — 74,134 Net income (loss) $ 67,967 $ (705 ) $ 67,262 Loss per share from continuing operations Basic and Diluted $ (0.19 ) $ (0.02 ) $ (0.21 ) Income per share from discontinued operations Basic 2.25 — 2.25 Diluted 2.19 — 2.19 Income (loss) per share from all operations Basic 2.06 (0.02 ) 2.04 Diluted 2.00 (0.02 ) 1.98 Weighted average number of shares outstanding basic 33,014 33,014 33,014 Weighted average number of shares outstanding diluted 33,952 33,952 33,952 Consolidated Balance Sheet as of December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 16,466 $ 130 $ 16,596 Short term investments 61,678 — 61,678 Trade accounts receivable, net** 3,656 65 3,721 Other receivables** 1,359 — 1,359 Inventories, net** 3,061 85 3,146 Prepaid expenses and other current assets** 3,297 38 3,335 Total current assets 89,517 318 89,835 Property and equipment, net 5,788 — 5,788 Other assets* 305 — 305 Total assets $ 95,610 $ 318 $ 95,928 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,423 $ — $ 1,423 Accrued expenses and other current liabilities* 6,279 909 7,188 Total current liabilities 7,702 909 8,611 Related party note payable 140 — 140 Total liabilities 7,842 909 8,751 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,847,100 issued and 33,704,525 outstanding 34 — 34 Additional paid-in capital 52,221 699 52,920 Retained earnings 35,513 (1,290 ) 34,223 Total stockholders’ equity 87,768 (591 ) 87,177 Total liabilities and stockholders’ equity $ 95,610 $ 318 $ 95,928 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the year ended December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 16,686 $ (81 ) $ 16,605 Cost of sales 5,893 (114 ) 5,779 Gross profit 10,793 33 10,826 Other costs and expenses: Research and development 2,469 80 2,549 Professional services 3,072 61 3,133 Salaries and related costs 8,673 599 9,272 Selling, general and administrative 9,438 (31 ) 9,407 Severance and related expense 741 — 741 Total other costs and expenses 24,393 709 25,102 Loss from operations (13,600 ) (676 ) (14,276 ) Interest income 616 — 616 Interest expense (104 ) — (104 ) Other losses (203 ) (744 ) (947 ) Change in fair value of derivative liabilities 20 — 20 Total other income (losses), net 329 (744 ) (415 ) Loss from continuing operations before income taxes (13,271 ) (1,420 ) (14,691 ) Income tax benefit (3,777 ) (130 ) (3,907 ) Net loss from continuing operations (9,494 ) (1,290 ) (10,784 ) Income from discontinued operations, net of tax 5,099 — 5,099 Gain on sale of the Core Business, net of tax 68,404 — 68,404 Total income from discontinued operations, net of tax 73,503 — 73,503 Net income (loss) $ 64,009 $ (1,290 ) $ 62,719 Loss per share from continuing operations Basic and Diluted $ (0.29 ) $ (0.04 ) $ (0.32 ) Income per share from discontinued operations Basic 2.21 — 2.21 Diluted 2.14 — 2.14 Income (loss) per share from all operations Basic 1.93 (0.04 ) 1.89 Diluted 1.86 (0.04 ) 1.83 Weighted average number of shares outstanding basic 33,185 33,185 33,185 Weighted average number of shares outstanding diluted 34,366 34,366 34,366 Consolidated Balance Sheet as of March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 32,415 $ — $ 32,415 Short term investments 40,885 — 40,885 Trade accounts receivable, net** 4,006 38 4,044 Other receivables** 925 — 925 Inventories, net** 3,013 — 3,013 Prepaid expenses and other current assets** 3,996 38 4,034 Total current assets 85,240 76 85,316 Property and equipment, net** 6,015 — 6,015 Operating lease right-of-use assets** 178 — 178 Other assets* 270 77 347 Total assets $ 91,703 $ 153 $ 91,856 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,504 $ — $ 1,504 Accrued expenses and other current liabilities* 5,868 1,141 7,009 Current portion of operating lease liabilities** 103 — 103 Total current liabilities 7,475 1,141 8,616 Related party note payable 140 — 140 Long-term portion of operating lease liabilities 75 — 75 Other long-term liabilities — 194 194 Total liabilities 7,690 1,335 9,025 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 34,033,255 issued and 33,891,255 outstanding 34 — 34 Additional paid-in capital 53,147 1,035 54,182 Retained earnings 30,832 (2,217 ) 28,615 Total stockholders’ equity 84,013 (1,182 ) 82,831 Total liabilities and stockholders’ equity $ 91,703 $ 153 $ 91,856 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the three months ended March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated Sales $ 5,823 $ (194 ) $ 5,629 Cost of sales 2,103 (37 ) 2,066 Gross profit 3,720 (157 ) 3,563 Other costs and expenses: Research and development 810 (80 ) 730 Professional services 1,791 327 2,118 Salaries and related costs 3,221 267 3,488 Selling, general and administrative 3,101 (144 ) 2,957 Total other costs and expenses 8,923 370 9,293 Loss from operations (5,203 ) (527 ) (5,730 ) Interest income 423 — 423 Other losses (25 ) (270 ) (295 ) Total other losses, net 398 (270 ) 128 Loss from continuing operations before income taxes (4,805 ) (797 ) (5,602 ) Income tax (benefit) expense (124 ) 130 6 Net loss $ (4,681 ) $ (927 ) $ (5,608 ) Loss per share Basic and Diluted $ (0.14 ) $ (0.03 ) $ (0.17 ) Weighted average number of shares outstanding basic and diluted 33,343 33,343 33,343 REVISIONS As a part of the efforts discussed in Note 4, the Company discovered additional errors in the consolidated financial statements for the three and six months ended June 30, 2019 and the three and nine months ended September 30, 2019. The Company has determined that the aggregated effects of correcting these errors are immaterial to the financial statements for the three and six month periods ending June 30, 2019 and the three and nine months ended September 30, 2019 but would materially misstate the three month period ended December 31, 2019 if recorded then, and has accordingly corrected the errors by revising the previously reported amounts for the three and six month periods ended June 30, 2019 and the three and nine month period ended September 30, 2019 in the following tables. The revised amounts below will be disclosed in the next filing discussing the periods that were subject to the revision. A summary of the revisions as of each reporting period affected is as follows: For the three months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 6,568 $ 81 $ 6,649 [3] Cost of sales 2,096 (121 ) 1,975 [2],[3] Professional services 1,633 28 1,661 [2] Salaries and related costs 3,333 177 3,510 [2] Selling, general and administrative 3,083 (46 ) 3,037 [2] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [2],[3] Gross profit 4,472 202 4,674 [2] Gross profit % 68.1 % 2.2 % 70.3 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the six months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 12,197 $ 81 $ 12,278 [3] Cost of sales 4,199 (158 ) 4,041 [2],[3] Research and development 1,698 (80 ) 1,618 [2],[3] Professional services 3,760 19 3,779 [2],[3] Salaries and related costs 6,671 327 6,998 [1],[2] Selling, general and administrative 6,107 (113 ) 5,994 [2],[3] Other income (losses), net (225 ) (270 ) (495 ) [1],[3] Loss per share - all $ (0.29 ) $ (0.01 ) $ (0.30 ) [1],[3] Gross profit 7,998 239 8,237 [2],[3] Gross profit % 65.6 % 1.5 % 67.1 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the three months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Cost of sales $ 2,558 $ (277 ) $ 2,281 [2] Research and development 936 80 1,016 [2] Professional services 1,996 43 2,039 [2] Salaries and related costs 3,020 139 3,159 [2] Selling, general and administrative 3,762 74 3,836 [2],[3] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [3] Gross profit 5,017 277 5,294 [2] Gross profit % 66.2 % 3.7 % 69.9 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the nine months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Sales $ 19,772 $ 81 $ 19,853 [3] Cost of sales 6,757 (435 ) 6,322 [2],[3] Research and development 2,634 — 2,634 [2],[3] Professional services 5,756 62 5,818 [2],[3] Salaries and related costs 9,691 466 10,157 [1],[2] Selling, general and administrative 9,869 (39 ) 9,830 [2],[3] Other income (losses), net 5 (270 ) (265 ) [1],[3] Loss per share - all $ (0.41 ) $ (0.01 ) $ (0.42 ) [1], [3] Gross profit 13,015 516 13,531 [2],[3] Gross profit % 65.8 % 2.4 % 68.2 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff |
DISPOSITION OF THE CORE BUSINES
DISPOSITION OF THE CORE BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION OF THE CORE BUSINESS | DISPOSITION OF THE CORE BUSINESS On August 30, 2018, we closed on a definitive asset purchase agreement (the "Asset Purchase Agreement") with Specialty Surgical Instrumentation Inc., a Tennessee Corporation and wholly-owned subsidiary of Symmetry Surgical Inc. (“Symmetry”), pursuant to which the Company divested and sold the Company's electrosurgical "Core" business segment and related intellectual property, including the Bovie ® brand and trademarks, to Symmetry for gross proceeds of $97 million in cash. In connection with the Asset Purchase Agreement, we entered into an Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement with Symmetry for a four -year term, whereby we will manufacture certain Core products and sell them to Symmetry at agreed upon prices. Any revenue, costs and expenses resulting from this agreement are netted and reported in our Consolidated Statements of Operations as other gains or (losses) in the amount of $0.1 million and $(0.2) million for 2019 and 2018, respectively. Core activity in 2019 amounted to $9.4 million with cost of sales of $8.8 million and related operating expenses of $0.5 million . Core activity in 2018 following the divestiture amounted to $1.5 million with cost of sales of $1.5 million and related operating expenses of $0.2 million . Additionally, in connection with the Asset Purchase Agreement, we entered into a Manufacture and Supply Agreement with Symmetry for a ten -year term, whereby we will manufacture certain products and sell them to Symmetry at agreed upon prices. Revenue, costs and expenses resulting from this agreement are reported as a component in our Consolidated Statements as income or loss from operations of our OEM reporting segment. We concluded that the divestiture of the Core business met the criteria for discontinued operations set forth in FASB ASC Topic No. 205, " Presentation of Financial Statements" . Gross sales of the Core business prior to the divestiture during 2018 amounted to $19.6 million with a cost of sales of $10.5 million and related operating expenses of $2.8 million . The table below summarizes the cash consideration and the carrying values of disposed assets at the disposition date of August 30, 2018 included as part of discontinued operations: (In thousands) Gross consideration from the sale of the Core Business $ 97,000 Closing and transaction costs 5,905 Net proceeds from sale of the Core Business before taxes $ 91,095 Non-cash commitment to provide inventory $ 2,305 Book value of the Core Business Current assets: Inventories, net $ 2,195 Prepaid expenses and other current assets 57 Total current assets 2,252 Property and equipment, net of depreciation 375 Brand name and trademark 1,510 Purchased technology and license rights, net of depreciation 112 Total non-current assets 1,997 Total assets $ 4,249 Net gain on sale of the Core Business before taxes 84,541 Income tax expense 16,137 Net gain on sale of the Core Business after income taxes $ 68,404 Cash flows associated with discontinued operations are shown in the table below: (in thousands) 2019 2018 2017 Net Income from discontinued operations — 73,503 8,620 Depreciation and amortization — 126 529 Change in current assets from discontinued operations — (2,378 ) 362 Change in non current assets from discontinued liabilities — (1,997 ) (632 ) Change in current liabilities from discontinued operations — (1,021 ) (1,451 ) Net cash provided by operating activities — 68,233 7,428 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: (In thousands) December 31, December 31, 2018 as Restated Raw materials $ 2,935 $ 2,594 Work in process 1,209 406 Finished goods 1,316 585 Gross inventories 5,460 3,585 Less: provision for obsolescence (392 ) (439 ) Inventories, net $ 5,068 $ 3,146 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following: (In thousands) December 31, December 31, Land $ 1,600 $ 1,600 Building and improvements 4,423 4,338 Machinery and equipment 2,187 2,881 Furniture and fixtures 292 461 Computer equipment and software 1,409 1,741 Leasehold improvements 156 108 Molds 805 1,017 Total property, plant and equipment 10,872 12,146 Less: accumulated depreciation and amortization (4,403 ) (6,358 ) Property and equipment in service 6,469 5,788 Construction in process 149 — Property and equipment, net $ 6,618 $ 5,788 Total depreciation expense from continuing operations was $0.7 million , $0.4 million and $0.6 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Depreciation expense is included primarily within cost of goods sold in the consolidated statements of operations. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company does not recognize leases with terms less than twelve months in duration in our consolidated balance sheet as right-of-use assets and lease liabilities. Leases with an initial term of 12 months or less or that have variable only payments are not recorded on the balance sheet. The Company has adopted the practical expedient which allows for the Company to not separate lease and non-lease components of contracts. Accordingly, non-lease components are included in the measurement of the Company's leases and right-of-use assets. If the Company is aware of the implicit rate in leases, the Company determines the operating lease liability using the implicit rate. For those leases where the Company is not aware of the implicit rate in the lease, the Company utilizes an incremental borrowing rate of 4.00% , which is indicative of our collateralized borrowing rate. Operating Leases The Company leases its facility in Sofia, Bulgaria and vehicles in Clearwater, Florida under non-cancelable operating lease agreements. The Company's lease on the Bulgaria facility includes rent escalation over the term of the lease. Rent expense on the lease is accounted for on a straight-line basis over the lease term. During 2019, the Bulgaria facility lease was extended for an additional 2 years . In accordance with operating lease guidance under Topic 842, the extension was accounted for as a lease modification and the right-of-use asset and lease liability were remeasured at the modification date. The Company's operating leases have terms expiring through December 2022. Finance Leases During 2019, the Company entered into non-cancelable finance leases for certain computer equipment and a vehicle in Clearwater, Florida. The Company's finance leases have terms expiring through August 2023. Information about the Company’s lease costs are as follows: Year Ended December 31, 2019 Lease costs (in thousands) : Operating lease costs $ 115 Finance lease costs: Amortization of right-of-use assets 57 Interest on lease liabilities 8 Variable lease costs 16 Total lease costs $ 196 Cash and non cash information related to our leases are as follows: Year Ended December 31, 2019 (in thousands) Operating Finance Non cash information: Right-of-use assets capitalized and lease liabilities recognized upon adoption of Topic 842 $ 212 $ — Right-of-use assets capitalized and lease liabilities recognized upon lease remeasurement $ 207 $ — Right-of-use assets capitalized and lease liabilities recognized upon execution of lease $ 28 $ 710 Cash information: Cash paid for lease liabilities $ 106 $ 68 Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: Year Ended December 31, 2019 Operating Finance Weighted average remaining lease term (in years) 3.0 2.7 Weighted average discount rate 4.04% 4.00% Maturities of lease liabilities as of December 31, 2019 are as follows: (In thousands) Operating Finance 2020 $ 120 $ 251 2021 124 236 2022 121 183 2023 — 18 Total lease payments 365 688 Less imputed interest (22 ) (38 ) Present value of lease liabilities 343 650 Less current portion of lease liabilities (108 ) (229 ) Long-term portion of lease liabilities $ 235 $ 421 |
LEASES | LEASES The Company does not recognize leases with terms less than twelve months in duration in our consolidated balance sheet as right-of-use assets and lease liabilities. Leases with an initial term of 12 months or less or that have variable only payments are not recorded on the balance sheet. The Company has adopted the practical expedient which allows for the Company to not separate lease and non-lease components of contracts. Accordingly, non-lease components are included in the measurement of the Company's leases and right-of-use assets. If the Company is aware of the implicit rate in leases, the Company determines the operating lease liability using the implicit rate. For those leases where the Company is not aware of the implicit rate in the lease, the Company utilizes an incremental borrowing rate of 4.00% , which is indicative of our collateralized borrowing rate. Operating Leases The Company leases its facility in Sofia, Bulgaria and vehicles in Clearwater, Florida under non-cancelable operating lease agreements. The Company's lease on the Bulgaria facility includes rent escalation over the term of the lease. Rent expense on the lease is accounted for on a straight-line basis over the lease term. During 2019, the Bulgaria facility lease was extended for an additional 2 years . In accordance with operating lease guidance under Topic 842, the extension was accounted for as a lease modification and the right-of-use asset and lease liability were remeasured at the modification date. The Company's operating leases have terms expiring through December 2022. Finance Leases During 2019, the Company entered into non-cancelable finance leases for certain computer equipment and a vehicle in Clearwater, Florida. The Company's finance leases have terms expiring through August 2023. Information about the Company’s lease costs are as follows: Year Ended December 31, 2019 Lease costs (in thousands) : Operating lease costs $ 115 Finance lease costs: Amortization of right-of-use assets 57 Interest on lease liabilities 8 Variable lease costs 16 Total lease costs $ 196 Cash and non cash information related to our leases are as follows: Year Ended December 31, 2019 (in thousands) Operating Finance Non cash information: Right-of-use assets capitalized and lease liabilities recognized upon adoption of Topic 842 $ 212 $ — Right-of-use assets capitalized and lease liabilities recognized upon lease remeasurement $ 207 $ — Right-of-use assets capitalized and lease liabilities recognized upon execution of lease $ 28 $ 710 Cash information: Cash paid for lease liabilities $ 106 $ 68 Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: Year Ended December 31, 2019 Operating Finance Weighted average remaining lease term (in years) 3.0 2.7 Weighted average discount rate 4.04% 4.00% Maturities of lease liabilities as of December 31, 2019 are as follows: (In thousands) Operating Finance 2020 $ 120 $ 251 2021 124 236 2022 121 183 2023 — 18 Total lease payments 365 688 Less imputed interest (22 ) (38 ) Present value of lease liabilities 343 650 Less current portion of lease liabilities (108 ) (229 ) Long-term portion of lease liabilities $ 235 $ 421 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILTIES Accrued expenses and other current liabilities consisted of the following: (in thousands) December 31, 2019 December 31, 2018 as Restated Accrued severance and related $ 116 $ 610 Accrued payroll 694 418 Accrued bonus 1,306 972 Accrued commissions 877 379 Accrued product warranties 452 348 Accrued insurance 1,170 725 Accrued professional fees 1,383 331 Joint and several payroll liability 1,045 713 Uncertain tax positions 1,491 1,325 Other accrued expenses and current liabilities 862 1,367 Total accrued expenses and other current liabilities $ 9,396 $ 7,188 |
PRODUCT WARRANTIES
PRODUCT WARRANTIES | 12 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | PRODUCT WARRANTIES Our product warranty activity consisted of the following for the years ended: (In thousands) December 31, December 31, Beginning balance $ 348 $ 233 Provision for product warranties 321 253 Product warranty expenses incurred (217 ) (138 ) Accrued product warranties $ 452 $ 348 |
JOINT AND SEVERAL PAYROLL LIABI
JOINT AND SEVERAL PAYROLL LIABILITY | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
JOINT AND SEVERAL PAYROLL LIABILITY | JOINT AND SEVERAL PAYROLL LIABILITY As discussed in Restatements (Note 4) and Revisions (Note 5), the Company did not report the correct amount of income to employees, nor did we collect and remit the employees' portion of income and payroll taxes, related to stock option exercises as required by the IRS. Due to IRS statutory requirements, we have joint and several liability for the full amount that was not withheld and remitted to the proper taxing authorities. This amount of the liability was approximately $1.0 million and $0.7 million at December 31, 2019 and 2018 respectively. The Company has recognized these amounts in other income (losses), net in the accompanying Consolidated Statements of Operations. If we can establish that our employees have in fact paid these obligations, either presently or in the future, we will be relieved of our liability. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE We compute basic earnings per share (“basic EPS”) by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding. The following table provides the computation of basic and diluted earnings per share. Year Ended December 31, (in thousands, except per share data) 2019 2018 as Restated 2017 Numerators: Net (loss) and numerator for dilutive (loss) per share - continuing operations $ (19,706 ) $ (10,784 ) $ (13,682 ) Numerator for dilutive income per share - discontinued operations — 73,503 8,620 Net income (loss) from all operations (19,706 ) 62,719 (5,062 ) Derivative liability warrants — — (183 ) Numerator for full dilutive (loss) income per share - all (19,706 ) 62,719 (5,245 ) Denominator for dilutive income (loss) per common share - continuing operations 34,069 33,185 31,420 Denominator - discontinued operations: Weighted average shares used to compute basic (loss) 34,069 33,185 31,420 Effect of dilutive securities: Stock options — 1,181 — Denominator for dilutive income (loss) per common share - discontinued operations 34,069 34,366 31,420 Denominator - all operations: Weighted average shares used to compute basic income (loss) 34,069 33,185 31,420 Effect of dilutive securities: Derivative liability warrants — — 7 Stock options — 1,181 — Denominator for dilutive income (loss) per common share 34,069 34,366 31,427 Loss per share from continuing operations Basic and diluted $ (0.58 ) $ (0.32 ) $ (0.44 ) Income per share from discontinued operations Basic $ — $ 2.21 $ 0.27 Diluted $ — $ 2.14 $ 0.27 Income (loss) per share from all operations Basic $ (0.58 ) $ 1.89 $ (0.16 ) Diluted $ (0.58 ) $ 1.83 $ (0.17 ) Anti-dilutive instruments excluded from diluted (loss) per common share - continuing operations: Warrants — — 7 Options 3,967 1,181 646 Anti-dilutive instruments excluded from diluted income per common share - discontinued operations: Warrants — — 7 Options 3,967 — 646 Anti-dilutive instruments excluded from diluted income (loss) per common share - all operations: Options 3,967 — 646 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Cash and Cash Equivalents at December 31, 2019, consists of approximately $2,237,000 in cash and $56,575,000 in US Treasury Securities with maturities of 3 months or less. Cash, Cash Equivalents and Marketable Securities, as of December 31, 2018 consists of the following: (In thousands) Adjusted Cost Unrealized Gains (3) Fair Value (3) Cash and Cash Equivalents (1) Short-term Marketable Securities Cash - As Restated $ 6,467 $ — $ 6,467 $ 6,467 $ — Level 1 (2) U.S. Treasury Securities, maturities less than three months 10,129 — 10,129 10,129 — U.S. Treasury Securities, maturities greater than three months 61,431 247 61,678 — 61,678 Total $ 78,027 $ 247 $ 78,274 $ 16,596 $ 61,678 (1) The company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. (2) The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. The fair value of these financial instruments are classified as Level 1 in the fair value hierarchy. The original purchase of U.S. Treasury bills occurred in 2018 utilizing the proceeds from the sale of our Core business. (3) ASC 825-10, Financial Instruments , allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings within interest income at each subsequent reporting date. At the date of purchase, the Company elected the fair value option for all investments with maturities of three months or greater at the time of purchase. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Components of the provision for income taxes from continuing operations are as follows: (In thousands) December 31, December 31, 2018 as Restated December 31, Current: Federal $ (12 ) $ (3,073 ) $ — State (205 ) (884 ) 22 Foreign 87 20 17 (130 ) (3,937 ) 39 Deferred: Federal (3,989 ) (171 ) 1,581 State (741 ) 7 (401 ) (4,730 ) (164 ) 1,180 Valuation allowance 4,730 194 (1,375 ) Total provision for income tax from continuing operations $ (130 ) $ (3,907 ) $ (156 ) The Company recognized tax expense of $1.20 million attributable to income from discontinued operations and $16.14 million attributable to the gain on sales of the Core business in the Income Statement in the year ended December 31, 2018. Below is a reconciliation of the statutory federal income tax rate to our effective tax rate: Year Ended December 31, 2019 2018 2017 Federal tax provision 21.0 % 21.0 % 34.0 % State taxes (net of federal benefit) 4.3 % 5.6 % 4.8 % Warrant gains — % — % 0.4 % Valuation allowance (23.8 )% (1.3 )% 28.9 % Change in federal tax rate — % — % (71.2 )% Other (0.8 )% 1.3 % 6.2 % Total 0.7 % 26.6 % 3.1 % Major components of the Company’s deferred tax assets (liabilities) are as follows: (In thousands) December 31, December 31, 2018 as Restated December 31, Deferred tax assets: Loss and credit carry-forwards $ 4,779 $ — $ 7,722 Stock-based compensation 1,004 721 549 Inventory Reserve 99 115 494 Intangibles 34 146 — Other 1,000 910 178 Total deferred tax assets 6,916 1,892 8,943 Valuation allowance (6,472 ) (1,742 ) (8,756 ) Total deferred tax assets, net of valuation allowance 444 150 187 Deferred tax liabilities: State taxes (capital) — — (17 ) Property and equipment (245 ) (150 ) (294 ) Intangibles — — (244 ) Lease right-of-use assets (199 ) — — Total deferred tax liabilities (444 ) (150 ) (555 ) Net deferred tax liabilities $ — $ — $ (368 ) We consider all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. We consider the earnings of Apyx Bulgaria, EOOD to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. We have not recorded a deferred tax liability related to the U.S. Federal and State income taxes and foreign withholding taxes on the undistributed earnings of Apyx Bulgaria, EOOD indefinitely invested outside the United States. If we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will no longer be indefinitely invested outside the United States. We assess the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. As of December 31, 2019 and 2018, we have reserved approximately $1.3 million of potential tax benefits and accrued approximately $0.2 million of interest and penalties on these positions. It is expected that the amount of unrecognized tax benefit change within the next 12 months will not be significant. The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the year ended December 31, 2019. (in thousands) Gross Unrealized Tax Benefits Balance at January 1, 2019 $ 1,313 Additions of tax positions related to the current year — Additions of tax positions related to the prior year — Decreases for tax positions related to prior year — Balance at December 31, 2019 $ 1,313 The Company is subject to U.S. federal and state income tax examination. The Company’s 2016 through 2018 U.S. federal income tax returns are subject to examination by the Internal Revenue Service. The Company’s state income tax returns are subject to examination for the 2015 through 2018 tax years. |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLAN | RETIREMENT PLAN The Company provides a tax-qualified profit-sharing retirement plan under section 401(k) of the Internal Revenue Code for the benefit of eligible employees with an accumulation of funds for retirement on a tax-deferred basis and provides for annual discretionary contribution to individual trust funds. All employees are eligible to participate upon completing three months of service. The employees may make voluntary contributions to the plan up to the maximum percentage allowed by the Internal Revenue Code. Vesting in employee matching contributions is graded and depends on the years of service. After three years from their date of hire, the employees are 100% vested. The Company makes matching contributions of 50% of the employee contributions up to a total of 3% of participant payroll. Matching contributions made by the Company totaled $0.3 million for each of the years ended December 31, 2019 , 2018 and 2017 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Several relatives of Nikolay Shilev, Apyx Bulgaria’s Managing Director, are considered related parties. Teodora Shileva, Mr. Shilev’s spouse, is an employee of the Company working in the accounting department. Antoaneta Dimitrova Shileva-Toromanova, Mr. Shilev’s sister, is the Manager of Production and Human Resources. Svetoslav Shilev, Mr. Shilev’s son, is an engineer in the quality assurance department. In addition, as part of the purchase of the Bulgaria manufacturing facility, Mr. Shilev was issued a note payable for $0.1 million to be paid 5 years after the original purchase date, which is in October 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The medical device industry is characterized by frequent claims and litigation, and we are and may become subject to various claims, lawsuits and proceedings in the ordinary course of our business. Such claims include claims by current or former employees, distributors and competitors, claims concerning the marketing and promotion of our products and product liability claims. We are involved in a number of legal actions relating to the use of our Helium Plasma technology. The outcomes of these legal actions are not within our complete control and may not be known for prolonged periods of time. We believe that such claims are adequately covered by insurance; however, in the case of one of our carriers, we are in a dispute regarding the total level of coverage available. Notwithstanding the foregoing, in the opinion of management, the Company has meritorious defenses and such claims are not expected, individually or in the aggregate, to result in a material, adverse effect on our financial condition. However, in the event that damages exceed the aggregate coverage limits of our policies or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with these claims could have a material adverse impact on our consolidated results of operations, financial position or cash flows. In addition, as previously disclosed with the U.S. Securities and Exchange Commission on the Company’s Report on Form 8-K filed April 26, 2019, on April 17, 2019, a complaint (the “Complaint”) was filed in the United States District Court for the Middle District of Florida by plaintiff Kyle Pritchard, individually and on behalf of all others similarly situated against the Company and Charles D. Goodwin (“Goodwin”), the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, alleging certain violations of the Securities Exchange Act of 1934, as amended. On July 16, 2019, the Court appointed a lead plaintiff for the putative class and approved the lead plaintiff’s selection of counsel. On or about September 3, 2019, Plaintiff filed an amended complaint (the “Amended Complaint”) with the Court. The Amended Complaint seeks class action status on behalf of all persons and entities that acquired the Company’s securities between December 21, 2018 and April 1, 2019 and alleges violations by the Company and Goodwin of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended and Rule 10b-5 thereunder, primarily related to certain public statements concerning the Premarket Notification 510(k) submission made to the US Food and Drug Administration for a new indication for the Company’s J-Plasma® technology for use in dermal resurfacing procedures. The Amended Complaint seeks an unspecified amount of compensatory damages, an award of interest, reasonable attorneys’ fees, expert fees and other costs, and equitable relief as the court may deem just and proper. On October 3, 2019, the Company and Goodwin filed a Motion to Dismiss the Amended Complaint. Plaintiff’s opposition to the motion to dismiss was served on November 4, 2019. On March 11, 2020, the Court issued an order denying the Company’s motion to dismiss. The Company intends to vigorously defend its interests against the allegations contained in the complaint. Although the ultimate outcome of this matter cannot be determined with certainty, the Company believes that the allegations stated in the Amended Complaint are entirely without merit. The Company and Goodwin intend to defend themselves vigorously in the suit. In the opinion of management, such claims are adequately covered by insurance, however, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with this claim could have a material adverse impact on our consolidated earnings, financial position or cash flows. We initially accrued $500,000 for defense costs and upon the denial of the motion to dismiss, we accrued an additional $500,000 , which is our insurance deductible related to the matter. $820,000 of the $1,000,000 is still accrued as of December 31, 2019. We accrue a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded, actual results may differ from these estimates. Purchase Commitments At December 31, 2019 , we had purchase commitments for inventories totaling approximately $2 million , substantially all of which is expected to be purchased by the end of 2020 . China Joint Venture In late 2019, we executed a joint venture agreement with our Chinese supplier. The agreement requires the Company to make a capital contribution into the newly formed entity of approximately $0.4M . We expect this capital contribution will be made in the first quarter of 2020. Severance Jay D. Ewers, the Chief Financial Officer, resigned as an officer of the Company effective December 31, 2018, although he continued on as an employee during the first quarter of 2019. In connection with this departure, the Company and Mr. Ewers entered into a separation agreement, dated November 12, 2018. Severance costs incurred included salary, option expense and other benefits of approximately $624,000 , approximately $532,000 is included in operational cash outflows during 2019, the remainder will be included in operational cash outflows during 2020. Jack McCarthy, the Chief Commercialization Officer, was terminated without cause from his position with the Company effective November 6, 2017. Severance costs incurred included salary, option expense and other benefits of approximately $582,000 , of which approximately $397,000 was included in operational cash outflows during 2018. Robert L. Gershon, the Chief Executive Officer and a director, resigned from all of his positions with the Company effective December 15, 2017. In connection with this departure, the Company and Mr. Gershon entered into a separation agreement, dated December 15, 2017. Severance costs incurred included salary, option expense and other benefits of approximately $767,000 , of which approximately $670,000 was included in operational cash outflows during 2018. Concentrations Sales to one customer within the OEM segment represented 11% of sales for the year ended December 31, 2019. The Company had no customers who comprised 10% or more of sales for the years ended December 31, 2018 and 2017. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | STOCK OPTIONS On October 30, 2007, our stockholders approved and the Board of Directors adopted an amendment to the 2003 Executive and Employee Stock Option Plan (the “Plan”) to increase the maximum aggregate number of shares of common stock reserved for issuance under the Plan from 1.2 million shares (already reserved against outstanding options) to 1.7 million shares. Except for the increase in the number of shares covered by the Plan, the Plan remained otherwise unchanged. In 2001, the Board of Directors adopted the 2001 Executive and Employee Stock Option Plan which reserved for issuance 1.2 million stock options. Stock options to employees typically have a ten -year life and currently vest over periods between one and seven years . In July of 2012, our stockholders approved the 2012 Share Incentive Plan covering a total of 750,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2019 approximately 160,000 are available to be issued in this plan. In July of 2015, our stockholders approved the 2015 Executive and Employee Stock Option Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2019 approximately 900,000 are available to be issued in this plan. In August of 2017, our stockholders approved the 2017 Executive and Employee Stock Option Plan covering a total of 3,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2019 approximately 480,000 are available to be issued in this plan. In August of 2019, our stockholders approved the 2019 Share Incentive Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2019 , all 2,000,000 are available to be issued in this plan. On January 15, 2020, the Company granted employees approximately 1,300,000 options to purchase common shares of the Company's stock. All options granted were pursuant to the plans noted above. The options vest over a period of three years . The status of our stock options and warrants are summarized as follows: Number of options and warrants Weighted average exercise price Outstanding at December 31, 2016 3,526,287 $ 3.17 Granted 1,728,000 3.09 Exercised (176,750 ) 2.41 Canceled and forfeited (443,302 ) 3.95 Outstanding at December 31, 2017 4,634,235 $ 3.10 Granted 225,000 2.40 Exercised (1,378,615 ) 2.43 Canceled and forfeited (225,841 ) 2.10 Outstanding at December 31, 2018 3,254,779 $ 3.18 Granted 1,379,500 7.70 Exercised (410,635 ) 2.99 Canceled and forfeited (256,785 ) 4.76 Outstanding at December 31, 2019 3,966,858 $ 4.67 Number of options Weighted average grant date fair value Non-vested at December 31, 2018 1,436,429 $ 1.68 Granted 1,379,500 4.57 Vested (1,119,000 ) 1.90 Forfeited (212,000 ) 2.31 Non-vested at December 31, 2019 1,484,929 $ 4.11 Common shares required to be issued upon the exercise of stock options would be issued from our authorized and unissued shares. Prior to 2019, options issued were valued utilizing a trinomial lattice model. During the current year, the Company began granting stock option awards deeper within the Company. The Company does not have the relevant history with grants to these employees to support the inputs required in a trinomial valuation model. Accordingly, the Company adopted the use of the Black-Scholes model in 2019. For employee grants, we calculate expected life via the simplified method as we do not have sufficient history to determine actual expected life. For, non-employee grants, we calculate expected life using a combination of past exercise behavior, the contractual term and expected remaining exercise behavior. Inputs used in the valuation models are as follows: 2019 Grants 2018 Grants 2017 Grants Option value $7.15 - $7.91 $1.46 - $3.04 $1.73 - $2.34 Risk-free rate 1.7% - 2.6% 1.9% - 2.5% 1.5% - 1.9% Expected dividend yield —% —% —% Expected volatility 64.9% - 66.4% 60.9% - 68.8% 62.1% - 68.0% Expected term (in years) 4.5 - 6 6 6 We recognized approximately $3,581,000 , $2,224,000 and $871,000 in stock-based compensation expense during the years ended December 31, 2019, 2018 and 2017, respectively. The intrinsic value of each option share is the difference between the fair market value of our common stock and the exercise price of such option share to the extent it is “in-the-money”. Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation at December 31, 2019 is based on the $8.46 closing stock price of our common stock on December 31, 2019, the last trading day of 2019. As of December 31, 2019, there were 3,772,139 stock options outstanding and expected to vest with an aggregate intrinsic value of approximately $14,820,000 . These options have a weighted average exercise price of $4.53 and a weighted average remaining contractual term of approximately 7 years . As of December 31, 2019, there were 2,481,929 stock options outstanding and exercisable with an aggregate intrinsic value of approximately $12,730,000 . These options have a weighted average exercise price of $3.33 and a weighted average remaining contractual term of approximately 6 years . The total intrinsic value of in the money options exercised during the years ended December 31, 2019, 2018 and 2017, was approximately $1,420,000 , $4,460,000 and $220,000 , respectively. Intrinsic value of exercised shares is the total value of such shares on the date of exercise less the cash received from the option holder to exercise the options or other consideration paid. The total fair value of options granted during the years ended December 31, 2019, 2018 and 2017, was approximately $6,300,000 , $540,000 , and $3,140,000 , respectively. The weighted average fair value of options granted during the years ended December 31, 2019, 2018 and 2017, was $4.57 , $2.40 , and $1.82 , respectively. The total fair value of option shares vested during the years ended December 31, 2019, 2018, and 2017, was approximately $2,130,000 , $1,440,000 and $810,000 , respectively. The Company allows employees to exercise stock-based awards by surrendering stock-based awards with a fair value of the stock-based awards exercised, referred to as net settlements. These surrenders are included in stock options exercised in the options rollforward above. During the years ended December 31, 2019, 2018 and 2017, the Company received 125,948 , 570,343 , and 129,378 options as payment in the exercise of 222,601 , 720,772 and 47,372 options, respectively. During the years ended December 31, 2018 and 2017, the Company received 22,711 and 34,687 warrants as payment in the exercise of 17,289 and 19,688 warrants, respectively. During the year ended December 31, 2018, the Company modified the terms of awards granted to two employees by immediately vesting the remaining unvested options at the modification dates. The modifications resulted in the recognition of approximately an additional $190,000 in compensation cost due to the revaluation of the stock options. As of December 31, 2019, there was approximately $3,520,000 of total unrecognized stock-based compensation cost, related to unvested stock options granted under the Amended Plan. This cost is expected to be recognized over a weighted-average period of approximately 1 year . During October 2015, the Company granted 225,922 restricted stock units that vest ratably over a period of 5 years . As of December 31, 2019, 180,740 of the shares had vested, with the remaining shares vesting in October 2020. At December 31, 2019, the Company has approximately $70,000 of stock-based compensation expense to be recognized through October 2020. |
GEOGRAPHIC AND SEGMENT INFORMAT
GEOGRAPHIC AND SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC AND SEGMENT INFORMATION | GEOGRAPHIC AND SEGMENT INFORMATION Operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics, we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Asset information is not reviewed by the chief operating decision maker by segment and is not available by segment, accordingly, we have not presented a measure of assets by segment. Our reportable segments are disclosed as principally organized and managed as two operating segments: Advanced Energy and OEM. "Corporate & Other" includes certain unallocated corporate and administrative costs which were not specifically attributed to any reportable segment. The OEM segment is primarily development and manufacturing contract and product driven, all related expenses are recorded as cost of sales, therefore no segment specific operating expenses are incurred. Summarized financial information with respect to reportable segments is as follows: Year ended December 31, 2019 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 22,676 $ 5,559 $ — 28,235 Income (loss) from operations (8,045 ) 2,136 (14,960 ) (20,869 ) Interest income — — 1,392 1,392 Interest expense — — (8 ) (8 ) Other losses, net — — (351 ) (351 ) Income tax benefit — — 130 130 Year ended December 31, 2018 as Restated (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 12,987 $ 3,618 $ — $ 16,605 Income (loss) from operations (6,326 ) 1,795 (9,745 ) (14,276 ) Interest income — — 616 616 Interest expense — — (104 ) (104 ) Other losses, net — — (947 ) (947 ) Change in fair value of derivative liabilities — — 20 20 Income tax benefit — — 3,907 3,907 Year ended December 31, 2017 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 7,636 $ 2,598 $ — $ 10,234 Income (loss) from operations (3,957 ) 1,353 (11,281 ) (13,885 ) Interest expense — — (136 ) (136 ) Change in fair value of derivative liabilities — — 183 183 Income tax benefit — — 156 156 International sales in 2019, 2018 and 2017 were 30.6% , 22.6% and 13.2% of sales, respectively. Substantially all of these sales are denominated in U.S. dollars. Revenue by geographic region, based on the "ship to" location on the invoice are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Sales by Domestic and International Domestic $ 19,584 $ 12,858 $ 8,887 International 8,651 3,747 1,347 Total $ 28,235 $ 16,605 $ 10,234 |
SUPPLEMENTAL UNAUDITED QUARTERL
SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL INFORMATION OF CONTINUING OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL INFORMATION OF CONTINUING OPERATIONS | SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL INFORMATION OF CONTINUING OPERATIONS The following table sets forth certain unaudited quarterly data of continuing operations for each of the four quarters in the years ended December 31, 2019, and 2018 , respectively. The data has been derived from the Company’s unaudited consolidated financial statements that, in management’s opinion, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of such information when read in conjunction with the Consolidated Financial Statements and Notes thereto. The results of operations for any quarter are not necessarily indicative of the results of operations for any future period. The results presented have been updated for restatements and revisions as discussed in Notes 4 and 5. (In thousands, except per share data) First Second Third Fourth Year ended December 31, 2019 Sales $ 5,629 $ 6,649 $ 7,575 $ 8,382 Gross profit 3,563 4,674 5,294 5,563 Net loss (5,608 ) (4,295 ) (4,370 ) (5,433 ) Basic loss per common share (0.17 ) (0.13 ) (0.13 ) (0.16 ) Year ended December 31, 2018 Sales $ 3,397 $ 3,691 $ 3,672 $ 5,845 Gross profit 2,212 2,537 2,521 3,556 Net loss (2,791 ) (2,938 ) (1,143 ) (3,912 ) Basic loss per common share (0.08 ) (0.09 ) (0.03 ) (0.12 ) *Fourth quarter 2018 period includes approximately $0.7 million of non-recurring severance and expenses related to former members of the Company’s executive management team. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS In March 2020, the World Health Organization recognized the novel strain of coronavirus, COVID-19, as a pandemic. This coronavirus outbreak has severely restricted the level of economic activity around the world. In response to this coronavirus outbreak, the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes. Temporary closures of businesses have been ordered and numerous other businesses have temporarily closed voluntarily. This coronavirus outbreak has started to have a significant decline on the Company's sales results to date in fiscal 2020. Given the uncertainty regarding the spread of this coronavirus, the related financial impact cannot be reasonably estimated at this time. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statements | Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Apyx and its wholly owned subsidiary, Apyx Bulgaria, EOOD, (collectively, the “Company” or “we”, “our” or “us”). All intercompany transactions and balances have been eliminated in consolidation. On August 30 th , 2018, we sold our Core business and discontinued those operations. The Company concluded that the divestiture of the Core business on August 30 th , 2018 met the criteria for discontinued operations set forth in FASB ASC Topic No. 205, " Presentation of Financial Statements. " The Company reclassified its discontinued operations for all periods presented and has excluded the results of its discontinued operations from continuing operations and from segment results for all periods presented. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions we are required to make. |
Cash and Cash Equivalents | Cash and Cash Equivalents Holdings of highly liquid investments with original maturities of three months or less from the date of purchase are considered to be cash equivalents. |
Short-term Investments | Short-term Investments Our short-term investments principally consisted of US Treasury Bills, which are classified available-for-sale and are carried at their fair value as of the balance sheet date. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. Short-term investments generally mature between three months and one year from the purchase date. Marketable securities less than or equal to three months are identified as cash equivalents while marketable securities with a maturity duration over three months are considered short term investments. Currently all of our US Treasury Bills have original maturities of three months or less and are included in cash and cash equivalents. The Treasury Bill investments accrue interest monthly, which is treated as interest income. Realized gains or losses are determined on the specific identification method and are reflected in other income. Net unrealized gains and losses are recorded on a quarterly basis in interest income. |
Fair Values of Financial Instruments and Concentration of Credit Risk | Fair Values of Financial Instruments and Concentration of Credit Risk The carrying amounts of our financial instruments included in current assets and liabilities approximate fair value due to their short term nature. Financial instruments, which potentially subject us to significant concentrations of credit risk, consists primarily of short term investments and trade accounts receivable. With respect to cash, we frequently maintain cash and cash equivalent balances in excess of federally insured limits. We have not experienced any losses in such accounts. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Our standard credit terms for our billings range from net 10 days to net 90 days , depending on the customer agreement. Accounts receivable are determined to be past due if payments are not made in accordance with such agreements and an allowance is generally recorded for accounts that become three months past due, or sooner if there are other indicators that the receivables may not be recovered. Customary collection efforts are initiated, and receivables are written off when we determine they are not collectible and abandon these collection efforts. We evaluate the allowance for doubtful accounts on a regular basis for adequacy based upon our periodic review of the collectability of the receivables in light of historical experience, adverse situations that may affect our customers’ ability to pay and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours. We monitor usage reports to determine if the carrying value of any items should be adjusted due to lack of demand for the item and adjust the inventory for estimated obsolescence or unusable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the assets. The amortization of leasehold improvements is based on the shorter of the lease term or the life of the improvement. Betterments and major improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and routine improvements are expensed as incurred. The estimated useful lives are: machinery and equipment, 3 - 10 years ; buildings, 39 years ; molds, 7 - 15 years ; furniture and fixtures, 5 - 10 years ; and computer equipment and software, 3 - 5 years . |
Goodwill | Goodwill Goodwill of $0.2 million resulted from our acquisition of Apyx Bulgaria, EOOD and is included in other assets in the Company's consolidated balance sheets. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets We review long-lived assets for recoverability if events or changes in circumstances indicate that the assets may have been impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. In those cases an impairment loss is recognized to the extent that the assets’ carrying amount exceeds its fair value. Any impairment losses are not restored in the future if the fair value increases. At December 31, 2019 , we believe the remaining carrying values of our long-lived assets are recoverable. |
Product Warranties | Product Warranties We provide a four years limited warranty on end-user sales of our Renuvion®/J-Plasma® generators, a two years warranty on mounting fixtures, and a one year warranty on some accessories. We estimate and provide for future costs for product warranties in cost of sales at the time revenue is recognized. We base product warranty costs on related material costs, repair labor costs and shipping costs. We estimate the future cost of product warranties by considering historical material, repair labor, and shipping costs, and applying the experience rates to the outstanding warranty period for products sold. It is reasonably possible that actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning with the first quarter of 2018, and we adopted the new accounting standard using the modified retrospective transition approach. The modified retrospective transition approach recognized any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. Management performed an evaluation to determine the effects of adopting ASC 606 and we determined that the adoption and the application of the transition requirements of the new standard presented no material impact on our consolidated financial statements, and no entry was recorded to opening retained earnings. We have disaggregated revenue by segment and geography in Note 20 Geographic and Segment Information. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that we expect to receive for those goods or services. To recognize revenue, we (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy the performance obligation(s). For sales of our Advanced Energy products (Renuvion®/J-Plasma®), this is at a point in time when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. For sales of products under our OEM agreements, the Company recognizes revenue over time when no alternative use exists for the manufactured goods and the Company has rights to payment. Presently, the Company does not stock any significant completed goods under our OEM agreements, accordingly, the recognition of revenue under these agreements approximates point in time recognition. The following policies apply to our major categories of revenue transactions: • The majority of our sales to customers are evidenced by firm purchase orders. Generally, title and the risks and rewards of ownership are transferred to the customer when the product is shipped. Payment by the customer is due under fixed payment terms. • Product returns are only accepted at our discretion and in accordance with our “Returned Goods Policy”. Historically, the level of product returns has not been significant. We accrue for sales returns, rebates and allowances as a reduction of revenue based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions. • Our terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are generally provided for sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data. • In connection with the execution of our OEM supply agreements, the Company may enter into an accompanying product development agreement. If the Company enters into a product development agreement, and development of the goods does not represent a performance obligation on a standalone basis, the Company defers the development fees billed to customers and the associated costs. Recognition of the revenues and cost of sales occurs as revenue is recognized on the accompanying supply agreement. At December 31, 2019, the Company had recorded approximately $0.4 million of contract liabilities and $0.1 million of contract assets related to the deferral of revenues and expenses under these agreements. |
Advertising Costs | Advertising Costs All advertising costs are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation . FASB ASC 718 requires recognizing compensation costs for all share-based payment awards made to employees, directors and non-employees based upon the awards’ grant date fair value. The Company currently accounts for forfeitures using the estimate method. The standard covers employee stock options, restricted stock and other equity awards. We currently utilize a Black-Scholes model and in prior years utilized a trinomial lattice option-pricing model to estimate the grant date fair value of stock option awards. For employee and director awards compensation cost is recognized on a straight-line basis over the awards’ vesting periods. For non-employee awards, compensation cost is recorded for non-forfeitable fully vested awards at the grant date. For other awards granted to non-employees, compensation cost is recognized as services are provided, which approximates a straight-line basis over the vesting period. |
Litigation Contingencies | Litigation Contingencies In accordance with authoritative guidance, we accrue a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded; actual results may differ from those estimates. |
Income (Loss) Per Share | Income (Loss) Per Share We compute basic (loss) earnings attributable to common shareholders per share by dividing net (loss) income attributable to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted (loss) earnings per share attributable to common shareholders gives effect to all potential dilutive shares outstanding during the period. The number of dilutive shares is calculated using the treasury stock method which reduces the effective number of shares by the amount of shares we could purchase with the proceeds of assumed exercises. |
Research and Development Costs | Research and Development Costs Research and development expenses are charged to operations as incurred. |
Income Taxes | Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, "Income Taxes". Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the basis difference. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income, the timing of reversals of temporary differences, and the availability of tax planning strategies. As of December 31, 2019 and 2018, the Company recorded a valuation allowance on the net deferred tax asset. The Company will reassess the realization of deferred tax assets each reporting period and will be able to reduce the valuation allowance to the extent the financial results of continuing operations improve and it becomes more likely than not that the deferred tax assets will be realizable. As Management expects the Company to continue to generate losses in the foreseeable future after 2019, the Company will continue to record a valuation allowance on the remaining deferred tax assets balance as of December 31, 2019. We assess the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. |
Foreign Currency Transactions | Foreign Currency Transactions The functional currency of Apyx Bulgaria is the U.S. dollar. The monetary assets and liabilities that are denominated in a currency other than U.S. dollar are remeasured into U.S. dollars at the exchange rate on the balance sheet date, while nonmonetary items are remeasured at historical rates. Revenue and expenses are remeasured at weighted average exchange rates during the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in selling, general and administrative expenses in the consolidated statements of operations and were not material for the years ended December 31, 2019, 2018 and 2017. |
Reclassifications | Reclassifications We have reclassified certain amounts presented in prior years to conform to the current year presentation. These reclassifications had no impact on previously reported net income, retained earnings or operating cash flows for the periods presented. |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Topic 842 establishes a new lease model, referred to as the right-of-use model that brings substantially all leases on the balance sheet. This standard requires lessees to recognize leased assets and lease liabilities on the balance sheet and disclose key information about the leasing arrangements in their financial statements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted Topic 842 effective January 1, 2019 using the modified retrospective transition approach that allows a reporting entity to use the effective date as its date of initial application and not restate the comparative periods in the period of adoption when transitioning to the new standard. Consequently, the requisite financial information and disclosures under the new standard are excluded for dates and periods prior to January 1, 2019. In addition, the Company elected to use a number of optional simplification and practical expedients permitted under the transition guidance within the new standard, including allowing the Company to combine fixed lease and non-lease components, apply the short-term lease exception to all leases of one year or less, and utilize the ‘package of practical expedients’, which permits the Company to not reassess prior accounting conclusions with respect to lease identification, lease classification and initial direct costs under Topic 842. Adoption of this new standard resulted in the recognition of approximately $212,000 of operating lease liabilities and right-of-user assets, which represents the present value of the remaining lease payments at the adoption date of approximately $221,000 , discounted using the Company’s incremental borrowing rate of 4.00% . Please see Note 9 for a full discussion of the impacts of adoption on the current year consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
RESTATEMENTS (Tables)
RESTATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Summary of Restatements | A reconciliation of the originally reported amounts to the restated amounts for the adjustments noted above for each of the affected periods is presented below. Consolidated Balance Sheet as of September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 40,663 $ — $ 40,663 Short term investments 55,480 — 55,480 Trade accounts receivable, net 4,080 59 4,139 Inventories, net 6,037 — 6,037 Prepaid expenses and other current assets 627 — 627 Total current assets 106,887 59 106,946 Property and equipment, net 5,842 — 5,842 Other assets* 385 — 385 Total assets $ 113,114 $ 59 $ 113,173 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,348 $ — $ 2,348 Accrued expenses and other current liabilities 19,324 764 20,088 Total current liabilities 21,672 764 22,436 Related party note payable 140 — 140 Total liabilities 21,812 764 22,576 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,763,019 issued and 33,620,444 outstanding 33 — 33 Additional paid-in capital 51,798 — 51,798 Retained earnings 39,471 (705 ) 38,766 Total stockholders’ equity 91,302 (705 ) 90,597 Total liabilities and stockholders’ equity $ 113,114 $ 59 $ 113,173 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. Consolidated Statement of Operations for the three months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 3,672 $ — $ 3,672 Cost of sales 1,151 — 1,151 Gross profit 2,521 — 2,521 Other costs and expenses: Research and development 613 — 613 Professional services 628 — 628 Salaries and related costs 2,119 51 2,170 Selling, general and administrative 1,957 (59 ) 1,898 Total other costs and expenses 5,317 (8 ) 5,309 Loss from operations (2,796 ) 8 (2,788 ) Interest income (expense), net 105 — 105 Other losses (155 ) (713 ) (868 ) Total other losses, net (50 ) (713 ) (763 ) Loss from continuing operations before income taxes (2,846 ) (705 ) (3,551 ) Income tax benefit (2,408 ) — (2,408 ) Net loss from continuing operations (438 ) (705 ) (1,143 ) Income from discontinued operations, net of tax 540 — 540 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 69,612 — 69,612 Net income (loss) $ 69,174 $ (705 ) $ 68,469 Loss per share from continuing operations Basic and Diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) Income per share from discontinued operations Basic 2.09 — 2.09 Diluted 1.99 — 1.99 Income (loss) per share from all operations Basic 2.08 (0.02 ) 2.06 Diluted 1.98 (0.02 ) 1.96 Weighted average number of shares outstanding basic 33,275 33,275 33,275 Weighted average number of shares outstanding diluted 34,934 34,934 34,934 Consolidated Statement of Operations for the nine months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 10,760 $ — $ 10,760 Cost of sales 3,490 — 3,490 Gross profit 7,270 — 7,270 Other costs and expenses: Research and development 1,890 — 1,890 Professional services 1,815 — 1,815 Salaries and related costs 5,734 51 5,785 Selling, general and administrative 6,280 (59 ) 6,221 Total other costs and expenses 15,719 (8 ) 15,711 Loss from operations (8,449 ) 8 (8,441 ) Interest income (expense), net 33 — 33 Other losses (155 ) (713 ) (868 ) Change in fair value of derivative liabilities 20 — 20 Total other losses, net (102 ) (713 ) (815 ) Loss from continuing operations before income taxes (8,551 ) (705 ) (9,256 ) Income tax benefit (2,384 ) — (2,384 ) Net loss from continuing operations (6,167 ) (705 ) (6,872 ) Income from discontinued operations, net of tax 5,062 — 5,062 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 74,134 — 74,134 Net income (loss) $ 67,967 $ (705 ) $ 67,262 Loss per share from continuing operations Basic and Diluted $ (0.19 ) $ (0.02 ) $ (0.21 ) Income per share from discontinued operations Basic 2.25 — 2.25 Diluted 2.19 — 2.19 Income (loss) per share from all operations Basic 2.06 (0.02 ) 2.04 Diluted 2.00 (0.02 ) 1.98 Weighted average number of shares outstanding basic 33,014 33,014 33,014 Weighted average number of shares outstanding diluted 33,952 33,952 33,952 Consolidated Balance Sheet as of December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 16,466 $ 130 $ 16,596 Short term investments 61,678 — 61,678 Trade accounts receivable, net** 3,656 65 3,721 Other receivables** 1,359 — 1,359 Inventories, net** 3,061 85 3,146 Prepaid expenses and other current assets** 3,297 38 3,335 Total current assets 89,517 318 89,835 Property and equipment, net 5,788 — 5,788 Other assets* 305 — 305 Total assets $ 95,610 $ 318 $ 95,928 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,423 $ — $ 1,423 Accrued expenses and other current liabilities* 6,279 909 7,188 Total current liabilities 7,702 909 8,611 Related party note payable 140 — 140 Total liabilities 7,842 909 8,751 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,847,100 issued and 33,704,525 outstanding 34 — 34 Additional paid-in capital 52,221 699 52,920 Retained earnings 35,513 (1,290 ) 34,223 Total stockholders’ equity 87,768 (591 ) 87,177 Total liabilities and stockholders’ equity $ 95,610 $ 318 $ 95,928 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the year ended December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 16,686 $ (81 ) $ 16,605 Cost of sales 5,893 (114 ) 5,779 Gross profit 10,793 33 10,826 Other costs and expenses: Research and development 2,469 80 2,549 Professional services 3,072 61 3,133 Salaries and related costs 8,673 599 9,272 Selling, general and administrative 9,438 (31 ) 9,407 Severance and related expense 741 — 741 Total other costs and expenses 24,393 709 25,102 Loss from operations (13,600 ) (676 ) (14,276 ) Interest income 616 — 616 Interest expense (104 ) — (104 ) Other losses (203 ) (744 ) (947 ) Change in fair value of derivative liabilities 20 — 20 Total other income (losses), net 329 (744 ) (415 ) Loss from continuing operations before income taxes (13,271 ) (1,420 ) (14,691 ) Income tax benefit (3,777 ) (130 ) (3,907 ) Net loss from continuing operations (9,494 ) (1,290 ) (10,784 ) Income from discontinued operations, net of tax 5,099 — 5,099 Gain on sale of the Core Business, net of tax 68,404 — 68,404 Total income from discontinued operations, net of tax 73,503 — 73,503 Net income (loss) $ 64,009 $ (1,290 ) $ 62,719 Loss per share from continuing operations Basic and Diluted $ (0.29 ) $ (0.04 ) $ (0.32 ) Income per share from discontinued operations Basic 2.21 — 2.21 Diluted 2.14 — 2.14 Income (loss) per share from all operations Basic 1.93 (0.04 ) 1.89 Diluted 1.86 (0.04 ) 1.83 Weighted average number of shares outstanding basic 33,185 33,185 33,185 Weighted average number of shares outstanding diluted 34,366 34,366 34,366 Consolidated Balance Sheet as of March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 32,415 $ — $ 32,415 Short term investments 40,885 — 40,885 Trade accounts receivable, net** 4,006 38 4,044 Other receivables** 925 — 925 Inventories, net** 3,013 — 3,013 Prepaid expenses and other current assets** 3,996 38 4,034 Total current assets 85,240 76 85,316 Property and equipment, net** 6,015 — 6,015 Operating lease right-of-use assets** 178 — 178 Other assets* 270 77 347 Total assets $ 91,703 $ 153 $ 91,856 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,504 $ — $ 1,504 Accrued expenses and other current liabilities* 5,868 1,141 7,009 Current portion of operating lease liabilities** 103 — 103 Total current liabilities 7,475 1,141 8,616 Related party note payable 140 — 140 Long-term portion of operating lease liabilities 75 — 75 Other long-term liabilities — 194 194 Total liabilities 7,690 1,335 9,025 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 34,033,255 issued and 33,891,255 outstanding 34 — 34 Additional paid-in capital 53,147 1,035 54,182 Retained earnings 30,832 (2,217 ) 28,615 Total stockholders’ equity 84,013 (1,182 ) 82,831 Total liabilities and stockholders’ equity $ 91,703 $ 153 $ 91,856 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the three months ended March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated Sales $ 5,823 $ (194 ) $ 5,629 Cost of sales 2,103 (37 ) 2,066 Gross profit 3,720 (157 ) 3,563 Other costs and expenses: Research and development 810 (80 ) 730 Professional services 1,791 327 2,118 Salaries and related costs 3,221 267 3,488 Selling, general and administrative 3,101 (144 ) 2,957 Total other costs and expenses 8,923 370 9,293 Loss from operations (5,203 ) (527 ) (5,730 ) Interest income 423 — 423 Other losses (25 ) (270 ) (295 ) Total other losses, net 398 (270 ) 128 Loss from continuing operations before income taxes (4,805 ) (797 ) (5,602 ) Income tax (benefit) expense (124 ) 130 6 Net loss $ (4,681 ) $ (927 ) $ (5,608 ) Loss per share Basic and Diluted $ (0.14 ) $ (0.03 ) $ (0.17 ) Weighted average number of shares outstanding basic and diluted 33,343 33,343 33,343 For the three months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 6,568 $ 81 $ 6,649 [3] Cost of sales 2,096 (121 ) 1,975 [2],[3] Professional services 1,633 28 1,661 [2] Salaries and related costs 3,333 177 3,510 [2] Selling, general and administrative 3,083 (46 ) 3,037 [2] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [2],[3] Gross profit 4,472 202 4,674 [2] Gross profit % 68.1 % 2.2 % 70.3 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the six months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 12,197 $ 81 $ 12,278 [3] Cost of sales 4,199 (158 ) 4,041 [2],[3] Research and development 1,698 (80 ) 1,618 [2],[3] Professional services 3,760 19 3,779 [2],[3] Salaries and related costs 6,671 327 6,998 [1],[2] Selling, general and administrative 6,107 (113 ) 5,994 [2],[3] Other income (losses), net (225 ) (270 ) (495 ) [1],[3] Loss per share - all $ (0.29 ) $ (0.01 ) $ (0.30 ) [1],[3] Gross profit 7,998 239 8,237 [2],[3] Gross profit % 65.6 % 1.5 % 67.1 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the three months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Cost of sales $ 2,558 $ (277 ) $ 2,281 [2] Research and development 936 80 1,016 [2] Professional services 1,996 43 2,039 [2] Salaries and related costs 3,020 139 3,159 [2] Selling, general and administrative 3,762 74 3,836 [2],[3] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [3] Gross profit 5,017 277 5,294 [2] Gross profit % 66.2 % 3.7 % 69.9 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the nine months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Sales $ 19,772 $ 81 $ 19,853 [3] Cost of sales 6,757 (435 ) 6,322 [2],[3] Research and development 2,634 — 2,634 [2],[3] Professional services 5,756 62 5,818 [2],[3] Salaries and related costs 9,691 466 10,157 [1],[2] Selling, general and administrative 9,869 (39 ) 9,830 [2],[3] Other income (losses), net 5 (270 ) (265 ) [1],[3] Loss per share - all $ (0.41 ) $ (0.01 ) $ (0.42 ) [1], [3] Gross profit 13,015 516 13,531 [2],[3] Gross profit % 65.8 % 2.4 % 68.2 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff |
REVISIONS (Tables)
REVISIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Summary of Revisions | A reconciliation of the originally reported amounts to the restated amounts for the adjustments noted above for each of the affected periods is presented below. Consolidated Balance Sheet as of September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 40,663 $ — $ 40,663 Short term investments 55,480 — 55,480 Trade accounts receivable, net 4,080 59 4,139 Inventories, net 6,037 — 6,037 Prepaid expenses and other current assets 627 — 627 Total current assets 106,887 59 106,946 Property and equipment, net 5,842 — 5,842 Other assets* 385 — 385 Total assets $ 113,114 $ 59 $ 113,173 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,348 $ — $ 2,348 Accrued expenses and other current liabilities 19,324 764 20,088 Total current liabilities 21,672 764 22,436 Related party note payable 140 — 140 Total liabilities 21,812 764 22,576 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,763,019 issued and 33,620,444 outstanding 33 — 33 Additional paid-in capital 51,798 — 51,798 Retained earnings 39,471 (705 ) 38,766 Total stockholders’ equity 91,302 (705 ) 90,597 Total liabilities and stockholders’ equity $ 113,114 $ 59 $ 113,173 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. Consolidated Statement of Operations for the three months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 3,672 $ — $ 3,672 Cost of sales 1,151 — 1,151 Gross profit 2,521 — 2,521 Other costs and expenses: Research and development 613 — 613 Professional services 628 — 628 Salaries and related costs 2,119 51 2,170 Selling, general and administrative 1,957 (59 ) 1,898 Total other costs and expenses 5,317 (8 ) 5,309 Loss from operations (2,796 ) 8 (2,788 ) Interest income (expense), net 105 — 105 Other losses (155 ) (713 ) (868 ) Total other losses, net (50 ) (713 ) (763 ) Loss from continuing operations before income taxes (2,846 ) (705 ) (3,551 ) Income tax benefit (2,408 ) — (2,408 ) Net loss from continuing operations (438 ) (705 ) (1,143 ) Income from discontinued operations, net of tax 540 — 540 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 69,612 — 69,612 Net income (loss) $ 69,174 $ (705 ) $ 68,469 Loss per share from continuing operations Basic and Diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) Income per share from discontinued operations Basic 2.09 — 2.09 Diluted 1.99 — 1.99 Income (loss) per share from all operations Basic 2.08 (0.02 ) 2.06 Diluted 1.98 (0.02 ) 1.96 Weighted average number of shares outstanding basic 33,275 33,275 33,275 Weighted average number of shares outstanding diluted 34,934 34,934 34,934 Consolidated Statement of Operations for the nine months ended September 30, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 10,760 $ — $ 10,760 Cost of sales 3,490 — 3,490 Gross profit 7,270 — 7,270 Other costs and expenses: Research and development 1,890 — 1,890 Professional services 1,815 — 1,815 Salaries and related costs 5,734 51 5,785 Selling, general and administrative 6,280 (59 ) 6,221 Total other costs and expenses 15,719 (8 ) 15,711 Loss from operations (8,449 ) 8 (8,441 ) Interest income (expense), net 33 — 33 Other losses (155 ) (713 ) (868 ) Change in fair value of derivative liabilities 20 — 20 Total other losses, net (102 ) (713 ) (815 ) Loss from continuing operations before income taxes (8,551 ) (705 ) (9,256 ) Income tax benefit (2,384 ) — (2,384 ) Net loss from continuing operations (6,167 ) (705 ) (6,872 ) Income from discontinued operations, net of tax 5,062 — 5,062 Gain on sale of the Core Business, net of tax 69,072 — 69,072 Total income from discontinued operations, net of tax 74,134 — 74,134 Net income (loss) $ 67,967 $ (705 ) $ 67,262 Loss per share from continuing operations Basic and Diluted $ (0.19 ) $ (0.02 ) $ (0.21 ) Income per share from discontinued operations Basic 2.25 — 2.25 Diluted 2.19 — 2.19 Income (loss) per share from all operations Basic 2.06 (0.02 ) 2.04 Diluted 2.00 (0.02 ) 1.98 Weighted average number of shares outstanding basic 33,014 33,014 33,014 Weighted average number of shares outstanding diluted 33,952 33,952 33,952 Consolidated Balance Sheet as of December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 16,466 $ 130 $ 16,596 Short term investments 61,678 — 61,678 Trade accounts receivable, net** 3,656 65 3,721 Other receivables** 1,359 — 1,359 Inventories, net** 3,061 85 3,146 Prepaid expenses and other current assets** 3,297 38 3,335 Total current assets 89,517 318 89,835 Property and equipment, net 5,788 — 5,788 Other assets* 305 — 305 Total assets $ 95,610 $ 318 $ 95,928 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,423 $ — $ 1,423 Accrued expenses and other current liabilities* 6,279 909 7,188 Total current liabilities 7,702 909 8,611 Related party note payable 140 — 140 Total liabilities 7,842 909 8,751 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 33,847,100 issued and 33,704,525 outstanding 34 — 34 Additional paid-in capital 52,221 699 52,920 Retained earnings 35,513 (1,290 ) 34,223 Total stockholders’ equity 87,768 (591 ) 87,177 Total liabilities and stockholders’ equity $ 95,610 $ 318 $ 95,928 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the year ended December 31, 2018: (In thousands) As Originally Reported Adjustments As Restated Sales $ 16,686 $ (81 ) $ 16,605 Cost of sales 5,893 (114 ) 5,779 Gross profit 10,793 33 10,826 Other costs and expenses: Research and development 2,469 80 2,549 Professional services 3,072 61 3,133 Salaries and related costs 8,673 599 9,272 Selling, general and administrative 9,438 (31 ) 9,407 Severance and related expense 741 — 741 Total other costs and expenses 24,393 709 25,102 Loss from operations (13,600 ) (676 ) (14,276 ) Interest income 616 — 616 Interest expense (104 ) — (104 ) Other losses (203 ) (744 ) (947 ) Change in fair value of derivative liabilities 20 — 20 Total other income (losses), net 329 (744 ) (415 ) Loss from continuing operations before income taxes (13,271 ) (1,420 ) (14,691 ) Income tax benefit (3,777 ) (130 ) (3,907 ) Net loss from continuing operations (9,494 ) (1,290 ) (10,784 ) Income from discontinued operations, net of tax 5,099 — 5,099 Gain on sale of the Core Business, net of tax 68,404 — 68,404 Total income from discontinued operations, net of tax 73,503 — 73,503 Net income (loss) $ 64,009 $ (1,290 ) $ 62,719 Loss per share from continuing operations Basic and Diluted $ (0.29 ) $ (0.04 ) $ (0.32 ) Income per share from discontinued operations Basic 2.21 — 2.21 Diluted 2.14 — 2.14 Income (loss) per share from all operations Basic 1.93 (0.04 ) 1.89 Diluted 1.86 (0.04 ) 1.83 Weighted average number of shares outstanding basic 33,185 33,185 33,185 Weighted average number of shares outstanding diluted 34,366 34,366 34,366 Consolidated Balance Sheet as of March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 32,415 $ — $ 32,415 Short term investments 40,885 — 40,885 Trade accounts receivable, net** 4,006 38 4,044 Other receivables** 925 — 925 Inventories, net** 3,013 — 3,013 Prepaid expenses and other current assets** 3,996 38 4,034 Total current assets 85,240 76 85,316 Property and equipment, net** 6,015 — 6,015 Operating lease right-of-use assets** 178 — 178 Other assets* 270 77 347 Total assets $ 91,703 $ 153 $ 91,856 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,504 $ — $ 1,504 Accrued expenses and other current liabilities* 5,868 1,141 7,009 Current portion of operating lease liabilities** 103 — 103 Total current liabilities 7,475 1,141 8,616 Related party note payable 140 — 140 Long-term portion of operating lease liabilities 75 — 75 Other long-term liabilities — 194 194 Total liabilities 7,690 1,335 9,025 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 75,000,000 shares authorized; 34,033,255 issued and 33,891,255 outstanding 34 — 34 Additional paid-in capital 53,147 1,035 54,182 Retained earnings 30,832 (2,217 ) 28,615 Total stockholders’ equity 84,013 (1,182 ) 82,831 Total liabilities and stockholders’ equity $ 91,703 $ 153 $ 91,856 * The Company has condensed the presentation of amounts presented in the balance sheet to conform to presentation guidelines. ** The Company has reclassified balances to conform to current presentation. Consolidated Statement of Operations for the three months ended March 31, 2019: (In thousands) As Originally Reported Adjustments As Restated Sales $ 5,823 $ (194 ) $ 5,629 Cost of sales 2,103 (37 ) 2,066 Gross profit 3,720 (157 ) 3,563 Other costs and expenses: Research and development 810 (80 ) 730 Professional services 1,791 327 2,118 Salaries and related costs 3,221 267 3,488 Selling, general and administrative 3,101 (144 ) 2,957 Total other costs and expenses 8,923 370 9,293 Loss from operations (5,203 ) (527 ) (5,730 ) Interest income 423 — 423 Other losses (25 ) (270 ) (295 ) Total other losses, net 398 (270 ) 128 Loss from continuing operations before income taxes (4,805 ) (797 ) (5,602 ) Income tax (benefit) expense (124 ) 130 6 Net loss $ (4,681 ) $ (927 ) $ (5,608 ) Loss per share Basic and Diluted $ (0.14 ) $ (0.03 ) $ (0.17 ) Weighted average number of shares outstanding basic and diluted 33,343 33,343 33,343 For the three months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 6,568 $ 81 $ 6,649 [3] Cost of sales 2,096 (121 ) 1,975 [2],[3] Professional services 1,633 28 1,661 [2] Salaries and related costs 3,333 177 3,510 [2] Selling, general and administrative 3,083 (46 ) 3,037 [2] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [2],[3] Gross profit 4,472 202 4,674 [2] Gross profit % 68.1 % 2.2 % 70.3 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the six months ended June 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Trade accounts receivable, net $ 5,233 $ 59 $ 5,292 [3] Accrued and other liabilities 6,149 1,081 7,230 [1] Retained earnings 25,342 (1,022 ) 24,320 [1],[3] Statement of Operations Sales $ 12,197 $ 81 $ 12,278 [3] Cost of sales 4,199 (158 ) 4,041 [2],[3] Research and development 1,698 (80 ) 1,618 [2],[3] Professional services 3,760 19 3,779 [2],[3] Salaries and related costs 6,671 327 6,998 [1],[2] Selling, general and administrative 6,107 (113 ) 5,994 [2],[3] Other income (losses), net (225 ) (270 ) (495 ) [1],[3] Loss per share - all $ (0.29 ) $ (0.01 ) $ (0.30 ) [1],[3] Gross profit 7,998 239 8,237 [2],[3] Gross profit % 65.6 % 1.5 % 67.1 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the three months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Cost of sales $ 2,558 $ (277 ) $ 2,281 [2] Research and development 936 80 1,016 [2] Professional services 1,996 43 2,039 [2] Salaries and related costs 3,020 139 3,159 [2] Selling, general and administrative 3,762 74 3,836 [2],[3] Loss per share - all $ (0.13 ) $ — $ (0.13 ) [3] Gross profit 5,017 277 5,294 [2] Gross profit % 66.2 % 3.7 % 69.9 % [2] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff For the nine months ended September 30, 2019: (In thousands) As Reported Adjustments As Revised Balance Sheet Accrued expenses and other liabilities $ 7,285 $ 1,081 $ 8,366 [1] Retained earnings 21,031 (1,081 ) 19,950 [1] Statement of Operations Sales $ 19,772 $ 81 $ 19,853 [3] Cost of sales 6,757 (435 ) 6,322 [2],[3] Research and development 2,634 — 2,634 [2],[3] Professional services 5,756 62 5,818 [2],[3] Salaries and related costs 9,691 466 10,157 [1],[2] Selling, general and administrative 9,869 (39 ) 9,830 [2],[3] Other income (losses), net 5 (270 ) (265 ) [1],[3] Loss per share - all $ (0.41 ) $ (0.01 ) $ (0.42 ) [1], [3] Gross profit 13,015 516 13,531 [2],[3] Gross profit % 65.8 % 2.4 % 68.2 % [2],[3] [1] Adjustments relate to payroll tax corrections [2] Adjustments relate to intercompany gross profit [3] Other corrections primarily related to balance sheet cutoff |
DISPOSITION OF THE CORE BUSIN_2
DISPOSITION OF THE CORE BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal group, including discontinued operations | The table below summarizes the cash consideration and the carrying values of disposed assets at the disposition date of August 30, 2018 included as part of discontinued operations: (In thousands) Gross consideration from the sale of the Core Business $ 97,000 Closing and transaction costs 5,905 Net proceeds from sale of the Core Business before taxes $ 91,095 Non-cash commitment to provide inventory $ 2,305 Book value of the Core Business Current assets: Inventories, net $ 2,195 Prepaid expenses and other current assets 57 Total current assets 2,252 Property and equipment, net of depreciation 375 Brand name and trademark 1,510 Purchased technology and license rights, net of depreciation 112 Total non-current assets 1,997 Total assets $ 4,249 Net gain on sale of the Core Business before taxes 84,541 Income tax expense 16,137 Net gain on sale of the Core Business after income taxes $ 68,404 Cash flows associated with discontinued operations are shown in the table below: (in thousands) 2019 2018 2017 Net Income from discontinued operations — 73,503 8,620 Depreciation and amortization — 126 529 Change in current assets from discontinued operations — (2,378 ) 362 Change in non current assets from discontinued liabilities — (1,997 ) (632 ) Change in current liabilities from discontinued operations — (1,021 ) (1,451 ) Net cash provided by operating activities — 68,233 7,428 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consisted of the following: (In thousands) December 31, December 31, 2018 as Restated Raw materials $ 2,935 $ 2,594 Work in process 1,209 406 Finished goods 1,316 585 Gross inventories 5,460 3,585 Less: provision for obsolescence (392 ) (439 ) Inventories, net $ 5,068 $ 3,146 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property and equipment consisted of the following: (In thousands) December 31, December 31, Land $ 1,600 $ 1,600 Building and improvements 4,423 4,338 Machinery and equipment 2,187 2,881 Furniture and fixtures 292 461 Computer equipment and software 1,409 1,741 Leasehold improvements 156 108 Molds 805 1,017 Total property, plant and equipment 10,872 12,146 Less: accumulated depreciation and amortization (4,403 ) (6,358 ) Property and equipment in service 6,469 5,788 Construction in process 149 — Property and equipment, net $ 6,618 $ 5,788 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease Costs | Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: Year Ended December 31, 2019 Operating Finance Weighted average remaining lease term (in years) 3.0 2.7 Weighted average discount rate 4.04% 4.00% Information about the Company’s lease costs are as follows: Year Ended December 31, 2019 Lease costs (in thousands) : Operating lease costs $ 115 Finance lease costs: Amortization of right-of-use assets 57 Interest on lease liabilities 8 Variable lease costs 16 Total lease costs $ 196 Cash and non cash information related to our leases are as follows: Year Ended December 31, 2019 (in thousands) Operating Finance Non cash information: Right-of-use assets capitalized and lease liabilities recognized upon adoption of Topic 842 $ 212 $ — Right-of-use assets capitalized and lease liabilities recognized upon lease remeasurement $ 207 $ — Right-of-use assets capitalized and lease liabilities recognized upon execution of lease $ 28 $ 710 Cash information: Cash paid for lease liabilities $ 106 $ 68 |
Maturity of Finance Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 are as follows: (In thousands) Operating Finance 2020 $ 120 $ 251 2021 124 236 2022 121 183 2023 — 18 Total lease payments 365 688 Less imputed interest (22 ) (38 ) Present value of lease liabilities 343 650 Less current portion of lease liabilities (108 ) (229 ) Long-term portion of lease liabilities $ 235 $ 421 |
Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 are as follows: (In thousands) Operating Finance 2020 $ 120 $ 251 2021 124 236 2022 121 183 2023 — 18 Total lease payments 365 688 Less imputed interest (22 ) (38 ) Present value of lease liabilities 343 650 Less current portion of lease liabilities (108 ) (229 ) Long-term portion of lease liabilities $ 235 $ 421 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: (in thousands) December 31, 2019 December 31, 2018 as Restated Accrued severance and related $ 116 $ 610 Accrued payroll 694 418 Accrued bonus 1,306 972 Accrued commissions 877 379 Accrued product warranties 452 348 Accrued insurance 1,170 725 Accrued professional fees 1,383 331 Joint and several payroll liability 1,045 713 Uncertain tax positions 1,491 1,325 Other accrued expenses and current liabilities 862 1,367 Total accrued expenses and other current liabilities $ 9,396 $ 7,188 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Activity | Our product warranty activity consisted of the following for the years ended: (In thousands) December 31, December 31, Beginning balance $ 348 $ 233 Provision for product warranties 321 253 Product warranty expenses incurred (217 ) (138 ) Accrued product warranties $ 452 $ 348 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table provides the computation of basic and diluted earnings per share. Year Ended December 31, (in thousands, except per share data) 2019 2018 as Restated 2017 Numerators: Net (loss) and numerator for dilutive (loss) per share - continuing operations $ (19,706 ) $ (10,784 ) $ (13,682 ) Numerator for dilutive income per share - discontinued operations — 73,503 8,620 Net income (loss) from all operations (19,706 ) 62,719 (5,062 ) Derivative liability warrants — — (183 ) Numerator for full dilutive (loss) income per share - all (19,706 ) 62,719 (5,245 ) Denominator for dilutive income (loss) per common share - continuing operations 34,069 33,185 31,420 Denominator - discontinued operations: Weighted average shares used to compute basic (loss) 34,069 33,185 31,420 Effect of dilutive securities: Stock options — 1,181 — Denominator for dilutive income (loss) per common share - discontinued operations 34,069 34,366 31,420 Denominator - all operations: Weighted average shares used to compute basic income (loss) 34,069 33,185 31,420 Effect of dilutive securities: Derivative liability warrants — — 7 Stock options — 1,181 — Denominator for dilutive income (loss) per common share 34,069 34,366 31,427 Loss per share from continuing operations Basic and diluted $ (0.58 ) $ (0.32 ) $ (0.44 ) Income per share from discontinued operations Basic $ — $ 2.21 $ 0.27 Diluted $ — $ 2.14 $ 0.27 Income (loss) per share from all operations Basic $ (0.58 ) $ 1.89 $ (0.16 ) Diluted $ (0.58 ) $ 1.83 $ (0.17 ) Anti-dilutive instruments excluded from diluted (loss) per common share - continuing operations: Warrants — — 7 Options 3,967 1,181 646 Anti-dilutive instruments excluded from diluted income per common share - discontinued operations: Warrants — — 7 Options 3,967 — 646 Anti-dilutive instruments excluded from diluted income (loss) per common share - all operations: Options 3,967 — 646 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Marketable Securities, as of December 31, 2018 consists of the following: (In thousands) Adjusted Cost Unrealized Gains (3) Fair Value (3) Cash and Cash Equivalents (1) Short-term Marketable Securities Cash - As Restated $ 6,467 $ — $ 6,467 $ 6,467 $ — Level 1 (2) U.S. Treasury Securities, maturities less than three months 10,129 — 10,129 10,129 — U.S. Treasury Securities, maturities greater than three months 61,431 247 61,678 — 61,678 Total $ 78,027 $ 247 $ 78,274 $ 16,596 $ 61,678 (1) The company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. (2) The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. The fair value of these financial instruments are classified as Level 1 in the fair value hierarchy. The original purchase of U.S. Treasury bills occurred in 2018 utilizing the proceeds from the sale of our Core business. (3) ASC 825-10, Financial Instruments , allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings within interest income at each subsequent reporting date. At the date of purchase, the Company elected the fair value option for all investments with maturities of three months or greater at the time of purchase. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of provision for income taxes | Components of the provision for income taxes from continuing operations are as follows: (In thousands) December 31, December 31, 2018 as Restated December 31, Current: Federal $ (12 ) $ (3,073 ) $ — State (205 ) (884 ) 22 Foreign 87 20 17 (130 ) (3,937 ) 39 Deferred: Federal (3,989 ) (171 ) 1,581 State (741 ) 7 (401 ) (4,730 ) (164 ) 1,180 Valuation allowance 4,730 194 (1,375 ) Total provision for income tax from continuing operations $ (130 ) $ (3,907 ) $ (156 ) |
Statutory federal income tax rate | Below is a reconciliation of the statutory federal income tax rate to our effective tax rate: Year Ended December 31, 2019 2018 2017 Federal tax provision 21.0 % 21.0 % 34.0 % State taxes (net of federal benefit) 4.3 % 5.6 % 4.8 % Warrant gains — % — % 0.4 % Valuation allowance (23.8 )% (1.3 )% 28.9 % Change in federal tax rate — % — % (71.2 )% Other (0.8 )% 1.3 % 6.2 % Total 0.7 % 26.6 % 3.1 % |
Deferred tax assets (liabilities) | Major components of the Company’s deferred tax assets (liabilities) are as follows: (In thousands) December 31, December 31, 2018 as Restated December 31, Deferred tax assets: Loss and credit carry-forwards $ 4,779 $ — $ 7,722 Stock-based compensation 1,004 721 549 Inventory Reserve 99 115 494 Intangibles 34 146 — Other 1,000 910 178 Total deferred tax assets 6,916 1,892 8,943 Valuation allowance (6,472 ) (1,742 ) (8,756 ) Total deferred tax assets, net of valuation allowance 444 150 187 Deferred tax liabilities: State taxes (capital) — — (17 ) Property and equipment (245 ) (150 ) (294 ) Intangibles — — (244 ) Lease right-of-use assets (199 ) — — Total deferred tax liabilities (444 ) (150 ) (555 ) Net deferred tax liabilities $ — $ — $ (368 ) |
Unrecognized tax benefits roll-forward | The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the year ended December 31, 2019. (in thousands) Gross Unrealized Tax Benefits Balance at January 1, 2019 $ 1,313 Additions of tax positions related to the current year — Additions of tax positions related to the prior year — Decreases for tax positions related to prior year — Balance at December 31, 2019 $ 1,313 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock options and stock awards | The status of our stock options and warrants are summarized as follows: Number of options and warrants Weighted average exercise price Outstanding at December 31, 2016 3,526,287 $ 3.17 Granted 1,728,000 3.09 Exercised (176,750 ) 2.41 Canceled and forfeited (443,302 ) 3.95 Outstanding at December 31, 2017 4,634,235 $ 3.10 Granted 225,000 2.40 Exercised (1,378,615 ) 2.43 Canceled and forfeited (225,841 ) 2.10 Outstanding at December 31, 2018 3,254,779 $ 3.18 Granted 1,379,500 7.70 Exercised (410,635 ) 2.99 Canceled and forfeited (256,785 ) 4.76 Outstanding at December 31, 2019 3,966,858 $ 4.67 |
Number of weighted average grant-date fair values of options | Number of options Weighted average grant date fair value Non-vested at December 31, 2018 1,436,429 $ 1.68 Granted 1,379,500 4.57 Vested (1,119,000 ) 1.90 Forfeited (212,000 ) 2.31 Non-vested at December 31, 2019 1,484,929 $ 4.11 |
Schedule of option fair value assumptions | Inputs used in the valuation models are as follows: 2019 Grants 2018 Grants 2017 Grants Option value $7.15 - $7.91 $1.46 - $3.04 $1.73 - $2.34 Risk-free rate 1.7% - 2.6% 1.9% - 2.5% 1.5% - 1.9% Expected dividend yield —% —% —% Expected volatility 64.9% - 66.4% 60.9% - 68.8% 62.1% - 68.0% Expected term (in years) 4.5 - 6 6 6 |
GEOGRAPHIC AND SEGMENT INFORM_2
GEOGRAPHIC AND SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of reporting information by segment | Summarized financial information with respect to reportable segments is as follows: Year ended December 31, 2019 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 22,676 $ 5,559 $ — 28,235 Income (loss) from operations (8,045 ) 2,136 (14,960 ) (20,869 ) Interest income — — 1,392 1,392 Interest expense — — (8 ) (8 ) Other losses, net — — (351 ) (351 ) Income tax benefit — — 130 130 Year ended December 31, 2018 as Restated (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 12,987 $ 3,618 $ — $ 16,605 Income (loss) from operations (6,326 ) 1,795 (9,745 ) (14,276 ) Interest income — — 616 616 Interest expense — — (104 ) (104 ) Other losses, net — — (947 ) (947 ) Change in fair value of derivative liabilities — — 20 20 Income tax benefit — — 3,907 3,907 Year ended December 31, 2017 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 7,636 $ 2,598 $ — $ 10,234 Income (loss) from operations (3,957 ) 1,353 (11,281 ) (13,885 ) Interest expense — — (136 ) (136 ) Change in fair value of derivative liabilities — — 183 183 Income tax benefit — — 156 156 |
Schedule of revenue by geographic area | Revenue by geographic region, based on the "ship to" location on the invoice are as follows: Year Ended December 31, (In thousands) 2019 2018 2017 Sales by Domestic and International Domestic $ 19,584 $ 12,858 $ 8,887 International 8,651 3,747 1,347 Total $ 28,235 $ 16,605 $ 10,234 |
SUPPLEMENTAL UNAUDITED QUARTE_2
SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL INFORMATION OF CONTINUING OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Schedule of quarterly information | The following table sets forth certain unaudited quarterly data of continuing operations for each of the four quarters in the years ended December 31, 2019, and 2018 , respectively. The data has been derived from the Company’s unaudited consolidated financial statements that, in management’s opinion, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of such information when read in conjunction with the Consolidated Financial Statements and Notes thereto. The results of operations for any quarter are not necessarily indicative of the results of operations for any future period. The results presented have been updated for restatements and revisions as discussed in Notes 4 and 5. (In thousands, except per share data) First Second Third Fourth Year ended December 31, 2019 Sales $ 5,629 $ 6,649 $ 7,575 $ 8,382 Gross profit 3,563 4,674 5,294 5,563 Net loss (5,608 ) (4,295 ) (4,370 ) (5,433 ) Basic loss per common share (0.17 ) (0.13 ) (0.13 ) (0.16 ) Year ended December 31, 2018 Sales $ 3,397 $ 3,691 $ 3,672 $ 5,845 Gross profit 2,212 2,537 2,521 3,556 Net loss (2,791 ) (2,938 ) (1,143 ) (3,912 ) Basic loss per common share (0.08 ) (0.09 ) (0.03 ) (0.12 ) *Fourth quarter 2018 period includes approximately $0.7 million of non-recurring severance and expenses related to former members of the Company’s executive management team. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Credit terms, billing term, lower limit | 10 days | ||||||||
Credit terms, billing term, upper limit | 90 days | ||||||||
Allowances for doubtful accounts | $ 273 | $ 428 | |||||||
Contract liabilities | 400 | ||||||||
Contract assets | 100 | ||||||||
Advertising expense | 1,500 | 800 | $ 1,100 | ||||||
Research and development | $ 1,016 | $ 730 | $ 613 | $ 1,618 | $ 2,634 | $ 1,890 | $ 3,731 | $ 2,549 | $ 1,941 |
Renuvion/J-Plasma generators | |||||||||
Product warranty | 4 years | ||||||||
Mounting Fixtures | |||||||||
Product warranty | 2 years | ||||||||
Accessories | |||||||||
Product warranty | 1 year |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment and Intangible Assets (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Building and improvements | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 39 years |
Molds | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 7 years |
Molds | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 15 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Apyx Bulgaria, EOOD | |
Property, Plant and Equipment [Line Items] | |
Goodwill | $ 0.2 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Operating lease right-of-use assets | $ 350 | $ 178 | |
Total lease payments | $ 365 | $ 221 | |
Operating lease, discount rate | 4.00% | ||
2016-02 | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Operating lease right-of-use assets | $ 212 |
RESTATEMENTS Narrative (Details
RESTATEMENTS Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||
Gross profit | $ 5,563,000 | $ 5,294,000 | $ 4,674,000 | $ 3,563,000 | $ 3,556,000 | $ 2,521,000 | $ 2,537,000 | $ 2,212,000 | $ 8,237,000 | $ 13,531,000 | $ 7,270,000 | $ 19,094,000 | $ 10,826,000 | $ 6,958,000 |
Operating expenses | 9,293,000 | 5,309,000 | 15,711,000 | 39,963,000 | 25,102,000 | 20,843,000 | ||||||||
Other losses, net | (295,000) | (868,000) | (495,000) | (265,000) | (868,000) | (351,000) | (947,000) | 0 | ||||||
Net loss | (68,469,000) | (67,262,000) | 19,706,000 | (62,719,000) | 5,062,000 | |||||||||
Sales | (8,382,000) | (7,575,000) | (6,649,000) | (5,629,000) | (5,845,000) | (3,672,000) | (3,691,000) | (3,397,000) | $ (12,278,000) | (19,853,000) | (10,760,000) | (28,235,000) | (16,605,000) | (10,234,000) |
Operating Income (Loss) | (5,730,000) | (2,788,000) | (8,441,000) | (20,869,000) | (14,276,000) | (13,885,000) | ||||||||
Net loss from continuing operations | $ (5,433,000) | $ (4,370,000) | $ (4,295,000) | (5,608,000) | $ (3,912,000) | (1,143,000) | $ (2,938,000) | $ (2,791,000) | (6,872,000) | $ (19,706,000) | (10,784,000) | $ (13,682,000) | ||
Elimination Of Markup On Intercompany Sales | Adjustments | ||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||
Gross profit | 113,000 | |||||||||||||
Operating expenses | 113,000 | |||||||||||||
Income Tax Provision Corrections | Adjustments | ||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||
Operating expenses | 16,000 | 51,000 | 51,000 | 51,000 | ||||||||||
Other losses, net | (301,000) | (713,000) | (713,000) | (713,000) | ||||||||||
Net loss | 317,000 | 764,000 | $ 764,000 | 764,000 | ||||||||||
Appropriate Cutoff Of Transactions Corrections | Adjustments | ||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||
Gross profit | 33,000 | |||||||||||||
Operating expenses | 59,000 | 59,000 | ||||||||||||
Net loss | 40,000 | 59,000 | 59,000 | |||||||||||
Sales | 81,000 | |||||||||||||
Operating Income (Loss) | 90,000 | $ (59,000) | $ (59,000) | (74,000) | ||||||||||
Net loss from continuing operations | 56,000 | |||||||||||||
Stock-based Compensation Corrections | Adjustments | ||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||
Operating expenses | 453,000 | 582,000 | ||||||||||||
Net loss | 453,000 | 582,000 | ||||||||||||
Operating Income (Loss) | (453,000) | $ (582,000) | ||||||||||||
Pre-development Activities On OEM Contracts | Adjustments | ||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||
Operating expenses | (77,000) | |||||||||||||
Net loss | 117,000 | |||||||||||||
Sales | 194,000 | |||||||||||||
Operating Income (Loss) | $ (117,000) |
REVISIONS (Details)
REVISIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance Sheet | ||||||||||||||
Trade accounts receivable, net | $ 7,987 | $ 5,292 | $ 4,044 | $ 3,721 | $ 4,139 | $ 5,292 | $ 4,139 | $ 7,987 | $ 3,721 | |||||
Accrued taxes and other liabilities | $ 8,366 | 7,230 | 7,230 | $ 8,366 | ||||||||||
Retained earnings | 14,517 | 19,950 | 24,320 | 28,615 | 34,223 | 38,766 | 24,320 | 19,950 | 38,766 | 14,517 | 34,223 | |||
Statement of Operations | ||||||||||||||
Sales | 8,382 | 7,575 | 6,649 | 5,629 | 5,845 | 3,672 | $ 3,691 | $ 3,397 | 12,278 | 19,853 | 10,760 | 28,235 | 16,605 | $ 10,234 |
Cost of sales | 2,281 | 1,975 | 2,066 | 1,151 | 4,041 | 6,322 | 3,490 | 9,141 | 5,779 | 3,276 | ||||
Research and development | 1,016 | 730 | 613 | 1,618 | 2,634 | 1,890 | 3,731 | 2,549 | 1,941 | |||||
Professional services | 2,039 | 1,661 | 2,118 | 628 | 3,779 | 5,818 | 1,815 | 8,507 | 3,133 | 1,769 | ||||
Salaries and related costs | 3,159 | 3,510 | 3,488 | 2,170 | 6,998 | 10,157 | 5,785 | 14,025 | 9,272 | 6,920 | ||||
Selling, general and administrative | $ 3,836 | $ 3,037 | 2,957 | 1,898 | 5,994 | 9,830 | 6,221 | 13,700 | 9,407 | 8,689 | ||||
Other income (losses), net | $ (295) | (868) | $ (495) | $ (265) | (868) | (351) | (947) | 0 | ||||||
Loss per share - all (in dollars per share) | $ (0.13) | $ (0.13) | $ (0.17) | $ (0.30) | $ (0.42) | |||||||||
Gross profit | $ 5,563 | $ 5,294 | $ 4,674 | $ 3,563 | 3,556 | 2,521 | $ 2,537 | $ 2,212 | $ 8,237 | $ 13,531 | 7,270 | $ 19,094 | 10,826 | $ 6,958 |
Gross profit percentage | 69.90% | 70.30% | 67.10% | 68.20% | ||||||||||
As Reported | ||||||||||||||
Balance Sheet | ||||||||||||||
Trade accounts receivable, net | $ 5,233 | 4,006 | 3,656 | 4,080 | $ 5,233 | 4,080 | 3,656 | |||||||
Accrued taxes and other liabilities | $ 7,285 | 6,149 | 6,149 | $ 7,285 | ||||||||||
Retained earnings | 21,031 | 25,342 | 30,832 | $ 35,513 | 39,471 | 25,342 | 21,031 | 39,471 | 35,513 | |||||
Statement of Operations | ||||||||||||||
Sales | 6,568 | 5,823 | 3,672 | 12,197 | 19,772 | 10,760 | 16,686 | |||||||
Cost of sales | 2,558 | 2,096 | 2,103 | 1,151 | 4,199 | 6,757 | 3,490 | 5,893 | ||||||
Research and development | 936 | 810 | 613 | 1,698 | 2,634 | 1,890 | 2,469 | |||||||
Professional services | 1,996 | 1,633 | 1,791 | 628 | 3,760 | 5,756 | 1,815 | 3,072 | ||||||
Salaries and related costs | 3,020 | 3,333 | 3,221 | 2,119 | 6,671 | 9,691 | 5,734 | 8,673 | ||||||
Selling, general and administrative | $ 3,762 | $ 3,083 | 3,101 | 1,957 | 6,107 | 9,869 | 6,280 | 9,438 | ||||||
Other income (losses), net | $ (25) | (155) | $ (225) | $ 5 | (155) | (203) | ||||||||
Loss per share - all (in dollars per share) | $ (0.13) | $ (0.13) | $ (0.14) | $ (0.29) | $ (0.41) | |||||||||
Gross profit | $ 5,017 | $ 4,472 | $ 3,720 | $ 2,521 | $ 7,998 | $ 13,015 | $ 7,270 | $ 10,793 | ||||||
Gross profit percentage | 66.20% | 68.10% | 65.60% | 65.80% | ||||||||||
Immaterial corrections | Adjustments | ||||||||||||||
Balance Sheet | ||||||||||||||
Trade accounts receivable, net | $ 59 | $ 59 | ||||||||||||
Accrued taxes and other liabilities | $ 1,081 | 1,081 | 1,081 | $ 1,081 | ||||||||||
Retained earnings | (1,081) | (1,022) | (1,022) | (1,081) | ||||||||||
Statement of Operations | ||||||||||||||
Sales | 81 | 81 | 81 | |||||||||||
Cost of sales | (277) | (121) | (158) | (435) | ||||||||||
Research and development | 80 | (80) | 0 | |||||||||||
Professional services | 43 | 28 | 19 | 62 | ||||||||||
Salaries and related costs | 139 | 177 | 327 | 466 | ||||||||||
Selling, general and administrative | $ 74 | $ (46) | (113) | (39) | ||||||||||
Other income (losses), net | $ (270) | $ (270) | ||||||||||||
Loss per share - all (in dollars per share) | $ 0 | $ 0 | $ (0.01) | $ (0.01) | ||||||||||
Gross profit | $ 277 | $ 202 | $ 239 | $ 516 | ||||||||||
Gross profit percentage | 3.70% | 2.20% | 1.50% | 2.40% |
RESTATEMENTS Consolidated Balan
RESTATEMENTS Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||||||||
Cash and cash equivalents | $ 58,812 | $ 32,415 | $ 16,596 | $ 40,663 | ||||
Short term investments | 0 | 40,885 | 61,678 | 55,480 | ||||
Trade accounts receivable, net | 7,987 | $ 5,292 | 4,044 | 3,721 | 4,139 | |||
Other receivables | 1,233 | 925 | 1,359 | |||||
Inventories, net | 5,068 | 3,013 | 3,146 | 6,037 | ||||
Prepaid expenses and other current assets | 3,633 | 4,034 | 3,335 | 627 | ||||
Total current assets | 76,733 | 85,316 | 89,835 | 106,946 | ||||
Property and equipment, net | 6,618 | 6,015 | 5,788 | 5,842 | ||||
Operating lease right-of-use assets | 350 | 178 | ||||||
Other assets | 391 | 347 | 305 | 385 | ||||
Total assets | 84,745 | 91,856 | 95,928 | 113,173 | ||||
Current liabilities: | ||||||||
Accounts payable | 2,438 | 1,504 | 1,423 | 2,348 | ||||
Accrued expenses and other current liabilities | 9,396 | 7,009 | 7,188 | 20,088 | ||||
Current portion of operating lease liabilities | 108 | 103 | ||||||
Total current liabilities | 12,311 | 8,616 | 8,611 | 22,436 | ||||
Related party note payable | 0 | 140 | 140 | 140 | ||||
Long-term operating lease liabilities | 235 | 75 | ||||||
Other liabilities | 519 | 194 | 0 | |||||
Liabilities | 13,486 | 9,025 | 8,751 | 22,576 | ||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock | 34 | 34 | 34 | 33 | ||||
Additional paid-in capital | 56,708 | 54,182 | 52,920 | 51,798 | ||||
Retained earnings | 14,517 | $ 19,950 | 24,320 | 28,615 | 34,223 | 38,766 | ||
Total stockholders’ equity | 71,259 | 82,831 | 87,177 | 90,597 | $ 22,032 | $ 26,223 | ||
Total liabilities and stockholders’ equity | $ 84,745 | 91,856 | 95,928 | 113,173 | ||||
As Originally Reported | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | 32,415 | 16,466 | 40,663 | |||||
Short term investments | 40,885 | 61,678 | 55,480 | |||||
Trade accounts receivable, net | 5,233 | 4,006 | 3,656 | 4,080 | ||||
Other receivables | 925 | 1,359 | ||||||
Inventories, net | 3,013 | 3,061 | 6,037 | |||||
Prepaid expenses and other current assets | 3,996 | 3,297 | 627 | |||||
Total current assets | 85,240 | 89,517 | 106,887 | |||||
Property and equipment, net | 6,015 | 5,788 | 5,842 | |||||
Operating lease right-of-use assets | 178 | |||||||
Other assets | 270 | 305 | 385 | |||||
Total assets | 91,703 | 95,610 | 113,114 | |||||
Current liabilities: | ||||||||
Accounts payable | 1,504 | 1,423 | 2,348 | |||||
Accrued expenses and other current liabilities | 5,868 | 6,279 | 19,324 | |||||
Current portion of operating lease liabilities | 103 | |||||||
Total current liabilities | 7,475 | 7,702 | 21,672 | |||||
Related party note payable | 140 | 140 | 140 | |||||
Long-term operating lease liabilities | 75 | |||||||
Other liabilities | 0 | |||||||
Liabilities | 7,690 | 7,842 | 21,812 | |||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock | 34 | 34 | 33 | |||||
Additional paid-in capital | 53,147 | 52,221 | 51,798 | |||||
Retained earnings | $ 21,031 | $ 25,342 | 30,832 | 35,513 | 39,471 | |||
Total stockholders’ equity | 84,013 | 87,768 | 91,302 | |||||
Total liabilities and stockholders’ equity | 91,703 | 95,610 | 113,114 | |||||
Adjustments | Material Corrections | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | 0 | 130 | 0 | |||||
Short term investments | 0 | 0 | 0 | |||||
Trade accounts receivable, net | 38 | 65 | 59 | |||||
Other receivables | 0 | 0 | ||||||
Inventories, net | 0 | 85 | 0 | |||||
Prepaid expenses and other current assets | 38 | 38 | 0 | |||||
Total current assets | 76 | 318 | 59 | |||||
Property and equipment, net | 0 | 0 | 0 | |||||
Operating lease right-of-use assets | 0 | |||||||
Other assets | 77 | 0 | 0 | |||||
Total assets | 153 | 318 | 59 | |||||
Current liabilities: | ||||||||
Accounts payable | 0 | 0 | 0 | |||||
Accrued expenses and other current liabilities | 1,141 | 909 | 764 | |||||
Current portion of operating lease liabilities | 0 | |||||||
Total current liabilities | 1,141 | 909 | 764 | |||||
Related party note payable | 0 | 0 | 0 | |||||
Long-term operating lease liabilities | 0 | |||||||
Other liabilities | 194 | |||||||
Liabilities | 1,335 | 909 | 764 | |||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock | 0 | 0 | 0 | |||||
Additional paid-in capital | 1,035 | 699 | 0 | |||||
Retained earnings | (2,217) | (1,290) | (705) | |||||
Total stockholders’ equity | (1,182) | (591) | (705) | |||||
Total liabilities and stockholders’ equity | $ 153 | $ 318 | $ 59 |
RESTATEMENTS Consolidated Bal_2
RESTATEMENTS Consolidated Balance Sheets - Additional Information (Details) - $ / shares | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Accounting Changes and Error Corrections [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 34,312,527 | 34,033,255 | 33,847,100 | 33,763,019 |
Common stock, shares outstanding (in shares) | 34,169,952 | 33,891,255 | 33,704,525 | 33,620,444 |
RESTATEMENTS Consolidated State
RESTATEMENTS Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Aug. 30, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||
Sales | $ 8,382 | $ 7,575 | $ 6,649 | $ 5,629 | $ 5,845 | $ 3,672 | $ 3,691 | $ 3,397 | $ 12,278 | $ 19,853 | $ 10,760 | $ 28,235 | $ 16,605 | $ 10,234 | |
Cost of sales | 2,281 | 1,975 | 2,066 | 1,151 | 4,041 | 6,322 | 3,490 | 9,141 | 5,779 | 3,276 | |||||
Gross profit | 5,563 | 5,294 | 4,674 | 3,563 | 3,556 | 2,521 | 2,537 | 2,212 | 8,237 | 13,531 | 7,270 | 19,094 | 10,826 | 6,958 | |
Other costs and expenses: | |||||||||||||||
Research and development | 1,016 | 730 | 613 | 1,618 | 2,634 | 1,890 | 3,731 | 2,549 | 1,941 | ||||||
Professional services | 2,039 | 1,661 | 2,118 | 628 | 3,779 | 5,818 | 1,815 | 8,507 | 3,133 | 1,769 | |||||
Salaries and related costs | 3,159 | 3,510 | 3,488 | 2,170 | 6,998 | 10,157 | 5,785 | 14,025 | 9,272 | 6,920 | |||||
Selling, general and administrative | 3,836 | 3,037 | 2,957 | 1,898 | 5,994 | 9,830 | 6,221 | 13,700 | 9,407 | 8,689 | |||||
Severance and related expense | 700 | 0 | 741 | 1,524 | |||||||||||
Total other costs and expenses | 9,293 | 5,309 | 15,711 | 39,963 | 25,102 | 20,843 | |||||||||
Loss from operations | (5,730) | (2,788) | (8,441) | (20,869) | (14,276) | (13,885) | |||||||||
Interest income (expense), net | 105 | 33 | |||||||||||||
Interest income | 423 | 1,392 | 616 | 0 | |||||||||||
Interest expense | (8) | (104) | (136) | ||||||||||||
Other losses, net | (295) | (868) | $ (495) | $ (265) | (868) | (351) | (947) | 0 | |||||||
Change in fair value of derivative liabilities | 20 | 0 | 20 | 183 | |||||||||||
Total other income, net | 128 | (763) | (815) | 1,033 | (415) | 47 | |||||||||
Loss from continuing operations before income taxes | (5,602) | (3,551) | (9,256) | (19,836) | (14,691) | (13,838) | |||||||||
Income tax benefit | 6 | (2,408) | (2,384) | (130) | (3,907) | (156) | |||||||||
Net loss from continuing operations | $ (5,433) | $ (4,370) | $ (4,295) | $ (5,608) | $ (3,912) | (1,143) | $ (2,938) | $ (2,791) | (6,872) | (19,706) | (10,784) | (13,682) | |||
Income from discontinued operations, net of tax | 540 | 5,062 | 0 | 5,099 | 8,620 | ||||||||||
Gain on sale of the Core Business, net of tax | $ 68,404 | 69,072 | 69,072 | 0 | 68,404 | 0 | |||||||||
Total income from discontinued operations, net of tax | 69,612 | 74,134 | 0 | 73,503 | 8,620 | ||||||||||
Net income (loss) | $ 68,469 | $ 67,262 | $ (19,706) | $ 62,719 | $ (5,062) | ||||||||||
Loss per share from continuing operations | |||||||||||||||
Basic and diluted (in dollars per share) | $ (0.03) | $ (0.21) | $ (0.58) | $ (0.32) | $ (0.44) | ||||||||||
Income per share from discontinued operations | |||||||||||||||
Basic (in dollars per share) | 2.09 | 2.25 | 0 | 2.21 | 0.27 | ||||||||||
Diluted (in dollars per share) | 1.99 | 2.19 | 0 | 2.14 | 0.27 | ||||||||||
Income (loss) per share from all operations | |||||||||||||||
Basic (in dollars per share) | 2.06 | 2.04 | (0.58) | 1.89 | (0.16) | ||||||||||
Diluted (in dollars per share) | $ 1.96 | $ 1.98 | $ (0.58) | $ 1.83 | $ (0.17) | ||||||||||
Loss per share, Basic and Diluted (in dollars per share) | $ (0.13) | $ (0.13) | $ (0.17) | $ (0.30) | $ (0.42) | ||||||||||
Weighted average number of shares outstanding basic (in shares) | 33,275 | 33,014 | 34,069 | 33,185 | 31,420 | ||||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,934 | 33,952 | 34,069 | 34,366 | 31,427 | ||||||||||
Weighted average number of shares outstanding basic and diluted (in shares) | 33,343 | ||||||||||||||
As Originally Reported | |||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||
Sales | $ 6,568 | $ 5,823 | $ 3,672 | $ 12,197 | $ 19,772 | $ 10,760 | $ 16,686 | ||||||||
Cost of sales | $ 2,558 | 2,096 | 2,103 | 1,151 | 4,199 | 6,757 | 3,490 | 5,893 | |||||||
Gross profit | 5,017 | 4,472 | 3,720 | 2,521 | 7,998 | 13,015 | 7,270 | 10,793 | |||||||
Other costs and expenses: | |||||||||||||||
Research and development | 936 | 810 | 613 | 1,698 | 2,634 | 1,890 | 2,469 | ||||||||
Professional services | 1,996 | 1,633 | 1,791 | 628 | 3,760 | 5,756 | 1,815 | 3,072 | |||||||
Salaries and related costs | 3,020 | 3,333 | 3,221 | 2,119 | 6,671 | 9,691 | 5,734 | 8,673 | |||||||
Selling, general and administrative | $ 3,762 | $ 3,083 | 3,101 | 1,957 | 6,107 | 9,869 | 6,280 | 9,438 | |||||||
Severance and related expense | 741 | ||||||||||||||
Total other costs and expenses | 8,923 | 5,317 | 15,719 | 24,393 | |||||||||||
Loss from operations | (5,203) | (2,796) | (8,449) | (13,600) | |||||||||||
Interest income (expense), net | 105 | 33 | |||||||||||||
Interest income | 423 | 616 | |||||||||||||
Interest expense | (104) | ||||||||||||||
Other losses, net | (25) | (155) | $ (225) | $ 5 | (155) | (203) | |||||||||
Change in fair value of derivative liabilities | 20 | 20 | |||||||||||||
Total other income, net | 398 | (50) | (102) | 329 | |||||||||||
Loss from continuing operations before income taxes | (4,805) | (2,846) | (8,551) | (13,271) | |||||||||||
Income tax benefit | (124) | (2,408) | (2,384) | (3,777) | |||||||||||
Net loss from continuing operations | $ (4,681) | (438) | (6,167) | (9,494) | |||||||||||
Income from discontinued operations, net of tax | 540 | 5,062 | 5,099 | ||||||||||||
Gain on sale of the Core Business, net of tax | 69,072 | 69,072 | 68,404 | ||||||||||||
Total income from discontinued operations, net of tax | 69,612 | 74,134 | 73,503 | ||||||||||||
Net income (loss) | $ 69,174 | $ 67,967 | $ 64,009 | ||||||||||||
Loss per share from continuing operations | |||||||||||||||
Basic and diluted (in dollars per share) | $ (0.01) | $ (0.19) | $ (0.29) | ||||||||||||
Income per share from discontinued operations | |||||||||||||||
Basic (in dollars per share) | 2.09 | 2.25 | 2.21 | ||||||||||||
Diluted (in dollars per share) | 1.99 | 2.19 | 2.14 | ||||||||||||
Income (loss) per share from all operations | |||||||||||||||
Basic (in dollars per share) | 2.08 | 2.06 | 1.93 | ||||||||||||
Diluted (in dollars per share) | $ 1.98 | $ 2 | $ 1.86 | ||||||||||||
Loss per share, Basic and Diluted (in dollars per share) | $ (0.13) | $ (0.13) | $ (0.14) | $ (0.29) | $ (0.41) | ||||||||||
Weighted average number of shares outstanding basic (in shares) | 33,275 | 33,014 | 33,185 | ||||||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,934 | 33,952 | 34,366 | ||||||||||||
Weighted average number of shares outstanding basic and diluted (in shares) | 33,343 | ||||||||||||||
Adjustments | Material Corrections | |||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||
Sales | $ (194) | $ 0 | $ 0 | $ (81) | |||||||||||
Cost of sales | (37) | 0 | 0 | (114) | |||||||||||
Gross profit | (157) | 0 | 0 | 33 | |||||||||||
Other costs and expenses: | |||||||||||||||
Research and development | (80) | 0 | 0 | 80 | |||||||||||
Professional services | 327 | 0 | 0 | 61 | |||||||||||
Salaries and related costs | 267 | 51 | 51 | 599 | |||||||||||
Selling, general and administrative | (144) | (59) | (59) | (31) | |||||||||||
Severance and related expense | 0 | ||||||||||||||
Total other costs and expenses | 370 | (8) | (8) | 709 | |||||||||||
Loss from operations | (527) | 8 | 8 | (676) | |||||||||||
Interest income (expense), net | 0 | 0 | |||||||||||||
Interest income | 0 | 0 | |||||||||||||
Interest expense | 0 | ||||||||||||||
Other losses, net | (270) | (713) | (713) | (744) | |||||||||||
Change in fair value of derivative liabilities | 0 | 0 | |||||||||||||
Total other income, net | (270) | (713) | (713) | (744) | |||||||||||
Loss from continuing operations before income taxes | (797) | (705) | (705) | (1,420) | |||||||||||
Income tax benefit | 130 | 0 | 0 | (130) | |||||||||||
Net loss from continuing operations | $ (927) | (705) | (705) | (1,290) | |||||||||||
Income from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||||||
Gain on sale of the Core Business, net of tax | 0 | 0 | 0 | ||||||||||||
Total income from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||||||
Net income (loss) | $ (705) | $ (705) | $ (1,290) | ||||||||||||
Loss per share from continuing operations | |||||||||||||||
Basic and diluted (in dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) | ||||||||||||
Income per share from discontinued operations | |||||||||||||||
Basic (in dollars per share) | 0 | 0 | |||||||||||||
Diluted (in dollars per share) | 0 | 0 | 0 | ||||||||||||
Income (loss) per share from all operations | |||||||||||||||
Basic (in dollars per share) | (0.02) | (0.02) | (0.04) | ||||||||||||
Diluted (in dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) | ||||||||||||
Loss per share, Basic and Diluted (in dollars per share) | $ (0.03) | ||||||||||||||
Weighted average number of shares outstanding basic (in shares) | 33,275 | 33,014 | 33,185 | ||||||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,934 | 33,952 | 34,366 | ||||||||||||
Weighted average number of shares outstanding basic and diluted (in shares) | 33,343 |
DISPOSITION OF THE CORE BUSIN_3
DISPOSITION OF THE CORE BUSINESS - Narrative (Details) - USD ($) $ in Thousands | Aug. 30, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Aug. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Proceeds from the disposition of Core business | $ 97,000 | $ 0 | $ 91,095 | $ 0 | |||||||
Other gains or (losses) | $ (295) | $ (868) | $ (495) | $ (265) | $ (868) | (351) | (947) | 0 | |||
Gain on sale of the Core Business, net of tax | $ 68,404 | $ 69,072 | $ 69,072 | $ 0 | 68,404 | $ 0 | |||||
Core Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Gain on sale of the Core Business, net of tax | $ 19,600 | 16,140 | |||||||||
Cost of sales | 10,500 | ||||||||||
Operating expenses | $ 2,800 | ||||||||||
Symmetry Surgical Inc. | Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Asset Purchase Agreement, term | 4 years | ||||||||||
Other gains or (losses) | $ 100 | $ (200) | |||||||||
Gain on sale of the Core Business, net of tax | $ 1,500 | 9,400 | |||||||||
Cost of sales | 1,500 | 8,800 | |||||||||
Operating expenses | $ 200 | $ 500 | |||||||||
Symmetry Surgical Inc. | Manufacture and Supply Agreement | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Asset Purchase Agreement, term | 10 years |
DISPOSITION OF THE CORE BUSIN_4
DISPOSITION OF THE CORE BUSINESS - Cash Consideration and Fair Value of Assets Disposed (Details) - USD ($) $ in Thousands | Aug. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gross consideration from the sale of the Core Business | $ 97,000 | $ 0 | $ 91,095 | $ 0 | ||
Closing and transaction costs | 5,905 | |||||
Net proceeds from sale of the Core Business before taxes | 91,095 | |||||
Non-cash commitment to provide inventory | 2,305 | |||||
Core business disposition, current assets | ||||||
Inventories, net | 2,195 | |||||
Prepaid expenses and other current assets | 57 | |||||
Total current assets | 2,252 | |||||
Property and equipment, net of depreciation | 375 | 149 | 0 | |||
Total non-current assets | 1,997 | |||||
Total assets | 4,249 | |||||
Net gain on sale of the Core Business before taxes | 84,541 | |||||
Income tax expense | 16,137 | |||||
Net gain on sale of the Core Business after income taxes | 68,404 | $ 69,072 | $ 69,072 | $ 0 | $ 68,404 | $ 0 |
Purchased technology and license rights, net of depreciation | ||||||
Core business disposition, current assets | ||||||
Intangible assets | 112 | |||||
Brand name and trademark | ||||||
Core business disposition, current assets | ||||||
Intangible assets | $ 1,510 |
DISPOSITION OF THE CORE BUSIN_5
DISPOSITION OF THE CORE BUSINESS - Cash Flows Associated with Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |||||
Net Income from discontinued operations | $ 69,612 | $ 74,134 | $ 0 | $ 73,503 | $ 8,620 |
Depreciation and amortization | 0 | 126 | 529 | ||
Change in current assets from discontinued operations | 0 | (2,378) | 362 | ||
Change in non current assets from discontinued liabilities | 0 | (1,997) | (632) | ||
Change in current liabilities from discontinued operations | 0 | (1,021) | (1,451) | ||
Net cash provided by operating activities | $ 0 | $ 68,233 | $ 7,428 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 2,935 | $ 2,594 | ||
Work in process | 1,209 | 406 | ||
Finished goods | 1,316 | 585 | ||
Gross inventories | 5,460 | 3,585 | ||
Less: provision for obsolescence | (392) | (439) | ||
Inventories, net | $ 5,068 | $ 3,013 | $ 3,146 | $ 6,037 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | Sep. 30, 2018 | Aug. 30, 2018 | |
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | $ 10,872 | $ 12,146 | ||||
Less: accumulated depreciation and amortization | (4,403) | (6,358) | ||||
Property and equipment, net | 6,469 | 5,788 | ||||
Construction in process | 149 | 0 | $ 375 | |||
Property and equipment in service | 6,618 | 5,788 | $ 6,015 | $ 5,842 | ||
Depreciation | 700 | 400 | $ 600 | |||
Land | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 1,600 | 1,600 | ||||
Building and improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 4,423 | 4,338 | ||||
Machinery and equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 2,187 | 2,881 | ||||
Furniture and fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 292 | 461 | ||||
Computer equipment and software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 1,409 | 1,741 | ||||
Leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 156 | 108 | ||||
Molds | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | $ 805 | $ 1,017 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |
Discount rate | 4.00% |
Sophia, Bulgaria | |
Lessee, Lease, Description [Line Items] | |
Lease term | 2 years |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease costs | $ 115 |
Amortization of right-of-use assets | 57 |
Interest on lease liabilities | 8 |
Variable lease costs | 16 |
Lease, Cost | $ 196 |
LEASES - Cash and Non-Cash Info
LEASES - Cash and Non-Cash Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating | |
Cash paid for lease liabilities | $ 106 |
Finance | |
Cash paid for lease liabilities | 68 |
2016-02 | |
Operating | |
Right-of-use assets capitalized and lease liabilities | 212 |
Finance | |
Right-of-use assets capitalized and lease liabilities | 0 |
Lease Remeasurement | |
Operating | |
Right-of-use assets capitalized and lease liabilities | 207 |
Finance | |
Right-of-use assets capitalized and lease liabilities | 0 |
Lease Execution | |
Operating | |
Right-of-use assets capitalized and lease liabilities | 28 |
Finance | |
Right-of-use assets capitalized and lease liabilities | $ 710 |
LEASES - Lease Terms and Discou
LEASES - Lease Terms and Discount Rates (Details) | Dec. 31, 2019 |
Operating | |
Weighted average remaining lease term | 2 years 11 months 23 days |
Weighted average discount rate | 4.04% |
Finance | |
Weighted average remaining lease term | 2 years 8 months 5 days |
Weighted average discount rate | 4.00% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Jan. 01, 2019 |
Operating | |||
2020 | $ 120 | ||
2021 | 124 | ||
2022 | 121 | ||
2023 | 0 | ||
Total lease payments | 365 | $ 221 | |
Less imputed interest | (22) | ||
Present value of lease liabilities | 343 | ||
Less current portion of lease liabilities | (108) | $ (103) | |
Long-term operating lease liabilities | 235 | $ 75 | |
Finance | |||
2020 | 251 | ||
2021 | 236 | ||
2022 | 183 | ||
2023 | 18 | ||
Total lease payments | 688 | ||
Less imputed interest | (38) | ||
Present value of lease liabilities | 650 | ||
Less current portion of lease liabilities | (229) | ||
Long-term finance lease liabilities | $ 421 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Payables and Accruals [Abstract] | ||||
Accrued severance and related | $ 116 | $ 610 | ||
Accrued payroll | 694 | 418 | ||
Accrued bonus | 1,306 | 972 | ||
Accrued commissions | 877 | 379 | ||
Accrued product warranties | 452 | 348 | ||
Accrued insurance | 1,170 | 725 | ||
Accrued professional fees | 1,383 | 331 | ||
Joint and several payroll liability | 1,045 | 713 | ||
Uncertain tax positions | 1,491 | 1,325 | ||
Other accrued expenses and current liabilities | 862 | 1,367 | ||
Total accrued expenses and other current liabilities | $ 9,396 | $ 7,009 | $ 7,188 | $ 20,088 |
PRODUCT WARRANTIES (Details)
PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 348 | $ 233 |
Provision for product warranties | 321 | 253 |
Product warranty expenses incurred | (217) | (138) |
Accrued product warranties | $ 452 | $ 348 |
JOINT AND SEVERAL PAYROLL LIA_2
JOINT AND SEVERAL PAYROLL LIABILITY (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Joint and several payroll liability | $ 1,045 | $ 713 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerators: | ||||||||||||
Net (loss) and numerator for dilutive (loss) per share - continuing operations | $ (5,433) | $ (4,370) | $ (4,295) | $ (5,608) | $ (3,912) | $ (1,143) | $ (2,938) | $ (2,791) | $ (6,872) | $ (19,706) | $ (10,784) | $ (13,682) |
Numerator for dilutive income per share - discontinued operations | $ 69,612 | $ 74,134 | 0 | 73,503 | 8,620 | |||||||
Numerator for full dilutive (loss) income per share - all | (19,706) | 62,719 | (5,062) | |||||||||
Derivative liability warrants | 0 | 0 | (183) | |||||||||
Numerator for full dilutive (loss) income per share - all | $ (19,706) | $ 62,719 | $ (5,245) | |||||||||
Denominator | ||||||||||||
Weighted average number of shares issued, basic (in shares) | 34,069 | 33,185 | 31,420 | |||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,934 | 33,952 | 34,069 | 34,366 | 31,427 | |||||||
Loss per share from continuing operations | ||||||||||||
Basic and diluted (in dollars per share) | $ (0.03) | $ (0.21) | $ (0.58) | $ (0.32) | $ (0.44) | |||||||
Income per share from discontinued operations | ||||||||||||
Basic (in dollars per share) | 2.09 | 2.25 | 0 | 2.21 | 0.27 | |||||||
Diluted (in dollars per share) | 1.99 | 2.19 | 0 | 2.14 | 0.27 | |||||||
Income (loss) per share from all operations | ||||||||||||
Basic (in dollars per share) | 2.06 | 2.04 | (0.58) | 1.89 | (0.16) | |||||||
Diluted (in dollars per share) | $ 1.96 | $ 1.98 | $ (0.58) | $ 1.83 | $ (0.17) | |||||||
Derivative liability warrants | ||||||||||||
Denominator | ||||||||||||
Derivative liability warrants (in shares) | 0 | 0 | 7 | |||||||||
Income (loss) per share from all operations | ||||||||||||
Anti-dilutive instruments excluded from diluted (loss) per common share - continuing operations: (in shares) | 0 | 0 | 7 | |||||||||
Anti-dilutive instruments excluded from diluted income (loss) per common share - discontinued operations (in shares) | 0 | 0 | 7 | |||||||||
Stock options | ||||||||||||
Denominator | ||||||||||||
Stock options (in shares) | 0 | 1,181 | 0 | |||||||||
Income (loss) per share from all operations | ||||||||||||
Anti-dilutive instruments excluded from diluted (loss) per common share - continuing operations: (in shares) | 3,967 | 1,181 | 646 | |||||||||
Anti-dilutive instruments excluded from diluted income (loss) per common share - discontinued operations (in shares) | 3,967 | 0 | 646 | |||||||||
Anti-dilutive instruments excluded from diluted income (loss) per common share - all operations: (in shares) | 3,967 | 0 | 646 | |||||||||
Continuing Operations | ||||||||||||
Denominator | ||||||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,069 | 33,185 | 31,420 | |||||||||
Discontinued Operations | ||||||||||||
Denominator | ||||||||||||
Weighted average number of shares issued, basic (in shares) | 34,069 | 33,185 | 31,420 | |||||||||
Weighted average number of shares outstanding dilutive (in shares) | 34,069 | 34,366 | 31,420 | |||||||||
Discontinued Operations | Stock options | ||||||||||||
Denominator | ||||||||||||
Stock options (in shares) | 0 | 1,181 | 0 |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Cash - As Restated | $ 2,237 | $ 6,467 |
US Treasury securities | $ 56,575 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||||
Cash - As Restated | $ 2,237 | $ 6,467 | ||
Adjusted Cost | 78,027 | |||
Unrealized Gains | 247 | |||
Fair Value | 78,274 | |||
Cash and Cash Equivalents | 58,812 | $ 32,415 | 16,596 | $ 40,663 |
Short-term Marketable Securities | $ 0 | $ 40,885 | 61,678 | $ 55,480 |
U.S. Treasury Securities, maturities less than three months | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Adjusted Cost | 10,129 | |||
Fair Value | 10,129 | |||
Cash and Cash Equivalents | 10,129 | |||
U.S. Treasury Securities, maturities greater than three months | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Adjusted Cost | 61,431 | |||
Unrealized Gains | 247 | |||
Fair Value | 61,678 | |||
Short-term Marketable Securities | $ 61,678 |
INCOME TAXES INCOME TAXES - Nar
INCOME TAXES INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | Aug. 30, 2018 | Sep. 30, 2018 | Aug. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Operating Loss Carryforwards [Line Items] | |||||||
Income tax expense from discontinued operations | $ 1,200 | ||||||
Gain on sale of the Core Business, net of tax | $ 68,404 | $ 69,072 | $ 69,072 | $ 0 | 68,404 | $ 0 | |
Unrecognized tax benefits | 1,313 | 1,313 | |||||
Accrued interest and penalties | $ 200 | 200 | |||||
Core Business | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Gain on sale of the Core Business, net of tax | $ 19,600 | $ 16,140 |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provision For Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||||||
Federal | $ (12) | $ (3,073) | $ 0 | |||
State | (205) | (884) | 22 | |||
Foreign | 87 | 20 | 17 | |||
Current income tax expense (benefit) | (130) | (3,937) | 39 | |||
Deferred: | ||||||
Federal | (3,989) | (171) | 1,581 | |||
State | (741) | 7 | (401) | |||
Deferred income tax expense (benefit) | (4,730) | (164) | 1,180 | |||
Valuation allowance | 4,730 | 194 | (1,375) | |||
Total provision for income tax from continuing operations | $ 6 | $ (2,408) | $ (2,384) | $ (130) | $ (3,907) | $ (156) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Statutory Federal Income Tax Rate to Effective Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the statutory federal income tax rate to our effective tax rate | |||
Federal tax provision | 21.00% | 21.00% | 34.00% |
State taxes (net of federal benefit) | 4.30% | 5.60% | 4.80% |
Warrant gains | 0.00% | 0.00% | 0.40% |
Valuation allowance | (23.80%) | (1.30%) | 28.90% |
Change in federal tax rate | 0.00% | 0.00% | (71.20%) |
Other | (0.80%) | 1.30% | 6.20% |
Total | 0.70% | 26.60% | 3.10% |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | |||
Loss and credit carry-forwards | $ 4,779 | $ 0 | $ 7,722 |
Stock-based compensation | 1,004 | 721 | 549 |
Inventory Reserve | 99 | 115 | 494 |
Intangibles | 34 | 146 | 0 |
Other | 1,000 | 910 | 178 |
Total deferred tax assets | 6,916 | 1,892 | 8,943 |
Valuation allowance | (6,472) | (1,742) | (8,756) |
Total deferred tax assets, net of valuation allowance | 444 | 150 | 187 |
Deferred tax liabilities: | |||
State taxes (capital) | 0 | 0 | (17) |
Property and equipment | (245) | (150) | (294) |
Intangibles | 0 | 0 | (244) |
Lease right-of-use assets | (199) | ||
Total deferred tax liabilities | (444) | (150) | (555) |
Net deferred tax liabilities | $ 0 | $ 0 | $ (368) |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits Roll-Forward (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Gross Unrealized Tax Benefits | |
Balance at January 1, 2019 | $ 1,313 |
Additions of tax positions related to the current year | 0 |
Additions of tax positions related to the prior year | 0 |
Decreases for tax positions related to prior year | 0 |
Balance at December 31, 2019 | $ 1,313 |
RETIREMENT PLAN - Narrative (De
RETIREMENT PLAN - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, vesting period | 3 years | ||
Defined contribution plan, vesting percentage after 3 years | 100.00% | ||
Defined contribution plan, employer matching contribution | 50.00% | ||
Defined contribution plan, percent of employees' gross pay | 3.00% | ||
Company matching contributions | $ 0.3 | $ 0.3 | $ 0.3 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Related Party Transactions [Abstract] | |
Note payable issued | $ 0.1 |
Note payable term | 5 years |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) | Nov. 12, 2018 | Dec. 15, 2017 | Nov. 06, 2017 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Apr. 17, 2019 |
Other Commitments [Line Items] | |||||||||
Purchase commitments | $ 2,000,000 | $ 2,000,000 | |||||||
Severance and related expense | $ 700,000 | 0 | $ 741,000 | $ 1,524,000 | |||||
Operational cash outflows | 18,475,000 | 20,881,000 | $ 3,704,000 | ||||||
Chief Financial Officer | |||||||||
Other Commitments [Line Items] | |||||||||
Severance and related expense | $ 624,000 | ||||||||
Operational cash outflows | 532,000 | ||||||||
Chief Commercialization Officer | |||||||||
Other Commitments [Line Items] | |||||||||
Severance and related expense | $ 582,000 | ||||||||
Operational cash outflows | 397,000 | ||||||||
Chief Executive Officer | |||||||||
Other Commitments [Line Items] | |||||||||
Severance and related expense | $ 767,000 | ||||||||
Operational cash outflows | $ 670,000 | ||||||||
Pending Litigation | Unfavorable Regulatory Action | |||||||||
Other Commitments [Line Items] | |||||||||
Cost accrued | 820,000 | 820,000 | $ 500,000 | ||||||
Increase in loss contingency accrual | 500,000 | ||||||||
Total loss contingency accrued | $ 1,000,000 | 1,000,000 | |||||||
Largest Customer | Sales | Customer Concentration Risk | |||||||||
Other Commitments [Line Items] | |||||||||
Concentration receivable risk | 11.00% | ||||||||
China joint venture | |||||||||
Other Commitments [Line Items] | |||||||||
Capital contribution | $ 400,000 | $ 400,000 |
STOCK OPTIONS - Narrative (Deta
STOCK OPTIONS - Narrative (Details) $ / shares in Units, $ in Thousands | Jan. 15, 2020shares | Oct. 31, 2015shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)employee$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2019shares | Aug. 31, 2017shares | Jul. 31, 2015shares | Jul. 31, 2012shares | Oct. 30, 2007shares | Dec. 31, 2001shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Option expiration period | 10 years | ||||||||||
Option vesting period | 7 years | ||||||||||
Granted (in shares) | 1,379,500 | 225,000 | 1,728,000 | ||||||||
Share-based compensation expense | $ | $ 3,581 | $ 2,224 | $ 871 | ||||||||
Closing stock price for computation of intrinsic value (in dollars per share) | $ / shares | $ 8.46 | ||||||||||
Stock options outstanding and expected to vest (in shares) | 3,772,139 | ||||||||||
Aggregate intrinsic value of all stock options outstanding and expected to vest | $ | $ 14,820 | ||||||||||
Stock options outstanding and expected to vest, weighted average exercise price (in dollars per share) | $ / shares | $ 4.53 | ||||||||||
Stock options outstanding and exercisable (in shares) | 2,481,929 | ||||||||||
Aggregate intrinsic value of currently exercisable stock options | $ | $ 12,730 | ||||||||||
Weighted average exercise price (in dollars per share) | $ / shares | $ 3.33 | ||||||||||
Weighted average remaining contractual term | 6 years | ||||||||||
Stock options outstanding and exercisable, weighted average remaining contractual term | 7 years | ||||||||||
Intrinsic value of options exercised | $ | $ 1,420 | 4,460 | 220 | ||||||||
Intrinsic value of options granted | $ | $ 6,300 | $ 540 | $ 3,140 | ||||||||
Weighted average grant date fair value of options granted (in dollars per share) | $ / shares | $ 4.57 | $ 2.40 | $ 1.82 | ||||||||
Fair value of option shares vested | $ | $ 2,130 | $ 1,440 | $ 810 | ||||||||
Shares issued in stock swaps (in shares) | 222,601 | 720,772 | 47,372 | ||||||||
Shares surrendered in period (in shares) | 22,711 | 34,687 | |||||||||
Stock swap to acquire options (in shares) | 17,289 | 19,688 | |||||||||
Number of employees, modified vesting terms | employee | 2 | ||||||||||
Compensation costs | $ | $ 190 | ||||||||||
Unrecognized stock-based compensation cost | $ | $ 3,520 | ||||||||||
Unrecognized stock-based compensation cost, recognition period | 1 year | ||||||||||
Common Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares received in stock swaps (in shares) | 125,948 | 570,343 | 129,378 | ||||||||
Restricted | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Option vesting period | 5 years | ||||||||||
Unrecognized stock-based compensation cost | $ | $ 70 | ||||||||||
Grants to date (in shares) | 225,922 | ||||||||||
Shares vested to date (in shares) | 180,740 | ||||||||||
2001 Executive and Employee Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized under common stock option plans (in shares) | 1,200,000 | ||||||||||
2003 Executive and Employee Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized under common stock option plans (in shares) | 1,700,000 | ||||||||||
2012 Share Incentive Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized under common stock option plans (in shares) | 750,000 | ||||||||||
Remaining shares for issuance (in shares) | 160,000 | ||||||||||
2015 Executive and Employee Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized under common stock option plans (in shares) | 2,000,000 | ||||||||||
Remaining shares for issuance (in shares) | 900,000 | ||||||||||
2017 Executive and Employee Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized under common stock option plans (in shares) | 3,000,000 | ||||||||||
Remaining shares for issuance (in shares) | 480,000 | ||||||||||
2019 Share Incentive Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized under common stock option plans (in shares) | 2,000,000 | ||||||||||
Remaining shares for issuance (in shares) | 2,000,000 | ||||||||||
Subsequent Event | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Option vesting period | 3 years | ||||||||||
Granted (in shares) | 1,300,000 |
STOCK OPTIONS - Summary of Stoc
STOCK OPTIONS - Summary of Stock Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of options and warrants | |||
Outstanding, beginning of period (in shares) | 3,254,779 | 4,634,235 | 3,526,287 |
Granted (in shares) | 1,379,500 | 225,000 | 1,728,000 |
Exercised (in shares) | (410,635) | (1,378,615) | (176,750) |
Cancelled and forfeited (in shares) | (256,785) | (225,841) | (443,302) |
Outstanding, end of period (in shares) | 3,966,858 | 3,254,779 | 4,634,235 |
Weighted average exercise price | |||
Outstanding, beginning of period (in dollars per share) | $ 3.18 | $ 3.10 | $ 3.17 |
Granted (in dollars per share) | 7.70 | 2.40 | 3.09 |
Exercised (in dollars per share) | 2.99 | 2.43 | 2.41 |
Cancelled and forfeited (in dollars per share) | 4.76 | 2.10 | 3.95 |
Outstanding, end of period (in dollars per share) | $ 4.67 | $ 3.18 | $ 3.10 |
STOCK OPTIONS - Summary of Nonv
STOCK OPTIONS - Summary of Nonvested Stock Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of options | |||
Number of Options Non-vested at beginning of period (in shares) | 1,436,429 | ||
Number of Options Non-vested, Granted (in shares) | 1,379,500 | 225,000 | 1,728,000 |
Number of Options Non-vested, Vested (in shares) | (1,119,000) | ||
Number of Options Non-vested, Forfeited (in shares) | (212,000) | ||
Number of Options Non-vested at end of period (in shares) | 1,484,929 | 1,436,429 | |
Weighted average grant date fair value | |||
Weighted average grant date fair value, Non-vested Options at beginning of period (in dollars per share) | $ 1.68 | ||
Weighted average grant date fair value, Non-vested Options, Granted (in dollars per share) | 4.57 | $ 2.40 | $ 1.82 |
Weighted average grant date fair value, Non-vested Options, Vested (in dollars per share) | 1.90 | ||
Weighted average grant date fair value, Non-vested Options, Forfeited (in dollars per share) | 2.31 | ||
Weighted average grant date fair value, Non-vested Options at end of period (in dollars per share) | $ 4.11 | $ 1.68 |
STOCK OPTIONS STOCK OPTIONS - F
STOCK OPTIONS STOCK OPTIONS - Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option value (in dollars per share) | $ 7.70 | $ 2.40 | $ 3.09 |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected volatility - low (as a percent) | 64.90% | 60.90% | 62.10% |
Expected volatility - high (as a percent) | 66.40% | 68.80% | 68.00% |
Expected term (in years) | 6 years | 6 years | |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option value (in dollars per share) | $ 7.15 | $ 1.46 | $ 1.73 |
Risk-free rate (as a percent) | 1.70% | 1.90% | 1.50% |
Expected term (in years) | 4 years 6 months | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option value (in dollars per share) | $ 7.91 | $ 3.04 | $ 2.34 |
Risk-free rate (as a percent) | 2.60% | 2.50% | 1.90% |
Expected term (in years) | 6 years |
GEOGRAPHIC AND SEGMENT INFORM_3
GEOGRAPHIC AND SEGMENT INFORMATION - Narrative (Details) - segment | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | |||
Number of operating segments | 2 | ||
International sales | 30.60% | 22.60% | 13.20% |
GEOGRAPHIC AND SEGMENT INFORM_4
GEOGRAPHIC AND SEGMENT INFORMATION - Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | $ 8,382 | $ 7,575 | $ 6,649 | $ 5,629 | $ 5,845 | $ 3,672 | $ 3,691 | $ 3,397 | $ 12,278 | $ 19,853 | $ 10,760 | $ 28,235 | $ 16,605 | $ 10,234 |
Income (loss) from operations | (5,730) | (2,788) | (8,441) | (20,869) | (14,276) | (13,885) | ||||||||
Interest income | 423 | 1,392 | 616 | 0 | ||||||||||
Interest expense | (8) | (104) | (136) | |||||||||||
Other losses, net | (295) | (868) | $ (495) | $ (265) | (868) | (351) | (947) | 0 | ||||||
Change in fair value of derivative liabilities | 20 | 0 | 20 | 183 | ||||||||||
Income tax benefit | $ (6) | $ 2,408 | $ 2,384 | 130 | 3,907 | 156 | ||||||||
Operating Segments | Advanced Energy | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | 22,676 | 12,987 | 7,636 | |||||||||||
Income (loss) from operations | (8,045) | (6,326) | (3,957) | |||||||||||
Interest income | 0 | 0 | ||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Other losses, net | 0 | 0 | ||||||||||||
Change in fair value of derivative liabilities | 0 | 0 | ||||||||||||
Income tax benefit | 0 | 0 | 0 | |||||||||||
Operating Segments | OEM | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | 5,559 | 3,618 | 2,598 | |||||||||||
Income (loss) from operations | 2,136 | 1,795 | 1,353 | |||||||||||
Interest income | 0 | 0 | ||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Other losses, net | 0 | 0 | ||||||||||||
Change in fair value of derivative liabilities | 0 | 0 | ||||||||||||
Income tax benefit | 0 | 0 | 0 | |||||||||||
Corporate (Other) | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | 0 | 0 | 0 | |||||||||||
Income (loss) from operations | (14,960) | (9,745) | (11,281) | |||||||||||
Interest income | 616 | |||||||||||||
Interest expense | (104) | (136) | ||||||||||||
Other losses, net | (947) | |||||||||||||
Change in fair value of derivative liabilities | 20 | 183 | ||||||||||||
Income tax benefit | $ 130 | $ 3,907 | $ 156 |
GEOGRAPHIC AND SEGMENT INFORM_5
GEOGRAPHIC AND SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | $ 8,382 | $ 7,575 | $ 6,649 | $ 5,629 | $ 5,845 | $ 3,672 | $ 3,691 | $ 3,397 | $ 12,278 | $ 19,853 | $ 10,760 | $ 28,235 | $ 16,605 | $ 10,234 |
Domestic | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | 19,584 | 12,858 | 8,887 | |||||||||||
International | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | $ 8,651 | $ 3,747 | $ 1,347 |
SUPPLEMENTAL UNAUDITED QUARTE_3
SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL INFORMATION OF CONTINUING OPERATIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | ||||||||||||||
Sales | $ 8,382 | $ 7,575 | $ 6,649 | $ 5,629 | $ 5,845 | $ 3,672 | $ 3,691 | $ 3,397 | $ 12,278 | $ 19,853 | $ 10,760 | $ 28,235 | $ 16,605 | $ 10,234 |
Gross profit | 5,563 | 5,294 | 4,674 | 3,563 | 3,556 | 2,521 | 2,537 | 2,212 | $ 8,237 | $ 13,531 | 7,270 | 19,094 | 10,826 | 6,958 |
Net Loss | $ (5,433) | $ (4,370) | $ (4,295) | $ (5,608) | $ (3,912) | $ (1,143) | $ (2,938) | $ (2,791) | $ (6,872) | (19,706) | (10,784) | (13,682) | ||
Basic loss per common share (in USD per share) | $ (0.16) | $ (0.13) | $ (0.13) | $ (0.17) | $ (0.12) | $ (0.03) | $ (0.09) | $ (0.08) | ||||||
Severance and related expense | $ 700 | $ 0 | $ 741 | $ 1,524 |