Apyx Medical (APYX) 10-Q 8 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	5-May-15
Document And Entity Information
Entity Registrant Name	BOVIE MEDICAL CORP
Entity Central Index Key	719135
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		23,876,751
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Current assets:
Cash and cash equivalents	$15,396	$5,733
Restricted cash	839	899
Trade accounts receivable, net	1,398	1,992
Inventories, net	6,130	5,727
Current portion of deposits	286	210
Prepaid expenses and other current assets	1,011	804
Total current assets	25,060	15,365
Property and equipment, net	7,011	6,947
Brand name and trademark	1,510	1,510
Purchased technology and license rights, net	404	431
Deposits, net of current portion	164	165
Other assets	439	415
Total assets	34,588	24,833
Current liabilities:
Accounts payable	1,876	1,553
Accrued payroll	118	197
Accrued vacation	209	181
Current portion of mortgage note payable	239	239
Accrued and other liabilities	1,634	1,596
Total current liabilities	4,076	3,766
Mortgage note payable, net of current portion	3,113	3,173
Deferred rents	22	23
Deferred tax liability	563	564
Derivative liabilities	622	12,613
Total liabilities	8,396	20,139
Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares authorized, zero issued and outstanding as of March 31, 2015		3,190
STOCKHOLDER'S EQUITY:
Series B convertible preferred stock, par value $.001; 3,588,139 issued and outstanding as of March 31, 2015	4
Common stock, par value $.001 par value; 40,000,000 shares authorized; 23,335,894 issued and 23,192,815 outstanding as of March 31, 2015 and 17,995,409 issued and 17,852,330 outstanding as of December 31, 2014, respectively	23	18
Additional paid-in capital	41,155	29,334
Accumulated deficit	-14,990	-27,848
Total stockholders' equity	26,192	1,504
Total liabilities and stockholders' equity	$34,588	$24,833

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Stockholders' equity:
Series A 6% convertible preferred stock, par value	$0.00
Series A 6% convertible preferred stock, shares authorized	3,500,000
Series A 6% convertible preferred stock, shares issued	0
Series B convertible preferred stock, par value	$0.00
Series B convertible preferred stock, shares issued	3,588,139
Series B convertible preferred stock, shares outstanding	3,588,139
Common stock, par value	$0.00	$0.00
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	23,335,894	17,995,409
Common stock, shares outstanding	23,192,815	17,852,330

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Consolidated Statements Of Operations
Sales	$6,128	$6,482
Cost of sales	3,454	3,726
Gross profit	2,674	2,756
Other costs and expenses:
Research and development	446	332
Professional services	331	258
Salaries and related costs	1,952	907
Selling, general and administrative	2,217	1,201
Total other costs and expenses	4,946	2,698
Income/(loss) from operations	-2,272	58
Interest expense, net	-40	-28
Change in fair value of liabilities, net	1,444	-9,599
Total other (expense), net	1,404	-9,627
Loss before income taxes	-868	-9,569
Provision for income taxes, net	-8	-38
Net loss	-876	-9,607
Accretion on convertible preferred stock	-222	-204
Deemed dividend on conversion of warrants and Series A preferred stock to Series B convertible preferred stock	13,956	0
Net income (loss) attributable to common shareholders	$12,858	($9,811)
Income (loss) per share
Basic	$0.69	($0.55)
Diluted	$0.57	($0.55)
Weighted average number of shares outstanding- basic	18,615	17,684
Weighted average number of shares outstanding - dilutive	20,470	17,684

CONSOLIDATED_STATEMENTS_OF_STO

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) (USD $)	Preferred Stock	Common Stock	Additional Paid-In Capital	Deficit	Total
In Thousands, except Share data
Beginning Balance, Amount at Dec. 31, 2014		$18	$29,334	($27,848)	$1,504
Beginning Balance, Shares at Dec. 31, 2014		17,854
Options exercised, Shares		5
Options exercised, Amount			11		11
Warrants exercised, Shares		198
Warrants exercised, Amount			438		438
Issuance of common stock, Shares		5,219
Issuance of common stock, Amount		5	11,526		11,531
Conversion of Series A preferred stock and common warrants to Series B preferred stock, Shares	3,588
Conversion of Series A preferred stock and common warrants to Series B preferred stock, Amount	4			13,956	13,960
Stock based compensation			119		119
Stock swap to acquire options, Shares		-81
Stock swap to acquire options, Amount			-273		-273
Accretion on convertible preferred stock				-222	-222
Net income (loss)				-876	-876
Ending Balance, Amount at Mar. 31, 2015	$4	$23	$41,155	($14,990)	$26,192
Ending Balance, Shares at Mar. 31, 2015	3,588	23,195

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net loss	($876)	($9,607)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	190	232
Amortization of intangible assets	27
Provision for inventory obsolescence	-77	53
Gain on disposal of property and equipment, net		4
Stock-based compensation	118	82
Non cash other income - warrants	-1,444	9,599
Provision (benefit) for deferred taxes		34
Changes in current assets and liabilities:
Trade receivables	594	-245
Prepaid expenses	-207	-437
Inventories	-327	95
Deposits and other assets	-99	-203
Accounts payable	323	-29
Litigation settlement liability		-441
Accrued and other liabilities	-13	-186
Net cash used in operating activities	-1,791	-1,049
Cash flows from investing activities
Purchases of property and equipment	-254	-75
Net cash used in investing activities	-254	-75
Cash flows from financing activities
Proceeds from stock options/warrants exercised	177
Change in restricted cash	60
Change in mortgage note payable	-60	3,592
Proceeds from issuance of common shares, net	11,531
Repayment of industrial revenue bonds		-3,257
Repurchase of warrants		-421
Net cash provided by (used in) financing activities	11,708	-86
Net change in cash and cash equivalents	9,663	-1,210
Cash and cash equivalents, beginning of period	5,733	7,924
Cash and cash equivalents, end of period	15,396	6,714
Cash paid during the three months ended March 31, 2015 and 2014 for:
Interest paid, net	40	28
Income taxes

BASIS_OF_PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 1. BASIS OF PRESENTATION	Unless the context otherwise indicates, the terms “we,” “our,” “us,” “Bovie,” and similar terms refer to Bovie Medical Corporation and its consolidated subsidiaries.
	The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, please refer to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year.
	Certain amounts in the March 31, 2014 and December 31, 2014 financial statements have been reclassified to conform to the presentation in the March 31, 2015 financial statements.

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 2. INVENTORIES	Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at March 31, 2015 and December 31, 2014 were as follows (in thousands):
		March 31,			December 31,
		2015			2014
	Raw materials	$	3,806		$	4,162
	Work in process		1,729			1,230
	Finished goods		1,595			1,412
	Gross inventories		7,130			6,804
	Less: reserve for obsolescence		(1,000	)		(1,077	)
	Net inventories	$	6,130		$	5,727

INTANGIBLE_ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Note 3. INTANGIBLE ASSETS	At March 31, 2015 and December 31, 2014 intangible assets consisted of the following (in thousands):
		March 31,			December 31,
		2015			2014
	Trade name (life indefinite)	$	1,510		$	1,510
	Purchased technology (9-17 yr life)	$	1,441		$	1,441
	Less: accumulated amortization		(1,037	)		(1,010	)
	Net carrying amount	$	404		$	431
	License rights (5 yr life)	$	316		$	316
	Less accumulated amortization		(316	)		(316	)
	Net carrying amount	$	-		$	-
	Amortization of intangibles, which is included in depreciation and amortization in the accompanying statements of cash flows, was approximately $27,000 and $49,000 during the respective three month periods ended March 31, 2015 and 2014.

NEW_ACCOUNTING_PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 4. NEW ACCOUNTING PRONOUNCEMENTS	We have reviewed recently issued standards and have determined they will not have a material impact on our consolidated financial statements, or do not apply to our operations.

FAIR_VALUE_MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 5. FAIR VALUE MEASUREMENTS	Certain assets and liabilities that are measured at fair value on a recurring basis are measured in accordance with FASB ASC Topic 820-10-05, Fair Value Measurements. FASB ASC Topic 820-10-05 defines fair value, establishes a framework for measuring fair value and expands the disclosure requirements regarding fair value measurements for financial assets and liabilities as well as for non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis in the financial statements.
	The statement requires fair value measurement be classified and disclosed in one of the following three categories:
	Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
	Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
	Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
	Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Our derivative financial instruments that are measured at fair value on a recurring basis are all measured at fair value using Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
	The following represents a reconciliation of the changes in fair value of warrants measured at fair value using Level 3 inputs during the quarter ended March 31, 2015:
	(in $ thousands)		2013			2013			2010			2010			Total
			Investor Warrants			Placement Agent Warrants			Investor Warrants			Placement Agent Warrants
	Balance, December 31, 2014		$	10,546		$	998		$	1,065		$	4		$	12,613
	Issuances			-			-			-			-			-
	Exchange of warrants (1)			(10,546	)		-			-			-			(10,546	)
	Change in fair value			-			(597	)		(845	)		(2	)		(1,444	)
	Balance, March 31, 2015 (2)		$	-		$	401		$	220		$	2		$	622
	-1	Represents the fair value carrying amount of 5,250,000 warrants that, along with 3,500,000 Series A Preferred shares, were exchanged for 3,588,139 shares of Series B Preferred stock exercisable into 7,176,298 shares of common stock. Resulting in a deemed dividend to the preferred shareholders of $13,956,000.
	-2	The warrants are valued using a trinomial lattice valuation methodology because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model at March 31, 2015 included the market price of our common stock, an expected dividend yield of zero, the remaining period to the expiration date of the warrants, expected volatility of our common stock over the remaining life of the warrants of 51.6%, estimated based on a review of our historical volatility, and risk-free rates of return of 0.12% for the 2010 warrants and 1.65% for the 2013 warrants based on constant maturity rates published by the U.S. Federal Reserve, applicable to the remaining life of the warrants. We also take into consideration a probability assumption for anti-dilution.

EARNINGS_PER_SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 6. EARNINGS PER SHARE	We compute basic earnings per share (“basic EPS”) by dividing the net 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 (primarily stock options). The following table provides the computation of basic and diluted earnings per share for the three month periods ending March 31, 2015 and 2014.
		Three Months Ended
		March 31,
	(in thousands, except per share data)	2015			2014
	Numerator:
	Net income (loss) available to common shareholders	$	12,858		$	(9,811	)
	Effect of dilutive securities
	Derivative liability - warrants	$	(1,444	)	$	-
	Accretion on  convertible preferred stock	$	222		$	-
	Numerator for diluted income (loss) per common share	$	11,636		$	(9,811	)
	Denominator:
	Weighted average shares used to compute basic income (loss) per common share		18,615			17,684
	Effect of dilutive securities:
	Derivative liability - warrants		326			-
	Convertible preferred stock		1,116			-
	Stock options		413			-
	Denominator for diluted income (loss) per common share		20,470			17,684
	Basic income (loss) per common share	$	0.69		$	(0.55	)
	Diluted income (loss) per common share	$	0.57		$	(0.55	)
	For the three months ended March 31, 2014, options and warrants to purchase approximately 7.5 million shares of common stock respectively, were excluded from the computation of diluted earnings per share because their effects were anti-dilutive. For the three months ended March 31, 2014, the conversion of Series A Preferred Stock into 3,500,000 shares of common stock was excluded from the computation of diluted earnings per share because its effect is anti-dilutive.

STOCKBASED_COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 7. STOCK-BASED COMPENSATION	Under our stock option plan, our board of directors may grant options to purchase common shares to our key employees, officers, directors and consultants. We account for stock options in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, with option expense amortized over the vesting period based on the trinomial lattice option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of our expense. During the three months ended March 31, 2015, we expensed approximately $118,575 in stock-based compensation.
	Activity in our stock options during the period ended March 31, 2015 was as follows:
					Weighted
		Number of			Average
		Options			Exercise
		(in thousands)			Price
	Outstanding at December 31, 2014		2,864		$	3.69
	Granted		40		$	3.58
	Exercised		(5	)	$	2.25
	Cancelled		-		$	-
	Outstanding at March 31, 2015		2,899		$	3.69
	The grant date fair value of options granted during the first three months of 2015 were estimated on the grant date using a trinomial lattice option-pricing model and the following assumptions: expected volatility of 54%, expected term of between 5-8 years, risk-free interest rate of 0.02%, and expected dividend yield of 0%.
	Expected volatility is based on a five year average of the historical volatility of the Company's stock. Previous to December 2013, we used a weighted average of our historical volatility combined with a peer group of companies’ volatility, which had openly traded stock options on the options market and weighted to percentages relative to our stock and the peer group at a 50%/50% weighting. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the options. The Company uses historical data to estimate pre-vesting forfeiture rates.
	During the three months ended March 31, 2015, we issued 5,000 shares upon the exercise of outstanding stock options.

INCOME_TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 8. INCOME TAXES	We utilize the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances we consider projected future taxable income and the availability of tax planning strategies.
	We have deferred tax assets mainly from net operating loss and tax credit carry forwards available in certain jurisdictions. During the fourth quarter 2014, management concluded that it is more likely than not that the Company will not realize its net deferred tax assets, and the Company establish a full valuation against it net deferred tax assets with finite life.
	We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.
	Since inception, we have been subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire (which may be as much as 20 years while we have unused NOL’s), we are subject to income tax audits in the jurisdictions in which we operate.

COMMITMENTS_CONTINGENCIES_AND_

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 9. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS	In March 2014, we entered into a lease for offices located in Purchase, New York. The lease is for 3,650 square feet of office space.
	The following is a schedule of approximate future minimum lease payments under operating leases having remaining terms in excess of one year as of March 31, 2015 for the calendar years ended December 31, 2015 and 2016 (in thousands):
	2015	$	81
	2016		111
	Therafter		378
	Total	$	570
	Rent expense approximated $27,000 and $12,000 for the three month periods ending March 31, 2015 and 2014 respectively.
	Other future contractual obligations for agreements with initial terms greater than one year and agreements to purchase materials in the normal course of business are summarized as follows (in thousands):
			Years Ending December 31,
	Description		2015		2016		2017
	Purchase commitments		$	4,574	$	-	$	-
	Long-term debt			239		239		2,874
	Total		$	4,813	$	239	$	2,874
	Litigation
	In the normal course of business, we are subject, from time to time, to legal proceedings, lawsuits and claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. If any of these matters arise in the future, it could affect the operating results of any one or more quarters.
	We expense costs of litigation related to contingencies in the periods in which the costs are incurred.
	Concentrations
	Our ten largest customers accounted for approximately 65.6% and 58.7% of net revenues for the three months ended March 31, 2015 and 2014 respectively. For the three months ended March 31, 2015, McKesson, NDC, and Medline accounted for 18.9%, 13.8% and 11.0% of our sales, while for the same three month period ended in 2014, Arthrex accounted for 10.1% of our sales.

RELATED_PARTY_TRANSACTION

RELATED PARTY TRANSACTION	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 10. RELATED PARTY TRANSACTIONS	A relative of Moshe Citronowicz, Bovie’s Senior Vice President, is considered a related party. Arik Zoran is a consultant of the Company doing business as AR Logic, Inc., a consulting firm owned by Arik Zoran, Mr. Citronowicz’s brother. On March 1, 2013 the Company amended the Consulting Services Agreement dated January 2011, extending the term of the existing agreement until December 31, 2014. The agreement shall automatically renew for additional one year periods, unless either party gives written notice of its desire not to renew at least one year prior to the expiration of the initial Term or renewal term. The agreement with AR Logic provides for a monthly retainer for engineering support for our existing generator product line and a separate hourly based fee structure for additional consulting related to new product lines. AR Logic has a royalty contract with us related to the creation and design of proprietary technology that is used in some of our generators. AR Logic was paid consulting fees of approximately $71,610 and $89,000 during the three months ended March 31, 2015 and 2014, respectively.
	A second relative of Mr. Citronowicz is considered a related party. Yechiel Tsitrinovich is also a brother of Mr. Citronowicz, and acts as a consultant to the Company related to research and development of certain products. Mr. Tsitrinovich has a royalty contract with us related to the creation and design of a proprietary technology that is used in some of our generators. Mr. Tsitrinovich was paid a combination of consulting fees and royalties on previous product designs approximating $23,763 and $18,700 during the three months ended March 31, 2015 and 2014, respectively.

LONG_TERM_DEBT

LONG TERM DEBT	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 11. LONG TERM DEBT	On March 20, 2014, the Company entered into a transaction with The Bank of Tampa, a Florida banking corporation (“Lender”) wherein Lender extended to the Company a mortgage loan in the principal amount of $3,592,000 (the “Loan”). The obligations under the Loan are secured by a first mortgage and security interest in the Company’s Clearwater, Florida facility as well as an assignment of the Company’s accounts receivable. In addition, the Company has pledged an interest in a certificate of deposit in the amount of $839,000 as additional collateral. The amount of the additional collateral required declines on a pro rata basis as principal is paid. The initial maturity date of the Loan is March 20, 2017; however the Company has an option to extend the maturity date until March 20, 2022.
	Borrowings under the Loan bear interest at LIBOR plus 3.5%, with a fixed monthly principal payment of $19,956. The interest rate at March 31, 2015 was 3.681%
	The Loan documents contain customary financial covenants, including a covenant that the Company maintains a minimum liquidity of $750,000. Although there is no Debt Service Coverage Ratio (as defined in the Loan Agreement) for the initial term of the Loan, should the Company desire to extend the Loan beyond three years, the Company must maintain a Debt Service Coverage Ratio for each of the preceding four quarters of not less than 1.0 to 1.0. In the event the Loan is extended, the Debt Service Coverage Ratio must not be less than 1.2 to 1.0.

GEOGRAPHIC_AND_PRODUCT_LINE_IN

GEOGRAPHIC AND PRODUCT LINE INFORMATION	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Note 12. GEOGRAPHIC AND PRODUCT LINE INFORMATION	International sales represented approximately 14.7% of total revenues for the first three months of 2015, as compared with 17.0% for the first three months of 2014.
		Three months ended				Percent
		March 31,
		2015		2014		Change
	Sales by Domestic and International (in 000's)
	Domestic	$	5,225	$	5,381		-2.9	%
	International		903		1,101		-18	%
	Total	$	6,128	$	6,482		-5.5	%
	Although we have only one reporting segment, beginning in 2014, management began analyzing revenue and other operating metrics across three operating categories.
	Sales by Operating Category  (in 000's)
	Core	$	5,525	$	5,431		1.7	%
	OEM		320		1,020		-68.6	%
	J-Plasma		283		31		812.9	%
	Total	$	6,128	$	6,482		-5.5	%

INVENTORIES_Tables

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2015
Inventories Tables
Schedule of inventory	Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at March 31, 2015 and December 31, 2014 were as follows (in thousands):
		March 31,			December 31,
		2015			2014
	Raw materials	$	3,806		$	4,162
	Work in process		1,729			1,230
	Finished goods		1,595			1,412
	Gross inventories		7,130			6,804
	Less: reserve for obsolescence		(1,000	)		(1,077	)
	Net inventories	$	6,130		$	5,727

INTANGIBLE_ASSETS_Tables

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2015
Intangible Assets Tables
Schedule of intangible assets	At March 31, 2015 and December 31, 2014 intangible assets consisted of the following (in thousands):
		March 31,			December 31,
		2015			2014
	Trade name (life indefinite)	$	1,510		$	1,510
	Purchased technology (9-17 yr life)	$	1,441		$	1,441
	Less: accumulated amortization		(1,037	)		(1,010	)
	Net carrying amount	$	404		$	431
	License rights (5 yr life)	$	316		$	316
	Less accumulated amortization		(316	)		(316	)
	Net carrying amount	$	-		$	-

FAIR_VALUE_MEASUREMENTS_Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2015
Fair Value Measurements Tables
Activity in Level 3 assets	The following represents a reconciliation of the changes in fair value of warrants measured at fair value using Level 3 inputs during the quarter ended March 31, 2015:
	(in $ thousands)		2013			2013			2010			2010			Total
			Investor Warrants			Placement Agent Warrants			Investor Warrants			Placement Agent Warrants
	Balance, December 31, 2014		$	10,546		$	998		$	1,065		$	4		$	12,613
	Issuances			-			-			-			-			-
	Exchange of warrants (1)			(10,546	)		-			-			-			(10,546	)
	Change in fair value			-			(597	)		(845	)		(2	)		(1,444	)
	Balance, March 31, 2015 (2)		$	-		$	401		$	220		$	2		$	622
	-1	Represents the fair value carrying amount of 5,250,000 warrants that, along with 3,500,000 Series A Preferred shares, were exchanged for 3,588,139 shares of Series B Preferred stock exercisable into 7,176,298 shares of common stock. Resulting in a deemed dividend to the preferred shareholders of $13,956,000.
	-2	The warrants are valued using a trinomial lattice valuation methodology because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model at March 31, 2015 included the market price of our common stock, an expected dividend yield of zero, the remaining period to the expiration date of the warrants, expected volatility of our common stock over the remaining life of the warrants of 51.6%, estimated based on a review of our historical volatility, and risk-free rates of return of 0.12% for the 2010 warrants and 1.65% for the 2013 warrants based on constant maturity rates published by the U.S. Federal Reserve, applicable to the remaining life of the warrants. We also take into consideration a probability assumption for anti-dilution.

EARNINGS_PER_SHARE_Tables

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2015
Earnings Per Share Tables
Computation of basic and diluted earnings (loss) per share	The following table provides the computation of basic and diluted earnings per share for the three month periods ending March 31, 2015 and 2014.
		Three Months Ended
		March 31,
	(in thousands, except per share data)	2015			2014
	Numerator:
	Net income (loss) available to common shareholders	$	12,858		$	(9,811	)
	Effect of dilutive securities
	Derivative liability - warrants	$	(1,444	)	$	-
	Accretion on  convertible preferred stock	$	222		$	-
	Numerator for diluted income (loss) per common share	$	11,636		$	(9,811	)
	Denominator:
	Weighted average shares used to compute basic income (loss) per common share		18,615			17,684
	Effect of dilutive securities:
	Derivative liability - warrants		326			-
	Convertible preferred stock		1,116			-
	Stock options		413			-
	Denominator for diluted income (loss) per common share		20,470			17,684
	Basic income (loss) per common share	$	0.69		$	(0.55	)
	Diluted income (loss) per common share	$	0.57		$	(0.55	)

STOCKBASED_COMPENSATION_Tables

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2015
Stock-Based Compensation Tables
Activity in stock options	Activity in our stock options during the period ended March 31, 2015 was as follows:
					Weighted
		Number of			Average
		Options			Exercise
		(in thousands)			Price
	Outstanding at December 31, 2014		2,864		$	3.69
	Granted		40		$	3.58
	Exercised		(5	)	$	2.25
	Cancelled		-		$	-
	Outstanding at March 31, 2015		2,899		$	3.69

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES (Tables)	3 Months Ended
	Mar. 31, 2015
Commitments And Contingencies Tables
Future minimum lease payments under operating leases	The following is a schedule of approximate future minimum lease payments under operating leases having remaining terms in excess of one year as of March 31, 2015 for the calendar years ended December 31, 2015 and 2016 (in thousands):
	2015	$	81
	2016		111
	Therafter		378
	Total	$	570
Other future contractual obligations	Other future contractual obligations for agreements with initial terms greater than one year and agreements to purchase materials in the normal course of business are summarized as follows (in thousands):
			Years Ending December 31,
	Description		2015		2016		2017
	Purchase commitments		$	4,574	$	-	$	-
	Long-term debt			239		239		2,874
	Total		$	4,813	$	239	$	2,874

GEOGRAPHIC_AND_PRODUCT_LINE_IN1

GEOGRAPHIC AND PRODUCT LINE INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2015
Geographic And Product Line Information Tables
Analyzing International sales represented	International sales represented approximately 14.7% of total revenues for the first three months of 2015, as compared with 17.0% for the first three months of 2014.
		Three months ended				Percent
		March 31,
		2015		2014		Change
	Sales by Domestic and International (in 000's)
	Domestic	$	5,225	$	5,381		-2.9	%
	International		903		1,101		-18	%
	Total	$	6,128	$	6,482		-5.5	%
Analyzing revenue and other operating metrics across three operating segments	Although we have only one reporting segment, beginning in 2014, management began analyzing revenue and other operating metrics across three operating categories.
	Sales by Operating Category  (in 000's)
	Core	$	5,525	$	5,431		1.7	%
	OEM		320		1,020		-68.6	%
	J-Plasma		283		31		812.9	%
	Total	$	6,128	$	6,482		-5.5	%

INVENTORIES_Details

INVENTORIES (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Inventories Details
Raw materials	$3,806	$4,162
Work in process	1,729	1,230
Finished goods	1,595	1,412
Gross inventories	7,130	6,804
Less: reserve for obsolescence	-1,000	-1,077
Net inventories	$6,130	$5,727

INTANGIBLE_ASSETS_Details

INTANGIBLE ASSETS (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Net carrying amount	$404	$431
Trade Names [Member]
Indefinite-lived intangible assets	1,510	1,510
Purchased Technology [Member]
Indefinite-lived intangible assets	1,441	1,441
Less: accumulated amortization	-1,037	-1,010
Net carrying amount	404	431
Purchased Technology [Member] | Minimum [Member]
Useful life	9 years
Purchased Technology [Member] | Maximum [Member]
Useful life	17 years
License Rights [Member]
Indefinite-lived intangible assets	316	316
Less: accumulated amortization	-316	-316
Net carrying amount
Useful life	5 years

INTANGIBLE_ASSETS_Details_Narr

INTANGIBLE ASSETS (Details Narrative) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Intangible Assets Details Narrative
Amortization of Intangible Assets	$27,000	$49,000

FAIR_VALUE_MEASUREMENTS_Detail

FAIR VALUE MEASUREMENTS (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015
Beginning balance	$12,613
Issuances
Exchange of warrants	-10,546
Change in fair value	-1,444
Ending Balance	622
2013 Investor Warrants [Member]
Beginning balance	10,546
Issuances
Exchange of warrants	-10,546
Change in fair value
Ending Balance
2013 Placement Agent Warrants [Member]
Beginning balance	998
Issuances
Exchange of warrants
Change in fair value	-597
Ending Balance	401
2010 Investor Warrants [Member]
Beginning balance	1,065
Issuances
Exchange of warrants
Change in fair value	-845
Ending Balance	220
2010 Placement Agent Warrants [Member]
Beginning balance	4
Issuances
Exchange of warrants
Change in fair value	-2
Ending Balance	$2

EARNINGS_PER_SHARE_Details

EARNINGS PER SHARE (Details) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Earnings Per Share Details
Net income (loss) available to common shareholders	$12,858	($9,811)
Effect of dilutive securities
Derivative liability - warrants	-1,444
Accretion on convertible preferred stock	222
Numerator for diluted income (loss) per common share	11,636	-9,811
Weighted average shares used to compute basic income (loss) per common share	18,615	17,684
Effect of dilutive securities:
Derivative liability - warrants	326
Convertible preferred stock	1,116
Stock options	413
Denominator for diluted income (loss) per common share	$20,470	$17,684
Basic income (loss) per common share	$0.69	($0.55)
Diluted income (loss) per common share	$0.57	($0.55)

EARNINGS_PER_SHARE_Details_Nar

EARNINGS PER SHARE (Details Narrative)	3 Months Ended
	Mar. 31, 2014
Earnings Per Share Details Narrative
Common stock options and warrants	7,500,000
Conversion of Series A Preferred Stock	3,500,000

STOCKBASED_COMPENSATION_Detail

STOCK-BASED COMPENSATION (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Number of options, outstanding
Outstanding, beginning of period (in shares)	2,864
Granted (in shares)	40
Exercised (in shares)	-5
Cancelled (in shares)
Outstanding, end of period (in shares)	2,899
Weighted average exercise price
Outstanding, beginning of period (in dollars per share)	$3.69
Granted (in dollars per share)	$3.58
Exercised (in dollars per share)	$2.25
Cancelled (in dollars per share)
Outstanding, end of period (in dollars per share)	$3.69

STOCKBASED_COMPENSATION_Detail1

STOCK-BASED COMPENSATION (Details Narrative) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015
Stock-based compensation	$118,575
Exercise of outstanding stock options	5,000
Expected volatility rate	54.00%
Risk free interest rate	0.02%
Expected dividend yield	0.00%
Minimum [Member]
Expected term	5 years
Maximum [Member]
Expected term	8 years

COMMITMENTS_CONTINGENCIES_AND_1

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details) (USD $)	Mar. 31, 2015
In Thousands, unless otherwise specified
Future minimum lease payments under operating leases
2015	$81
2016	111
Thereafter	378
Total	$570

COMMITMENTS_CONTINGENCIES_AND_2

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details 1) (USD $)	Mar. 31, 2015
In Thousands, unless otherwise specified
2015	$4,813
2016	239
2017	2,874
Purchase Commitments [Member]
2015	4,574
2016
2017
Long Term Debt [Member]
2015	239
2016	239
2017	$2,874

COMMITMENTS_CONTINGENCIES_AND_3

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details Narrative) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Rent expense	$27,000	$12,000
Net revenues	65.60%	58.70%
McKesson [Member]
Customers accounted for sales percentage	18.90%
NDC [Member]
Customers accounted for sales percentage	13.80%
Medline [Member]
Customers accounted for sales percentage	11.00%
Arthrex [Member]
Customers accounted for sales percentage		10.10%

RELATED_PARTY_TRANSACTION_Deta

RELATED PARTY TRANSACTION (Details Narrative) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
AR Logic [Member]
Consulting fees	$71,610	$89,000
Mr.Tsitrinovich [Member]
Consulting fees	$23,763	$18,700

LONG_TERM_DEBT_Details_Narrati

LONG TERM DEBT (Details Narrative)	Mar. 31, 2015
Notes to Financial Statements
Interest rate	3.68%

GEOGRAPHIC_AND_PRODUCT_LINE_IN2

GEOGRAPHIC AND PRODUCT LINE INFORMATION (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Sales by Domestic and International	$6,128	$6,482
Percent Change	-5.50%	-5.50%
Domestic [Member]
Sales by Domestic and International	5,225	5,381
Percent Change	-2.90%	-2.90%
International [Member]
Sales by Domestic and International	$903	$1,101
Percent Change	-18.00%	-18.00%

GEOGRAPHIC_AND_PRODUCT_LINE_IN3

GEOGRAPHIC AND PRODUCT LINE INFORMATION (Details 1) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Sales by Operating Category	$6,128	$6,482
Sales by Operating Category Percent	-5.50%	-5.50%
Core [Member]
Sales by Operating Category	5,525	5,431
Sales by Operating Category Percent	1.70%	1.70%
OEM [Member]
Sales by Operating Category	320	1,020
Sales by Operating Category Percent	-68.60%	-68.60%
J-Plas ma [Member]
Sales by Operating Category	$283	$31
Sales by Operating Category Percent	812.90%	812.90%

GEOGRAPHIC_AND_PRODUCT_LINE_IN4

GEOGRAPHIC AND PRODUCT LINE INFORMATION (Details Narrative)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Geographic And Product Line Information Details Narrative
Percentage of International sales of sales	14.70%	17.00%