Apyx Medical (APYX) 10-K 18 Mar 16 2015 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Mar. 16, 2016	Jun. 30, 2015
Document And Entity Information
Entity Registrant Name	BOVIE MEDICAL CORP
Entity Central Index Key	719,135
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
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		27,051,172
Entity Public Float			$ 59,780,649
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 11,805	$ 5,733
Restricted cash	839	899
Trade accounts receivable, net	2,925	1,992
Inventories, net	$ 5,957	5,727
Current portion of deposits		210
Prepaid expenses and other current assets	$ 516	804
Total current assets	22,042	15,365
Property and equipment, net	6,810	6,947
Brand name and trademark	1,510	1,510
Purchased technology and license rights, net	323	$ 431
Goodwill	185
Deposits, net of current portion	123	$ 165
Deferred tax asset	25
Other assets	430	$ 415
Total assets	31,448	24,833
Current liabilities:
Accounts payable	1,214	1,553
Accrued payroll	321	197
Accrued vacation	228	181
Current portion of mortgage note payable	239	239
Accrued and other liabilities	2,119	1,596
Total current liabilities	4,121	3,766
Mortgage note payable, net of current portion	2,934	3,173
Notes payable	140
Deferred rents	18	23
Deferred tax liability	564	564
Derivative liabilities	267	12,613
Total liabilities	$ 8,044	$ 20,139
Commitments and Contingencies (see Notes 9 and 11)
STOCKHOLDER'S EQUITY:
Common stock, par value $.001 par value; 40,000,000 shares authorized; 27,194,251 issued and 27,051,172 outstanding as of December 31, 2015 and 17,995,409 issued and 17,852,330 outstanding as of December 31, 2014, respectively	$ 27	$ 18
Additional paid-in capital	42,859	29,334
Accumulated deficit	(19,484)	(27,848)
Total stockholders' equity	23,404	1,504
Total liabilities and stockholders' equity	$ 31,448	24,833
Series A Preferred Stock [Member]
Current liabilities:
Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares authorized, zero issued and outstanding as of December 31, 2015		$ 3,190
Series B Preferred Stock [Member]
STOCKHOLDER'S EQUITY:
Series B convertible preferred stock, par value $.001; 3,588,139 issued and 1,975,639 outstanding as of December 31, 2015	$ 2

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
Stockholders' equity:
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	27,194,251	17,995,409
Common stock, shares outstanding	27,051,172	17,852,330
Series A Preferred Stock [Member]
Stockholders' equity:
Preferred stock, par value	$ 0.001
Preferred stock, shares authorized	3,500,000
Preferred stock, shares issued	0
Preferred stock, shares outstanding	0
Series B Preferred Stock [Member]
Stockholders' equity:
Preferred stock, par value	$ 0.001
Preferred stock, shares issued	3,588,139
Preferred stock, shares outstanding	1,975,639

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements Of Operations
Sales	$ 29,520	$ 27,681	$ 23,660
Cost of sales	16,963	18,689	14,462
Gross profit	12,557	8,992	9,198
Other costs and expenses:
Research and development	2,160	1,416	1,260
Professional services	1,484	1,016	1,835
Salaries and related costs	7,482	5,723	3,992
Selling, general and administrative	8,417	6,686	5,777
Total other costs and expenses	19,543	14,841	12,864
Loss from operations	(6,986)	(5,849)	(3,666)
Interest expense, net	$ (158)	$ (151)	(237)
Investor warrants issuance cost			(664)
Fees associated with refinance			(543)
Change in fair value of liabilities, net	$ 1,799	$ (7,285)	(842)
Total other income (expense), net	1,641	(7,436)	(2,286)
Loss before income taxes	(5,345)	(13,285)	(5,952)
Income tax expense (benefit)	(25)	(3,997)	1,613
Net loss	(5,370)	(17,282)	(4,339)
Accretion on convertible preferred stock	(222)	$ (932)	$ (39)
Gain on conversion of warrants and preferred shares, net	$ 13,956
Deemed dividend on beneficial conversion feature			$ (2,616)
Net income (loss) attributable to common shareholders	$ 8,364	$ (18,214)	$ (6,994)
Income (loss) per share
Basic	$ 0.34	$ (1.03)	$ (0.4)
Diluted	$ 0.24	$ (1.03)	$ (0.4)
Weighted average number of shares outstanding- basic	24,333,000	17,756,000	17,760,000
Weighted average number of shares outstanding - dilutive	27,747,000	17,756,000	17,760,000

CONSOLIDATED STATEMENT OF STOCK

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2013		17,684,000
Beginning Balance, Amount at Dec. 31, 2013	$ 0	$ 18	$ 28,687	$ (9,634)	$ 19,071
Options exercised, Shares		221,000
Options exercised, Amount			469		469
Stock based compensation			388		388
Stock swap to acquire options, Shares		(51,000)
Stock swap to acquire options, Amount			(210)		(210)
Accretion on convertible preferred stock				(932)	(932)
Net income (loss)				(17,282)	(17,282)
Ending Balance, Shares at Dec. 31, 2014		17,852,000
Ending Balance, Amount at Dec. 31, 2014	$ 0	$ 18	29,334	(27,848)	1,504
Options exercised, Shares		98,000
Options exercised, Amount			220		220
Warrant exercised, Shares		739,000
Warrant exercised, Amount			1,519		1,519
Issuance of common stock, Shares		5,219,000
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	3,588,000
Conversion of Series A Preferred stock and common warrants to Series B preferred stock, Amount	$ 4		(40)	13,956	13,920
Conversion of Series B convertible preferred to common stock, Shares	(1,612,000)	3,225,000
Conversion of Series B convertible preferred to common stock, Amount	$ (2)	$ 4	(2)
Stock based compensation			575		575
Stock swap to acquire options, Shares		(81,000)
Stock swap to acquire options, Amount			(273)		(273)
Accretion on convertible preferred stock				(222)	(222)
Net income (loss)				(5,370)	(5,370)
Ending Balance, Shares at Dec. 31, 2015	1,976,000
Ending Balance, Amount at Dec. 31, 2015	$ 2	$ 27	$ 42,859	$ (19,484)	$ 23,404

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities
Net loss	$ (5,370)	$ (17,282)	$ (4,339)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	812	876	827
Provision for inventory obsolescence	157	733	12
Gain (loss) on disposal of property and equipment, net	21	14	16
Stock-based compensation	575	388	506
Non cash other (income) loss - warrants	(1,799)	7,285	884
Benefit (provision) for deferred taxes	(25)	3,975	(1,613)
Changes in current assets and liabilities, net of effects of acquisition:
Trade receivables	(933)	(3)	884
Prepaid expenses	286	(259)	406
Inventories	(102)	1,955	(884)
Deposits and other assets	228	952	(234)
Accounts payable	(189)	494	257
Accrued and other liabilities	553	455	742
Net cash used in operating activities	(5,786)	(417)	(2,536)
Cash flows from investing activities
Purchases of property and equipment	(421)	$ (630)	$ (588)
Acquisition of Bovie Bulgaria, net of cash acquired	(500)
Net cash used in investing activities	(921)	$ (630)	$ (588)
Cash flows from financing activities
Proceeds from stock options/warrants exercised	1,427	259	$ 7,048
Change in restricted cash	60	(899)
Change in mortgage note payable	(239)	$ 3,173
Proceeds from issuance of common shares, net	$ 11,531
Repayment of industrial revenue bonds		$ (3,257)	$ (162)
Repurchase of warrants		(420)
Net cash provided by (used in) financing activities	$ 12,779	(1,144)	$ 6,886
Net change in cash and cash equivalents	6,072	(2,191)	3,762
Cash and cash equivalents, beginning of period	5,733	7,924	4,162
Cash and cash equivalents, end of period	11,805	5,733	7,924
Cash paid for:
Interest paid, net	$ 158	$ 151	$ 195
Income taxes
Non cash investing activities:
Note payable for acquisition	$ 140

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 1. DESCRIPTION OF BUSINESS	Bovie Medical Corporation ("Bovie") was incorporated in 1982, under the laws of the State of Delaware and is a medical device company engaged in the manufacturing and marketing of electrosurgical devices. Our medical products include a wide range of devices including electrosurgical generators and accessories, cauteries, medical lighting, nerve locators and other products.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES	Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Bovie and its wholly owned subsidiaries, Aaron Medical Industries, Inc., Bovie Bulgaria, EOOD, BVX Holdings LLC, and Bovie Holdings, Inc., (collectively, the "Company" or "we", "our" or "us"). All intercompany transactions and balances have been eliminated in consolidation. 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 are considered to be cash equivalents. 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. In addition, we believe the book values of our mortgage payable and capital lease payable approximates their fair values as the terms of such obligations approximate the terms at which similar types of borrowing arrangements could be currently obtained. Financial instruments, which potentially subject us to significant concentrations of credit risk, consist primarily of cash and cash equivalents, 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. With respect to receivables, our ten largest customers accounted for approximately 48%, 48%, and 58% of trade receivables as of December 31, 2015, 2014, and 2013, respectively and 58.3%, 61.0%, and 60.9% of net revenues for the respective years then ended. In 2015, McKesson accounted for 18.6% and National Distribution & Contracting Inc. accounted for 13.3% of our sales. In 2014, National Distribution & Contracting Inc. accounted for 13.9% of our sales. In 2013, National Distribution & Contracting Inc. accounted for 13.1%, PSS World Medical accounted for 10.9% and McKesson Medical Surgical accounted for 10.3% of our sales. Derivative Financial Instruments We generally do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks. However, certain financial instruments, such as warrants, which are indexed to our common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even if the terms of the underlying contracts do not always provide for net-cash settlement. Such financial instruments are initially recorded, and continuously carried, at fair value. Determining the fair value of these instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rate risk, historical volatility and stock price, estimated life of the derivative, anti-dilution provisions, and conversion/redemption privileges. The use of different assumptions or changes in those assumptions could have a material effect on the estimated fair value amounts. Accounts Receivable and Allowance for Doubtful Accounts Our credit terms for our billings range from net 10 days to net 60 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 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 gave negotiated sales volume discounts, which amounted to approximately $261,176, $579,885, and $523,000 for the years ended December 31, 2015, 2014, and 2013, respectively. Sales are reported net of all discounts. 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, estimated value of any underlying collateral 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 $192,000 and $133,000 at December 31, 2015 and 2014, respectively, are, or were, adequate to provide for possible bad debts. Inventories and Repair Parts Inventories are stated at the lower of cost or market. 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. Inventories at December 31, 2015 and 2014 were as follows (in thousands): December 31, December 31, 2015 2014 Raw materials $ 4,627 $ 4,162 Work in process 483 1,230 Finished goods 2,080 1,412 Gross inventories 7,190 6,804 Less: reserve for obsolescence (1,233 ) (1,077 ) Net inventories $ 5,957 $ 5,727 During 2015, the Company recorded charges totaling approximately $157,000 for excess and obsolete inventory. During 2014, the Company recorded charges totaling approximately $2.0 million for excess and obsolete inventory. The charges relate to management updates to the commercial plan, book to physical inventory adjustments at both the Clearwater facility and consignments at foreign suppliers, and other adjustments. During 2013, the reserves for raw materials inventory and related costs of sales decreased by approximately $67,000 due to disposing of old inventory. Property and Equipment These assets 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 large improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and small improvements are expensed as incurred. The estimated useful lives are: machinery and equipment, 3-10 years; buildings, 39 years; molds, 7-15 years and furniture and fixtures, 5-10 years. Intangible Assets These assets consist of licenses, purchased technology and brand name and trademarks. The licenses and purchased technology (other intangibles) are being amortized by the straight-line method over a 5-17 year period commencing with the date they were placed in service. Estimated aggregate amortization expense for the five years ending December 31, 2019 is expected to approximate $431,000 per year. Brand name and trademark qualifies as an indefinite-lived intangible asset and is not subject to amortization. Intangibles with indefinite lives are analyzed for impairment annually or more frequently if events and circumstances indicate that the asset may be impaired. If impaired, an impairment loss is recognized in an amount equal to the excess of the asset's carrying value over its fair value. Management concluded that the assigned value at December 31, 2015 of approximately $1,510,000 was not impaired and is reasonable. Other Long-Lived Assets We review other 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, 2015, we believe the remaining carrying values of our long-lived assets are recoverable. Revenue Recognition Revenue is recognized when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. The following policies apply to our major categories of revenue transactions: ● The majority of our sales to customers are evidenced by firm purchase orders. 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 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. ● Amounts billed to customers related to shipping and handling charges are included in net sales. Shipping and handling costs included in cost of sales were approximately $100,000, $103,000, and $104,000 in 2015, 2014, and 2013, respectively. Advertising Costs All advertising costs are expensed as incurred. The amounts of advertising costs were approximately $542,000, $540,000 and $305,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Stock-Based Compensation We account for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation Litigation Contingencies From time to time, we are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of the Company and our stockholders. There can be no assurance these actions or other third party assertions will be resolved without costly litigation, or in a manner that is not adverse to our financial position. We do not believe that any of the currently identified claims or litigation matters will have a material adverse impact on our results of operations, cash flows or financial condition. However, given uncertainties associated with any litigation, if our assessments prove to be wrong, or if additional information becomes available such that we estimate that there is a possible loss or possible range of loss associated with these contingencies, then we would record the minimum estimated liability, which could materially impact our results of operations, financial position and cash flows. Tax Effects of Stock-Based Compensation We will only recognize a tax benefit from windfall tax deductions for stock-based awards in additional paid-in capital if an incremental tax benefit is realized after all other tax attributes currently available have been utilized. Net Earnings (Loss) Per Common Share We compute basic earnings (loss) attributable to common shareholders per share by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings (loss) 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 method which reduces the effective number of shares by the amount of shares we could purchase with the proceeds of assumed exercises. In 2015, the diluted net income per share calculated included the dilutive effect of the employee stock options, warrants and the conversion of Series B Preferred Stock because their effects were dilutive. In 2014 and 2013, respectively, the net loss per share calculated when including the dilutive effect of the employee stock options and warrants are excluded from diluted net loss per common share calculations as of such dates because they are anti-dilutive and results in basic and diluted loss per share to be equivalent. Research and Development Costs With the exception of development costs that are purchased from another enterprise and have alternative future use, research and development expenses are charged to operations as incurred. We have expended approximately $2.2 million, and $1.4 million, and $1.3 million for the years ended 2015, 2014, and 2013 respectively. Research and Development Costs for Others For research and development activities that are partially or completely funded by other parties, and when the obligation is incurred solely to perform contractual services, expenses are charged to cost of sales and all revenues resulting from such activities are shown as sales. Income Taxes We utilize the liability method of accounting for income taxes as set forth in FASB 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. Management evaluated the positive and negative evidence in determining the realizability of the net deferred tax asset. In determining the need for valuation allowance, we reviewed historic operating results, updated 2015 actual results, as well as future income forecasts based on the projections, management concluded that it was not more likely that the Company should realize its net deferred tax assets through future operating results and the reversal of taxable temporary differences. If in the future we determine that we will be able to realize any of the net deferred tax assets, we will make adjustment to the valuation allowance, which would increase our income in the period that the determination is made. 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.

ACQUISITION OF BOVIE BULGARIA

ACQUISITION OF BOVIE BULGARIA	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 3. ACQUISITION OF BOVIE BULGARIA	On October 20, 2015 (the "Effective Date"), the Company and Nikolay Shilev entered into and consummated a Share Purchase Agreement (the "Purchase Agreement") whereby the Company acquired all of the outstanding equity interests of Bovie Bulgaria EOOD, a limited liability company incorporated under Bulgarian law ("Bovie Bulgaria"). Pursuant to the terms of the Purchase Agreement, the Company agreed to pay Mr. Shilev approximately $559,000 payable as follows: (i) $419,000 payable within three business days after the effective registration of the Company as the sole shareholder of Bovie Bulgaria and (ii) $140,000 payable on the five year anniversary of the Effective Date. In conjunction with the execution and consummation of the Purchase Agreement, the Company caused Bovie Bulgaria to enter into a Management Agreement with Mr. Shilev (the "Management Agreement"). Pursuant to the terms of the Management Agreement: (i) Mr. Shilev shall be engaged by the Company for a period of five years; (ii) the Company agreed to pay Mr. Shilev an annual base salary of $141,250; (iii) Mr. Shilev shall be entitled to, subject to certain limitations, an annual performance based bonus equal to twenty percent of Mr. Shilev's base salary; (iv) as an inducement to enter into the Management Agreement, the Company awarded Mr. Shilev a restricted stock grant of 225,922 shares of the Company's common stock, with such restricted stock vesting ratably over a five year period and subject to forfeiture upon Mr. Shilev's Management Agreement being terminated for Cause or without "Good Reason" (as each is defined in the Management Agreement); and (v) the Company agreed to provide severance payments in the event of certain termination events as set forth in the Management Agreement. The table below summarizes the preliminary purchase price and the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date of October 20, 2015: Purchase Price Value of consideration paid: $ 559 Tangible assets acquired and liabilities assumed at fair value Cash and cash equivalents 59 Trade accounts receivable, net - Inventories, net 285 Prepaid expenses and other current assets 1 Property and equipment, net 167 Deferred income tax assets, net 25 Deposits, net of current portion 8 Accounts payable (150 ) Accrued and other liabilities (21 ) Excess of assets over liabilities assumed $ 374 Goodwill $ 185

TRADE ACCOUNTS RECEIVABLE

TRADE ACCOUNTS RECEIVABLE	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 4. TRADE ACCOUNTS RECEIVABLE	As of December 31, 2015 and 2014, trade accounts receivable were as follows (in thousands): December 31, December 31, 2015 2014 Trade accounts receivable $ 3,117 $ 2,125 Less: allowance for doubtful accounts (192 ) (133 ) Trade accounts receivable, net $ 2,925 $ 1,992

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 5. PROPERTY, PLANT AND EQUIPMENT	As of December 31, 2015 and 2014, property, plant and equipment consisted of the following (in thousands): December 31, December 31, 2015 2014 Land $ 1,600 $ 1,600 Machinery and equipment 3,933 3,983 Building and improvements 4,200 3,899 Furniture and fixtures 2,237 2,188 Leasehold improvements 12 12 Molds 1,701 1,613 Total property, plant and equipment 13,683 13,295 Less: accumulated depreciation and amportization (6,873 ) (6,348 ) Net property, plant and equipment $ 6,810 $ 6,947

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 6. INTANGIBLE ASSETS	At December 31, 2015 and 2014, intangible assets consisted of the following (in thousands): December 31, December 31, 2015 2014 Brand name and trademark (life indefinite) $ 1,510 $ 1,510 Purchased technology (9-17 year lives) 1,441 1,441 Less: accumulated amortization (1,118 ) (1,010 ) Purchased technology, net 323 431 Goodwill $ 185 $ - With respect to our trademark and brand name, we continue to market products, release new products and product extensions and maintain and promote these trademarks and brand name in the marketplace through legal registration and such methods as advertising, medical education and trade shows. It is our belief that these trademarks and brand names will generate cash flow for an indefinite period of time. Therefore, we believe our trademarks and brand name intangible assets are not impaired. Goodwill results from our acquisition of Bovie Bulgaria, EOOD Amortization expense amounts for the next five years are approximately $108,000 for 2015 through 2019.

EARNINGS PER SHARE

EARNINGS PER SHARE	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 7. 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 for the twelve month periods ended December 31, 2015, 2014, and 2013, respectively. Year Ended December 31, (in thousands, except per share data) 2015 2014 2013 Numerator: Net income (loss) available to common shareholders $ 8,364 $ (18,214 ) $ (6,994 ) Effect of dilutive securities Derivative liability - warrants $ (1,799 ) $ - $ - Accretion on convertible preferred stock $ 222 $ - $ - Numerator for diluted income (loss) per common share $ 6,787 $ (18,214 ) $ (6,994 ) Denominator: Weighted average shares used to compute basic income (loss) per common share 24,333 17,756 17,670 Effect of dilutive securities: Derivative liability - warrants 28 - - Convertible preferred stock 3,137 - - Stock options 249 - - Denominator for diluted income (loss) per common share 27,747 17,756 17,670 Basic income (loss) per common share $ 0.34 $ (1.03 ) $ (0.40 ) Diluted income (loss) per common share $ 0.24 $ (1.03 ) $ (0.40 ) For the year ended December 31, 2015, warrants to purchase approximately 28,000 shares of common stock and approximately $1,800,000 of the gain on the fair market valuation of the derivative liabilities, options to purchase approximately 249,000 shares of common stock, and the conversion of Series B Preferred Stock into 3,137,141 shares of common stock were included in the computation of diluted earnings per share because their effects were dilutive. For the year ended December 31, 2014, options and warrants to purchase approximately 6,500,000 shares of common stock were excluded in the computation of diluted earnings per share because their effects were anti-dilutive. For the year ended December 31, 2013, options and warrants to purchase approximately 12,900,000 shares of common stock were excluded in the computation of diluted earnings per share because their effects were anti-dilutive.

CAPITAL STOCK

CAPITAL STOCK	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 8. CAPITAL STOCK	Common Stock Preferred Stock - Series B Convertible Preferred Stock – Number of Shares: Conversion: Dividends: Voting Rights: Series A 6% Convertible Preferred Stock - Number of Shares Stated Value: Conversion: Redemption Dividends: Voting Rights: Liquidation Preferences.

CONVERTIBLE PREFERRED STOCK AND

CONVERTIBLE PREFERRED STOCK AND WARRANTS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 9. CONVERTIBLE PREFERRED STOCK AND WARRANTS	2013 Financing On December 13, 2013, the Company entered into a securities purchase agreement with certain investors for the private placement, for aggregate gross proceeds of $7,000,000, of 3,500,000 shares of the Company's newly-designated Series A 6% Convertible Preferred Stock (the "Series A Preferred Stock" – see Note 6) and warrants to purchase 5,250,000 shares of our common stock at an exercise price of $2.387 per share. The shares of Series A Preferred Stock, which had a stated liquidation value of $2.00, were convertible at any time, at the option of the holder, into shares of common stock on a one-for-one basis and vote with the shares of common stock on an as-converted basis. The holders of the Series A Preferred Stock could request redemption of their shares at their stated value of $2.00 per share, beginning on December 13, 2017. The Series A Preferred Stock accrued dividends at the rate of 6% per annum, whether or not declared by the Board of Directors. The Warrants could have been exercised at any time on or after June 13, 2014 and expire on June 13, 2019. They could have been exercised on a cashless basis and contain customary anti-dilution protection in the event of stock splits, stock dividends or similar events. In connection with the placement of the Series A Preferred Stock and warrants, we also issued warrants to purchase 525,000 shares of our common stock, with the same terms as the investor warrants, to the placement agent and paid cash fees to the placement agent of $420,000, equal to six percent of the purchase price paid by the investors in the offering. We also incurred other cash fees related to the offering of $202,145. The warrants contain a provision that may require net cash settlement in the event that there is a Fundamental Transaction (contractually defined as a merger, sale of substantially all assets, tender offer or share exchange). Because of this contingent redemption provision, the warrants require liability classification in accordance with FASB ASC 480-10, Distinguishing Liabilities from Equity Derivatives and Hedging – Contracts in Entity's Own Equity. The warrants issued to the investors and to the placement agent were valued using a trinomial lattice model, because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model included the market price of our common stock on the date of valuation, 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 48.75% estimated based on a review of our historical volatility, and risk-free rates of return based on constant maturity rates published by the U.S. Federal Reserve, applicable to the remaining life of the warrants. At December 31, 2015 and December 31, 2014, the investor warrants were valued at $0 and $10,547,250, respectively, and the placement agent warrants were valued at $267,331 and $998,222, respectively. The aggregate change in value of the investor and placement agent warrants between December 13, 2015 and December 31, 2014 of $1,798,845 was recorded in income as a non-operating gain. The Company and the investors also executed a Registration Rights Agreement whereby the Company agreed to register the shares of common stock issuable upon conversion of the Series A Preferred Stock and upon exercise of the Warrants, as well as the common stock underlying the warrants issued to the placement agent. Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file a registration statement within thirty days of the closing date and was required to obtain the effectiveness of such registration statement within ninety days of its filing. In the event that the required filing and effectiveness dates were not met or if the registration statement, once effective, failed to remain effective for a continuous period of 30 days or for a cumulative total of 60 days in any 12 month period, then the Company would have been required to pay to each investor an amount in cash, as liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid by such investor for its Preferred Stock and Warrants; and on each monthly anniversary of each such event (if the applicable event has not been cured by such date) until the applicable event was cured, a further 1% of the purchase price, subject to a maximum payment of 10% of the purchase price. The required registration statement was filed on January 10, 2014 and became effective on January 28, 2014. Accordingly, the Company was not required to pay any liquidated damages to the investors, unless the registration statement failed to remain continuously effective for the periods specified by the Registration Rights Agreement. The Company does not presently anticipate being required to make any such payments. The gross proceeds of the offering of $7,000,000 were first allocated to the fair value of the warrants issued to the investors, with the balance of the proceeds allocated to the Series A Preferred Stock. The aggregate costs of the offering of $1,060,520, including the cash fees paid of $622,145 and the fair value of the placement agent warrants of $438,375, were allocated between the Series A Preferred Stock and the warrants based on the gross proceeds allocated to each instrument, as follows: Proceeds Allocated Expenses Allocated Series A Preferred Stock $ 2,616,250 $ 396,369 Investor Warrants 4,383,750 664,151 $ 7,000,000 $ 1,060,520 Because the warrants are recorded as a liability at fair value, the portion of the expenses allocated to the warrants was expensed and is included in other income (expense) section in our Statement of Operations. In accordance with FASB ASC 470-20-25-5, the company recognized a beneficial conversion feature related to the Series A Preferred Stock, The beneficial conversion feature, which was limited to $2,616,250, the proceeds initially allocated to the Series A Preferred Stock, was credited to additional paid-in capital. Because the Series A Preferred Stock is not mandatorily redeemable but can be immediately converted by the holder, the discount recognized by the allocation of proceeds to the beneficial conversion feature was immediately accreted and recognized as a dividend to the preferred shareholders, in accordance with FASB ASC 470-20-35-7c. Because the holders of the Series A Preferred Stock could have requested redemption on or after December 13, 2017, the preferred stock has conditions for its redemption that are not within the control of the Company. Accordingly, the carrying amount of the Series A Preferred Stock of $2,616,250, net of the expenses allocated to the preferred stock of $396,369, was recorded outside of stockholders' equity, as mezzanine equity, in accordance with FASB ASC 480-10-S99. The net carrying amount of the Series A Preferred Stock was accreted to its redemption value over the four year period to when the holders may request redemption, using an effective interest method. For the period ended December 31, 2015, additional accretion of $221,902 was recognized and the net carrying amount of the Series A Preferred Stock at December 31, 2015 was $0. The warrants contain a provision that may require net cash settlement in the event that there is a Fundamental Transaction (contractually defined as a merger, sale of substantially all assets, tender offer or share exchange). Because of this contingent redemption provision, the warrants require liability classification in accordance with FASB ASC 480-10, Distinguishing Liabilities from Equity Derivatives and Hedging – Contracts in Entity's Own Equity. The warrants are valued using a trinomial lattice model. Significant assumptions used in the model at December 31, 2014 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 48.75%, estimated based on a review of our historical volatility, and risk-free rates of return of 0.12% 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. At December 31, 2015 and December 31, 2014, the fair value of the investor and placement agent warrants was approximately $0 and $1,067,954, respectively. On March 31, 2014, the Company entered into an agreement with an existing warrant holder pursuant to which the Company repurchased warrants exercisable into 142,857 shares of Common Stock for an aggregate purchase price of $420,571. Reconciliation of changes in fair value 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 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 year ended December 31, 2015: (in $ thousands) 2013 Investor Warrants 2013 Placement Agent Warrants 2010 Investor Warrants 2010 Placement Agent Warrants Total Balance, December 31, 2014 $ 10,546 $ 998 $ 1,065 $ 4 $ 12,613 Issuances - - - - - Exchange of warrants (1) (10,546 ) - - - (10,546 ) Exercise of warrants - - (1,081 ) - (1,081 ) Change in fair value - (731 ) 16 (4 ) (719 ) Balance, December 31, 2015 (2) $ - $ 267 $ - $ - $ 267 (1) Represents the fair value carrying amount of 3,500,000 Series A Preferred shares and 5,250,000 warrants exchanged for 3,588,139 shares of Series B Preferred stock exercisable into 7,176,298 shares of common stock. (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 December 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 48.59%, estimated based on a review of our historical volatility, and risk-free rates of return of 1.535% 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.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 10. RECENT ACCOUNTING PRONOUNCEMENTS	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers 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

LONG TERM DEBT

LONG TERM DEBT	12 Months Ended
	Dec. 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 pledged an interest in a certificate of deposit in the amount of $898,000 as additional collateral which 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 December 31, 2015 was 3.744%. 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. Simultaneously with the closing of the Loan, the Company redeemed those certain Industrial Revenue Bonds issued by the Pinellas County Industrial Development Authority and satisfied its obligations to its prior lender, PNC Bank, N.A ("PNC Bank"). In connection with the redemption of the Bonds, the Company paid PNC Bank $3,188,333 to satisfy its existing credit facility. In connection with the termination of the interest rates swap agreement with PNC Bank, the Company paid PNC Bank an additional $410,275. Our 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 2016 2017 Purchase commitments $ 3,377 $ - Long-term debt 239 2,934 Total $ 3,616 $ 2,934

TAXES AND NET OPERATING LOSS CA

TAXES AND NET OPERATING LOSS CARRYFORWARDS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 12. TAXES AND NET OPERATING LOSS CARRYFORWARDS	Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of these temporary differences representing the components of deferred tax assets (liabilities) at December 31 were approximately as follows (in thousands): 2015 2014 Deferred tax assets: Loss and credit carry-forwards $ 6,578 $ 5,497 Stock based compensation 283 156 Inventory Reserve 466 361 Other 273 193 Total Deferred Tax Assets 7,600 6,207 Deferred tax liabilities: State taxes (capital) (10 ) (9 ) Property and equipment (413 ) (416 ) Intangibles (337 ) (376 ) Total deferred tax liabilities (760 ) (801 ) Total Net Deferred Tax Assets 6,840 5,406 Valuation Allowance (7,404 ) (5,970 ) Total Net Deferred Tax Assets/(Liabilities), net of Valuation Allowance $ (564 ) $ (564 ) We consider all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. U.S. net operating losses will begin to expire in years beginning in 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. All of our positions arise from taxable temporary differences and, as such, the liability has been recognized in the net deferred tax asset, current and non-current items to which they relate. Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended December 31, 2015, 2014, and 2013: 2015 2014 2013 Federal tax provision 34.0 % 34.0 % 34.0 % State taxes (net of federal benefit) 2.4 % 1.4 % 2.6 % Warrant gains (11.1 )% (18.8 )% - % Valuation allowance (26.3 )% (45.3 )% - % Other 0.6 % (1.6 )% (9.3) % (0.4 )% (30.3 )% 27.3 %

RETIREMENT PLAN

RETIREMENT PLAN	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 13. 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. 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 $245,239, $100,465 and $0 for the years ended December 31, 2015, 2014 and 2013, respectively.

OTHER RELATED PARTY TRANSACTION

OTHER RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 14. OTHER RELATED PARTY TRANSACTIONS	Research and Development Consulting Services Our policy is that employees, non-employees, and third parties must obtain authorization from the appropriate department executive manager, for any business relationship or proposed business transaction in which they or an immediate family member has a direct or indirect interest, or from which they or an immediate family member may derive a personal benefit (a "related party transaction"). The maximum dollar amount of related party transactions that may be approved as described above in this paragraph in any calendar year is $120,000. Any related party transactions that would bring the total value of such transactions to greater than $120,000 must be referred to the Audit Committee to determine the procedure for approval, and then have the recommendations presented to the Board of Directors for approval. Several relatives of Nikolay Shilev, Bovie 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. 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 $259,200, $252,000, and $266,600 during 2015, 2014, and 2013, 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 $67,575, $72,412, and $72,890 for 2015, 2014, and 2013, respectively.

OTHER COMMITMENTS AND CONTINGEN

OTHER COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 15. OTHER COMMITMENTS AND CONTINGENCIES	Property and Rental Agreements In March 2014, we signed a lease for offices located in Purchase, New York. The lease is for 3,650 square feet of office space with a monthly cost of approximately $8,500 per month. In October 2015, pursuant to our acquisition of Bovie Bulgaria, we are obligated to pay $6,350 per month for the lease expiring on December 31, 2016. The following is a schedule of approximate future minimum lease payments under operating leases as of December 31, 2015 (in thousands): 2016 $ 187 2017 114 Therafter 267 Total $ 568 Rent expense for the years ended December 31, 2015, 2014 and 2013 approximated $120,000, $72,000, and $228,000, respectively. Purchase Commitments At December 31, 2015, we had purchase commitments for inventories totaling approximately $3.3 million, substantially all of which is expected to be purchased by the end of 2016. Employment Agreements At December 31, 2015, we were obligated under six employment agreements which have expiration dates between December 2016 and March 2017. Name Contract Expiration Date Robert Gershon N/A (1) J. Robert Saron December, 2016 Moshe Citronowicz December, 2016 Andrew Makrides December, 2016 John McCarthy March, 2017 Jay D. Ewers N/A (1) (1) Employment contracts were revised to remove a date certain for the conclusion of such term and provide for the Executives to remain employed by the Company until such time as their employment is terminated pursuant to the terms of their Employment Agreement. Approximate future minimum payments under these agreements are as follows as of December 31, 2015 (in thousands): 2016 $ 1,591 2017 94 Total $ 1,685 Employment contracts contain an automatic extension for a period of one year after the initial term unless we provide the executives with appropriate 60 days written notice pursuant to the contracts. The employment agreements provide, among other things, that the executive may be terminated as follows: (a) Upon the death of the executive, in which case the executive's estate shall be paid the basic annual compensation due the employee pro-rated through the date of death. (b) By the resignation of the executive at any time upon at least thirty (30) days prior written notice to Bovie in which case Bovie shall be obligated to pay the employee the basic annual compensation due him pro-rated to the effective date of termination. (c) By Bovie, "for cause" if during the term of the employment agreement the employee violates the non-competition provisions of his employment agreement, or is found guilty in a court of law of any crime of moral turpitude in which case the contract would be terminated and provisions for future compensation forfeited. (d) By Bovie, without cause, with the majority approval of the Board of Directors, for Mr. Makrides, Mr. Gershon, Mr. Saron, Mr. McCarthy, Mr. Ewers, and Mr. Citronowicz at any time upon at least thirty (30) days prior written notice to the executive. In this case Bovie shall be obligated to pay the executive compensation in effect at such time, including all bonuses, accrued or prorated, and expenses up to the date of termination. Thereafter for Messrs. Makrides, Saron, and Citronowicz, Bovie shall pay the executive three times the salary in effect at the time of termination payable in one lump sum. (e) If Bovie fails to meet its obligations to the executive on a timely basis, or if there is a change in the control of Bovie, the executive may elect to terminate his employment agreement. Upon any such termination or breach of any of its obligations under the employment agreement, Bovie shall pay Mr. Makrides, Mr. Saron and Mr. Citronowicz a lump sum severance equal to three times the annual salary and bonus in effect the month preceding such termination or breach as well as any other sums which may be due under the terms of the employment agreement up to the date of termination. Mr. Gershon shall be paid two times his annual salary and bonus in effect the month preceding such termination or breach as well as any other sums which may be due under the terms of the employment agreement up to the date of termination. There are no other employment contracts that have non-cancelable terms in excess of one year. Litigation Stockholder Derivative Action In September 2011, the Company was served in a purported stockholder derivative action (the "Derivative Action") that was filed in the United States District Court for the Middle District of Florida (the "Court") against the Company and certain of its present and former officers and directors. The complaint asserted, among other things, breach of fiduciary duties and bad faith in relation to the management of the Company's business. The complaint sought, among other things, unspecified compensatory damages and various forms of equitable relief. The allegations in the Derivative Action appear to be based largely on counterclaims previously asserted by Steven Livneh, a former director of the Company, in a prior litigation between the Company and Mr. Livneh which was settled. On June 26, 2014, the Company entered into a Stipulation and Agreement of Settlement ("Stipulation of Settlement") setting forth the terms of the settlement of the claims asserted against the Company in the Derivative Action. On July 7, 2014, the Court issued an Amended Order Preliminarily Approving Derivative Settlement and Providing for Notice ("Preliminary Order") preliminarily approving the Stipulation of Settlement. On October 2, 2014, the Court entered an order and final judgment approving the Stipulation of Settlement. 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.

STOCK OPTIONS

STOCK OPTIONS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
NOTE 16. 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 1,200,000 stock options. Stock options typically have a ten-year life and currently vest over a seven year period. In July of 2012, the 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, 2015 approximately 40,333 remain to be issued in this plan. In July of 2015, the 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, 2015 approximately 1,479,078 remain to be issued in this plan. The status of our stock options and stock awards are summarized as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2013 2,467,046 $ 3.55 Granted 592,000 $ 3.88 Exercised (107,000 ) $ 2.17 Cancelled and Forfeited (87,857 ) $ 2.80 Outstanding at December 31, 2014 2,864,189 $ 3.69 Granted 830,922 $ 2.21 Exercised (97,500 ) $ 2.25 Cancelled and Forfeited (466,164 ) $ 3.57 Outstanding at December 31, 2015 3,131,447 $ 3.38 Exercisable at December 31, 2015 1,424,036 $ 4.28 The number and weighted average grant-date fair values of options non-vested at the beginning and end of 2015, as well as options granted, vested and forfeited during the year was as follows: Exercise Prices 2014 Number Outstanding 2014 Options Exercisable Granted Exercised Vested Cancelled Forfeited 2015 Number Outstanding 2015 Options Exercisable Weighted Average Remaining Contractual Life $ 2.25 309,500 309,500 - 97,500 - 212,000 - - - - $ 2.93 35,000 35,000 - - - 35,000 - - - - $ 6.93 20,000 20,000 - - - - - 20,000 20,000 1 $ 8.66 97,857 97,857 - - - 7,858 - 89,999 89,999 2 $ 7.10 12,125 12,125 - - - - - 12,125 12,125 2 $ 7.68 7,500 7,500 - - - - - 7,500 7,500 2 $ 7.18 50,000 50,000 - - - - - 50,000 50,000 3 $ 7.33 131,190 114,346 - - 16,844 27,135 - 104,055 104,055 3 $ 6.60 500 500 - - - - - 500 500 4 $ 8.32 61,428 48,060 - - 357 24,286 - 37,142 24,131 4 $ 7.85 7,500 5,357 - - 1,071 - - 7,500 6,428 4 $ 7.45 100,000 100,000 - - - - - 100,000 100,000 5 $ 6.00 30,000 24,000 - - 6,000 - - 30,000 30,000 5 $ 2.46 68,446 58,704 - - 1,428 27,731 - 40,715 32,401 5 $ 1.89 50,000 28,572 - - 7,143 - - 50,000 35,715 5 $ 3.08 10,000 5,716 - - 1,429 - - 10,000 7,145 5 $ 2.81 15,000 6,429 - - 2,143 - - 15,000 8,572 6 $ 2.80 7,143 3,877 - - 714 - - 7,143 4,591 6 $ 2.79 46,000 33,334 - - 10,667 - - 46,000 44,001 7 $ 2.54 216,000 92,933 - - 34,400 16,404 - 199,596 110,929 7 $ 3.79 100,000 40,000 - - 20,000 - - 100,000 60,000 7 $ 2.50 10,000 2,000 - - 2,000 - - 10,000 4,000 8 $ 6.00 50,000 37,778 - - 6,000 - - 50,000 43,778 8 $ 2.97 42,000 27,333 - - 7,333 - - 42,000 34,666 8 $ 2.20 45,000 28,333 - - 8,333 - - 45,000 36,666 8 $ 2.09 750,000 187,500 - - 187,500 - - 750,000 375,000 8 $ 3.90 213,000 - - - 53,250 - - 213,000 53,250 9 $ 3.81 169,000 - - - 45,250 - 105,750 63,250 45,250 9 $ 3.63 35,000 - - - 8,750 - - 35,000 8,750 9 $ 4.30 50,000 - - - 12,500 - - 50,000 12,500 9 $ 4.05 30,000 - - - 7,500 - - 30,000 7,500 9 $ 4.07 45,000 - - - 8,750 - 10,000 35,000 8,750 9 $ 3.50 50,000 - - - 12,500 - - 50,000 12,500 9 $ 2.25 - - 100,000 - 33,333 - - 100,000 33,333 10 $ 1.95 - - 75,000 - - - - 75,000 - 10 $ 2.13 - - 65,000 - - - - 65,000 - 10 $ 2.00 - - 225,922 - - - - 225,922 - 10 $ 1.77 - - 155,000 - - - - 155,000 - 10 $ 2.87 - - 100,000 - - - - 100,000 - 10 $ 2.48 - - 10,000 - - - - 10,000 - 10 $ 2.78 - - 10,000 - - - - 10,000 - 10 $ 2.30 - - 50,000 - - - - 50,000 - 10 $ 3.78 - - 20,000 - - - - 20,000 - 10 $ 3.38 - - 20,000 - - - - 20,000 - 10 2,864,189 1,376,754 830,922 97,500 495,196 350,414 115,750 3,131,447 1,424,036 Number of Options Weighted Average Grant Date Fair Value Non-vested at January 1, 2015 1,487,435 $ 3.11 Granted in 2015 830,922 $ 2.21 Vested in 2015 (495,196 ) $ 3.06 Forfeited in 2015 (115,750 ) $ 3.83 Non-vested at December 31, 2015 1,707,411 Common shares required to be issued upon the exercise of stock options and warrants would be issued from our authorized and unissued shares. We calculated the fair value of issued options utilizing a trinomial lattice with an expected life calculated via the simplified method as we do not have sufficient history to determine actual expected life. The grant date fair value of options granted in 2015 was estimated on the grant date using a trinomial lattice option-pricing model and the following assumptions: expected volatility of 53% - 54%, expected term of 4-10 years, risk-free interest rates of 0.2% - 1.58%, and expected dividend yield of 0%. The grant date fair value of options granted in 2014 was estimated on the grant date using a trinomial lattice option-pricing model and the following assumptions: expected volatility of 53% - 54%, expected term of 4-10 years, risk-free interest rates of 0.6%, and expected dividend yield of 0%. The grant date fair value of options granted in 2013 was estimated on the grant date using both binomial and trinomial lattice option-pricing model and the following assumptions: expected volatility of 43% - 47%, expected term of 3-5 years, risk-free interest rates of 0.4% - 0.6%, and expected dividend yield of 0%. As of December 31, 2015, the aggregate intrinsic value of all stock options outstanding and expected to vest was approximately $102,992 and the aggregate intrinsic value of currently exercisable stock options was approximately $11,250. 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 is based on the $2.10 closing stock price of our common stock on December 31, 2015, the last trading day of 2015. The total number of in-the-money options outstanding and exercisable as of December 31, 2015 was approximately 410,715. As of December 31, 2014, the aggregate intrinsic value of all stock options outstanding and expected to vest was approximately $2,265,825 and the aggregate intrinsic value of currently exercisable stock options was approximately $1,101,468. 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 is based on the $3.68 closing stock price of our common stock on December 31, 2014, the last trading day of 2014. The total number of in-the-money options outstanding and exercisable as of December 31, 2014 was approximately 819,231. The total intrinsic value of options exercised during the years ended December 31, 2015, 2014, and 2013 was approximately $51,575, $229,135, and $76,000, 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. The total cash proceeds received from the exercise of stock options was approximately $209,250 and $87,475, and $48,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The total fair value of options granted during the years ended December 31, 2015, 2014, and 2013 was approximately $932,771, $1,107,280, and $672,000, respectively. The total fair value of option shares vested during the years ended December 31, 2015, 2014, and 2013, was approximately $612,464, $412,638, and $637,000, respectively. During the year ended December 31, 2015, we issued 33,520 common shares in exchange for 114,500 non-employee stock options and 80,980 common shares (via stock swaps). During the year ended December 31, 2014, we issued 73,699 common shares in exchange for 107,000 employee and non-employee stock options and 33,301 common shares (via stock swaps). Net proceeds from the issuance of common shares along with the shares received in the stock swap exercises were approximately $80,475 for the year ended December 31, 2014. Stock compensation cost recognized for the years ended December 31, 2015, 2014, and 2013 was approximately $575,000, $388,000, and $506,000, respectively. As of December 31, 2015, there was approximately $1,570,000 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 4 years. Allocation of stock based compensation expense for the fiscal years ended December 31, 2015, 2014, and 2013 was as follows (in thousands): 2015 2014 2013 Cost of Sales $ 3 $ 8 $ 12 Research and development 39 51 34 Salaries and related costs 526 329 460 Total $ 568 $ 388 $ 506

GEOGRAPHIC AND SEGMENT INFORMAT

GEOGRAPHIC AND SEGMENT INFORMATION	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 17. GEOGRAPHIC AND SEGMENT INFORMATION	International sales in 2015, 2014, and 2013 were 16.9%, 15.8%, and 17.5% of sales, respectively. Substantially all of these sales are denominated in U.S. dollars Although we have only one reporting segment, beginning in 2014, Management began analyzing revenue and other operating metrics across three operating segments. Sales by Operating Category (in thousands) 2015 2014 2013 Core $ 26,098 $ 24,322 $ 22,134 OEM 2,116 3,150 1,484 J-Plasma 1,306 209 42 Total $ 29,520 $ 27,681 $ 23,660

SELECTED QUARTERLY INFORMATION

SELECTED QUARTERLY INFORMATION (UNAUDITED)	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 18. SELECTED QUARTERLY INFORMATION (UNAUDITED)	The following table sets forth certain unaudited quarterly data for each of the four quarters in the years ended December 31, 2015 and 2014, 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. First Quarter Second Quarter Third Quarter Fourth Quarter Year ended December 31, 2015 Total revenue $ 6,128 $ 7,274 $ 7,823 $ 8,295 Gross profit $ 2,674 $ 3,140 $ 3,229 $ 3,514 Net income (loss) attributable to common shareholders $ 12,858 $ (1,497 ) $ (1,587 ) $ (1,410 ) Income (loss) per basic share $ 0.69 $ (0.06 ) $ (0.06 ) $ (0.05 ) Year ended December 31, 2014 Total revenue $ 6,482 $ 6,945 $ 6,788 $ 7,466 Gross profit $ 2,756 $ 1,877 $ 1,919 $ 2,441 Net loss attributable to common shareholders $ (9,811 ) $ 29 $ 2,976 $ (5,454 ) Loss per basic share $ (0.55 ) $ - $ (0.17 ) $ (0.31 )

RESTATEMENT OF 2013 STATEMENT O

RESTATEMENT OF 2013 STATEMENT OF OPERATIONS	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 19. RESTATEMENT OF 2013 STATEMENT OF OPERATIONS	We previously restated our 2013 10-K on May 8, 2014. The requirement to restate the Company's basic and diluted earnings per share arose from the requirement to deduct $2.616 million attributable to the beneficial conversion feature of the Convertible Preferred Shares issued on December 13, 2013 and the accretion of $39,000 related to the preferred shares from December 13, 2013 through December 31, 2013, in calculating net loss attributable to common shareholders for the purposes of earnings per share, in accordance with FASB ASC 480-10-S99-2-20. The impact of this change is an increase in basic and diluted loss per share of $0.15 to $0.40 for the year ended December 31, 2013. The $2.6 million deduction is a one-time non-cash, deemed dividend. The accretion of the preferred shares is a reduction in the net income (loss) attributable to common shareholders which will be recorded until the preferred shares are fully accreted to their face value. Neither has an effect on net income, comprehensive income or cash flows for the year ended December 31, 2013, or total shareholders' equity as of December 31, 2013.

SIGNIFICANT ACCOUNTING POLICI26

SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2015
Significant Accounting Policies Policies
Consolidated Financial Statements	The accompanying consolidated financial statements include the accounts of Bovie and its wholly owned subsidiaries, Aaron Medical Industries, Inc., Bovie Bulgaria, EOOD, BVX Holdings LLC, and Bovie Holdings, Inc., (collectively, the "Company" or "we", "our" or "us"). All intercompany transactions and balances have been eliminated in consolidation.
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 are considered to be cash equivalents.
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. In addition, we believe the book values of our mortgage payable and capital lease payable approximates their fair values as the terms of such obligations approximate the terms at which similar types of borrowing arrangements could be currently obtained. Financial instruments, which potentially subject us to significant concentrations of credit risk, consist primarily of cash and cash equivalents, 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. With respect to receivables, our ten largest customers accounted for approximately 48%, 48%, and 58% of trade receivables as of December 31, 2015, 2014, and 2013, respectively and 58.3%, 61.0%, and 60.9% of net revenues for the respective years then ended. In 2015, McKesson accounted for 18.6% and National Distribution & Contracting Inc. accounted for 13.3% of our sales. In 2014, National Distribution & Contracting Inc. accounted for 13.9% of our sales. In 2013, National Distribution & Contracting Inc. accounted for 13.1%, PSS World Medical accounted for 10.9% and McKesson Medical Surgical accounted for 10.3% of our sales.
Derivative Financial Instruments	We generally do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks. However, certain financial instruments, such as warrants, which are indexed to our common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even if the terms of the underlying contracts do not always provide for net-cash settlement. Such financial instruments are initially recorded, and continuously carried, at fair value. Determining the fair value of these instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rate risk, historical volatility and stock price, estimated life of the derivative, anti-dilution provisions, and conversion/redemption privileges. The use of different assumptions or changes in those assumptions could have a material effect on the estimated fair value amounts.
Accounts Receivable and Allowance for Doubtful Accounts	Our credit terms for our billings range from net 10 days to net 60 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 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 gave negotiated sales volume discounts, which amounted to approximately $261,176, $579,885, and $523,000 for the years ended December 31, 2015, 2014, and 2013, respectively. Sales are reported net of all discounts. 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, estimated value of any underlying collateral 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 $192,000 and $133,000 at December 31, 2015 and 2014, respectively, are, or were, adequate to provide for possible bad debts.
Inventories and Repair Parts	Inventories are stated at the lower of cost or market. 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. Inventories at December 31, 2015 and 2014 were as follows (in thousands): December 31, December 31, 2015 2014 Raw materials $ 4,627 $ 4,162 Work in process 483 1,230 Finished goods 2,080 1,412 Gross inventories 7,190 6,804 Less: reserve for obsolescence (1,233 ) (1,077 ) Net inventories $ 5,957 $ 5,727 During 2015, the Company recorded charges totaling approximately $157,000 for excess and obsolete inventory. During 2014, the Company recorded charges totaling approximately $2.0 million for excess and obsolete inventory. The charges relate to management updates to the commercial plan, book to physical inventory adjustments at both the Clearwater facility and consignments at foreign suppliers, and other adjustments. During 2013, the reserves for raw materials inventory and related costs of sales decreased by approximately $67,000 due to disposing of old inventory.
Property and Equipment	These assets 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 large improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and small improvements are expensed as incurred. The estimated useful lives are: machinery and equipment, 3-10 years; buildings, 39 years; molds, 7-15 years and furniture and fixtures, 5-10 years.
Intangible Assets	These assets consist of licenses, purchased technology and brand name and trademarks. The licenses and purchased technology (other intangibles) are being amortized by the straight-line method over a 5-17 year period commencing with the date they were placed in service. Estimated aggregate amortization expense for the five years ending December 31, 2019 is expected to approximate $431,000 per year. Brand name and trademark qualifies as an indefinite-lived intangible asset and is not subject to amortization. Intangibles with indefinite lives are analyzed for impairment annually or more frequently if events and circumstances indicate that the asset may be impaired. If impaired, an impairment loss is recognized in an amount equal to the excess of the asset's carrying value over its fair value. Management concluded that the assigned value at December 31, 2015 of approximately $1,510,000 was not impaired and is reasonable.
Other Long-Lived Assets	We review other 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, 2015, we believe the remaining carrying values of our long-lived assets are recoverable.
Revenue Recognition	Revenue is recognized when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. The following policies apply to our major categories of revenue transactions: ● The majority of our sales to customers are evidenced by firm purchase orders. 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 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. ● Amounts billed to customers related to shipping and handling charges are included in net sales. Shipping and handling costs included in cost of sales were approximately $100,000, $103,000, and $104,000 in 2015, 2014, and 2013, respectively.
Advertising Costs	All advertising costs are expensed as incurred. The amounts of advertising costs were approximately $542,000, $540,000 and $305,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
Stock-Based Compensation	We account for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation
Litigation Contingencies	From time to time, we are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of the Company and our stockholders. There can be no assurance these actions or other third party assertions will be resolved without costly litigation, or in a manner that is not adverse to our financial position. We do not believe that any of the currently identified claims or litigation matters will have a material adverse impact on our results of operations, cash flows or financial condition. However, given uncertainties associated with any litigation, if our assessments prove to be wrong, or if additional information becomes available such that we estimate that there is a possible loss or possible range of loss associated with these contingencies, then we would record the minimum estimated liability, which could materially impact our results of operations, financial position and cash flows.
Tax Effects of Stock-Based Compensation	We will only recognize a tax benefit from windfall tax deductions for stock-based awards in additional paid-in capital if an incremental tax benefit is realized after all other tax attributes currently available have been utilized.
Net Earnings (Loss) Per Common Share	We compute basic earnings (loss) attributable to common shareholders per share by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings (loss) 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 method which reduces the effective number of shares by the amount of shares we could purchase with the proceeds of assumed exercises. In 2015, the diluted net income per share calculated included the dilutive effect of the employee stock options, warrants and the conversion of Series B Preferred Stock because their effects were dilutive. In 2014 and 2013, respectively, the net loss per share calculated when including the dilutive effect of the employee stock options and warrants are excluded from diluted net loss per common share calculations as of such dates because they are anti-dilutive and results in basic and diluted loss per share to be equivalent.
Research and Development Costs	With the exception of development costs that are purchased from another enterprise and have alternative future use, research and development expenses are charged to operations as incurred. We have expended approximately $2.2 million, and $1.4 million, and $1.3 million for the years ended 2015, 2014, and 2013 respectively.
Research and Development Costs for Others	For research and development activities that are partially or completely funded by other parties, and when the obligation is incurred solely to perform contractual services, expenses are charged to cost of sales and all revenues resulting from such activities are shown as sales.
Income Taxes	We utilize the liability method of accounting for income taxes as set forth in FASB 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. Management evaluated the positive and negative evidence in determining the realizability of the net deferred tax asset. In determining the need for valuation allowance, we reviewed historic operating results, updated 2015 actual results, as well as future income forecasts based on the projections, management concluded that it was not more likely that the Company should realize its net deferred tax assets through future operating results and the reversal of taxable temporary differences. If in the future we determine that we will be able to realize any of the net deferred tax assets, we will make adjustment to the valuation allowance, which would increase our income in the period that the determination is made. 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.

SIGNIFICANT ACCOUNTING POLICI27

SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2015
Significant Accounting Policies Tables
Schedule of inventory	Inventories at December 31, 2015 and 2014 were as follows (in thousands): December 31, December 31, 2015 2014 Raw materials $ 4,627 $ 4,162 Work in process 483 1,230 Finished goods 2,080 1,412 Gross inventories 7,190 6,804 Less: reserve for obsolescence (1,233 ) (1,077 ) Net inventories $ 5,957 $ 5,727

ACQUISITION OF BOVIE BULGARIA (

ACQUISITION OF BOVIE BULGARIA (Tables)	12 Months Ended
	Dec. 31, 2015
Acquisition Of Bovie Bulgaria Tables
Fair values of the assets acquired and liabilities	The table below summarizes the preliminary purchase price and the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date of October 20, 2015: Purchase Price Value of consideration paid: $ 559 Tangible assets acquired and liabilities assumed at fair value Cash and cash equivalents 59 Trade accounts receivable, net - Inventories, net 285 Prepaid expenses and other current assets 1 Property and equipment, net 167 Deferred income tax assets, net 25 Deposits, net of current portion 8 Accounts payable (150 ) Accrued and other liabilities (21 ) Excess of assets over liabilities assumed $ 374 Goodwill $ 185

TRADE ACCOUNTS RECEIVABLE (Tabl

TRADE ACCOUNTS RECEIVABLE (Tables)	12 Months Ended
	Dec. 31, 2015
Trade Accounts Receivable Tables
Trade accounts receivable	As of December 31, 2015 and 2014, trade accounts receivable were as follows (in thousands): December 31, December 31, 2015 2014 Trade accounts receivable $ 3,117 $ 2,125 Less: allowance for doubtful accounts (192 ) (133 ) Trade accounts receivable, net $ 2,925 $ 1,992

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2015
Property Plant And Equipment Tables
Property, plant and equipment	As of December 31, 2015 and 2014, property, plant and equipment consisted of the following (in thousands): December 31, December 31, 2015 2014 Land $ 1,600 $ 1,600 Machinery and equipment 3,933 3,983 Building and improvements 4,200 3,899 Furniture and fixtures 2,237 2,188 Leasehold improvements 12 12 Molds 1,701 1,613 Total property, plant and equipment 13,683 13,295 Less: accumulated depreciation and amportization (6,873 ) (6,348 ) Net property, plant and equipment $ 6,810 $ 6,947

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2015
Intangible Assets Tables
Schedule of intangible assets	At December 31, 2015 and 2014, intangible assets consisted of the following (in thousands): December 31, December 31, 2015 2014 Brand name and trademark (life indefinite) $ 1,510 $ 1,510 Purchased technology (9-17 year lives) 1,441 1,441 Less: accumulated amortization (1,118 ) (1,010 ) Purchased technology, net 323 431 Goodwill $ 185 $ -

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	12 Months Ended
	Dec. 31, 2015
Earnings Per Share Tables
Basic and diluted earnings per share	Year Ended December 31, (in thousands, except per share data) 2015 2014 2013 Numerator: Net income (loss) available to common shareholders $ 8,364 $ (18,214 ) $ (6,994 ) Effect of dilutive securities Derivative liability - warrants $ (1,799 ) $ - $ - Accretion on convertible preferred stock $ 222 $ - $ - Numerator for diluted income (loss) per common share $ 6,787 $ (18,214 ) $ (6,994 ) Denominator: Weighted average shares used to compute basic income (loss) per common share 24,333 17,756 17,670 Effect of dilutive securities: Derivative liability - warrants 28 - - Convertible preferred stock 3,137 - - Stock options 249 - - Denominator for diluted income (loss) per common share 27,747 17,756 17,670 Basic income (loss) per common share $ 0.34 $ (1.03 ) $ (0.40 ) Diluted income (loss) per common share $ 0.24 $ (1.03 ) $ (0.40 )

CONVERTIBLE PREFERRED STOCK A33

CONVERTIBLE PREFERRED STOCK AND WARRANTS (Tables)	12 Months Ended
	Dec. 31, 2015
Convertible Preferred Stock And Warrants Tables
Fair value of the warrants issued to the investors	Proceeds Allocated Expenses Allocated Series A Preferred Stock $ 2,616,250 $ 396,369 Investor Warrants 4,383,750 664,151 $ 7,000,000 $ 1,060,520
Reconciliation of changes in fair value	The following represents a reconciliation of the changes in fair value of warrants measured at fair value using Level 3 inputs during the year ended December 31, 2015: (in $ thousands) 2013 Investor Warrants 2013 Placement Agent Warrants 2010 Investor Warrants 2010 Placement Agent Warrants Total Balance, December 31, 2014 $ 10,546 $ 998 $ 1,065 $ 4 $ 12,613 Issuances - - - - - Exchange of warrants (1) (10,546 ) - - - (10,546 ) Exercise of warrants - - (1,081 ) - (1,081 ) Change in fair value - (731 ) 16 (4 ) (719 ) Balance, December 31, 2015 (2) $ - $ 267 $ - $ - $ 267

LONG TERM DEBT (Tables)

LONG TERM DEBT (Tables)	12 Months Ended
	Dec. 31, 2015
Long Term Debt Tables
Summary of Long Term Debt	Our 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 2016 2017 Purchase commitments $ 3,377 $ - Long-term debt 239 2,934 Total $ 3,616 $ 2,934

TAXES AND NET OPERATING LOSS 35

TAXES AND NET OPERATING LOSS CARRYFORWARDS (Tables)	12 Months Ended
	Dec. 31, 2015
Taxes And Net Operating Loss Carryforwards Tables
Deferred tax assets (liabilities)	The tax effects of these temporary differences representing the components of deferred tax assets (liabilities) at December 31 were approximately as follows (in thousands): 2015 2014 Deferred tax assets: Loss and credit carry-forwards $ 6,578 $ 5,497 Stock based compensation 283 156 Inventory Reserve 466 361 Other 273 193 Total Deferred Tax Assets 7,600 6,207 Deferred tax liabilities: State taxes (capital) (10 ) (9 ) Property and equipment (413 ) (416 ) Intangibles (337 ) (376 ) Total deferred tax liabilities (760 ) (801 ) Total Net Deferred Tax Assets 6,840 5,406 Valuation Allowance (7,404 ) (5,970 ) Total Net Deferred Tax Assets/(Liabilities), net of Valuation Allowance $ (564 ) $ (564 )
Statutory federal income tax rate	Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended December 31, 2015, 2014, and 2013: 2015 2014 2013 Federal tax provision 34.0 % 34.0 % 34.0 % State taxes (net of federal benefit) 2.4 % 1.4 % 2.6 % Warrant gains (11.1 )% (18.8 )% - % Valuation allowance (26.3 )% (45.3 )% - % Other 0.6 % (1.6 )% (9.3) % (0.4 )% (30.3 )% 27.3 %

OTHER COMMITMENTS AND CONTING36

OTHER COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2015
Other 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 as of December 31, 2015 (in thousands): 2016 $ 187 2017 114 Therafter 267 Total $ 568
Employment Agreements	At December 31, 2015, we were obligated under six employment agreements which have expiration dates between December 2016 and March 2017. Name Contract Expiration Date Robert Gershon N/A (1) J. Robert Saron December, 2016 Moshe Citronowicz December, 2016 Andrew Makrides December, 2016 John McCarthy March, 2017 Jay D. Ewers N/A (1)
Future minimum payments under these agreements	Approximate future minimum payments under these agreements are as follows as of December 31, 2015 (in thousands): 2016 $ 1,591 2017 94 Total $ 1,685

STOCK OPTIONS (Tables)

STOCK OPTIONS (Tables)	12 Months Ended
	Dec. 31, 2015
Stock Options Tables
Summary of stock options and stock awards	The status of our stock options and stock awards are summarized as follows: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2013 2,467,046 $ 3.55 Granted 592,000 $ 3.88 Exercised (107,000 ) $ 2.17 Cancelled and Forfeited (87,857 ) $ 2.80 Outstanding at December 31, 2014 2,864,189 $ 3.69 Granted 830,922 $ 2.21 Exercised (97,500 ) $ 2.25 Cancelled and Forfeited (466,164 ) $ 3.57 Outstanding at December 31, 2015 3,131,447 $ 3.38 Exercisable at December 31, 2015 1,424,036 $ 4.28
Number and weighted average grant-date fair values of options	The number and weighted average grant-date fair values of options non-vested at the beginning and end of 2015, as well as options granted, vested and forfeited during the year was as follows: Exercise Prices 2014 Number Outstanding 2014 Options Exercisable Granted Exercised Vested Cancelled Forfeited 2015 Number Outstanding 2015 Options Exercisable Weighted Average Remaining Contractual Life $ 2.25 309,500 309,500 - 97,500 - 212,000 - - - - $ 2.93 35,000 35,000 - - - 35,000 - - - - $ 6.93 20,000 20,000 - - - - - 20,000 20,000 1 $ 8.66 97,857 97,857 - - - 7,858 - 89,999 89,999 2 $ 7.10 12,125 12,125 - - - - - 12,125 12,125 2 $ 7.68 7,500 7,500 - - - - - 7,500 7,500 2 $ 7.18 50,000 50,000 - - - - - 50,000 50,000 3 $ 7.33 131,190 114,346 - - 16,844 27,135 - 104,055 104,055 3 $ 6.60 500 500 - - - - - 500 500 4 $ 8.32 61,428 48,060 - - 357 24,286 - 37,142 24,131 4 $ 7.85 7,500 5,357 - - 1,071 - - 7,500 6,428 4 $ 7.45 100,000 100,000 - - - - - 100,000 100,000 5 $ 6.00 30,000 24,000 - - 6,000 - - 30,000 30,000 5 $ 2.46 68,446 58,704 - - 1,428 27,731 - 40,715 32,401 5 $ 1.89 50,000 28,572 - - 7,143 - - 50,000 35,715 5 $ 3.08 10,000 5,716 - - 1,429 - - 10,000 7,145 5 $ 2.81 15,000 6,429 - - 2,143 - - 15,000 8,572 6 $ 2.80 7,143 3,877 - - 714 - - 7,143 4,591 6 $ 2.79 46,000 33,334 - - 10,667 - - 46,000 44,001 7 $ 2.54 216,000 92,933 - - 34,400 16,404 - 199,596 110,929 7 $ 3.79 100,000 40,000 - - 20,000 - - 100,000 60,000 7 $ 2.50 10,000 2,000 - - 2,000 - - 10,000 4,000 8 $ 6.00 50,000 37,778 - - 6,000 - - 50,000 43,778 8 $ 2.97 42,000 27,333 - - 7,333 - - 42,000 34,666 8 $ 2.20 45,000 28,333 - - 8,333 - - 45,000 36,666 8 $ 2.09 750,000 187,500 - - 187,500 - - 750,000 375,000 8 $ 3.90 213,000 - - - 53,250 - - 213,000 53,250 9 $ 3.81 169,000 - - - 45,250 - 105,750 63,250 45,250 9 $ 3.63 35,000 - - - 8,750 - - 35,000 8,750 9 $ 4.30 50,000 - - - 12,500 - - 50,000 12,500 9 $ 4.05 30,000 - - - 7,500 - - 30,000 7,500 9 $ 4.07 45,000 - - - 8,750 - 10,000 35,000 8,750 9 $ 3.50 50,000 - - - 12,500 - - 50,000 12,500 9 $ 2.25 - - 100,000 - 33,333 - - 100,000 33,333 10 $ 1.95 - - 75,000 - - - - 75,000 - 10 $ 2.13 - - 65,000 - - - - 65,000 - 10 $ 2.00 - - 225,922 - - - - 225,922 - 10 $ 1.77 - - 155,000 - - - - 155,000 - 10 $ 2.87 - - 100,000 - - - - 100,000 - 10 $ 2.48 - - 10,000 - - - - 10,000 - 10 $ 2.78 - - 10,000 - - - - 10,000 - 10 $ 2.30 - - 50,000 - - - - 50,000 - 10 $ 3.78 - - 20,000 - - - - 20,000 - 10 $ 3.38 - - 20,000 - - - - 20,000 - 10 2,864,189 1,376,754 830,922 97,500 495,196 350,414 115,750 3,131,447 1,424,036
Allocation of stock based compensation expense	Number of Options Weighted Average Grant Date Fair Value Non-vested at January 1, 2015 1,487,435 $ 3.11 Granted in 2015 830,922 $ 2.21 Vested in 2015 (495,196 ) $ 3.06 Forfeited in 2015 (115,750 ) $ 3.83 Non-vested at December 31, 2015 1,707,411

GEOGRAPHIC AND SEGMENT INFORM38

GEOGRAPHIC AND SEGMENT INFORMATION (Tables)	12 Months Ended
	Dec. 31, 2015
Geographic And Segment Information Tables
Analyzing revenue and other operating metrics across three operating segments	Sales by Operating Category (in thousands) 2015 2014 2013 Core $ 26,098 $ 24,322 $ 22,134 OEM 2,116 3,150 1,484 J-Plasma 1,306 209 42 Total $ 29,520 $ 27,681 $ 23,660

SELECTED QUARTERLY INFORMATIO39

SELECTED QUARTERLY INFORMATION (UNAUDITED) (Tables)	12 Months Ended
	Dec. 31, 2015
Selected Quarterly Information Tables
Schedule of Quarterly Information	First Quarter Second Quarter Third Quarter Fourth Quarter Year ended December 31, 2015 Total revenue $ 6,128 $ 7,274 $ 7,823 $ 8,295 Gross profit $ 2,674 $ 3,140 $ 3,229 $ 3,514 Net income (loss) attributable to common shareholders $ 12,858 $ (1,497 ) $ (1,587 ) $ (1,410 ) Income (loss) per basic share $ 0.69 $ (0.06 ) $ (0.06 ) $ (0.05 ) Year ended December 31, 2014 Total revenue $ 6,482 $ 6,945 $ 6,788 $ 7,466 Gross profit $ 2,756 $ 1,877 $ 1,919 $ 2,441 Net loss attributable to common shareholders $ (9,811 ) $ 29 $ 2,976 $ (5,454 ) Loss per basic share $ (0.55 ) $ - $ (0.17 ) $ (0.31 )

SIGNIFICANT ACCOUNTING POLICI40

SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Significant Accounting Policies Details
Raw materials	$ 4,627	$ 4,162
Work in process	483	1,230
Finished goods	2,080	1,412
Gross inventories	7,190	6,804
Less: reserve for obsolescence	(1,233)	(1,077)
Net inventories	$ 5,957	$ 5,727

SIGNIFICANT ACCOUNTING POLICI41

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Significant Accounting Policies Details Narrative
Percent of receivables from ten largest customers	48.00%	48.00%	58.00%
Percent of net revenues from ten largest customers	58.30%	61.00%	60.90%
Sales volume discounts	$ 261	$ 580	$ 523
Allowances for doubtful accounts	192	133
Charges for excess and obsolete inventory	157
Intangible assets not impaired	1,510
Shipping and handling costs	100	103	104
Advertising Costs	542	540	305
Research and development costs	$ 2,160	$ 1,416	$ 1,260

ACQUISITION OF BOVIE BULGARIA42

ACQUISITION OF BOVIE BULGARIA (Details) $ in Thousands	Dec. 31, 2015USD ($)
Purchase Price
Value of consideration paid:	$ 559
Tangible assets acquired and liabilities assumed at fair value
Cash and cash equivalents	$ 59
Trade accounts receivable, net
Inventories, net	$ 285
Prepaid expenses and other current assets	1
Property and equipment, net	167
Deferred income tax assets, net	25
Deposits, net of current portion	8
Accounts payable	(150)
Accrued and other liabilities	(21)
Excess of assets over liabilities assumed	374
Goodwill	$ 185

TRADE ACCOUNTS RECEIVABLE (Deta

TRADE ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Trade Accounts Receivable Details
Trade accounts receivable	$ 3,117	$ 2,125
Less: allowance for doubtful accounts	(192)	(133)
Trade accounts receivable, net	$ 2,925	$ 1,992

PROPERTY, PLANT AND EQUIPMENT44

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Property Plant And Equipment Details
Land	$ 1,600	$ 1,600
Machinery and equipment	3,933	3,983
Building and improvements	4,200	3,899
Furniture and fixtures	2,237	2,188
Leasehold improvements	12	12
Molds	1,701	1,613
Total property, plant and equipment	13,683	13,295
Less: accumulated depreciation and amortization	(6,873)	(6,348)
Net property, plant and equipment	$ 6,810	$ 6,947

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net carrying amount	$ 323	$ 431
Goodwill	185
Brand name and trademark (life indefinite) [Member]
Indefinite-lived intangible assets	1,510	$ 1,510
Purchased Technology [Member]
Indefinite-lived intangible assets	1,441	1,441
Less: accumulated amortization	(1,118)	(1,010)
Net carrying amount	323	$ 431
Goodwill	$ 185
Purchased Technology [Member] | Minimum [Member]
Useful life	9 years
Purchased Technology [Member] | Maximum [Member]
Useful life	17 years

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) $ in Thousands	Dec. 31, 2015USD ($)
Amortization of Intangible Assets
2,015	$ 108
2,016	108
2,017	108
2,018	108
2,019	$ 108

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share Details
Net income (loss) available to common shareholders									$ 8,364	$ (18,214)	$ (6,994)
Effect of dilutive securities
Derivative liability - warrants									(1,799)
Accretion on convertible preferred stock									222
Numerator for diluted income (loss) per common share									$ 6,787	$ (18,214)	$ (6,994)
Weighted average shares used to compute basic income (loss) per common share									24,333,000	17,756,000	17,670,000
Effect of dilutive securities:
Derivative liability - warrants									28,000
Convertible preferred stock									3,137,000
Stock options									249,000
Denominator for diluted income (loss) per common share									27,747,000	17,756,000	17,670,000
Basic income (loss) per common share									$ 0.34	$ (1.03)	$ (0.4)
Diluted income (loss) per common share	$ (0.05)	$ (0.06)	$ (0.06)	$ 0.69	$ (0.31)	$ (0.17)		$ (0.55)	$ 0.24	$ (1.03)	$ (0.4)

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share Details Narrative
Warrants to purchase of common stock	28,000
Gain on the fair market valuation of the derivative liabilities	$ 1,800
Options to purchase of common stock	249,000	6,500,000	12,900,000
Conversion of Series B Preferred Stock	3,137,141

CONVERTIBLE PREFERRED STOCK A49

CONVERTIBLE PREFERRED STOCK AND WARRANTS (Details)	12 Months Ended
	Dec. 31, 2015USD ($)
Proceeds allocated	$ 7,000,000
Expenses allocated	1,060,520
Series A Preferred Stock [Member]
Proceeds allocated	2,616,250
Expenses allocated	396,369
Investor Warrants [Member]
Proceeds allocated	4,383,750
Expenses allocated	$ 664,151

CONVERTIBLE PREFERRED STOCK A50

CONVERTIBLE PREFERRED STOCK AND WARRANTS (Details 1) $ in Thousands	12 Months Ended
	Dec. 31, 2015USD ($)
Beginning Balance	$ 12,613
Issuances
Exchange of warrant	$ (10,546)
Effect of change in exercise price	(1,081)
Change in fair value	(719)
Ending Balance	267
2013 Investor Warrants [Member]
Beginning Balance	$ 10,546
Issuances
Exchange of warrant	$ (10,546)
Effect of change in exercise price
Change in fair value
2013 Placement Agent Warrants [Member]
Beginning Balance	$ 998
Issuances
Exchange of warrant
Effect of change in exercise price
Change in fair value	$ (731)
Ending Balance	267
2010 Investor Warrants [Member]
Beginning Balance	$ 1,065
Issuances
Exchange of warrant
Effect of change in exercise price	$ (1,081)
Change in fair value	16
2010 Placement Agent Warrants [Member]
Beginning Balance	$ 4
Issuances
Exchange of warrant
Effect of change in exercise price
Change in fair value	$ (4)

CONVERTIBLE PREFERRED STOCK A51

CONVERTIBLE PREFERRED STOCK AND WARRANTS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Investor warrants	$ 0	$ 10,547
Placement agent warrants	267	998
Aggregate change in value of the investor and placement agent warrants	1,799
Additional accretion of convertible preferred stock and warrants	222
Series A preferred stock	0
Investor [Member]
Fair value of the investor and placement agent warrants	$ 0
Placement Agent [Member]
Fair value of the investor and placement agent warrants		$ 1,068

LONG TERM DEBT (Details)

LONG TERM DEBT (Details) $ in Thousands	Dec. 31, 2015USD ($)
Purchase commitments
2,016	$ 3,377
2,017
Long-term debt
2,016	$ 239
2,017	2,934
Total Future Obligation
2,016	3,616
2,017	$ 2,934

LONG TERM DEBT (Details Narrati

LONG TERM DEBT (Details Narrative)	Dec. 31, 2015
Long Term Debt Details Narrative
Interest rate	3.744%

TAXES AND NET OPERATING LOSS 54

TAXES AND NET OPERATING LOSS CARRYFORWARDS (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Deferred tax assets, non-current:
Loss and credit carryforwards	$ 6,578	$ 5,497
Stock based compensation	283	156
Inventory Reserve	466	361
Other	273	193
Total deferred tax assets	7,600	6,207
Deferred tax liabilities
State taxes (capital)	(10)	(9)
Property and equipment	(413)	(416)
Intangibles	(337)	(376)
Total deferred tax liabilities	(760)	(801)
Total Net Deferred Tax Assets	6,840	5,406
Valuation Allowance	(7,404)	(5,970)
Total Net Deferred Tax Assets/(Liabilities) , net of Valuation Allowance	$ (564)	$ (564)

TAXES AND NET OPERATING LOSS 55

TAXES AND NET OPERATING LOSS CARRYFORWARDS (Details 1)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reconciliation of the statutory federal income tax rate to our effective tax rate
Federal Tax Provision	34.00%	34.00%	34.00%
State taxes (net of federal benefit)	2.40%	1.40%	2.60%
Warrant Gain	(11.10%)	(18.80%)
Valuation allowance	(26.30%)	(45.30%)
Other	0.60%	(1.60%)	(9.30%)
Total Tax Rate	(0.40%)	(30.30%)	27.30%

RETIREMENT PLAN (Details Narrat

RETIREMENT PLAN (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Retirement Plan Details Narrative
Company Retirement Contribution	$ 245	$ 100	$ 0

OTHER RELATED PARTY TRANSACTI57

OTHER RELATED PARTY TRANSACTION (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
AR Logic [Member]
Consulting fees	$ 259,200	$ 252,000	$ 266,600
Mr. Tsitrinovich [Member]
Consulting fees	$ 67,575	$ 72,412	$ 72,890

OTHER COMMITMENTS, CONTINGENCIE

OTHER COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details) $ in Thousands	Dec. 31, 2015USD ($)
Future minimum lease payments under operating leases
2,016	$ 187
2,017	114
Thereafter	267
Total	$ 568

OTHER COMMITMENTS, CONTINGENC59

OTHER COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details 1)	12 Months Ended
	Dec. 31, 2015
Robert L. Gershon [Member]
Contract Expiration Date	N/A
J. Robert Saron [Member]
Contract Expiration Date	December, 2016
Moshe Citronowicz [Member]
Contract Expiration Date	December, 2016
Andrew Makrides [Member]
Contract Expiration Date	December, 2016
John J. McCarthy [Member]
Contract Expiration Date	March, 2017
Peter L. Donato [Member]
Contract Expiration Date	N/A

OTHER COMMITMENTS, CONTINGENC60

OTHER COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details 2) $ in Thousands	Dec. 31, 2015USD ($)
Approximate future minimum payments under employment agreements
2,016	$ 1,591
2,017	94
Total	$ 1,685

OTHER COMMITMENTS, CONTINGENC61

OTHER COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Other Commitments Contingencies And Concentrations Details Narrative
Rent expense	$ 120	$ 72	$ 228
Purchase commitments for inventories	$ 3,300

STOCK OPTIONS (Details)

STOCK OPTIONS (Details) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Number of options, outstanding
Outstanding, beginning of period (in shares)	2,864,189	2,467,046
Granted (in shares)	830,922	592,000
Exercised (in shares)	(97,500)	(107,000)
Cancelled and Forfeited (In shares)	(466,164)	(87,857)
Outstanding, end of period (in shares)	3,131,447	2,864,189
Exercisable, end of period (in shares)	1,424,036
Weighted average exercise price
Outstanding, beginning of period (in dollars per share)	$ 3.69	$ 3.55
Granted (in dollars per share)	2.21	3.88
Exercised (in dollars per share)	2.25	2.17
Cancelled (in dollars per share)	3.57	2.80
Outstanding, end of period (in dollars per share)	3.38	$ 3.69
Exercisable, end of period (in dollars per share)	$ 4.28

STOCK OPTIONS (Details 1)

STOCK OPTIONS (Details 1) - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Summary of information about options outstanding
Number Outstanding	3,131,447	2,864,189
Options Exercisable	1,424,036	1,376,754
Granted	830,922	592,000
Exercised	97,500	107,000
Vested	(495,196)
Cancelled	350,414
Exercise Price 2.25 [Member]
Summary of information about options outstanding
Number Outstanding		309,500
Options Exercisable		309,500
Exercised	97,500
Cancelled	212,000
Exercise Price 2.93 [Member]
Summary of information about options outstanding
Number Outstanding		35,000
Options Exercisable		35,000
Cancelled	35,000
Exercise Price 6.93 [Member]
Summary of information about options outstanding
Number Outstanding	20,000	20,000
Options Exercisable	20,000	20,000
Weighted Average Remaining Contractual Life	1 year
Exercise Price 8.66 [Member]
Summary of information about options outstanding
Number Outstanding	89,999	97,857
Options Exercisable	89,999	97,857
Cancelled	7,858
Weighted Average Remaining Contractual Life	2 years
Exercise Price 7.10 [Member]
Summary of information about options outstanding
Number Outstanding	12,125	12,125
Options Exercisable	12,125	12,125
Weighted Average Remaining Contractual Life	2 years
Exercise Price 7.68 [Member]
Summary of information about options outstanding
Number Outstanding	7,500	7,500
Options Exercisable	7,500	7,500
Weighted Average Remaining Contractual Life	2 years
Exercise Price 7.18 [Member]
Summary of information about options outstanding
Number Outstanding	50,000	50,000
Options Exercisable	50,000	50,000
Weighted Average Remaining Contractual Life	3 years
Exercise Price 7.33 [Member]
Summary of information about options outstanding
Number Outstanding	104,055	131,190
Options Exercisable	104,055	114,346
Vested	16,844
Cancelled	27,135
Weighted Average Remaining Contractual Life	3 years
Exercise Price 6.60 [Member]
Summary of information about options outstanding
Number Outstanding	500	500
Options Exercisable	500	500
Weighted Average Remaining Contractual Life	4 years
Exercise Price 8.32 [Member]
Summary of information about options outstanding
Number Outstanding	37,142	61,428
Options Exercisable	24,131	48,060
Vested	357
Cancelled	24,286
Weighted Average Remaining Contractual Life	4 years
Exercise Price 7.85 [Member]
Summary of information about options outstanding
Number Outstanding	7,500	7,500
Options Exercisable	6,428	5,357
Vested	1,071
Weighted Average Remaining Contractual Life	4 years
Exercise Price 7.45 [Member]
Summary of information about options outstanding
Number Outstanding	100,000	100,000
Options Exercisable	100,000	100,000
Weighted Average Remaining Contractual Life	5 years
Exercise Price 6.00 [Member]
Summary of information about options outstanding
Number Outstanding	30,000	30,000
Options Exercisable	30,000	24,000
Vested	6,000
Weighted Average Remaining Contractual Life	5 years
Exercise Price 2.46 [Member]
Summary of information about options outstanding
Number Outstanding	40,715	68,446
Options Exercisable	32,401	58,704
Vested	1,428
Cancelled	27,731
Weighted Average Remaining Contractual Life	5 years
Exercise Price 1.89 [Member]
Summary of information about options outstanding
Number Outstanding	50,000	50,000
Options Exercisable	35,715	28,572
Vested	7,143
Weighted Average Remaining Contractual Life	5 years
Exercise Price 3.08 [Member]
Summary of information about options outstanding
Number Outstanding	10,000	10,000
Options Exercisable	7,145	5,716
Vested	1,429
Weighted Average Remaining Contractual Life	5 years
Exercise Price 2.81 [Member]
Summary of information about options outstanding
Number Outstanding	15,000	15,000
Options Exercisable	8,572	6,429
Vested	2,143
Weighted Average Remaining Contractual Life	6 years
Exercise Price 2.80 [Member]
Summary of information about options outstanding
Number Outstanding	7,143	7,143
Options Exercisable	4,591	3,877
Vested	714
Weighted Average Remaining Contractual Life	6 years
Exercise Price 2.79 [Member]
Summary of information about options outstanding
Number Outstanding	46,000	46,000
Options Exercisable	44,001	33,334
Vested	10,667
Weighted Average Remaining Contractual Life	7 years
Exercise Price 2.54 [Member]
Summary of information about options outstanding
Number Outstanding	199,596	216,000
Options Exercisable	110,929	92,933
Vested	34,400
Cancelled	16,404
Weighted Average Remaining Contractual Life	7 years
Exercise Price 3.79 [Member]
Summary of information about options outstanding
Number Outstanding	100,000	100,000
Options Exercisable	60,000	40,000
Vested	20,000
Weighted Average Remaining Contractual Life	7 years
Exercise Price 2.50 [Member]
Summary of information about options outstanding
Number Outstanding	10,000	10,000
Options Exercisable	4,000	2,000
Vested	2,000
Weighted Average Remaining Contractual Life	8 years
Exercise Price 6.00 [Member]
Summary of information about options outstanding
Number Outstanding	50,000	50,000
Options Exercisable	43,778	37,778
Vested	6,000
Weighted Average Remaining Contractual Life	8 years
Exercise Price 2.97 [Member]
Summary of information about options outstanding
Number Outstanding	42,000	42,000
Options Exercisable	34,666	27,333
Vested	7,333
Weighted Average Remaining Contractual Life	8 years
Exercise Price 2.20 [Member]
Summary of information about options outstanding
Number Outstanding	45,000	45,000
Options Exercisable	36,666	28,333
Vested	8,333
Weighted Average Remaining Contractual Life	8 years
Exercise Price 2.09 [Member]
Summary of information about options outstanding
Number Outstanding	750,000	750,000
Options Exercisable	375,000	187,500
Vested	187,500
Weighted Average Remaining Contractual Life	8 years
Exercise Price 3.90 [Member]
Summary of information about options outstanding
Number Outstanding	213,000	213,000
Options Exercisable	53,250
Vested	53,250
Weighted Average Remaining Contractual Life	9 years
Exercise Price 3.81 [Member]
Summary of information about options outstanding
Number Outstanding	63,250	169,000
Options Exercisable	45,250
Vested	45,250
Forfeited	105,750
Weighted Average Remaining Contractual Life	9 years
Exercise Price 3.63 [Member]
Summary of information about options outstanding
Number Outstanding	35,000	35,000
Options Exercisable	8,750
Vested	8,750
Weighted Average Remaining Contractual Life	9 years
Exercise Price 4.30 [Member]
Summary of information about options outstanding
Number Outstanding	50,000	50,000
Options Exercisable	12,500
Vested	12,500
Weighted Average Remaining Contractual Life	9 years
Exercise Price 4.05 [Member]
Summary of information about options outstanding
Number Outstanding	30,000	30,000
Options Exercisable	7,500
Vested	7,500
Weighted Average Remaining Contractual Life	9 years
Exercise Price 4.07 [Member]
Summary of information about options outstanding
Number Outstanding	35,000	45,000
Options Exercisable	8,750
Vested	8,750
Forfeited	10,000
Weighted Average Remaining Contractual Life	9 years
Exercise Price 3.50 [Member]
Summary of information about options outstanding
Number Outstanding	50,000	50,000
Options Exercisable	12,500
Vested	12,500
Weighted Average Remaining Contractual Life	9 years
Exercise Price 2.25 [Member]
Summary of information about options outstanding
Number Outstanding	100,000
Options Exercisable	33,333
Granted	100,000
Vested	33,333
Weighted Average Remaining Contractual Life	10 years
Exercise Price 1.95 [Member]
Summary of information about options outstanding
Number Outstanding	75,000
Granted	75,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 2.13 [Member]
Summary of information about options outstanding
Number Outstanding	65,000
Granted	65,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 2.00 [Member]
Summary of information about options outstanding
Number Outstanding	225,922
Granted	225,922
Weighted Average Remaining Contractual Life	10 years
Exercise Price 1.77 [Member]
Summary of information about options outstanding
Number Outstanding	155,000
Granted	155,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 2.87 [Member]
Summary of information about options outstanding
Number Outstanding	100,000
Granted	100,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 2.48 [Member]
Summary of information about options outstanding
Number Outstanding	10,000
Granted	10,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 2.78 [Member]
Summary of information about options outstanding
Number Outstanding	10,000
Granted	10,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 2.30 [Member]
Summary of information about options outstanding
Number Outstanding	50,000
Granted	50,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 3.78 [Member]
Summary of information about options outstanding
Number Outstanding	20,000
Granted	20,000
Weighted Average Remaining Contractual Life	10 years
Exercise Price 3.38 [Member]
Summary of information about options outstanding
Number Outstanding	20,000
Granted	20,000
Weighted Average Remaining Contractual Life	10 years

STOCK OPTIONS (Details 2)

STOCK OPTIONS (Details 2)	12 Months Ended
	Dec. 31, 2015$ / sharesshares
Number and weighted average grant date fair values of options non-vested
Number of Options Non-vested at beginning of period	1,487,435
Number of Options Non-vested, Granted 2015	830,922
Number of Options Non-vested, Vested in 2015	(495,196)
Number of Options Non-vested, Forfeited in 2015	(115,750)
Number of Options Non-vested at end of period	1,707,411
Weighted average grant date fair value, Non-vested Options at beginning of period | $ / shares	$ 3.11
Weighted average grant date fair value, Non-vested Options Granted in 2015 | $ / shares	2.21
Weighted average grant date fair value, Non-vested Options Vested in 2015 | $ / shares	3.06
Weighted average grant date fair value, Non-vested Options Forfeited in 2015 | $ / shares	$ 3.83

STOCK OPTIONS (Details 3)

STOCK OPTIONS (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Allocated stock based compensation expense	$ 568	$ 388	$ 506
Cost of Sales [Member]
Allocated stock based compensation expense	3	8	12
Research and Development [Member]
Allocated stock based compensation expense	39	51	34
Salaries and Related Costs [Member]
Allocated stock based compensation expense	$ 526	$ 329	$ 460

STOCK OPTIONS (Details Narrativ

STOCK OPTIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Stock compensation cost recognized	$ 575	$ 388	$ 506
Unrecognized stock-based compensation cost	1,570
Intrinsic value of options exercised	52	229	76
Shares of common stock remain to be issued upon exercise of options	290
Aggregate intrinsic value of all stock options outstanding and expected to vest	103	2,266
Aggregate intrinsic value of currently exercisable stock options	$ 11	$ 1,101
Intrinsic value of closing stock	$ 2.10	$ 3.68
Number of in-the-money options outstanding and exercisable	410,715	819,231
Cash proceeds received from the exercise of stock options	$ 209	$ 87	48
Fair value of options granted	933	1,107	672
Fair value of option shares vested	$ 612	$ 413	$ 637
Common shares in issued in exchange for employee and non-employee stock options	33,520
Number of employee non-employee stock options	114,500
Common shares issued	80,980
2012 Share Incentive Plan [Member]
Remaining stock issued	40,333
2015 Executive and Employee Stock Option Plan [Member]
Remaining stock issued	1,479,078

GEOGRAPHIC AND SEGMENT INFORM67

GEOGRAPHIC AND SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Sales by Operating Segment	$ 29,520	$ 27,681	$ 23,660
Core [Member]
Sales by Operating Segment	26,098	24,322	22,134
OEM [Member]
Sales by Operating Segment	2,116	3,150	1,484
J-Plasma [Member]
Sales by Operating Segment	$ 1,306	$ 209	$ 42

GEOGRAPHIC AND SEGMENT INFORM68

GEOGRAPHIC AND SEGMENT INFORMATION (Details Narrative)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Geographic And Segment Information Details Narrative
Percentage of International sales of sales	16.90%	15.80%	17.50%

SELECTED QUARTERLY INFORMATIO69

SELECTED QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Unaudited quarterly data
Total revenue	$ 8,295	$ 7,823	$ 7,274	$ 6,128	$ 7,466	$ 6,788	$ 6,945	$ 6,482
Gross profit	3,514	3,229	3,140	2,674	2,441	1,919	1,877	2,756	$ 12,557	$ 8,992	$ 9,198
Net income (loss)	$ (1,410)	$ (1,587)	$ (1,497)	$ 12,858	$ (5,454)	$ (2,976)	$ 29	$ (9,811)	$ (5,370)	$ (17,282)	$ (4,339)
Diluted earnings (loss) per share (in dollars per share)	$ (0.05)	$ (0.06)	$ (0.06)	$ 0.69	$ (0.31)	$ (0.17)		$ (0.55)	$ 0.24	$ (1.03)	$ (0.4)