Document_and_Entity_Informatio
Document and Entity Information Document | 6 Months Ended | |
Jun. 30, 2014 | Aug. 08, 2014 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Arrhythmia Research Technology Inc /DE/ | ' |
Entity Central Index Key | '0000819689 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 2,731,839 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $232,024 | $749,766 |
Restricted cash | 0 | 1,000,000 |
Trade accounts receivable, net of allowance for doubtful accounts of $50,000 at June 30, 2014 and $40,000 at December 31, 2013 | 3,876,966 | 3,803,853 |
Inventories, net | 3,087,557 | 2,335,291 |
Prepaid expenses and other current assets | 627,375 | 513,197 |
Assets from discontinued operations | 0 | 1,509 |
Total current assets | 7,823,922 | 8,403,616 |
Property, plant and equipment, net | 7,672,749 | 7,579,556 |
Intangible assets, net | 178,293 | 184,517 |
Other assets | 119,467 | 185,595 |
Total assets | 15,794,431 | 16,353,284 |
Current liabilities: | ' | ' |
Revolving line of credit | 2,296,495 | 0 |
Equipment line of credit, current portion | 0 | 85,387 |
Term notes payable, current portion | 479,719 | 335,760 |
Accounts payable | 1,758,083 | 2,156,031 |
Accrued expenses & other current liabilities | 773,870 | 436,775 |
Customer deposits | 903,126 | 341,465 |
Deferred revenue, current | 229,337 | 248,559 |
Performance guarantee liability | 0 | 1,000,000 |
Liabilities from discontinued operations, current | 320,056 | 319,787 |
Total current liabilities | 6,760,686 | 4,923,764 |
Long-term liabilities: | ' | ' |
Revolving line of credit | 0 | 2,774,495 |
Equipment line of credit, non-current portion | 0 | 538,707 |
Term notes payable, non-current portion | 1,577,895 | 1,179,709 |
Subordinated promissory notes | 431,610 | 417,769 |
Deferred revenue, non-current | 121,255 | 172,316 |
Total long-term liabilities | 2,130,760 | 5,082,996 |
Total liabilities | 8,891,446 | 10,006,760 |
Commitments and Contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock, $1 par value; 2,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $.01 par value; 10,000,000 shares authorized; 3,926,491 issued, 2,731,839 outstanding at June 30, 2014 and 3,926,491 issued, 2,722,239 outstanding at December 31,2013 | 39,265 | 39,265 |
Additional paid-in-capital | 11,282,665 | 11,236,236 |
Treasury stock at cost, 1,194,652 shares at June, 30, 2014 and 1,204,252 at December 31, 2013 | -3,259,954 | -3,272,808 |
Accumulated other comprehensive income | 42,502 | 42,502 |
Accumulated deficit | -1,201,493 | -1,698,671 |
Total shareholders’ equity | 6,902,985 | 6,346,524 |
Total liabilities and shareholders’ equity | $15,794,431 | $16,353,284 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets Parenthetical (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Allowance for doubtful accounts receivable, current | $50,000 | $40,000 |
Preferred stock, par value per share | $1 | $1 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par or stated value per share | $0.01 | $0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares, issued | 3,926,491 | 3,926,491 |
Common stock, shares, outstanding | 2,731,839 | 2,722,239 |
Treasury stock, shares | 1,194,652 | 1,204,252 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net sales | $6,253,757 | $4,880,445 | $12,283,600 | $10,523,634 |
Cost of sales | 5,119,734 | 4,322,779 | 9,838,291 | 9,013,820 |
Gross profit | 1,134,023 | 557,666 | 2,445,309 | 1,509,814 |
Selling and marketing | 240,408 | 246,839 | 532,080 | 487,214 |
General and administrative | 543,235 | 585,345 | 1,137,866 | 1,309,475 |
Research and development | 85,694 | 61,293 | 182,521 | 120,695 |
Total operating expenses | 869,337 | 893,477 | 1,852,467 | 1,917,384 |
Income (loss) from continuing operations | 264,686 | -335,811 | 592,842 | -407,570 |
Other income (expense): | ' | ' | ' | ' |
Interest expense | -70,529 | -196,999 | -140,678 | -207,545 |
Other income (expense), net | 46,687 | 7,905 | 48,998 | 7,769 |
Total other expense, net | -23,842 | -189,094 | -91,680 | -199,776 |
Income (loss) from continuing operations before income taxes | 240,844 | -524,905 | 501,162 | -607,346 |
Income tax provision | 1,030 | 2,352,478 | 2,207 | 2,267,969 |
Net income (loss) from continuing operations | 239,814 | -2,877,383 | 498,955 | -2,875,315 |
Discontinued Operations: | ' | ' | ' | ' |
Income (loss) from discontinued operations, net of tax provisions of $0 and $5,031 for the three months ended June 30, 2014 and 2013, respectively and net of tax provisions of $0 and $5,031 for the six months ended June 30, 2014 and 2013 respectively | 646 | -12,808 | -1,779 | -20,546 |
Net income (loss) | $240,460 | ($2,890,191) | $497,176 | ($2,895,861) |
Earnings (loss) per share - basic | ' | ' | ' | ' |
Continuing operations | $0.09 | ($1.06) | $0.18 | ($1.06) |
Discontinued operations | $0 | $0 | $0 | ($0.01) |
Earnings (loss) per share - basic | $0.09 | ($1.06) | $0.18 | ($1.07) |
Earnings (loss) per share - diluted | ' | ' | ' | ' |
Continuing operations | $0.09 | ($1.06) | $0.18 | ($1.06) |
Discontinued operations | $0 | $0 | $0 | ($0.01) |
Earnings (loss) per share - diluted | $0.09 | ($1.06) | $0.18 | ($1.07) |
Weighted average common shares outstanding - basic | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 |
Weighted average common shares outstanding - diluted | 2,815,578 | 2,704,239 | 2,798,163 | 2,704,239 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations Parenthetical (Parentheticals) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Statement of Comprehensive Loss Parenthetical [Abstract] | ' | ' | ' | ' |
Tax provision, discontinued operations | $0 | $5,031 | $0 | $5,031 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $497,176 | ($2,895,861) |
Loss from discontinued operations | 1,779 | 20,546 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
(Gain) loss on sale of property, plant and equipment | -24,500 | 0 |
Depreciation and amortization | 750,616 | 688,089 |
Non-cash interest expense | 13,842 | 0 |
Change in allowance for doubtful accounts | 10,000 | -77,098 |
Deferred income taxes | 0 | 2,267,969 |
Share-based compensation expense | 26,548 | 27,746 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -83,113 | -39,618 |
Inventories | -752,266 | -36,105 |
Prepaid expenses and other current assets | -107,017 | 132,438 |
Other non-current assets | 66,128 | -94,558 |
Accounts payable | -397,948 | -211,992 |
Accrued expenses and other current liabilities | 879,531 | 242,612 |
Other non-current liabilities | -51,060 | -38,195 |
Net cash provided by (used in) operating activities of continuing operations | 829,716 | -14,027 |
Net cash provided by (used in) operating activites of discontinued operations | -1,509 | -310,301 |
Net cash provided by (used in) investing activities | 828,207 | -324,328 |
Cash flows from investing activities: | ' | ' |
Purchases of property, plant and equipment | -834,971 | -703,737 |
Proceeds from sale of property, plant and equipment | 24,500 | 0 |
Cash paid for patents and trademarks | -2,613 | -31,385 |
Net cash provided by (used in) investing activities from continuing operations | -813,084 | -735,122 |
Net cash provided by (used in) investing activities from discontinued operations | 0 | 320,518 |
Net cash provided by (used in) investing activities | -813,084 | -414,604 |
Cash flows from financing activities: | ' | ' |
(Payments on) proceeds from revolving line of credit, net | -478,000 | 2,174,493 |
Payments on demand line of credit | 0 | -800,000 |
Proceeds from equipment line of credit | 116,905 | 0 |
Proceeds from term notes payable | 0 | 1,500,000 |
Payments on term notes payable | -198,854 | -1,273,742 |
Proceeds from stock options exercises | 25,575 | 0 |
Restricted cash | 0 | -1,000,000 |
Net cash provided by (used in) financing activities from continuing operations | -534,374 | 600,751 |
Net cash provided by (used in) financing activities from discontinued operations | 0 | -55,002 |
Net cash provided by (used in) financing activities | -534,374 | 545,749 |
Net decrease in cash and cash equivalents | -519,251 | -193,183 |
Cash and cash equivalents, beginning of period | 751,275 | 508,590 |
Cash and cash equivalents, end of period | 232,024 | 315,407 |
Less: cash and cash equivalents of discontinued operations at end of period | 0 | 2,495 |
Cash and cash equivalents of continuing operations at end of period | 232,024 | 312,912 |
Supplemental Cash Flow Information (unaudited) | ' | ' |
Cash paid for interest | 119,229 | 40,593 |
Non-cash activities: | ' | ' |
Acquisition of equipment with equipment notes | 0 | 272,500 |
Equipment line of credit converted to term notes payable | 740,999 | 0 |
Reduction of restricted cash offset by performance guarantee | $975,430 | $0 |
Note_1_Basis_of_Presentation_N
Note 1 - Basis of Presentation (Notes) | 6 Months Ended |
Jun. 30, 2014 | |
Basis of presentation [Abstract] | ' |
Basis of presentation | ' |
Basis of Presentation | |
The consolidated financial statements (the "financial statements") include the accounts of Arrhythmia Research Technology, Inc (“ART”) and its subsidiary, Micron Products, Inc. ("Micron" and together with ART, the “Company”). ART’s wholly owned Pennsylvania subsidiary, RMDDxUSA Corp. (“RMDDxUSA”) and that subsidiary’s Prince Edward Island subsidiary, RMDDx Corporation (“RMDDx” and collectively with RMDDxUSA,“WirelessDx”) discontinued operations in the third quarter of 2012. The WirelessDx results are presented herein as discontinued operations. All intercompany balances and transactions have been eliminated in consolidation. | |
The unaudited interim consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations. These financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 21, 2014. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. | |
The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company's balance sheet at December 31, 2013 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. | |
The information presented reflects, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial results for the interim periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Note_2_Operating_Matters_Liqui
Note 2 - Operating Matters & Liquidity (Notes) | 6 Months Ended |
Jun. 30, 2014 | |
Operating Matters and Liquidity [Abstract] | ' |
Operating Matters and Liquidity | ' |
Operating Matters and Liquidity | |
The Company experienced net operating losses in 2013 and 2012, primarily as a result of the discontinued WirelessDx operations. The Company believes that cash flows from its operations, together with its existing working capital and other resources, will be sufficient to fund operations at current levels and repay debt obligations over the next twelve months and beyond. The Company continues to develop opportunities within new and existing channels where the Company can maximize its return on investments in capital equipment, research and development, marketing and human resources. | |
On June 26, 2014, the Company entered into a new equipment line of credit for $1.0 million under the Company's multi-year credit facility entered into on March 29, 2013 with a Massachusetts bank (see Note 6). |
Note_3_Earnings_per_share_Note
Note 3 - Earnings per share (Notes) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings Per Share | ' | ||||||||||||
Earnings per Share ("EPS") | |||||||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding. The computation of diluted earnings (loss) per share is similar to the computation of basic earnings (loss) per share except that the denominator is increased to include the average number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. In addition, the numerator is adjusted for any changes in net income (loss) that would result from the assumed conversions of those potential shares. | |||||||||||||
The following table presents the calculation of both basic and diluted EPS. | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Income (loss) from continuing operations | $ | 239,814 | $ | (2,877,383 | ) | $ | 498,955 | $ | (2,875,315 | ) | |||
Income (loss) from discontinued operations, net of tax | 646 | (12,808 | ) | (1,779 | ) | (20,546 | ) | ||||||
Net income (loss) available to common shareholders | $ | 240,460 | $ | (2,890,191 | ) | $ | 497,176 | $ | (2,895,861 | ) | |||
Basic EPS: | |||||||||||||
Weighted average common shares outstanding | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 | |||||||||
Income (loss) per share - basic | |||||||||||||
Continuing operations | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.06 | ) | |||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||
Consolidated basic EPS | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.07 | ) | |||
Diluted EPS: | |||||||||||||
Weighted average common shares outstanding | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 | |||||||||
Assumed conversion of net common shares issuable under stock option plans | 53,492 | — | 44,028 | — | |||||||||
Assumed conversion of net common shares issuable under warrants | 38,504 | — | 31,221 | — | |||||||||
Weighted average common and common equivalent shares outstanding, diluted | 2,815,578 | 2,704,239 | 2,798,163 | 2,704,239 | |||||||||
Income (loss) per share - diluted | |||||||||||||
Continuing operations | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.06 | ) | |||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||
Consolidated diluted EPS | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.07 | ) | |||
Note_4_Inventories_net
Note 4 - Inventories, net | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories, net | ' | ||||||||
Inventories, net | |||||||||
Inventories consist of the following: | |||||||||
30-Jun-14 | 31-Dec-13 | ||||||||
Raw materials | $ | 915,578 | $ | 947,765 | |||||
Work-in-process | 827,759 | 266,431 | |||||||
Finished goods | 1,344,220 | 1,121,095 | |||||||
Total | $ | 3,087,557 | $ | 2,335,291 | |||||
The cost of silver in inventory that is included in raw materials, work-in-process and finished goods had an estimated cost of $480,600 and $382,332 as of June 30, 2014 and December 31, 2013, respectively. Work-in-process increased $561,328 from December 31, 2013 to June 30, 2014. This increase is primarily due to in-process tooling of $431,660. |
Note_5_Property_Plant_and_Equi
Note 5 - Property, Plant and Equipment, Net | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Property, Plant and Equipment, Net [Abstract] | ' | ||||||||||||
Property, Plant and Equipment, Net | ' | ||||||||||||
Property, Plant and Equipment, Net | |||||||||||||
Property, plant and equipment consist of the following: | |||||||||||||
Asset Lives (in years) | 30-Jun-14 | 31-Dec-13 | |||||||||||
Machinery and equipment | 3 | to | 15 | $ | 13,932,828 | $ | 13,734,528 | ||||||
Building and improvements | 20 | 4,357,247 | 4,303,156 | ||||||||||
Vehicles | 3 | to | 5 | 90,713 | 94,227 | ||||||||
Furniture, fixtures, computers and software | 3 | to | 5 | 1,338,793 | 1,317,189 | ||||||||
Land | 202,492 | 202,492 | |||||||||||
Construction in progress | 583,154 | 177,473 | |||||||||||
Total property, plant and equipment | 20,505,227 | 19,829,065 | |||||||||||
Less: accumulated depreciation | (12,832,478 | ) | (12,249,509 | ) | |||||||||
Property, plant and equipment, net | $ | 7,672,749 | $ | 7,579,556 | |||||||||
For the three and six months ended June 30, 2014, the Company recorded $364,264 and $741,779 of depreciation expense, respectively, as compared to $361,152 and $697,895 for the three and six months ended June 30, 2013, respectively. |
Note_6_Debt
Note 6 - Debt | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt [Abstract] | ' | |||||||
Debt | ' | |||||||
Debt | ||||||||
The following tables set forth the items which comprise debt for the Company: | ||||||||
Lines of credit | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||
Revolving line of credit, current | $ | 2,296,495 | $ | — | ||||
Revolving line of credit, non-current | $ | — | $ | 2,774,495 | ||||
Equipment line of credit, current portion | $ | — | $ | 85,387 | ||||
Equipment line of credit, non-current portion | $ | — | $ | 538,707 | ||||
Long-term debt and promissory notes | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||
Term notes payable | ||||||||
Commercial term loan | $ | 1,153,131 | $ | 1,293,378 | ||||
Equipment term loan | 707,944 | — | ||||||
Equipment notes | 196,539 | 222,091 | ||||||
Term notes payable | 2,057,614 | 1,515,469 | ||||||
Less: current portion | 479,719 | 335,760 | ||||||
Long-term notes payable | $ | 1,577,895 | $ | 1,179,709 | ||||
Subordinated promissory notes | $ | 431,610 | $ | 417,769 | ||||
The revolving line of credit, equipment line of credit, equipment term loan and the commercial term loan are all under the terms of a multi-year credit facility with a bank entered into on March 29, 2013. The bank facility contains both financial and non-financial covenants. | ||||||||
Revolving line of credit | ||||||||
The revolving line of credit provides for borrowings up to 80% of eligible accounts receivable and 50% of eligible raw materials inventory. The interest rate on the revolver is calculated at the bank's prime rate plus 0.25% (3.50% at June 30, 2014). The revolver has a maturity date of June 2015. | ||||||||
Equipment line of credit and equipment term loan | ||||||||
The equipment line of credit allowed for advances of up to $1.0 million and included a one-year draw period during which payments were interest only. The draw period ended March 29, 2014 and the then outstanding balance on the equipment line of credit of $740,999 was converted to a five-year term loan with monthly payments of $13,890, consisting of principal and interest at a fixed rate of 4.65%. | ||||||||
On June 26, 2014, the Company entered into a new equipment line of credit for $1.0 million under the Company's multi-year credit facility. This equipment line of credit is for the purchase of capital equipment. As of the date of this filing, no amounts have been drawn on the equipment line. The term of this equipment line is six years, maturing on June 26, 2020, inclusive of a maximum one year draw period. Repayment shall consist of monthly interest only payments, equal to the bank's prime rate plus 0.25% as to each advance commencing on the date of the loan through the earlier of: (i) one year from the date of the loan or (ii) the date upon which the equipment line of credit is fully advanced (the “Conversion Date”). On the Conversion Date, principal and interest payments will be due and payable monthly in an amount sufficient to pay the loan in full based upon an amortization schedule commensurate with the remaining term of the loan. | ||||||||
Commercial term loan | ||||||||
The commercial term loan has a five year term with a maturity date in March 2018. The interest rate on the loan is a fixed 4.25% per annum. | ||||||||
Equipment notes | ||||||||
In January 2013, the Company entered into two equipment notes totaling $272,500 with a financing company to acquire production equipment. The notes bear interest at the fixed rate of 4.66% and require monthly payments of principal and interest over the term of five years. | ||||||||
Subordinated promissory notes | ||||||||
In December 2013, the Company completed a private offering in which the Company sold an aggregate of $500,000 in subordinated promissory notes. The notes are unsecured and require quarterly interest-only payments at a rate of 10% per annum. On the second anniversary following issuance, the interest rate increases to 12% per annum. The notes mature in December 2016 at which point the outstanding balance is due in full. The subordinated promissory notes may be prepaid by the Company at any time following the first anniversary thereof without penalty. The notes are subordinated to all indebtedness of the Company pursuant to the bank credit facility. | ||||||||
In connection with the subordinated promissory notes, the Company issued warrants to purchase the Company's common stock. The proceeds were allocated between the notes and warrants on a relative fair value basis resulting in $416,950 allocated to the notes and $83,050 allocated to the warrants as part of Additional-Paid-in-Capital. The total discount on the notes is being recognized as non-cash interest expense over the term of the notes. For the three and six months ended June 30, 2014, the Company recorded $6,921 and $13,842 of non-cash interest expense, respectively, related to the amortization of the discount. The unamortized discount which is net against the outstanding balance of the subordinated promissory notes is $68,390 at June 30, 2014 and $82,231 at December 31, 2013. |
Note_7_Income_Taxes
Note 7 - Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Taxes [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The tax provisions for the three and six months ended June 30, 2014 and 2013 are attributable to the U.S. Federal, state and foreign income taxes on our continuing operations. | |
The tax provision for the three and six months ended June 30, 2013 also includes the impact on tax expense of $2,267,969 associated with the establishment of a full valuation allowance of the Company’s beginning of the year deferred tax assets. | |
The Company has a full valuation allowance against its deferred tax assets at both June 30, 2014 and December 31, 2013. |
Note_8_Commitments_and_Conting
Note 8 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Legal matters | |
In the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations. With respect to a specific matter, a third party had asserted a claim of approximately $100,000 against the Company as of December 31, 2013. On April 22, 2014 the case was dismissed with no judgment issued against the Company. | |
Severance agreements | |
In September 2013, the Company's former Chief Financial Officer resigned and entered into a severance agreement with the Company. The Company accrued the full amount of the severance package in the amount of $92,061 (salary and benefits) in the third quarter of 2013. The severance agreement provides for payments through September 2014 and the balance outstanding as of June 30, 2014 and December 31, 2013 is $20,169 and $69,673 and is included within accrued expenses. |
Note_9_Stock_Options_Sharebase
Note 9 - Stock Options & Share-based plan | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Stock Options [Abstract] | ' | |||||||||||||
Stock Options & Share-Based Incentive Plan | ' | |||||||||||||
Stock Options and Share-Based Incentive Plan | ||||||||||||||
The following table sets forth the stock option transactions for the six months ended June 30, 2014: | ||||||||||||||
Number of options | Weighted average Exercise Price | Weighted average remaining contractual term (in years) | Aggregate Intrinsic Value | |||||||||||
Outstanding at December 31, 2013 | 256,500 | $ | 5.61 | 5.3 | — | |||||||||
Granted | — | — | — | — | ||||||||||
Exercised | (9,600 | ) | 3.41 | — | — | |||||||||
Forfeited/expired | (56,500 | ) | 7.15 | — | — | |||||||||
Outstanding at June 30, 2014 | 190,400 | 5.26 | 6.6 | — | ||||||||||
Exercisable at June 30, 2014 | 83,400 | $ | 5.9 | 4.9 | $ | 118,476 | ||||||||
Exercisable at December 31, 2013 | 120,000 | $ | 6.34 | 2.5 | $ | 8,850 | ||||||||
For the three and six months ended June 30, 2014, share-based compensation expense related to stock options amounted to $15,298 and $26,548, respectively, and is included in general and administrative expenses. | ||||||||||||||
For the three and six months ended June 30, 2014, 9,600 stock options were exercised generating proceeds of $25,575 and $7,161 of other receivables on the Company's balance sheet. |
Note_10_Discontinued_Operation
Note 10 - Discontinued Operations | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Discontinued Operations [Abstract] | ' | ||||||
Discontinued Operations | ' | ||||||
Discontinued Operations | |||||||
There was no revenue from discontinued operations for the three and six months ended June 30, 2014 or 2013, respectively. Activity during the above note periods consisted primarily of legal and other fees incurred offset by minor reversals. | |||||||
At December 31, 2013, the Company had a $1.0 million liability for an unmet performance obligation related to the discontinued operations. This performance obligation was secured by $1.0 million of restricted cash. The performance guarantee liability was carried on the balance sheet of continuing operations, as the liability was guaranteed by ART. | |||||||
In May 2014, $975,430 was drawn from the restricted cash, satisfying the guarantee on the performance obligation. The balance of $24,570 was returned to ART and recorded as other income (expense) on the condensed consolidated statements of operations. | |||||||
The assets and liabilities of the discontinued operations are listed below: | |||||||
June 30, 2014 | 31-Dec-13 | ||||||
Cash | $ | — | $ | 1,509 | |||
Total current assets from discontinued operations | — | 1,509 | |||||
Total assets from discontinued operations | $ | — | $ | 1,509 | |||
Accounts payable and accrued expenses | $ | 320,056 | $ | 319,787 | |||
Total current liabilities from discontinued operations | 320,056 | 319,787 | |||||
Total liabilities from discontinued operations | $ | 320,056 | $ | 319,787 | |||
On May 8, 2014, RMDDxUSA filed a voluntary petition for relief under Chapter 7 (Liquidation) of the United States Bankruptcy Code in the District of Massachusetts. A trustee was assigned to review the assets and liabilities of the company. The trustee conducted the statutory Meeting of Creditors on June 16, 2014. There has been no further activity in the bankruptcy proceeding. |
Note_3_Earnings_per_share_Tabl
Note 3 - Earnings per share (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Schedule of Earnings Per Share | ' | ||||||||||||
The following table presents the calculation of both basic and diluted EPS. | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Income (loss) from continuing operations | $ | 239,814 | $ | (2,877,383 | ) | $ | 498,955 | $ | (2,875,315 | ) | |||
Income (loss) from discontinued operations, net of tax | 646 | (12,808 | ) | (1,779 | ) | (20,546 | ) | ||||||
Net income (loss) available to common shareholders | $ | 240,460 | $ | (2,890,191 | ) | $ | 497,176 | $ | (2,895,861 | ) | |||
Basic EPS: | |||||||||||||
Weighted average common shares outstanding | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 | |||||||||
Income (loss) per share - basic | |||||||||||||
Continuing operations | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.06 | ) | |||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||
Consolidated basic EPS | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.07 | ) | |||
Diluted EPS: | |||||||||||||
Weighted average common shares outstanding | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 | |||||||||
Assumed conversion of net common shares issuable under stock option plans | 53,492 | — | 44,028 | — | |||||||||
Assumed conversion of net common shares issuable under warrants | 38,504 | — | 31,221 | — | |||||||||
Weighted average common and common equivalent shares outstanding, diluted | 2,815,578 | 2,704,239 | 2,798,163 | 2,704,239 | |||||||||
Income (loss) per share - diluted | |||||||||||||
Continuing operations | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.06 | ) | |||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||
Consolidated diluted EPS | $ | 0.09 | $ | (1.06 | ) | $ | 0.18 | $ | (1.07 | ) | |||
Note_4_Inventories_net_Tables
Note 4 - Inventories, net (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory [Abstract] | ' | ||||||||
Inventories, net | ' | ||||||||
Inventories consist of the following: | |||||||||
30-Jun-14 | 31-Dec-13 | ||||||||
Raw materials | $ | 915,578 | $ | 947,765 | |||||
Work-in-process | 827,759 | 266,431 | |||||||
Finished goods | 1,344,220 | 1,121,095 | |||||||
Total | $ | 3,087,557 | $ | 2,335,291 | |||||
Note_5_Property_Plant_and_Equi1
Note 5 - Property, Plant and Equipment, Net (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||
Property, Plant and Equipment, Net | ' | ||||||||||||
Property, plant and equipment consist of the following: | |||||||||||||
Asset Lives (in years) | 30-Jun-14 | 31-Dec-13 | |||||||||||
Machinery and equipment | 3 | to | 15 | $ | 13,932,828 | $ | 13,734,528 | ||||||
Building and improvements | 20 | 4,357,247 | 4,303,156 | ||||||||||
Vehicles | 3 | to | 5 | 90,713 | 94,227 | ||||||||
Furniture, fixtures, computers and software | 3 | to | 5 | 1,338,793 | 1,317,189 | ||||||||
Land | 202,492 | 202,492 | |||||||||||
Construction in progress | 583,154 | 177,473 | |||||||||||
Total property, plant and equipment | 20,505,227 | 19,829,065 | |||||||||||
Less: accumulated depreciation | (12,832,478 | ) | (12,249,509 | ) | |||||||||
Property, plant and equipment, net | $ | 7,672,749 | $ | 7,579,556 | |||||||||
Note_6_Debt_Tables
Note 6 - Debt (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt [Abstract] | ' | |||||||
Lines of credit | ' | |||||||
Lines of credit | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||
Revolving line of credit, current | $ | 2,296,495 | $ | — | ||||
Revolving line of credit, non-current | $ | — | $ | 2,774,495 | ||||
Equipment line of credit, current portion | $ | — | $ | 85,387 | ||||
Equipment line of credit, non-current portion | $ | — | $ | 538,707 | ||||
Long-term debt and promissory notes | ' | |||||||
Long-term debt and promissory notes | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||
Term notes payable | ||||||||
Commercial term loan | $ | 1,153,131 | $ | 1,293,378 | ||||
Equipment term loan | 707,944 | — | ||||||
Equipment notes | 196,539 | 222,091 | ||||||
Term notes payable | 2,057,614 | 1,515,469 | ||||||
Less: current portion | 479,719 | 335,760 | ||||||
Long-term notes payable | $ | 1,577,895 | $ | 1,179,709 | ||||
Subordinated promissory notes | $ | 431,610 | $ | 417,769 | ||||
Note_9_Stock_Options_Sharebase1
Note 9 - Stock Options & Share-based plan (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Stock Options [Abstract] | ' | |||||||||||||
Stock Option Transactions | ' | |||||||||||||
The following table sets forth the stock option transactions for the six months ended June 30, 2014: | ||||||||||||||
Number of options | Weighted average Exercise Price | Weighted average remaining contractual term (in years) | Aggregate Intrinsic Value | |||||||||||
Outstanding at December 31, 2013 | 256,500 | $ | 5.61 | 5.3 | — | |||||||||
Granted | — | — | — | — | ||||||||||
Exercised | (9,600 | ) | 3.41 | — | — | |||||||||
Forfeited/expired | (56,500 | ) | 7.15 | — | — | |||||||||
Outstanding at June 30, 2014 | 190,400 | 5.26 | 6.6 | — | ||||||||||
Exercisable at June 30, 2014 | 83,400 | $ | 5.9 | 4.9 | $ | 118,476 | ||||||||
Exercisable at December 31, 2013 | 120,000 | $ | 6.34 | 2.5 | $ | 8,850 | ||||||||
Note_10_Discontinued_Operation1
Note 10 - Discontinued Operations (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Discontinued Operations [Abstract] | ' | ||||||
Assets and Liabilities of Discontinued Operations | ' | ||||||
The assets and liabilities of the discontinued operations are listed below: | |||||||
June 30, 2014 | 31-Dec-13 | ||||||
Cash | $ | — | $ | 1,509 | |||
Total current assets from discontinued operations | — | 1,509 | |||||
Total assets from discontinued operations | $ | — | $ | 1,509 | |||
Accounts payable and accrued expenses | $ | 320,056 | $ | 319,787 | |||
Total current liabilities from discontinued operations | 320,056 | 319,787 | |||||
Total liabilities from discontinued operations | $ | 320,056 | $ | 319,787 | |||
Note_2_Operating_Matters_Liqui1
Note 2 - Operating Matters & Liquidity (Details) (USD $) | Jun. 26, 2014 |
Operating Matters and Liquidity [Abstract] | ' |
New equipment line of credit | $1,000,000 |
Note_3_Earnings_per_share_Deta
Note 3 - Earnings per share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Income (loss) from continuing operations | $239,814 | ($2,877,383) | $498,955 | ($2,875,315) |
Income (loss) from discontinued operations, net of tax | 646 | -12,808 | -1,779 | -20,546 |
Net income (loss) available to common shareholders | $240,460 | ($2,890,191) | $497,176 | ($2,895,861) |
Basic EPS: | ' | ' | ' | ' |
Weighted average of common shares outstanding | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 |
Income (loss) per share - basic | ' | ' | ' | ' |
Continuing operations | $0.09 | ($1.06) | $0.18 | ($1.06) |
Discontinued operations | $0 | $0 | $0 | ($0.01) |
Consolidated basic EPS | $0.09 | ($1.06) | $0.18 | ($1.07) |
Diluted EPS: | ' | ' | ' | ' |
Weighted average common shares outstanding | 2,723,582 | 2,704,239 | 2,722,914 | 2,704,239 |
Assumed conversion of net common shares issuable under stock option plans | 53,492 | 0 | 44,028 | 0 |
Assumed conversion of net common shares issuable under warrants | 38,504 | 0 | 31,221 | 0 |
Weighted average common and common equivalent shares outstanding, diluted | 2,815,578 | 2,704,239 | 2,798,163 | 2,704,239 |
Income (loss) per share - diluted | ' | ' | ' | ' |
Continuing operations | $0.09 | ($1.06) | $0.18 | ($1.06) |
Discontinued operations | $0 | $0 | $0 | ($0.01) |
Consolidated diluted EPS | $0.09 | ($1.06) | $0.18 | ($1.07) |
Note_4_Inventories_net_Details
Note 4 - Inventories, net (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Inventories, net | ' | ' |
Raw materials | $915,578 | $947,765 |
Work-in-process | 827,759 | 266,431 |
Finished goods | 1,344,220 | 1,121,095 |
Total | 3,087,557 | 2,335,291 |
Silver inventory | 480,600 | 382,332 |
Increase in work-in-process | 561,328 | ' |
In-process tooling | $431,660 | ' |
Note_5_Property_Plant_and_Equi2
Note 5 - Property, Plant and Equipment, Net (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment | ' | ' |
Machinery and equipment | $13,932,828 | $13,734,528 |
Building and improvements | 4,357,247 | 4,303,156 |
Vehicles | 90,713 | 94,227 |
Furniture, fixtures, computers and software | 1,338,793 | 1,317,189 |
Land | 202,492 | 202,492 |
Construction in progress | 583,154 | 177,473 |
Total property, plant and equipment | 20,505,227 | 19,829,065 |
Less: accumulated depreciation | -12,832,478 | -12,249,509 |
Property, plant and equipment, net | $7,672,749 | $7,579,556 |
Minimum asset life (years) | ' | ' |
Property, Plant and Equipment | ' | ' |
Machinery and equipment | 3 | ' |
Vehicles | 3 | ' |
Furniture, fixtures, computers and software | 3 | ' |
Maximum asset life (years) | ' | ' |
Property, Plant and Equipment | ' | ' |
Machinery and equipment | 15 | ' |
Vehicles | 5 | ' |
Furniture, fixtures, computers and software | 5 | ' |
Asset life (years) | ' | ' |
Property, Plant and Equipment | ' | ' |
Building and improvements | 20 | ' |
Note_5_Property_Plant_and_Equi3
Note 5 - Property, Plant and Equipment, Net Depreciation Expense (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Depreciation [Abstract] | ' | ' | ' | ' |
Depreciation expense | $364,264 | $361,152 | $741,779 | $697,895 |
Note_6_Debt_Lines_of_credit_De
Note 6 - Debt Lines of credit (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Lines of credit [Abstract] | ' | ' |
Revolving line of credit, current | $2,296,495 | $0 |
Revolving line of credit, non-current | 0 | 2,774,495 |
Equipment line of credit, current portion | 0 | 85,387 |
Equipment line of credit, non-current portion | $0 | $538,707 |
Note_6_Debt_Longterm_debt_Deta
Note 6 - Debt Long-term debt (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Term notes payable [Abstract] | ' | ' |
Commercial term loan | $1,153,131 | $1,293,378 |
Equipment term loan | 707,944 | 0 |
Equipment notes | 196,539 | 222,091 |
Term notes payable | 2,057,614 | 1,515,469 |
Less: current portion | -479,719 | -335,760 |
Long-term notes payable | 1,577,895 | 1,179,709 |
Subordinated Long-term Debt, Noncurrent | $431,610 | $417,769 |
Note_6_Debt_Details
Note 6 - Debt (Details) (USD $) | Jun. 30, 2014 | Jun. 26, 2014 | Mar. 31, 2014 | Mar. 29, 2014 | Dec. 31, 2013 | Dec. 19, 2013 | Mar. 31, 2013 | Mar. 29, 2013 |
2013 Credit Facility [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Percent borrowable of net eligible accounts receivable, Revolving line of credit | ' | ' | ' | ' | ' | ' | ' | 80.00% |
Percent borrowable of net eligible raw materials inventory, Revolving line of credit | ' | ' | ' | ' | ' | ' | ' | 50.00% |
Revolving line of credit, interest rate | ' | ' | ' | ' | ' | ' | ' | 3.50% |
Equipment Line of Credit | ' | ' | ' | ' | ' | ' | ' | $1,000,000 |
Equipment line of credit, outstanding balance at end of draw period | ' | ' | ' | 740,999 | ' | ' | ' | ' |
Equipment line of credit, monthly payment | 13,890 | ' | ' | ' | ' | ' | ' | ' |
Equipment line of credit, interest rate | 4.65% | ' | ' | ' | ' | ' | ' | ' |
Equipment line of credit, 2014 | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
Equipment line of credit, 2014, interest rate, rate in addition to bank's prime rate | ' | 0.25% | ' | ' | ' | ' | ' | ' |
Interest Rate on Commercial Term Loan | ' | ' | ' | ' | ' | ' | ' | 4.25% |
Equipment Notes [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Equipment notes | ' | ' | ' | ' | ' | ' | 272,500 | ' |
Equipment notes, interest rate | ' | ' | ' | ' | ' | ' | 4.66% | ' |
Subordinated Debt [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Subordinated Debt | ' | ' | ' | ' | ' | 500,000 | ' | ' |
Subordinated borrowing, Interest rate years 1 and 2 | ' | ' | ' | ' | ' | 10.00% | ' | ' |
Subordinated Borrowing, Interest rate after year 2 | ' | ' | ' | ' | ' | 12.00% | ' | ' |
Subordinated promissory notes, fair value | ' | ' | ' | ' | ' | 416,950 | ' | ' |
Additional-Paid-in-Capital, stock option warrants, subordinated debt | ' | ' | ' | ' | ' | 83,050 | ' | ' |
Non-cash interest expense related to the amortization of the discount | 13,842 | ' | 6,921 | ' | ' | ' | ' | ' |
Unamortized discount, net against outstanding balance of subordinated promissory notes | $68,390 | ' | ' | ' | $82,231 | ' | ' | ' |
Note_7_Income_Taxes_Details
Note 7 - Income Taxes (Details) (USD $) | 6 Months Ended |
Jun. 30, 2013 | |
Income Taxes [Abstract] | ' |
Deferred tax assets, valuation allowance | $2,267,969 |
Note_8_Commitments_and_Conting1
Note 8 - Commitments and Contingencies (Details) (USD $) | 3 Months Ended | ||
Sep. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Legal matters, approximate claim | ' | ' | $100,000 |
Severance Agreement [Abstract] | ' | ' | ' |
Severance agreement, Chief Financial Officer | 92,061 | ' | ' |
Severance agreement, outstanding balance | ' | $20,169 | $69,673 |
Note_9_Stock_Options_Sharebase2
Note 9 - Stock Options & Share-based plan Stock Option Transactions (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Number of options | ' | ' |
Stock Options | ' | ' |
Outstanding | 190,400 | 256,500 |
Granted | 0 | ' |
Exercised | -9,600 | ' |
Forfeited/expired | -56,500 | ' |
Exercisable | 83,400 | 120,000 |
Weighted average Exercise Price | ' | ' |
Stock Options | ' | ' |
Outstanding | 5.26 | 5.61 |
Granted | 0 | ' |
Exercised | 3.41 | ' |
Forfeited/expired | 7.15 | ' |
Exercisable | 5.9 | 6.34 |
Weighted average remaining contractual term (in years) | ' | ' |
Stock Options | ' | ' |
Outstanding | 6.6 | 5.3 |
Granted | 0 | ' |
Exercised | 0 | ' |
Forfeited/expired | 0 | ' |
Exercisable | 4.9 | 2.5 |
Aggregate Intrinsic Value | ' | ' |
Stock Options | ' | ' |
Outstanding | 0 | 0 |
Granted | 0 | ' |
Exercised | 0 | ' |
Forfeited/expired | 0 | ' |
Exercisable | 118,476 | 8,850 |
Note_9_Stock_Options_Sharebase3
Note 9 - Stock Options & Share-based plan Share-based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
Share-based Compensation [Abstract] | ' | ' |
Share-based compensation expense related to stock options | $15,298 | $26,548 |
Stock options exercised | ' | 9,600 |
Proceeds generated from stock options exercised | ' | 25,575 |
Other receivables, stock options exercised | ' | $7,161 |
Note_10_Discontinued_Operation2
Note 10 - Discontinued Operations (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Assets and liabilities of discontinued operations | ' | ' |
Cash | $0 | $1,509 |
Total current assets from discontinued operations | 0 | 1,509 |
Total assets from discontinued operations | 0 | 1,509 |
Accounts payable and accrued expenses | 320,056 | 319,787 |
Total current liabilities from discontinued operations | 320,056 | 319,787 |
Total Liabilities from discontinued operations | $320,056 | $319,787 |
Note_10_Discontinued_Operation3
Note 10 - Discontinued Operations Additional Information (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Discontinued Operations Information [Abstract] | ' | ' |
Performance guarantee obligation | $0 | $1,000,000 |
Restricted cash that secured performance obligation | ' | 1,000,000 |
Reduction of restricted cash offset by performance guarantee | 975,430 | ' |
Other income, in relation to performance gaurantee obligation | $24,570 | ' |