Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 23, 2021 | Jun. 28, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | VASO Corp | ||
Entity Central Index Key | 0000839087 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation, State or Country Code | DE | ||
Entity File Number | 0-18105 | ||
Entity Public Float | $ 1,900,000 | ||
Entity Common Stock, Shares Outstanding | 174,936,212 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,819 | $ 2,124 |
Short-term investments | 766 | 0 |
Accounts and other receivables, net of an allowance for doubtful accounts and commission adjustments of $4,208 at December 31, 2020 and $4,285 at December 31, 2019 | 9,776 | 15,852 |
Receivables due from related parties | 18 | 18 |
Inventories | 1,384 | 1,941 |
Deferred commission expense | 2,354 | 2,785 |
Prepaid expenses and other current assets | 1,151 | 1,339 |
Total current assets | 22,268 | 24,059 |
Property and equipment, net of accumulated depreciation of $8,833 at December 31, 2020 and $7,560 at December 31, 2019 | 3,885 | 4,954 |
Operating lease right of use assets | 1,009 | 870 |
Goodwill | 15,688 | 17,271 |
Intangibles, net | 3,949 | 4,301 |
Other assets, net | 2,190 | 2,586 |
Investment in EECP Global | 1,116 | 0 |
Deferred tax assets, net | 271 | 323 |
Total assets | 50,376 | 54,364 |
CURRENT LIABILITIES | ||
Accounts payable | 6,285 | 7,654 |
Accrued commissions | 1,474 | 2,102 |
Accrued expenses and other liabilities | 4,867 | 5,344 |
Finance lease liabilities - current | 190 | 170 |
Operating lease liabilities - current | 540 | 549 |
Sales tax payable | 621 | 887 |
Deferred revenue - current portion | 11,516 | 12,345 |
Notes payable - current portion | 5,970 | 2,700 |
Notes payable - related parties - current portion | 0 | 1,233 |
Due to related party | 236 | 19 |
Total current liabilities | 31,699 | 33,003 |
LONG-TERM LIABILITIES | ||
Notes payable, net of current portion | 5,779 | 8,121 |
Notes payable - related parties, net of current portion | 0 | 20 |
Finance lease liabilities, net of current portion | 246 | 437 |
Operating lease liabilities, net of current portion | 469 | 321 |
Deferred revenue, net of current portion | 6,188 | 6,998 |
Deferred tax liability | 0 | 124 |
Other long-term liabilities | 910 | 1,026 |
Total long-term liabilities | 13,592 | 17,047 |
Commitments and contingencies (Note S) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at December 31, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $.001 par value; 250,000,000 shares authorized; 185,244,299 and 183,744,376 shares issued at December 31, 2020 and December 31, 2019; 174,936,212 and 173,436,289 shares outstanding at December 31, 2020 and December 31, 2019 | 185 | 184 |
Additional paid-in capital | 63,886 | 63,803 |
Accumulated deficit | (57,002) | (57,360) |
Accumulated other comprehensive income (loss) | 16 | (313) |
Treasury stock, at cost, 10,308,087 shares at December 31, 2020 and December 31, 2019 | (2,000) | (2,000) |
Total stockholders' equity | 5,085 | 4,314 |
Total liabilities and stockholders' equity | $ 50,376 | $ 54,364 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Accounts and other receivables, allowance for doubtful accounts and commission adjustments | $ 4,208 | $ 4,285 |
Property and equipment, accumulated depreciation | $ 8,833 | $ 7,560 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 185,244,299 | 183,744,376 |
Common stock, shares outstanding | 174,936,212 | 173,436,289 |
Treasury stock, at cost | 10,308,087 | 10,308,087 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | ||
Total revenues | $ 69,850 | $ 75,515 |
Cost of revenues | ||
Total cost of revenues | 31,279 | 33,083 |
Gross profit | 38,571 | 42,432 |
Operating expenses | ||
Selling, general and administrative | 37,054 | 41,028 |
Research and development | 745 | 813 |
Total operating expenses | 37,799 | 41,841 |
Operating income (loss) | 772 | 591 |
Other (expense) income | ||
Interest and financing costs | (701) | (993) |
Interest and other income, net | 176 | 131 |
Gain on sale of equity in EECP Global | 110 | 0 |
Total other (expense) income, net | (415) | (862) |
Income (loss) before income taxes | 357 | (271) |
Income tax benefit (expense) | 1 | (111) |
Net income (loss) | 358 | (382) |
Other comprehensive income (loss) | ||
Foreign currency translation gain | 142 | 2 |
Comprehensive income (loss) | $ 500 | $ (380) |
Earnings (loss) per common share | ||
- basic | $ .00 | $ 0 |
- diluted | $ .00 | $ 0 |
Weighted average common shares outstanding | ||
- basic (in thousands) | 169,932 | 167,843 |
- diluted (in thousands) | 170,846 | 167,843 |
Managed IT Systems and Services | ||
Revenues | ||
Total revenues | $ 43,894 | $ 45,505 |
Cost of revenues | ||
Total cost of revenues | 26,212 | 26,715 |
Professional Sales Services | ||
Revenues | ||
Total revenues | 22,865 | 26,208 |
Cost of revenues | ||
Total cost of revenues | 4,257 | 4,921 |
Equipment Sales and Services | ||
Revenues | ||
Total revenues | 3,091 | 3,802 |
Cost of revenues | ||
Total cost of revenues | $ 810 | $ 1,447 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning balance, shares (in thousands) at Dec. 31, 2018 | 177,417 | (10,308) | ||||
Beginning balance at Dec. 31, 2018 | $ 178 | $ (2,000) | $ 63,672 | $ (56,978) | $ (315) | $ 4,557 |
Share-based compensation, shares (in thousands) | 6,327 | |||||
Share-based compensation | $ 6 | 135 | 141 | |||
Shares withheld for employee tax liability | (4) | (4) | ||||
Foreign currency translation gain | 2 | 2 | ||||
Net (loss) income | (382) | (382) | ||||
Ending balance, shares (in thousands) at Dec. 31, 2019 | 183,744 | (10,308) | ||||
Ending balance at Dec. 31, 2019 | $ 184 | $ (2,000) | 63,803 | (57,360) | (313) | 4,314 |
Share-based compensation, shares (in thousands) | 1,500 | |||||
Share-based compensation | $ 1 | 87 | 88 | |||
Shares withheld for employee tax liability | (4) | (4) | ||||
Reclassify accumulated translation loss (see Note N) | 187 | 187 | ||||
Foreign currency translation gain | 142 | 142 | ||||
Net (loss) income | 358 | 358 | ||||
Ending balance, shares (in thousands) at Dec. 31, 2020 | 185,244 | (10,308) | ||||
Ending balance at Dec. 31, 2020 | $ 185 | $ (2,000) | $ 63,886 | $ (57,002) | $ 16 | $ 5,085 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ 358 | $ (382) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 2,462 | 2,681 |
Deferred income taxes | (73) | 52 |
Gain from investment in EECP Global | (11) | 0 |
Gain on sale of equity in EECP Global | (110) | 0 |
Provision for doubtful accounts and commission adjustments | 663 | 507 |
Amortization of debt issue costs | 0 | 14 |
Share-based compensation | 88 | 141 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables | 5,050 | (5,301) |
Due from related parties | 55 | 10 |
Inventories | 6 | 31 |
Deferred commission expense | 407 | (200) |
Prepaid expenses and other current assets | 193 | (450) |
Other assets, net | 350 | 449 |
Accounts payable | (1,369) | 316 |
Accrued commissions | (791) | (56) |
Accrued expenses and other liabilities | (333) | (261) |
Sales tax payable | (243) | (131) |
Deferred revenue | (870) | 1,258 |
Due to related party | 218 | 0 |
Other long-term liabilities | (116) | (11) |
Net cash provided by (used in) operating activities | 5,934 | (1,333) |
Cash flows from investing activities | ||
Purchases of equipment and software | (1,000) | (1,205) |
Sale of fixed assets | 0 | 22 |
Purchases of short-term investments | (725) | 0 |
Proceeds from sale of equity in EECP Global | 1,150 | 0 |
Net cash used in investing activities | (575) | (1,183) |
Cash flows from financing activities | ||
Net (repayment) borrowings on revolving lines of credit | (1,375) | 1,550 |
Proceeds from notes payable | 3,756 | 300 |
Payroll taxes paid by withholding shares | (4) | (4) |
Repayment of notes payable and finance lease obligations | (1,674) | (367) |
Proceeds from notes payable - related parties | 0 | 930 |
Repayment of notes payable - related parties | (1,256) | (500) |
Net cash (used in) provided by financing activities | (553) | 1,909 |
Effect of exchange rate differences on cash and cash equivalents | (111) | 63 |
Net increase (decrease) in cash and cash equivalents | 4,695 | (544) |
Cash and cash equivalents - beginning of period | 2,124 | 2,668 |
Cash and cash equivalents - end of period | 6,819 | 2,124 |
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION | ||
Interest paid | 702 | 784 |
Income taxes paid | 70 | 62 |
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Initial recognition of operating lease right of use asset and liability | 791 | 1,107 |
Equipment acquired through note payable | 42 | 0 |
Equipment acquired through finance lease | $ 0 | $ 229 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | Vaso Corporation was incorporated in Delaware in July 1987. For most of its history, the Company was a single-product company designing, manufacturing, marketing and servicing its proprietary Enhanced External Counterpulsation, or EECP®, therapy systems, mainly for the treatment of angina. In 2010 it began to diversify its business operations. The Company changed its name to Vaso Corporation in 2016 to more accurately reflect the diversified nature of its business mixture, and continues to use the original name VasoMedical for its proprietary medical device subsidiary. Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Vaso” or “management” refer to Vaso Corporation and its subsidiaries. Overview Vaso Corporation principally operates in three distinct business segments in the healthcare equipment and information technology industries. We manage and evaluate our operations, and report our financial results, through these three business segments. ● IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focuses on healthcare IT and managed network technology services; ● Professional sales service segment, operating through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, primarily focuses on the sale of healthcare capital equipment for General Electric Healthcare (“GEHC”) into the health provider middle market; and ● Equipment segment, primarily focuses on the design, manufacture, sale and service of proprietary medical devices, operating through a wholly-owned subsidiary VasoMedical, Inc., which in turn operates through Vasomedical Solutions, Inc. for domestic business and Vasomedical Global Corp. for international business, respectively. VasoTechnology VasoTechnology, Inc. In June 2014, the Company began its IT segment business by executing the Value Added Reseller Agreement (“VAR Agreement”) with GEHC to become a national value added reseller of GEHC Digital’s software solutions such as Picture Archiving and Communication System (“PACS”), Radiology Information System (“RIS”), and related services, including implementation, training, management and support. This business focuses primarily on customer segments currently served by VasoHealthcare on behalf of GEHC. A new wholly owned subsidiary, VasoHealthcare IT Corp. (“VHC IT”), was formed to conduct the healthcare IT business. In May 2015, the Company further expanded its IT segment business by acquiring NetWolves. NetWolves designs and delivers multi-network and multi-technology solutions as a managed network provider, and provides a complete single-source solution that includes design, network redundancy, application device management, real-time network monitoring, reporting and support systems as a comprehensive solution. VasoHealthcare In May 2010, the Company launched its Professional Sales Service business through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, which was appointed the exclusive representative for the sale of select GEHC diagnostic imaging equipment to specific market segments in the 48 contiguous states of the United States and the District of Columbia. The original agreement (“GEHC Agreement”) has been extended several times and currently expires December 31, 2022, subject to earlier termination. VasoMedical The proprietary medical equipment business under VasoMedical traces back to 1995 when the Company began the proprietary Enhanced External Counterpulsation (EECP®) technology in the United States and has since diversified to include other medical hardware and software. Vasomedical Global was formed in 2011 to combine and coordinate the various international operations including design, development, manufacturing, and sales of medical devices, while domestic activities are under Vasomedical Solutions. Over the last decade the Company’s Equipment business has been significantly expanded from the original EECP®-only operations. In September 2011, the Company acquired FGE, a British Virgin Islands company, which owned or controlled two Chinese operating companies - Life Enhancement Technology Ltd. (“LET”) based in Foshan, China, and Biox Instruments Co. Ltd. (“Biox”) based in Wuxi, China, respectively - to expand its technical and manufacturing capabilities and to enhance its distribution network, technology, and product portfolio. Biox was a variable interest entity (“VIE”) controlled by FGE through certain contracts and an option to acquire all the shares of Biox by FGE’s wholly owned subsidiary Gentone, and in March 2019 Gentone exercised its option to acquire all of the shares of Biox. In August 2014, the Company through Gentone acquired all of the outstanding shares of Genwell Instruments Co. Ltd. (“Genwell”), located in Wuxi, China. Genwell was formed in China in 2010 with the assistance of a local government grant to develop the MobiCare™ wireless multi-parameter patient monitoring system and holds intellectual property rights for this system. As a result, the Company has now expanded its equipment products portfolio to include Biox™ series ambulatory patient monitoring systems, ARCS™ series software for ECG and blood pressure analysis, and the MobiCare™ patient monitoring device. In April 2014, the Company entered into a cooperation agreement with Chongqing PSK-Health Sci-Tech Development Co., Ltd. (“PSK”) of Chongqing, China, the leading manufacturer of external counter pulsation, or ECP, therapy systems in China, to form a joint venture company, VSK Medical Limited (“VSK”), a Cayman Islands company, for the global marketing, sale and advancement of ECP therapy technology. The Company owned 49.9% of VSK, which commenced operations in January 2015. In March 2018, the Company terminated the cooperation agreement with PSK and sold its shares in VSK to PSK. On May 20, 2020, the Company closed on the sale of 51% of the capital stock of its wholly-owned subsidiary EECP Global Corporation (“EECP Global”) to PSK for $1,150,000. EECP Global was formed in September 2019 to hold all the assets and liabilities of its EECP business. Concurrently with the closing of the transaction, the Company signed a three-year Management Service Agreement with EECP Global to provide management service for the business and operation of EECP Global in the United States. Pursuant to the agreement, EECP Global reimburses the Company all direct expenses and pays a management fee starting April 1, 2020, the effective date of the sale. |
REVISIONS
REVISIONS | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
REVISIONS | The income statement, balance sheet and changes in stockholders’ equity for the year ended December 31, 2019 have been corrected for immaterial errors as a result of what we believe to be the misappropriation of funds by a mid-level management employee, who was not an officer or director of the Company. The correction includes $190 thousand in additional SG&A expense in the year ended December 31, 2019 and a beginning balance addition of total $907 thousand to accumulated deficit at January 1, 2019, of which $333 thousand represents a charge as of the May 2015 acquisition date of the subsidiary affected. The effect on net income (loss) for each of the years ended December 31, 2015 through December 31, 2018 is not material. The individual was suspended on March 29, 2021 and was terminated effective April 1, 2021. Upon additional examination and comprehensive review, the Company believes that this was an isolated incident and non-recurring. The Company has taken immediate steps to implement additional internal control procedures. See also Item 9A – Controls and Procedures. In addition, the Company noted accounting errors in our IT segment where certain regulatory fees billed to our customers during the years 2016 through 2019 were partially recorded as revenue. Correction of such errors resulted in a $147 thousand addition to accumulated deficit at January 1, 2019 and the reversal of $231 thousand in revenue in the year ended December 31, 2019. The Company assessed the materiality of these misstatements on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality, codified in ASC 250 ("ASC250"), Presentation of Financial Statements, and concluded that these misstatements were not material to any prior annual or interim periods. Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the Consolidated Financial Statements as of December 31, 2019, and the year then ended, which are presented herein, have been revised. The following are selected line items from the Company's Consolidated Financial Statements illustrating the effect of these corrections: Consolidated Statement of Operations and Comprehensive Income (Loss) Year ended December 31, 2019 (in thousands, except per share data) As Reported Adjustment As Revised Revenues Managed IT systems and services $ 45,736 $ (231 ) $ 45,505 Gross Profit 42,663 (231 ) 42,432 Operating expenses Selling, general and administrative 40,838 190 41,028 Operating income $ 1,012 $ (421 ) $ 591 Net income (loss) $ 39 $ (421 ) $ (382 ) Comprehensive income (loss) $ 41 $ (421 ) $ (380 ) Earnings (loss) per common share - basic $ 0.00 $ (0.00 ) $ (0.00 ) - diluted $ 0.00 $ (0.00 ) $ (0.00 ) Consolidated Balance Sheet As of December 31, 2019 (in thousands) As Reported Adjustment As Revised Accounts payable $ 6,179 $ 1,475 $ 7,654 Accumulated deficit $ (55,885 ) $ (1,475 ) $ (57,360 ) Consolidated Statement of Cash Flows Year ended December 31, 2019 (in thousands) As Reported Adjustment As Revised Net income (loss) $ 39 $ (421 ) $ (382 ) Accounts payable $ (105 ) $ 421 $ 316 Consolidated Statement of Changes in Stockholders’ Equity Accumulated Deficit Total Shareholders' Equity (in thousands) As Reported Adjustment As Revised As Reported Adjustment As Revised Balance at January 1, 2019 $ (55,924 ) $ (1,054 ) $ (56,978 ) $ 5,611 $ (1,054 ) $ 4,557 Net income (loss) 39 (421 ) (382 ) 39 (421 ) (382 ) Balance at December 31, 2019 $ (55,885 ) $ (1,475 ) $ (57,360 ) $ 5,789 $ (1,475 ) $ 4,314 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | A summary of the significant accounting policies consistently applied in the preparation of the consolidated financial statements are as follows: Principles of Consolidation The consolidated financial statements include the accounts of Vaso Corporation, its wholly-owned subsidiaries, and the accounts of the companies over which we exercise control. Significant intercompany balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions relate to estimates of collectibility of accounts receivable, the realizability of deferred tax assets, stock-based compensation, values and lives assigned to acquired intangible assets, fair value of reporting units in connection with goodwill impairment test, the adequacy of inventory reserves, variable consideration, and allocation of contract transaction price to performance obligations. Actual results could differ from those estimates. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. ASU 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. The new standard introduces a five-step process to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred to obtain or fulfill contracts with customers, and establishes disclosure requirements which are more extensive than those required under prior U.S. GAAP. Generally, we recognize revenue under Topic 606 for each of our performance obligations either over time (generally, the transfer of a service) or at a point in time (generally, the transfer of a good) as follows: ● VasoTechnology Revenue relating to recurring managed network and voice services provided by NetWolves are recognized as provided on a monthly basis (“over time”). Non-recurring charges related to the provision of such services are recognized in the period provided (“point in time”). In the IT VAR business, software system installations are recognized upon verification of installation and expiration of an acceptance period (“point in time”). Monthly post-implementation customer support provided under such installations as well as software solutions offered under a monthly Software as a Service (“SaaS”) fee basis are recognized monthly over the contract term (“over time”). ● VasoHealthcare Commission revenue is recognized when the underlying equipment has been delivered by GEHC and accepted at the customer site in accordance with the terms of the specific sales agreement (“point in time”). ● VasoMedical In the United States, we recognized revenue from the sale of our medical equipment in the period in which we deliver the product to the customer (“point in time”). Revenue from the sale of our medical equipment to international markets is recognized upon shipment of the product to a common carrier, as are supplies, accessories and spare parts delivered in both domestic and international markets (“point in time”). The Company also recognizes revenue from the maintenance of its medical products either on a time and material as-billed basis (“point in time”) or through the sale of a service contract, where revenue is recognized ratably over the contract term (“over time”). Disaggregation of Revenue The following tables present revenues disaggregated by our business operations and timing of revenue recognition: (in thousands) Year Ended December 31, 2020 Year Ended December 31, 2019 Professional sales Professional sales IT segment service segment Equipment segment Total IT segment service segment Equipment segment Total Network services $ 39,908 $ - $ - $ 39,908 $ 39,962 $ - $ - $ 39,962 Software sales and support 3,986 - - 3,986 5,543 - - 5,543 Commissions - 22,865 - 22,865 - 26,208 - 26,208 Medical equipment sales - - 2,789 2,789 - - 2,778 2,778 Medical equipment service - - 302 302 - - 1,024 1,024 $ 43,894 $ 22,865 $ 3,091 $ 69,850 $ 45,505 $ 26,208 $ 3,802 $ 75,515 Year Ended December 31, 2020 Year Ended December 31, 2019 Professional sales Professional sales IT segment service segment Equipment segment Total IT segment service segment Equipment segment Total Revenue recognized over time $ 40,660 $ - $ 234 $ 40,894 $ 40,628 $ - $ 595 $ 41,223 Revenue recognized at a point in time 3,234 22,865 2,857 28,956 4,877 26,208 3,207 34,292 $ 43,894 $ 22,865 $ 3,091 $ 69,850 $ 45,505 $ 26,208 $ 3,802 $ 75,515 Transaction Price Allocated to Remaining Performance Obligations As of December 31, 2020, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $71 million, of which we expect to recognize revenue as follows: (in thousands) Fiscal years of revenue recognition (unaudited) 2021 2022 2023 Thereafter Unfulfilled performance obligations $ 38,686 $ 17,825 $ 5,657 $ 8,631 Contract Liabilities Contract liabilities arise in our IT VAR, VasoHealthcare, and VasoMedical businesses. In our IT VAR business, payment arrangements with clients typically include an initial payment due upon contract signing and milestone-based payments based upon product delivery and go-live, as well as post go-live monthly payments for subscription and support fees. Customer payments received, or receivables recorded, in advance of go-live and customer acceptance, where applicable, are deferred as contract liabilities. Such amounts aggregated approximately $553,000 and $568,000 at December 31, 2020 and 2019, respectively, and are included in accrued expenses and other liabilities in our consolidated balance sheets. In our VasoHealthcare business, we bill a portion of commissions on the orders we booked in advance of delivery of the underlying equipment. Such amounts aggregated approximately $17,689,000 and $18,565,000 at December 31, 2020 and 2019, respectively, and are classified in our consolidated balance sheets into current or long-term deferred revenue. In addition, we record a contract liability for amounts expected to be credited back to GEHC due to customer order reductions. Such amounts aggregated approximately $1,118,000 and $1,270,000 at December 31, 2020 and 2019, respectively, and are included in accrued expenses and other liabilities in our consolidated balance sheets. In our VasoMedical business, we bill amounts for post-delivery services and varying duration service contracts in advance of performance. Such amounts aggregated approximately $15,000 and $778,000 at December 31, 2020 and 2019, respectively, and are classified in our consolidated balance sheets as either current or long-term deferred revenue. During the year ended December 31, 2020, we recognized approximately $4.9 million of revenues that were included in our contract liability balance at the beginning of such period. Costs to Obtain or Fulfill a Contract Topic 606 requires that incremental costs of obtaining a contract are recognized as an asset and amortized to expense in a pattern that matches the timing of the revenue recognition of the related contract. We have determined the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 are certain sales commissions paid to associates. In addition, the Company elected the practical expedient to recognize the incremental costs of obtaining a contract when incurred for contracts where the amortization period for the asset the Company would otherwise have recognized is one year or less. Under Topic 606, sales commissions applicable to service contracts exceeding one year have been capitalized and amortized ratably over the term of the contract. In our IT VAR business, commissions allocable to multi-year subscription contracts or multi-year post-contract support performance obligations are amortized to expense ratably over the terms of the multi-year periods. IT VAR commissions allocable to other elements are charged to expense at go-live or customer acceptance. In our professional sales services segment, commissions paid to our sales force are deferred until the underlying equipment is accepted by the customer. At December 31, 2020, our consolidated balance sheet includes approximately $4,037,000 in capitalized sales commissions to be expensed in future periods, of which $2,354,000 is recorded in deferred commission expense and $1,683,000, representing the long-term portion, is included in other assets. Significant Judgments when Applying Topic 606 Contract transaction price is allocated to performance obligations using estimated stand-alone selling price. Judgment is required in estimating stand-alone selling price for each distinct performance obligation. We determine stand-alone selling price maximizing observable inputs such as stand-alone sales when they exist or substantive renewal price charged to clients. In instances where stand-alone selling price is not observable, we utilize an estimate of stand-alone selling price based on historical pricing and industry practices. Certain revenue we record in our professional sales service segment contains an estimate for variable consideration. Due to the tiered structure of our commission rate, which increases as annual targets are achieved, under Topic 606 we record revenue and deferred revenue at the rate we expect to be achieved by year end. We base our estimate of variable consideration on historical results of previous years’ achievement under the GEHC agreement. Such estimate will be reviewed each quarter and adjusted as necessary. In addition, the Company records commissions for arranging financing at an estimated rate which is subject to later revision based on certain factors. The Company recognized increases in revenue associated with revisions to variable consideration for previously completed performance obligations of $5,000 for the year ended December 31, 2020. Shipping and Handling Costs All shipping and handling expenses are charged to cost of sales. Amounts billed to customers related to shipping and handling costs are included as a component of sales. Research and Development Research and development costs attributable to development are expensed as incurred. Share-Based Compensation The Company complies with ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”), which requires all companies to recognize the cost of services received in exchange for equity instruments to be recognized in the financial statements based on their grant date fair values. The Company applies an estimated forfeiture rate to the grant date fair value to determine the annual compensation cost of share-based payment arrangements with employees. The forfeiture rate is estimated based primarily on job title and prior forfeiture experience. The Company did not grant any awards to non-employees during the years ended December 31, 2020 and 2019. During the year ended December 31, 2020, the Company granted 1,000,000 restricted shares of common stock valued at $20,000 to an employee. 20% of the shares vested at approximate grant date and the remaining 80% vest over four years from the grant date. The total fair value of shares vested during the year ended December 31, 2020 was $23,000 for officers and $63,000 for employees. The weighted average grant date fair value of shares granted during the year ended December 31, 2020 was $0.02 per share. During the year ended December 31, 2019, the Company granted 5,500,000 restricted shares of common stock valued at $115,000 to officers. The shares vest over four years from the grant date. The total fair value of shares vested during the year ended December 31, 2019 was $65,000 for officers and $113,000 for employees. The weighted average grant date fair value of shares granted during the year ended December 31, 2019 was $0.02 per share. The Company did not grant any stock options during the years ended December 31, 2020 or 2019, nor were any options exercised during such periods. No options were outstanding at December 31, 2020 or 2019. Share-based compensation expense recognized for the years ended December 31, 2020 and 2019 was $88,000 and $141,000, respectively, and is recorded in selling, general, and administrative expense in the consolidated statements of operations and comprehensive loss. Unrecognized expense related to existing share-based compensation and arrangements is approximately $76,000 at December 31, 2020 and will be recognized over a weighted-average period of approximately 16 months. Cash and Cash Equivalents Cash and cash equivalents represent cash and short-term, highly liquid investments either in certificates of deposit, treasury bills, money market funds, or investment grade commercial paper issued by major corporations and financial institutions that generally have maturities of three months or less from the date of acquisition. Short term investments The Company's short-term investments consist of bank deposits with yields based on underlying debt and equity securities. Accounts Receivable, net The Company’s accounts receivable are due from customers to whom we sell our products and services, distributors engaged in the distribution of our products and from GEHC. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are generally due 30 to 90 days from shipment and services provided and are stated at amounts due from customers net of allowances for doubtful accounts, returns, term discounts and other allowances. Accounts that are outstanding longer than the contractual payment terms are considered past due. Estimates are used in determining the allowance for doubtful accounts based on the Company’s historical collections experience, current trends, credit policy and a percentage of its accounts receivable by aging category. In determining these percentages, the Company reviews historical write-offs of their receivables. The Company also looks at the credit quality of their customer base as well as changes in their credit policies. The Company continuously monitors collections and payments from our customers, and writes off receivables when all efforts at collection have been exhausted. While credit losses have historically been within expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same credit loss rates that they have in the past. The changes in the Company’s allowance for doubtful accounts and commission adjustments are as follows: (in thousands) Year ended December 31, 2020 2019 Beginning Balance $ 4,285 $ 3,994 Provision for losses on accounts receivable 663 507 Direct write-offs, net of recoveries (542 ) (528 ) Commission adjustments (186 ) 312 Deconsolidate EECP Global (see Note N) (12 ) - Ending Balance $ 4,208 $ 4,285 Concentrations of Credit Risk We market our equipment and IT software solutions principally to hospitals, diagnostic imaging centers and physician private practices. We perform credit evaluations of our customers’ financial condition and, as a result, believe that our receivable credit risk exposure is limited. For the years ended December 31, 2020 and 2019, no customer in our equipment or IT segment accounted for 10% or more of revenues or accounts receivable. In our professional sales service segment, 100% of our revenues and accounts receivable are with GEHC; however, we believe this risk is acceptable based on GEHC’s financial position and our long history of doing business with GEHC. The Company maintains cash balances in certain U.S. financial institutions, which, at times, may exceed the Federal Depository Insurance Corporation (“FDIC”) coverage of $250,000. The Company has not experienced any losses on these accounts and believes it is not subject to any significant credit risk on these accounts. In addition, the FDIC does not insure the Company’s foreign bank balances, which aggregated approximately $582,000 and $352,000 at December 31, 2020 and 2019, respectively. Inventories The Company values inventories in the equipment segment at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company regularly reviews inventory quantities on hand, particularly raw materials and components, and records a provision for excess and slow moving inventory based primarily on existing and anticipated design and engineering changes to its products as well as forecasts of future product demand. In our IT Segment, we purchase computer hardware and software for specific customer requirements and value such inventories using the specific identification method. Property and Equipment Property and equipment, including assets under finance leases, are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheets. Depreciation is expensed over the estimated useful lives of the assets, which range from two to eight years, on a straight-line basis. Accelerated methods of depreciation are used for tax purposes. We amortize leasehold improvements over the useful life of the related leasehold improvement or the life of the related lease, whichever is less. Goodwill and Intangible Assets Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the ASC Topic 350, “Intangibles: Goodwill and Other”. Goodwill acquired in a purchase business combination is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not result in an impairment. The Company tests goodwill for impairment at the reporting unit level on an annual basis as of December 31 and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In any year, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If the Company cannot determine qualitatively that the fair value is in excess of the carrying value, or the Company decides to bypass the qualitative assessment, the Company proceeds to the quantitative goodwill impairment test, which compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. No impairment loss was recorded as of December 31, 2020 and 2019. Intangible assets consist of the value of customer contracts and relationships, patent and technology costs, and software. The cost of significant customer-related intangibles is amortized in proportion to estimated total related revenue; cost of other intangible assets is generally amortized on a straight-line basis over the asset's estimated economic life, which range from five to ten years. The Company capitalizes internal use software development costs incurred during the application development stage. Costs related to preliminary project activities, training, data conversion, and post implementation activities are expensed as incurred. The Company capitalized $541,000 and $494,000 in software development costs for the years ended December 31, 2020 and 2019, respectively. Impairment of Long-lived Assets The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. If required, the Company compares the estimated fair value determined by either the undiscounted future net cash flows or appraised value to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value, which is based either on discounted cash flows or appraised values in the period the impairment becomes known. No assets were determined to be impaired as of December 31, 2020 and 2019. Deferred Revenue Amounts billable under the agreement with GEHC in advance of delivery of the underlying equipment are recorded initially as deferred revenue, and commission revenue is subsequently recognized as customer acceptance of such equipment is reported to us by GEHC. Similarly, commissions payable to our sales force related to such billings are recorded as deferred commission expense when the associated deferred revenue is recorded. Commission expense is recognized when the corresponding commission revenue is recognized. We record revenue on extended service contracts ratably over the term of the related service contracts. Under the provisions of ASC 606, we defer revenue related to EECP® system sales for the fair value of installation and in-service training to the period when the services are rendered and for service obligations ratably over the service period, which is generally one year. (See Note J) Income Taxes Deferred income taxes are recognized for temporary differences between financial statement and income tax bases of assets and liabilities and loss carry-forwards for which income tax benefits are expected to be realized in future years. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized. In estimating future tax consequences, we generally consider all expected future events other than an enactment of changes in the tax laws or rates. Deferred tax assets are continually evaluated for the expected realization. To the extent our judgment regarding the realization of the deferred tax assets changes, an adjustment to the allowance is recorded, with an offsetting increase or decrease, as appropriate, in income tax expense. Such adjustments are recorded in the period in which our estimate as to the realization of the assets changed that it is “more likely than not” that all of the deferred tax assets will be realized. The “realization” standard is subjective and is based upon our estimate of a greater than 50% probability that the deferred tax asset can be realized. The Company also complies with the provisions of ASC Topic 740, “Income Taxes”, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by the relevant taxing authority based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. Derecognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces ending retained earnings. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2020 and 2019. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at December 31, 2020 and 2019. Generally, the Company is no longer subject to income tax examinations by major domestic taxing authorities for years before 2017. According to the China tax regulatory framework, there is no statute of limitations on examination of tax filings by tax authorities. However, the general practice is going back five years. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. Foreign Currency Translation Gain (Loss) and Comprehensive Income (Loss) In countries in which the Company operates, and the functional currency is other than the U.S. dollar, assets and liabilities are translated using published exchange rates in effect at the consolidated balance sheet date. Equity accounts are translated at historical rates except for the changes in accumulated deficit during the year as the result of the income statement translation process. Revenues and expenses and cash flows are translated using a weighted average exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive loss on the accompanying consolidated balance sheets. For the years ended December 31, 2020 and 2019, other comprehensive income includes gains of $142,000 and $2,000, respectively, which were entirely from foreign currency translation. Net Income (Loss) Per Common Share Basic income per common share is based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per common share is based on the weighted average number of common and potential dilutive common shares outstanding. Diluted earnings per share were computed based on the weighted average number of shares outstanding plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows: (in thousands) Year ended December 31, 2020 2019 Basic weighted average shares outstanding 169,932 167,843 Dilutive effect of unvested restricted shares 914 - Diluted weighted average shares outstanding 170,846 167,843 The following table represents common stock equivalents that were excluded from the computation of diluted earnings per share for the years ended December 31, 2020 and 2019, because the effect of their inclusion would be anti-dilutive. (in thousands) Year ended December 31, 2020 2019 Restricted common stock grants 76 1,267 Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, "Leases." See Note N for further details. Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: Credit Losses on Financial instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how we determine our allowance for estimated uncollectible receivables. In November 2019, the FASB issued ASU 2019-10, which changed the effective date of ASU 2016-13 for smaller reporting companies as defined by the SEC from first quarter of 2020 to the first quarter of 2023, with early adoption permitted. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | The Company views its business in three segments – the IT segment, the professional sales service segment, and the equipment segment. The IT segment includes the operations of NetWolves and VasoHealthcare IT Corp. The professional sales service segment operates through the Vaso Diagnostics subsidiary and is currently engaged solely in the fulfillment of the Company’s responsibilities under our agreement with GEHC. The equipment segment is engaged in designing, manufacturing, marketing and supporting EECP® enhanced external counterpulsation systems (see Note O) both domestically and internationally, as well as the development, production, marketing and supporting of other medical devices. The chief operating decision maker is the Company’s Chief Executive Officer, who, in conjunction with upper management, evaluates segment performance based on operating income and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization – defined as net (loss) income, plus net interest expense (income), tax expense, depreciation and amortization, and non-cash expenses for share-based compensation). Administrative functions such as finance and human resources are centralized and related expenses allocated to each segment. Other costs not directly attributable to operating segments, such as audit, legal, director fees, investor relations, and others, as well as certain assets – primarily cash balances – are reported in the Corporate entity below. There are no intersegment revenues. Summary financial information for the segments is set forth below: (in thousands) Year ended December 31, 2020 2019 Revenues from external customers IT $ 43,894 $ 45,505 Professional sales service 22,865 26,208 Equipment 3,091 3,802 Total revenues $ 69,850 $ 75,515 Gross Profit IT $ 17,682 $ 18,790 Professional sales service 18,608 21,287 Equipment 2,281 2,355 Total gross profit $ 38,571 $ 42,432 Operating income (loss) IT $ (1,247 ) $ (1,170 ) Professional sales service 2,977 3,626 Equipment (155 ) (855 ) Corporate (803 ) (1,010 ) Total operating income (loss) $ 772 $ 591 Depreciation and amortization IT $ 2,010 $ 2,213 Professional sales service 161 170 Equipment 291 298 Corporate - - Total depreciation and amortization $ 2,462 $ 2,681 Capital expenditures IT $ 960 $ 1,149 Professional sales service 26 - Equipment 12 54 Corporate 2 2 Total cash capital expenditures $ 1,000 $ 1,205 December 31, 2020 December 31, 2019 Identifiable Assets IT $ 28,110 $ 30,079 Professional sales service 9,171 16,257 Equipment 6,668 6,370 Corporate 6,427 1,658 Total assets $ 50,376 $ 54, 364 For the years ended December 31, 2020 and 2019, GEHC accounted for 33% and 35% of revenue, respectively. Also, GEHC accounted for $5.1 million, or 52%, and $10.9 million, or 69%, of accounts and other receivables at December 31, 2020 and 2019, respectively. Our revenues were derived from the following geographic areas: (in thousands) Year ended December 31, 2020 2019 Domestic (United States) $ 67,184 $ 73,019 Non-domestic (foreign) 2,666 2,496 $ 69,850 $ 75,515 |
ACCOUNTS AND OTHER RECEIVABLES
ACCOUNTS AND OTHER RECEIVABLES | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
ACCOUNTS AND OTHER RECEIVABLES | The following table presents information regarding the Company’s accounts and other receivables as of December 31, 2020 and 2019: (in thousands) December 31, 2020 December 31, 2019 Trade receivables $ 13,960 $ 20,110 Due from employees 24 27 Allowance for doubtful accounts and commission adjustments (4,208 ) (4,285 ) Accounts and other receivables, net $ 9,776 $ 15,852 Trade receivables include amounts due for shipped products and services rendered. Amounts currently due under the GEHC Agreement are subject to adjustment in subsequent periods should the underlying sales order amount, upon which the receivable is based, change. Allowance for doubtful accounts and commission adjustments include estimated losses resulting from the inability of our customers to make required payments, and adjustments arising from estimated future changes in sales order amounts that may reduce the amount the Company will ultimately receive under the GEHC Agreement. Due from employees primarily reflects commission advances made to sales personnel. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories, net of reserves, consisted of the following: (in thousands) December 31, 2020 December 31, 2019 Raw materials $ 669 $ 650 Work in process 4 181 Finished goods 711 1,110 $ 1,384 $ 1,941 At December 31, 2020 and 2019, the Company maintained reserves for slow moving inventories of $167,000 and $390,000, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Property and equipment is summarized as follows: (in thousands) December 31, 2020 December 31, 2019 Office, laboratory and other equipment $ 2,328 $ 2,476 Equipment furnished for customer or clinical uses 9,176 8,796 Right of use assets - finance leases 1,115 1,115 Furniture and fixtures 99 127 12,718 12,514 Less: accumulated depreciation and amortization (8,833 ) (7,560 ) Property and equipment, net $ 3,885 $ 4,954 Accumulated amortization of right of use (“ROU”) assets under finance leases aggregated approximately $636,000 and $438,000 at December 31, 2020 and 2019, respectively. Depreciation expense amounted to approximately $1,556,000 and $1,738,000 for the years ended December 31, 2020 and 2019, respectively. Amortization of ROU assets under finance leases is included in depreciation expense. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | Goodwill of $14,375,000 is attributable to the NetWolves reporting unit within the IT segment. The remaining $1,313,000 of goodwill is attributable to the FGE reporting unit within the Equipment segment. The NetWolves and FGE reporting units had negative net asset carrying amounts at December 31, 2020 and 2019. The changes in the carrying amount of goodwill are as follows: (in thousands) Year ended Year ended December 31, 2020 December 31, 2019 Beginning of period $ 17,271 $ 17,309 Foreign currency translation adjustment 82 (38 ) Sale of equity in EECP Global (1,665 ) - End of period $ 15,688 $ 17,271 The Company’s other intangible assets consist of capitalized customer-related intangibles, patent and technology costs, and software costs, as set forth in the following table: (in thousands) December 31, 2020 December 31, 2019 Customer-related Costs $ 5,831 $ 5,831 Accumulated amortization (3,947 ) (3,553 ) 1,884 2,278 Patents and Technology Costs 1,894 2,363 Accumulated amortization (1,521 ) (1,752 ) 373 611 Software Costs 3,394 2,840 Accumulated amortization (1,702 ) (1,428 ) 1,692 1,412 $ 3,949 $ 4,301 The Company owns, through our Chinese subsidiaries, thirty invention and utility patents that expire at various times through 2032, as well as fourteen software copyright certificates in China related to proprietary technologies in physiological data acquisition, analysis and reporting. The Company also holds one patent for secure and remote monitoring management through its NetWolves subsidiary. Costs incurred for submitting the applications to the United States Patent and Trademark Office and other foreign authorities for these patents have been capitalized. Patent and technology costs are being amortized using the straight-line method over 10-year and 8-year lives, respectively. The Company begins amortizing patent costs once a filing receipt is received stating the patent serial number and filing date from the Patent Office or other foreign authority. Due to the sale of equity in the EECP business, the Company deconsolidated approximately $469,000 in gross patent assets and related accumulated amortization. The cost of significant customer-related intangibles is amortized in proportion to estimated total related revenue; cost of other customer-related intangible assets is amortized on a straight-line basis over the asset's estimated economic life of seven years. Software costs are amortized on a straight-line basis over its expected useful life of five years. Amortization expense amounted to approximately $906,000 and $943,000 for the years ended December 31, 2020 and 2019, respectively. Amortization of intangibles for the next five years is: (in thousands) Years ending December 31, 2021 1,064 2022 768 2023 543 2024 474 2025 408 $ 3,257 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
OTHER ASSETS | Other assets consist of the following: (in thousands) December 31, 2020 December 31, 2019 Deferred commission expense - noncurrent $ 1,683 $ 1,770 Trade receivables - noncurrent 448 631 Other, net of allowance for loss on loan receivable of $412 at December 31, 2020 and 2019 59 185 $ 2,190 $ 2,586 |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUE | The changes in the Company’s deferred revenues are as follows: (in thousands) Year ended December 31, 2020 2019 Deferred revenue at beginning of period $ 19,343 $ 18,086 Deconsolidate EECP Global (see Note O) (769 ) - Net additions: Deferred extended service contracts 144 363 Deferred in-service and training 3 13 Deferred service arrangements 5 25 Deferred commission revenues 7,752 11,366 Recognized as revenue: Deferred extended service contracts (140 ) (566 ) Deferred in-service and training - (15 ) Deferred service arrangements (5 ) (30 ) Deferred commission revenues (8,629 ) (9,899 ) Deferred revenue at end of period 17,704 19,343 Less: current portion 11,516 12,345 Long-term deferred revenue at end of period $ 6,188 $ 6,998 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | Accrued expenses and other liabilities consist of the following: (in thousands) December 31, 2020 December 31, 2019 Accrued compensation $ 1,044 $ 1,509 Accrued expenses - other 1,854 1,818 Other liabilities 1,969 2,017 $ 4,867 $ 5,344 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | The Company recorded interest charges aggregating approximately $287,000 and $467,000 for the years ended December 31, 2020 and 2019, respectively, payable to MedTechnology Investments, LLC (“MedTech”) pursuant to its promissory notes (“Notes”). The MedTech Notes were used in 2015 to partially fund the purchase of NetWolves. $2,300,000 of the $4,800,000 provided by MedTech was provided by directors of the Company, or by family members. The Notes bore interest, payable quarterly, at an annual rate of 9% through their original maturity date of May 29, 2019. In August 2018, MedTech agreed to extend, if necessary, the maturity date of $3,600,000 of the Notes an additional year from May 29, 2019 to May 29, 2020, provided that a minimum of $1,200,000 of the principal was paid on or before December 31, 2019 and the annual interest rate for the balance increased to 10% during the extension. The $1,200,000 principal payment was waived pursuant to MedTech’s consent to the bank line of credit maturity extension to September 30, 2020. The Notes may be prepaid without penalty, and are subordinated to any current or future Senior Debt as defined in the Subordinated Security Agreement. The Subordinated Security Agreement secures payment and performance of the Company’s obligations under the Notes. In April 2020, $1.2 million in principal was repaid and the maturity date of $3.6 million of the Notes were extended through April 30, 2021 at a new interest rate of 6% per annum. The maturity date was extended again in March 2021 to June 30, 2022, provided $1.2 million is paid prior to April 1, 2021, and $50,000 is paid quarterly beginning June 30, 2021 (see Note U). The interest rate remains at 6% per annum. Approximately $1.4 million of the $3.6 million outstanding balance of the MedTech Notes is included in current liabilities in the Company’s consolidated balance sheet as of December 31, 2020. Interest charges aggregating approximately $55,000 were outstanding at December 31, 2020 and paid on January 4, 2021. David Lieberman, a practicing attorney in the State of New York, serves as Vice Chairman of the Board of Directors. He is currently a senior partner at the law firm of Beckman Lieberman and Associates, LLP, which performs certain legal services for the Company. Fees of approximately $227,000 and $280,000 were billed by the firm for the years ended December 31, 2020 and 2019, respectively, at which dates no amounts were outstanding. On August 6, 2014 the Company acquired all of the outstanding shares of Genwell Instruments Co. Ltd. (“Genwell”), located in Wuxi, China for cash and notes of Chinese Yuan RMB13,250,000 (approximately $2,151,000 at the acquisition date). In August 2019, the Company modified the notes, which had a remaining principal balance of RMB2,250,000, to change the interest rate from 9% to 10% per annum, effective August 27, 2019, and to extend the maturity date from August 26, 2019 to February 26, 2020. Unsecured notes and accrued interest aggregating approximately $339,000 was payable to officers of Biox at December 31, 2019. The notes and accrued interest were repaid in March 2020. In the year ended December 31, 2019, the Company issued notes aggregating $930,000 to third parties, including directors and employees. The notes matured from January 2020 to July 2020 and bore interest at 10% per annum payable quarterly. In March 2020, the notes were extended for six months, substantially all of which matured by November 2020, at a reduced interest rate of 8%, and permitted prepayment without penalty. In June and July 2020, the Company repaid the notes and accrued interest. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Debt and Lease Obligation [Abstract] | |
NOTES PAYABLE | Notes payable consist of the following: (in thousands) December 31, 2020 December 31, 2019 Line of credit $ 4,346 $ 5,721 Notes payable 3,803 300 Notes payable - MedTech 3,600 4,800 Notes payable - related parties - 1,253 Total debt 11,749 12,074 Less: current portion (including related parties) (5,970 ) (3,933 ) $ 5,779 $ 8,141 Line of Credit NetWolves maintains a $4.0 million line of credit with a lending institution. In December 2019, the line’s expiration date was extended from December 18, 2019 to September 30, 2020, and the interest rate was increased 25 basis points to LIBOR plus 3.50%. In April 2020, the lending institution extended the maturity date to April 30, 2021 and established a minimum LIBOR rate of 0.50%. The maturity date was extended again in March 2021 to June 30, 2022 provided $825,000 is paid prior to April 1, 2021, and $50,000 is paid quarterly beginning June 30, 2021 (see Note U). Advances under the line are secured by substantially all of the assets of NetWolves Network Services, LLC and guaranteed by Vaso Corporation. During the year ended December 31, 2020, $100,000 in draw was repaid. At December 31, 2020, the Company had drawn approximately $3.7 million against the line, of which amount $975,000 is included in notes payable – current portion in the Company’s consolidated balance sheet at December 31, 2020. The Company maintained an additional $2.0 million line of credit with a lending institution. In December 2019, the line’s expiration date was extended from December 18, 2019 to September 30, 2020, and the interest rate was increased 25 basis points to LIBOR plus 3.50%. Advances under the line are secured by substantially all of the assets of the Company. In April 2020, the lending institution extended the maturity date to April 30, 2021 and established a minimum LIBOR rate of 0.50%, and $1.2 million in draw was repaid. At December 31, 2020, the Company had drawn $675,000 against the line. In March 2021, the $675,000 balance and accrued interest was paid off in full and the line was closed (see Note U). The line of credit agreement includes certain financial covenants, and the Company was in compliance with such covenants at December 31, 2020. The $675,000 balance is included in notes payable – current portion in the Company’s consolidated balance sheet at December 31, 2020. Notes Payable In August 2019, the Company issued to a private party a $300,000 note bearing interest at 10% and maturing November 15, 2019. In November, 2019, the note’s maturity date was extended to January 15, 2020, and repaid upon maturity. In April 2020, the Company’s Biox subsidiary issued a note RMB1,000,000 (approximately $153,000) with a Chinese bank for working capital purposes. The note was secured by the assets of Biox and bore interest at 4.35% per annum. It matured on April 15, 2021 and was repaid upon maturity. In August 2020, the Company issued a note for approximately $42,000 for the purchase of equipment. The note is secured by the purchased equipment, bears interest at 1.9% and is payable in 60 equal monthly installments maturing August 2025. Paycheck Protection Program debt In April 2020, the Company received funding of a $3,610,900 Note (the “PPP Note”) issued by PNC Bank, National Association (“PNC”) pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (the “Program”). The Company accounts for the PPP Note in accordance with Financial Accounting Standards Board ASC Topic 470, “Debt”, and Technical Question and Answer (TQA) 3200.18, “Borrower Accounting for a Forgivable Loan Received Under the Small Business Administration Paycheck Protection Program”. Under the TQA, the Company: ● Initially records the cash inflow from the PPP loan as a financial liability and accrues interest in accordance with the interest method under ASC Subtopic 835-30. ● Does not impute additional interest at a market rate. ● Continues to record the proceeds from the loan as a liability until either (i) the loan is partly or wholly forgiven and the debtor has been legally released or (ii) the debtor pays off the loan. ● Reduces the liability by the amount forgiven and records a gain on extinguishment once the loan is partly or wholly forgiven and legal release is received. Amounts outstanding on the PPP Note are at the annual interest rate of 1%. During the first six months of the PPP Note, there is no principal nor interest required to be paid. Thereafter, to the extent the PPP Note is not forgiven under the Program, the outstanding balance of the PPP Note converts to an amortizing term loan payable monthly over an eighteen-month period, which has been updated according to the Paycheck Protection Program Flexibility Act of 2020 (“Flexibility Act”). The PPP Note can be prepaid at any time without penalty. In June 2020, the Flexibility Act was signed into law, which amended the CARES Act. The Flexibility Act changed key provisions of the PPP, including, but not limited to, (i) provisions relating to the maturity of PPP loans, (ii) the deferral period covering of PPP loan payments and (iii) the process for measurement of loan forgiveness. More specifically, the Flexibility Act provides a minimum maturity of five years for all PPP loans made on or after the date of the enactment of the Flexibility Act (“June 5, 2020”) and permits lenders and borrowers to extend the maturity date of earlier PPP loans by mutual agreement. As of the date of this filing, the Company has not approached the lender to request an extension of the maturity date from two years to five years. The Flexibility Act also provides that if a borrower does not apply for forgiveness of a loan within 10 months after the last day of the measurement period (“covered period”), the PPP loan is no longer deferred and the borrower must begin paying principal and interest. In addition, the Flexibility Act extended the length of the covered period from eight weeks to 24 weeks from receipt of proceeds, while allowing borrowers that received PPP loans before June 5, 2020 to determine, at their sole discretion, a covered period of either 8 weeks or 24 weeks. After reviewing the applicable terms and conditions of the Flexibility Act, the Company elected to extend the length of the covered period from the lesser of (i) period whereby qualified expenses equal loan proceeds or (ii) 24 weeks. The Company has performed initial calculations for the PPP loan forgiveness according to the terms and conditions of the SBA’s Loan Forgiveness Application (Revised June 16, 2020) and, based on such calculations, expects that the PPP loan will be forgiven in full over a period less than 24 weeks. In October 2020, the Company submitted its application to PNC for forgiveness of the PPP Note in an amount equal to the sum of the following costs incurred by the Company during the covered period beginning on the date of first disbursement of the PPP Note proceeds: (a) payroll costs; (b) any payment of interest on a covered mortgage obligation; (c) any covered rent payment; and (d) any covered utility payment. The amount of forgiveness is calculated in accordance with the requirements of the Program. In this regard, no more than 40% of the amount forgiven can be attributable to non-payroll costs. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | ASC 842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at either the effective date (the “effective date method”) or the beginning of the earliest period presented (the “comparative method”) using a modified retrospective approach. Under the effective date method, the Company’s comparative period reporting is unchanged. In contrast, under the comparative method, the Company’s date of initial application is the beginning of the earliest comparative period presented, and the Topic 842 transition guidance is then applied to all comparative periods presented. Further, under either transition method, the standard includes certain practical expedients intended to ease the burden of adoption. The Company adopted ASC 842 January 1, 2019 using the effective date method and elected certain practical expedients allowing the Company not to reassess: ● whether expired or existing contracts contain leases under the new definition of a lease; ● lease classification for expired or existing leases; and ● whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. The Company enters into finance leases, typically with terms of 3 to 5 years, to acquire equipment for its data center. The Company enters into operating leases for its facilities in New York, Florida, and China, as well as for vehicles provided to certain employees in the professional sales services segment. The operating lease terms range from 2 to 7 years. The Company excluded the renewal option on its applicable facility leases from the calculation of its right-of-use assets and lease liabilities. Finance and operating lease liabilities consist of the following: (in thousands) December 31, 2020 December 31, 2019 Lease liabilities - current Finance leases $ 190 $ 170 Operating leases 540 549 $ 730 $ 719 Lease liabilities - net of current portion Finance leases $ 246 $ 437 Operating leases 469 321 $ 715 $ 758 A reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the consolidated balance sheet at December 31, 2020 is set forth below: (in thousands) Years ending December 31, Finance leases Operating leases Total 2021 227 613 840 2022 200 374 574 2023 62 98 160 Undiscounted lease payments 489 1,085 1,574 Amount representing interest (53 ) (76 ) (129 ) Discounted lease liabilities 436 1,009 1,445 Additional disclosures of lease data are set forth below: (in thousands) Year ended December 31, 2020 Lease costs: Finance lease costs: Amortization of right-of-use assets $ 198 Interest on lease liabilities 56 254 Operating lease costs: 712 Short-term lease costs: 82 Total lease cost $ 1,048 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 56 Operating cash flows from operating leases 712 Financing cash flows from finance leases 171 $ 939 December 31, 2020 Weighted-average remaining lease term - finance leases (months) 29 Weighted-average remaining lease term - operating leases (months) 23 Weighted-average discount rate - finance leases 12.1 % Weighted-average discount rate - operating leases 8.6 % The Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease payments. |
SALE OF EQUITY IN THE EECP BUSI
SALE OF EQUITY IN THE EECP BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
Proceeds from Issuance or Sale of Equity [Abstract] | |
SALE OF EQUITY IN THE EECP BUSINESS | On May 20, 2020, the Company closed on the sale of 51% of the capital stock of its wholly-owned subsidiary EECP Global Corporation (“EECP Global”) to Chongqing PSK-Health Sci-Tech Development Co. Ltd, a China-based company, for $1,150,000. EECP Global was formed in September 2019 to hold all the assets and liabilities of its EECP business. Concurrently with the closing of the transaction, the Company signed a three-year Management Service Agreement with EECP Global to provide management service for the business and operation of EECP Global in the United States. Pursuant to the agreement, EECP Global reimburses the Company all direct expenses and pays a management fee starting April 1, 2020, the effective date of the sale. Due to the Company’s now minority ownership of EECP Global, it deconsolidated the EECP Global operations effective April 1, 2020 and recorded a gain on sale of approximately $110,000, of which approximately $54,000 resulted from the gain related to the remeasurement of the retained noncontrolling investment in EECP Global to fair value. The gain on sale includes the effect of the reclassification of approximately $187,000 in accumulated translation losses from accumulated other comprehensive loss. The Company uses the equity method to account for its interest in EECP Global, as it has the ability to exercise significant influence over the entity, and reports its share of EECP Global operations in Other Income (Expense) on its condensed consolidated statements of operations. For the year ended December 31, 2020, the Company’s share of EECP Global’s income was approximately $11,000. At December 31, 2020, the Company recorded a net payable to related parties of approximately $233,000 on its consolidated balance sheet for amounts due to EECP Global for receivables collected on its behalf net of amounts due from EECP Global for fees and cost reimbursements. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Chinese subsidiaries dividends and statutory reserves The payment of dividends by entities organized in China is subject to limitations. In particular, regulations in China currently permit payment of dividends only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. Based on People’s Republic of China (PRC) accounting standards, our Chinese subsidiaries are also required to set aside at least 10% of after-tax profit each year to their general reserves until the accumulative amount of such reserves reaches 50% of the registered capital. As of December 31, 2020 and 2019, statutory reserves aggregating approximately $35,000 were recorded in the Company’s consolidated balance sheets. These reserves are not distributable as cash dividends. In addition, they are required to allocate a portion of their after-tax profit to their staff welfare and bonus fund at the discretion of their respective boards of directors. Moreover, if any of our PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Distribution of dividends from the Chinese operating companies to foreign shareholders is subject to a 10% withholding tax. |
OPTION PLANS
OPTION PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
OPTION PLANS | 2010 Stock Option and Stock Issuance Plan On June 17, 2010 the Board of Directors approved the 2010 Stock Plan (the “2010 Plan”) for officers, directors, employees and consultants of the Company. The stock issuable under the 2010 Plan shall be shares of the Company’s authorized but unissued or reacquired common stock. The maximum number of shares of common stock which may be issued under the 2010 Plan is 5,000,000 shares. The 2010 Plan is comprised of two separate equity programs, the Options Grant Program, under which eligible persons may be granted options to purchase shares of common stock, and the Stock Issuance Program, under which eligible persons may be issued shares of common stock directly, either through the immediate purchase of such shares or as a bonus for services rendered to the Company. The 2010 Plan provides that the Board of Directors, or a committee of the Board of Directors, will administer it with full authority to determine the identity of the recipients of the options or shares and the number of options or shares. Options granted under the 2010 Plan may be either incentive stock options or non-qualified stock options. The option price shall be 100% of the fair market value of the common stock on the date of the grant (or in the case of incentive stock options granted to any individual stockholder possessing more than 10% of the total combined voting power of all voting stock of the Company, 110% of such fair market value). The term of any option may be fixed by the Board of Directors, or its authorized committee, but in no event shall it exceed five years from the date of grant. Options are exercisable upon payment in full of the exercise price, either in cash or in common stock valued at fair market value on the date of exercise of the option. No shares or options were granted under the 2010 Plan during the year ended December 31, 2020. In June 2020, the 2010 Plan terminated with 15,059 ungranted authorized shares. 2013 Stock Option and Stock Issuance Plan On October 30, 2013, the Board of Directors approved the 2013 Stock Plan (the “2013 Plan”) for officers, directors, employees and consultants of the Company. The stock issuable under the 2013 Plan shall be shares of the Company’s authorized but unissued or reacquired common stock. The maximum number of shares of common stock which may be issued under the 2013 Plan is 7,500,000 shares. The 2013 Plan is comprised of two separate equity programs, the Options Grant Program, under which eligible persons may be granted options to purchase shares of common stock, and the Stock Issuance Program, under which eligible persons may be issued shares of common stock directly, either through the immediate purchase of such shares or as a bonus for services rendered to the Company. The 2013 Plan provides that the Board of Directors, or a committee of the Board of Directors, will administer it with full authority to determine the identity of the recipients of the options or shares and the number of options or shares. During the year ended December 31, 2020, no shares of common stock were granted under the 2013 Plan, 251,250 shares were forfeited, and 77,369 shares were withheld for withholding taxes. No shares of common stock or options were granted under the 2013 Plan during the year ended December 31, 2020. 2016 Stock Option and Stock Issuance Plan On June 15, 2016, the Board of Directors ("Board") approved the 2016 Stock Plan (the "2016 Plan") for officers, directors, and senior employees of the Corporation or any subsidiary of the Corporation. The stock issuable under the 2016 Plan shall be shares of the Company's authorized but unissued or reacquired common stock. The maximum number of shares of common stock that may be issued under the 2016 Plan is 7,500,000 shares. The 2016 Plan consists of a Stock Issuance Program, under which eligible persons may, at the discretion of the Board, be issued shares of common stock directly, as a bonus for services rendered or to be rendered to the Corporation or any subsidiary of the Corporation. No shares of common stock or options were granted under the 2016 Plan during the year ended December 31, 2020. 2019 Stock Option and Stock Issuance Plan In May 2019, the Board of Directors ("Board") approved the 2019 Stock Plan (the "2019 Plan") for officers, directors, and senior employees of the Corporation or any subsidiary of the Corporation. The stock issuable under the 2019 Plan shall be shares of the Company's authorized but unissued or reacquired common stock. The maximum number of shares of common stock that may be issued under the 2019 Plan is 15,000,000 shares. The 2019 Plan consists of a Stock Issuance Program, under which eligible persons may, at the discretion of the Board, be issued shares of common stock directly, as a bonus for services rendered or to be rendered to the Corporation or any subsidiary of the Corporation. During the year ended December 31, 2020, 1,000,000 shares were granted under the 2019 Plan. The following table summarizes non-vested restricted shares under all plans for the year ended December 31, 2020: Shares Available for Future Issuance Unvested shares Weighted Average Grant Date Fair Value Balance at December 31, 2018 1,901,817 2,387,500 $ 0.12 Authorized 15,000,000 - $ - Granted (5,500,000 ) 5,500,000 $ 0.02 Vested - (2,077,089 ) $ 0.08 Forfeited 290,203 (290,203 ) $ 0.14 Balance at December 31, 2019 11,692,020 5,520,208 $ 0.03 Authorized - - $ - Granted (1,000,000 ) 1,000,000 $ 0.02 Vested - (1,799,923 ) $ 0.05 Forfeited 328,619 (328,619 ) $ 0.10 Expired (15,059 ) - $ - Balance at December 31, 2020 11,005,580 4,391,666 $ 0.02 There were 53,558,455 remaining authorized shares of common stock after reserves for all stock option plans. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The following is a geographical breakdown of income (loss) before the provision for income taxes: (in thousands) Year ended December 31, 2020 2019 Domestic $ (74 ) $ (152 ) Foreign 431 (119 ) Income (loss) before provision for income taxes $ 357 $ (271 ) The provision for income taxes consisted of the following: (in thousands) Year ended December 31, 2020 2019 Current provision (benefit) Federal $ - $ - State 78 43 Foreign (7 ) 16 Total current provision (benefit) 71 59 Deferred provision (benefit) Federal 41 41 State 11 11 Foreign (124 ) - Total deferred provision (benefit) (72 ) 52 Total income tax (benefit) provision $ (1 ) $ 111 Effective income tax rate -0.28 % - 41.02 % Income tax benefit for the year ended December 31, 2020 was $1,000 due primarily to a $124,000 reduction in foreign deferred tax liability, partially offset by $78,000 in state income taxes. The income tax provision of $111,000 for the year ended December 31, 2019 was due primarily to $43,000 in state income taxes and a $52,000 reduction in deferred tax assets. The following is a reconciliation of the effective income tax rate to the federal statutory rate: Year ended December 31, 2020 2019 % % Federal statutory rate 21.00 21.00 State income taxes 19.39 (16.91 ) Change in valuation allowance relating to operations 2.13 12.81 Foreign tax rate differential (61.99 ) (15.27 ) R&D credit (1.39 ) 5.64 Nondeductible expenses 8.06 (29.32 ) Other 12.52 (18.97 ) (0.28 ) (41.02 ) The effective tax rate increased mainly due to the change from pre-tax loss in 2019 to pre-tax profit in 2020, and the impact of foreign taxes and non-deductible expenses. As of December 31, 2020, the recorded deferred tax assets were $14,917,000 , reflecting a decrease of $ during the year ended December 31, 2020, which was offset by a valuation allowance of $ ,000, reflecting a decrease of $ ,000. The components of our deferred tax assets and liabilities are summarized as follows: (in thousands) December 31, 2020 December 31, 2019 Deferred Tax Assets: Net operating loss carryforwards $ 12,026 $ 12,517 Amortization 344 338 Stock-based compensation 6 6 Allowance for doubtful accounts 110 84 Reserve for slow moving inventory 47 169 Tax credits 449 444 Expense accruals 543 457 Excess interest carryforwards - 171 Deferred revenue 1,392 1,159 Total gross deferred taxes 14,917 15,345 Valuation allowance (12,145 ) (12,327 ) Net deferred tax assets 2,772 3,018 Deferred Tax Liabilities: Deferred commissions (370 ) (302 ) Goodwill (1,445 ) (1,186 ) Differences in timing of revenue recognition - (124 ) Depreciation (686 ) (1,207 ) Total deferred tax liabilities (2,501 ) (2,819 ) Total deferred tax assets (liabilities) 271 199 Recorded as: Non-current deferred tax assets 271 323 Non-current deferred tax liabilities - (124 ) Total deferred tax assets (liabilities) $ 271 $ 199 The activity in the valuation allowance is set forth below: (in thousands) 2020 2019 Valuation allowance, January 1, $ 12,327 $ 12,362 Change in valuation allowance (182 ) (35 ) Valuation allowance, December 31, $ 12,145 $ 12,327 At December 31, 2020, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $38 million expiring at various dates from 2020 through 2037 and approximately $7 million with no expiration date. Under current tax law, the utilization of tax attributes will be restricted if an ownership change, as defined, were to occur. Section 382 of the Internal Revenue Code provides, in general, that if an “ownership change” occurs with respect to a corporation with net operating and other loss carryforwards, such carryforwards will be available to offset taxable income in each taxable year after the ownership change only up to the “Section 382 Limitation” for each year (generally, the product of the fair market value of the corporation’s stock at the time of the ownership change, with certain adjustments, and a specified long-term tax-exempt bond rate at such time). The Company’s ability to use its loss carryforwards will be limited in the event of an ownership change. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Sales representation agreement In December 2017, the Company concluded an amendment of the GEHC Agreement with GEHC, originally signed on May 19, 2010. The amendment extends the term of the original agreement, which began on July 1, 2010 and was previously extended in 2012 and 2015, through December 31, 2022, subject to early termination by GEHC without cause with certain conditions, making it the longest extension thus far with a remaining term of five years from December 31, 2017. Under the agreement, VasoHealthcare is the exclusive representative for the sale of select GE Healthcare diagnostic imaging products to specific market accounts in the 48 contiguous states of the United States and the District of Columbia. The circumstances under which early termination of the agreement may occur with cause include: not materially achieving certain sales goals, not maintaining a minimum number of sales representatives, and not meeting various legal and GEHC policy requirements. The Company met all the contractual conditions in 2020 except achieving certain sales goals due to the adverse impact of the COVID-19 pandemic. Employment Agreements On May 10, 2019, the Company modified its Employment Agreement with its President and Chief Executive Officer, Dr. Jun Ma, to provide for a five-year term with extensions, unless earlier terminated by the Company, but in no event can it extend beyond May 31, 2026. The Employment Agreement provides for annual compensation of $500,000. Dr. Ma shall be eligible to receive a bonus for each fiscal year during the employment term. The amount and the occasion for payment of such bonus, if any, shall be at the discretion of the Board of Directors. Dr. Ma shall also be eligible for an award under any long-term incentive compensation plan and grants of options and awards of shares of the Company's stock, as determined at the Board of Directors' discretion. The Employment Agreement further provides for reimbursement of certain expenses, and certain severance benefits in the event of termination prior to the expiration date of the Employment Agreement. On June 1, 2015, the Company entered into an Employment Agreement with Mr. Peter Castle to be its Chief Operating Officer. The agreement provides for a three-year term ending on June 1, 2018 and shall extend for additional one-year periods annually commencing June 1, 2018, unless earlier terminated by the Company, but in no event can extend beyond June 1, 2021. The Employment Agreement currently provides for annual compensation of $350,000. Mr. Castle shall be eligible to receive a bonus for each fiscal year thereafter during the employment term. The amount and the occasion for payment of such bonus, if any, shall be at the discretion of the Board of Directors. Mr. Castle shall also be eligible for an award under any long-term incentive compensation plan and grants of options and awards of shares of the Company’s stock, as determined at the Board of Directors’ discretion. The Employment Agreement further provides for reimbursement of certain expenses, and certain severance benefits in the event of termination prior to the expiration date of the Employment Agreement. Licensing and Support Service Agreement In December 2020, NetWolves extended the licensing and support service agreement of its billing system for an additional three years, to expire December 2023. The agreement provides for monthly recurring charges based on a percentage of billed revenues using these services, which charges aggregated approximately $301,000 and $331,000 for the years ended December 31, 2020 and 2019, respectively. Letters of Credit At December 31, 2020 we are contingently liable under a standby letter of credit approximating $220,500. The letter of credit is being maintained as security for payments to a vendor. Litigation The Company is currently, and has been in the past, a party to various routine legal proceedings, primarily employee related matters, incident to the ordinary course of business. The Company believes that the outcome of all such pending legal proceedings in the aggregate is unlikely to have a material adverse effect on the business or consolidated financial condition of the Company. Foreign operations During the years ended December 31, 2020 and 2019, the Company had and continues to have operations in China. Operating transactions in China are denominated in the Chinese currency called RMB or CNY, which is not freely convertible into foreign currencies. Operating internationally involves additional risks relating to such things as currency exchange rates, different legal and regulatory environments, political, economic risks relating to the stability or predictability of foreign governments, differences in the manner in which different cultures do business, difficulties in staffing and managing foreign operations, differences in financial reporting, operating difficulties, and other factors. Commercial law is still developing in China and there are limited legal precedents to follow in commercial transactions. There are many tax jurisdictions each of which may have changing tax laws. Applicable taxes include value added taxes (“VAT”), Enterprise Income Tax, and social (payroll) taxes. Regulations are often unclear. Tax declarations (reports) are subject to review and taxing authorities may impose fines, penalties and interest. These facts create risks in China. |
401(k) PLANS
401(k) PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
401(k) PLANS | The Company maintains a defined contribution plan to provide retirement benefits for its employees - the Vaso Corporation 401(k) Plan adopted in April 1997. As allowed under Section 401(k) of the Internal Revenue Code, the plan provides tax-deferred salary deductions for eligible employees. Employees are eligible to participate in the next quarter enrollment period after employment and participants may make voluntary contributions to the plan up to 80% of their compensation, subject to applicable IRS annual limitations. In the years ended December 31, 2020 and 2019 the Company made discretionary contributions, to match a percentage of employee contributions, of approximately $114,000 and $118,000, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Extension of debt maturity dates In March 2021, the Company made principal payments aggregating $1.5 million on its lines of credit and $1.2 million on its MedTech Notes, and extended the maturity dates of its remaining line of credit and its MedTech Notes to June 30, 2022. The extensions require subsequent principal payments of $50,000 per quarter beginning June 30, 2021 through March 31, 2022 under both the line of credit and the MedTech Notes. No change was made to the interest rates in effect at the time of extensions. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of Vaso Corporation, its wholly-owned subsidiaries, and the accounts of the companies over which we exercise control. Significant intercompany balances and transactions have been eliminated. |
Use of Estimates | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions relate to estimates of collectibility of accounts receivable, the realizability of deferred tax assets, stock-based compensation, values and lives assigned to acquired intangible assets, fair value of reporting units in connection with goodwill impairment test, the adequacy of inventory reserves, variable consideration, and allocation of contract transaction price to performance obligations. Actual results could differ from those estimates. |
Revenue Recognition | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. ASU 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. The new standard introduces a five-step process to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred to obtain or fulfill contracts with customers, and establishes disclosure requirements which are more extensive than those required under prior U.S. GAAP. Generally, we recognize revenue under Topic 606 for each of our performance obligations either over time (generally, the transfer of a service) or at a point in time (generally, the transfer of a good) as follows: ● VasoTechnology Revenue relating to recurring managed network and voice services provided by NetWolves are recognized as provided on a monthly basis (“over time”). Non-recurring charges related to the provision of such services are recognized in the period provided (“point in time”). In the IT VAR business, software system installations are recognized upon verification of installation and expiration of an acceptance period (“point in time”). Monthly post-implementation customer support provided under such installations as well as software solutions offered under a monthly Software as a Service (“SaaS”) fee basis are recognized monthly over the contract term (“over time”). ● VasoHealthcare Commission revenue is recognized when the underlying equipment has been delivered by GEHC and accepted at the customer site in accordance with the terms of the specific sales agreement (“point in time”). ● VasoMedical In the United States, we recognized revenue from the sale of our medical equipment in the period in which we deliver the product to the customer (“point in time”). Revenue from the sale of our medical equipment to international markets is recognized upon shipment of the product to a common carrier, as are supplies, accessories and spare parts delivered in both domestic and international markets (“point in time”). The Company also recognizes revenue from the maintenance of its medical products either on a time and material as-billed basis (“point in time”) or through the sale of a service contract, where revenue is recognized ratably over the contract term (“over time”). Disaggregation of Revenue The following tables present revenues disaggregated by our business operations and timing of revenue recognition: (in thousands) Year Ended December 31, 2020 Year Ended December 31, 2019 Professional sales Professional sales IT segment service segment Equipment segment Total IT segment service segment Equipment segment Total Network services $ 39,908 $ - $ - $ 39,908 $ 39,962 $ - $ - $ 39,962 Software sales and support 3,986 - - 3,986 5,543 - - 5,543 Commissions - 22,865 - 22,865 - 26,208 - 26,208 Medical equipment sales - - 2,789 2,789 - - 2,778 2,778 Medical equipment service - - 302 302 - - 1,024 1,024 $ 43,894 $ 22,865 $ 3,091 $ 69,850 $ 45,505 $ 26,208 $ 3,802 $ 75,515 Year Ended December 31, 2020 Year Ended December 31, 2019 Professional sales Professional sales IT segment service segment Equipment segment Total IT segment service segment Equipment segment Total Revenue recognized over time $ 40,660 $ - $ 234 $ 40,894 $ 40,628 $ - $ 595 $ 41,223 Revenue recognized at a point in time 3,234 22,865 2,857 28,956 4,877 26,208 3,207 34,292 $ 43,894 $ 22,865 $ 3,091 $ 69,850 $ 45,505 $ 26,208 $ 3,802 $ 75,515 Transaction Price Allocated to Remaining Performance Obligations As of December 31, 2020, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $71 million, of which we expect to recognize revenue as follows: (in thousands) Fiscal years of revenue recognition (unaudited) 2021 2022 2023 Thereafter Unfulfilled performance obligations $ 38,686 $ 17,825 $ 5,657 $ 8,631 Contract Liabilities Contract liabilities arise in our IT VAR, VasoHealthcare, and VasoMedical businesses. In our IT VAR business, payment arrangements with clients typically include an initial payment due upon contract signing and milestone-based payments based upon product delivery and go-live, as well as post go-live monthly payments for subscription and support fees. Customer payments received, or receivables recorded, in advance of go-live and customer acceptance, where applicable, are deferred as contract liabilities. Such amounts aggregated approximately $553,000 and $568,000 at December 31, 2020 and 2019, respectively, and are included in accrued expenses and other liabilities in our consolidated balance sheets. In our VasoHealthcare business, we bill a portion of commissions on the orders we booked in advance of delivery of the underlying equipment. Such amounts aggregated approximately $17,689,000 and $18,565,000 at December 31, 2020 and 2019, respectively, and are classified in our consolidated balance sheets into current or long-term deferred revenue. In addition, we record a contract liability for amounts expected to be credited back to GEHC due to customer order reductions. Such amounts aggregated approximately $1,118,000 and $1,270,000 at December 31, 2020 and 2019, respectively, and are included in accrued expenses and other liabilities in our consolidated balance sheets. In our VasoMedical business, we bill amounts for post-delivery services and varying duration service contracts in advance of performance. Such amounts aggregated approximately $15,000 and $778,000 at December 31, 2020 and 2019, respectively, and are classified in our consolidated balance sheets as either current or long-term deferred revenue. During the year ended December 31, 2020, we recognized approximately $4.9 million of revenues that were included in our contract liability balance at the beginning of such period. Costs to Obtain or Fulfill a Contract Topic 606 requires that incremental costs of obtaining a contract are recognized as an asset and amortized to expense in a pattern that matches the timing of the revenue recognition of the related contract. We have determined the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 are certain sales commissions paid to associates. In addition, the Company elected the practical expedient to recognize the incremental costs of obtaining a contract when incurred for contracts where the amortization period for the asset the Company would otherwise have recognized is one year or less. Under Topic 606, sales commissions applicable to service contracts exceeding one year have been capitalized and amortized ratably over the term of the contract. In our IT VAR business, commissions allocable to multi-year subscription contracts or multi-year post-contract support performance obligations are amortized to expense ratably over the terms of the multi-year periods. IT VAR commissions allocable to other elements are charged to expense at go-live or customer acceptance. In our professional sales services segment, commissions paid to our sales force are deferred until the underlying equipment is accepted by the customer. At December 31, 2020, our consolidated balance sheet includes approximately $4,037,000 in capitalized sales commissions to be expensed in future periods, of which $2,354,000 is recorded in deferred commission expense and $1,683,000, representing the long-term portion, is included in other assets. Significant Judgments when Applying Topic 606 Contract transaction price is allocated to performance obligations using estimated stand-alone selling price. Judgment is required in estimating stand-alone selling price for each distinct performance obligation. We determine stand-alone selling price maximizing observable inputs such as stand-alone sales when they exist or substantive renewal price charged to clients. In instances where stand-alone selling price is not observable, we utilize an estimate of stand-alone selling price based on historical pricing and industry practices. Certain revenue we record in our professional sales service segment contains an estimate for variable consideration. Due to the tiered structure of our commission rate, which increases as annual targets are achieved, under Topic 606 we record revenue and deferred revenue at the rate we expect to be achieved by year end. We base our estimate of variable consideration on historical results of previous years’ achievement under the GEHC agreement. Such estimate will be reviewed each quarter and adjusted as necessary. In addition, the Company records commissions for arranging financing at an estimated rate which is subject to later revision based on certain factors. The Company recognized increases in revenue associated with revisions to variable consideration for previously completed performance obligations of $5,000 for the year ended December 31, 2020. |
Shipping and Handling Costs | All shipping and handling expenses are charged to cost of sales. Amounts billed to customers related to shipping and handling costs are included as a component of sales. |
Research and Development | Research and development costs attributable to development are expensed as incurred. |
Share-Based Compensation | The Company complies with ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”), which requires all companies to recognize the cost of services received in exchange for equity instruments to be recognized in the financial statements based on their grant date fair values. The Company applies an estimated forfeiture rate to the grant date fair value to determine the annual compensation cost of share-based payment arrangements with employees. The forfeiture rate is estimated based primarily on job title and prior forfeiture experience. The Company did not grant any awards to non-employees during the years ended December 31, 2020 and 2019. During the year ended December 31, 2020, the Company granted 1,000,000 restricted shares of common stock valued at $20,000 to an employee. 20% of the shares vested at approximate grant date and the remaining 80% vest over four years from the grant date. The total fair value of shares vested during the year ended December 31, 2020 was $23,000 for officers and $63,000 for employees. The weighted average grant date fair value of shares granted during the year ended December 31, 2020 was $0.02 per share. During the year ended December 31, 2019, the Company granted 5,500,000 restricted shares of common stock valued at $115,000 to officers. The shares vest over four years from the grant date. The total fair value of shares vested during the year ended December 31, 2019 was $65,000 for officers and $113,000 for employees. The weighted average grant date fair value of shares granted during the year ended December 31, 2019 was $0.02 per share. The Company did not grant any stock options during the years ended December 31, 2020 or 2019, nor were any options exercised during such periods. No options were outstanding at December 31, 2020 or 2019. Share-based compensation expense recognized for the years ended December 31, 2020 and 2019 was $88,000 and $141,000, respectively, and is recorded in selling, general, and administrative expense in the consolidated statements of operations and comprehensive loss. Unrecognized expense related to existing share-based compensation and arrangements is approximately $76,000 at December 31, 2020 and will be recognized over a weighted-average period of approximately 16 months. |
Cash and Cash Equivalents | Cash and cash equivalents represent cash and short-term, highly liquid investments either in certificates of deposit, treasury bills, money market funds, or investment grade commercial paper issued by major corporations and financial institutions that generally have maturities of three months or less from the date of acquisition. |
Short Term Investments | The Company's short-term investments consist of bank deposits with yields based on underlying debt and equity securities. |
Accounts Receivable, Net | The Company’s accounts receivable are due from customers to whom we sell our products and services, distributors engaged in the distribution of our products and from GEHC. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are generally due 30 to 90 days from shipment and services provided and are stated at amounts due from customers net of allowances for doubtful accounts, returns, term discounts and other allowances. Accounts that are outstanding longer than the contractual payment terms are considered past due. Estimates are used in determining the allowance for doubtful accounts based on the Company’s historical collections experience, current trends, credit policy and a percentage of its accounts receivable by aging category. In determining these percentages, the Company reviews historical write-offs of their receivables. The Company also looks at the credit quality of their customer base as well as changes in their credit policies. The Company continuously monitors collections and payments from our customers, and writes off receivables when all efforts at collection have been exhausted. While credit losses have historically been within expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same credit loss rates that they have in the past. The changes in the Company’s allowance for doubtful accounts and commission adjustments are as follows: (in thousands) Year ended December 31, 2020 2019 Beginning Balance $ 4,285 $ 3,994 Provision for losses on accounts receivable 663 507 Direct write-offs, net of recoveries (542 ) (528 ) Commission adjustments (186 ) 312 Deconsolidate EECP Global (see Note N) (12 ) - Ending Balance $ 4,208 $ 4,285 |
Concentrations of Credit Risk | We market our equipment and IT software solutions principally to hospitals, diagnostic imaging centers and physician private practices. We perform credit evaluations of our customers’ financial condition and, as a result, believe that our receivable credit risk exposure is limited. For the years ended December 31, 2020 and 2019, no customer in our equipment or IT segment accounted for 10% or more of revenues or accounts receivable. In our professional sales service segment, 100% of our revenues and accounts receivable are with GEHC; however, we believe this risk is acceptable based on GEHC’s financial position and our long history of doing business with GEHC. The Company maintains cash balances in certain U.S. financial institutions, which, at times, may exceed the Federal Depository Insurance Corporation (“FDIC”) coverage of $250,000. The Company has not experienced any losses on these accounts and believes it is not subject to any significant credit risk on these accounts. In addition, the FDIC does not insure the Company’s foreign bank balances, which aggregated approximately $582,000 and $352,000 at December 31, 2020 and 2019, respectively. |
Inventories | The Company values inventories in the equipment segment at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company regularly reviews inventory quantities on hand, particularly raw materials and components, and records a provision for excess and slow moving inventory based primarily on existing and anticipated design and engineering changes to its products as well as forecasts of future product demand. In our IT Segment, we purchase computer hardware and software for specific customer requirements and value such inventories using the specific identification method. |
Property and Equipment | Property and equipment, including assets under finance leases, are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheets. Depreciation is expensed over the estimated useful lives of the assets, which range from two to eight years, on a straight-line basis. Accelerated methods of depreciation are used for tax purposes. We amortize leasehold improvements over the useful life of the related leasehold improvement or the life of the related lease, whichever is less. |
Goodwill and Intangible Assets | Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the ASC Topic 350, “Intangibles: Goodwill and Other”. Goodwill acquired in a purchase business combination is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not result in an impairment. The Company tests goodwill for impairment at the reporting unit level on an annual basis as of December 31 and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In any year, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If the Company cannot determine qualitatively that the fair value is in excess of the carrying value, or the Company decides to bypass the qualitative assessment, the Company proceeds to the quantitative goodwill impairment test, which compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. No impairment loss was recorded as of December 31, 2020 and 2019. Intangible assets consist of the value of customer contracts and relationships, patent and technology costs, and software. The cost of significant customer-related intangibles is amortized in proportion to estimated total related revenue; cost of other intangible assets is generally amortized on a straight-line basis over the asset's estimated economic life, which range from five to ten years. The Company capitalizes internal use software development costs incurred during the application development stage. Costs related to preliminary project activities, training, data conversion, and post implementation activities are expensed as incurred. The Company capitalized $541,000 and $494,000 in software development costs for the years ended December 31, 2020 and 2019, respectively. |
Impairment of Long-Lived Assets | The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. If required, the Company compares the estimated fair value determined by either the undiscounted future net cash flows or appraised value to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value, which is based either on discounted cash flows or appraised values in the period the impairment becomes known. No assets were determined to be impaired as of December 31, 2020 and 2019. |
Deferred Revenue | Amounts billable under the agreement with GEHC in advance of delivery of the underlying equipment are recorded initially as deferred revenue, and commission revenue is subsequently recognized as customer acceptance of such equipment is reported to us by GEHC. Similarly, commissions payable to our sales force related to such billings are recorded as deferred commission expense when the associated deferred revenue is recorded. Commission expense is recognized when the corresponding commission revenue is recognized. We record revenue on extended service contracts ratably over the term of the related service contracts. Under the provisions of ASC 606, we defer revenue related to EECP® system sales for the fair value of installation and in-service training to the period when the services are rendered and for service obligations ratably over the service period, which is generally one year. (See Note J) |
Income Taxes | Deferred income taxes are recognized for temporary differences between financial statement and income tax bases of assets and liabilities and loss carry-forwards for which income tax benefits are expected to be realized in future years. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized. In estimating future tax consequences, we generally consider all expected future events other than an enactment of changes in the tax laws or rates. Deferred tax assets are continually evaluated for the expected realization. To the extent our judgment regarding the realization of the deferred tax assets changes, an adjustment to the allowance is recorded, with an offsetting increase or decrease, as appropriate, in income tax expense. Such adjustments are recorded in the period in which our estimate as to the realization of the assets changed that it is “more likely than not” that all of the deferred tax assets will be realized. The “realization” standard is subjective and is based upon our estimate of a greater than 50% probability that the deferred tax asset can be realized. The Company also complies with the provisions of ASC Topic 740, “Income Taxes”, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by the relevant taxing authority based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. Derecognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces ending retained earnings. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2020 and 2019. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at December 31, 2020 and 2019. Generally, the Company is no longer subject to income tax examinations by major domestic taxing authorities for years before 2017. According to the China tax regulatory framework, there is no statute of limitations on examination of tax filings by tax authorities. However, the general practice is going back five years. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. |
Foreign Currency Translation Gain (Loss) and Comprehensive Income (Loss) | In countries in which the Company operates, and the functional currency is other than the U.S. dollar, assets and liabilities are translated using published exchange rates in effect at the consolidated balance sheet date. Equity accounts are translated at historical rates except for the changes in accumulated deficit during the year as the result of the income statement translation process. Revenues and expenses and cash flows are translated using a weighted average exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive loss on the accompanying consolidated balance sheets. For the years ended December 31, 2020 and 2019, other comprehensive income includes gains of $142,000 and $2,000, respectively, which were entirely from foreign currency translation. |
Net Income (Loss) Per Common Share | Basic income per common share is based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per common share is based on the weighted average number of common and potential dilutive common shares outstanding. Diluted earnings per share were computed based on the weighted average number of shares outstanding plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows: (in thousands) Year ended December 31, 2020 2019 Basic weighted average shares outstanding 169,932 167,843 Dilutive effect of unvested restricted shares 914 - Diluted weighted average shares outstanding 170,846 167,843 The following table represents common stock equivalents that were excluded from the computation of diluted earnings per share for the years ended December 31, 2020 and 2019, because the effect of their inclusion would be anti-dilutive. (in thousands) Year ended December 31, 2020 2019 Restricted common stock grants 76 1,267 |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, "Leases." See Note N for further details. Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: Credit Losses on Financial instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how we determine our allowance for estimated uncollectible receivables. In November 2019, the FASB issued ASU 2019-10, which changed the effective date of ASU 2016-13 for smaller reporting companies as defined by the SEC from first quarter of 2020 to the first quarter of 2023, with early adoption permitted. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures. |
REVISIONS (Tables)
REVISIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Revisions | Consolidated Statement of Operations and Comprehensive Income (Loss) Year ended December 31, 2019 (in thousands, except per share data) As Reported Adjustment As Revised Revenues Managed IT systems and services $ 45,736 $ (231 ) $ 45,505 Gross Profit 42,663 (231 ) 42,432 Operating expenses Selling, general and administrative 40,838 190 41,028 Operating income $ 1,012 $ (421 ) $ 591 Net income (loss) $ 39 $ (421 ) $ (382 ) Comprehensive income (loss) $ 41 $ (421 ) $ (380 ) Earnings (loss) per common share - basic $ 0.00 $ (0.00 ) $ (0.00 ) - diluted $ 0.00 $ (0.00 ) $ (0.00 ) Consolidated Balance Sheet As of December 31, 2019 (in thousands) As Reported Adjustment As Revised Accounts payable $ 6,179 $ 1,475 $ 7,654 Accumulated deficit $ (55,885 ) $ (1,475 ) $ (57,360 ) Consolidated Statement of Cash Flows Year ended December 31, 2019 (in thousands) As Reported Adjustment As Revised Net income (loss) $ 39 $ (421 ) $ (382 ) Accounts payable $ (105 ) $ 421 $ 316 Consolidated Statement of Changes in Stockholders’ Equity Accumulated Deficit Total Shareholders' Equity (in thousands) As Reported Adjustment As Revised As Reported Adjustment As Revised Balance at January 1, 2019 $ (55,924 ) $ (1,054 ) $ (56,978 ) $ 5,611 $ (1,054 ) $ 4,557 Net income (loss) 39 (421 ) (382 ) 39 (421 ) (382 ) Balance at December 31, 2019 $ (55,885 ) $ (1,475 ) $ (57,360 ) $ 5,789 $ (1,475 ) $ 4,314 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | Year Ended December 31, 2020 Year Ended December 31, 2019 Professional sales Professional sales IT segment service segment Equipment segment Total IT segment service segment Equipment segment Total Network services $ 39,908 $ - $ - $ 39,908 $ 39,962 $ - $ - $ 39,962 Software sales and support 3,986 - - 3,986 5,543 - - 5,543 Commissions - 22,865 - 22,865 - 26,208 - 26,208 Medical equipment sales - - 2,789 2,789 - - 2,778 2,778 Medical equipment service - - 302 302 - - 1,024 1,024 $ 43,894 $ 22,865 $ 3,091 $ 69,850 $ 45,505 $ 26,208 $ 3,802 $ 75,515 Year Ended December 31, 2020 Year Ended December 31, 2019 Professional sales Professional sales IT segment service segment Equipment segment Total IT segment service segment Equipment segment Total Revenue recognized over time $ 40,660 $ - $ 234 $ 40,894 $ 40,628 $ - $ 595 $ 41,223 Revenue recognized at a point in time 3,234 22,865 2,857 28,956 4,877 26,208 3,207 34,292 $ 43,894 $ 22,865 $ 3,091 $ 69,850 $ 45,505 $ 26,208 $ 3,802 $ 75,515 |
Transaction price allocated to remaining performance obligations | Fiscal years of revenue recognition (unaudited) 2021 2022 2023 Thereafter Unfulfilled performance obligations $ 38,686 $ 17,825 $ 5,657 $ 8,631 |
Changes in allowance for doubtful accounts and commission adjustments | Year ended December 31, 2020 2019 Beginning Balance $ 4,285 $ 3,994 Provision for losses on accounts receivable 663 507 Direct write-offs, net of recoveries (542 ) (528 ) Commission adjustments (186 ) 312 Deconsolidate EECP Global (see Note N) (12 ) - Ending Balance $ 4,208 $ 4,285 |
Weighted average shares outstanding | Year ended December 31, 2020 2019 Basic weighted average shares outstanding 169,932 167,843 Dilutive effect of unvested restricted shares 914 - Diluted weighted average shares outstanding 170,846 167,843 |
Anti-dilutive securities | Year ended December 31, 2020 2019 Restricted common stock grants 76 1,267 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary financial information | Year ended December 31, 2020 2019 Revenues from external customers IT $ 43,894 $ 45,505 Professional sales service 22,865 26,208 Equipment 3,091 3,802 Total revenues $ 69,850 $ 75,515 Gross Profit IT $ 17,682 $ 18,790 Professional sales service 18,608 21,287 Equipment 2,281 2,355 Total gross profit $ 38,571 $ 42,432 Operating income (loss) IT $ (1,247 ) $ (1,170 ) Professional sales service 2,977 3,626 Equipment (155 ) (855 ) Corporate (803 ) (1,010 ) Total operating income (loss) $ 772 $ 591 Depreciation and amortization IT $ 2,010 $ 2,213 Professional sales service 161 170 Equipment 291 298 Corporate - - Total depreciation and amortization $ 2,462 $ 2,681 Capital expenditures IT $ 960 $ 1,149 Professional sales service 26 - Equipment 12 54 Corporate 2 2 Total cash capital expenditures $ 1,000 $ 1,205 December 31, 2020 December 31, 2019 Identifiable Assets IT $ 28,110 $ 30,079 Professional sales service 9,171 16,257 Equipment 6,668 6,370 Corporate 6,427 1,658 Total assets $ 50,376 $ 54, 364 |
Geographic revenues | Year ended December 31, 2020 2019 Domestic (United States) $ 67,184 $ 73,019 Non-domestic (foreign) 2,666 2,496 $ 69,850 $ 75,515 |
ACCOUNTS AND OTHER RECEIVABLES
ACCOUNTS AND OTHER RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts and other receivables | December 31, 2020 December 31, 2019 Trade receivables $ 13,960 $ 20,110 Due from employees 24 27 Allowance for doubtful accounts and commission adjustments (4,208 ) (4,285 ) Accounts and other receivables, net $ 9,776 $ 15,852 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | December 31, 2020 December 31, 2019 Raw materials $ 669 $ 650 Work in process 4 181 Finished goods 711 1,110 $ 1,384 $ 1,941 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | December 31, 2020 December 31, 2019 Office, laboratory and other equipment $ 2,328 $ 2,476 Equipment furnished for customer or clinical uses 9,176 8,796 Right of use assets - finance leases 1,115 1,115 Furniture and fixtures 99 127 12,718 12,514 Less: accumulated depreciation and amortization (8,833 ) (7,560 ) Property and equipment, net $ 3,885 $ 4,954 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Year ended Year ended December 31, 2020 December 31, 2019 Beginning of period $ 17,271 $ 17,309 Foreign currency translation adjustment 82 (38 ) Sale of equity in EECP Global (1,665 ) - End of period $ 15,688 $ 17,271 |
Other intangible assets | December 31, 2020 December 31, 2019 Customer-related Costs $ 5,831 $ 5,831 Accumulated amortization (3,947 ) (3,553 ) 1,884 2,278 Patents and Technology Costs 1,894 2,363 Accumulated amortization (1,521 ) (1,752 ) 373 611 Software Costs 3,394 2,840 Accumulated amortization (1,702 ) (1,428 ) 1,692 1,412 $ 3,949 $ 4,301 |
Amortization expense | Years ending December 31, 2021 1,064 2022 768 2023 543 2024 474 2025 408 $ 3,257 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
Other assets | December 31, 2020 December 31, 2019 Deferred commission expense - noncurrent $ 1,683 $ 1,770 Trade receivables - noncurrent 448 631 Other, net of allowance for loss on loan receivable of $412 at December 31, 2020 and 2019 59 185 $ 2,190 $ 2,586 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred revenues | Year ended December 31, 2020 2019 Deferred revenue at beginning of period $ 19,343 $ 18,086 Deconsolidate EECP Global (see Note O) (769 ) - Net additions: Deferred extended service contracts 144 363 Deferred in-service and training 3 13 Deferred service arrangements 5 25 Deferred commission revenues 7,752 11,366 Recognized as revenue: Deferred extended service contracts (140 ) (566 ) Deferred in-service and training - (15 ) Deferred service arrangements (5 ) (30 ) Deferred commission revenues (8,629 ) (9,899 ) Deferred revenue at end of period 17,704 19,343 Less: current portion 11,516 12,345 Long-term deferred revenue at end of period $ 6,188 $ 6,998 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other liabilities | December 31, 2020 December 31, 2019 Accrued compensation $ 1,044 $ 1,509 Accrued expenses - other 1,854 1,818 Other liabilities 1,969 2,017 $ 4,867 $ 5,344 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt and Lease Obligation [Abstract] | |
Notes payable | December 31, 2020 December 31, 2019 Line of credit $ 4,346 $ 5,721 Notes payable 3,803 300 Notes payable - MedTech 3,600 4,800 Notes payable - related parties - 1,253 Total debt 11,749 12,074 Less: current portion (including related parties) (5,970 ) (3,933 ) $ 5,779 $ 8,141 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease liabilities | December 31, 2020 December 31, 2019 Lease liabilities - current Finance leases $ 190 $ 170 Operating leases 540 549 $ 730 $ 719 Lease liabilities - net of current portion Finance leases $ 246 $ 437 Operating leases 469 321 $ 715 $ 758 |
Discounted lease liabilities | Years ending December 31, Finance leases Operating leases Total 2021 227 613 840 2022 200 374 574 2023 62 98 160 Undiscounted lease payments 489 1,085 1,574 Amount representing interest (53 ) (76 ) (129 ) Discounted lease liabilities 436 1,009 1,445 |
Additional disclosures | Year ended December 31, 2020 Lease costs: Finance lease costs: Amortization of right-of-use assets $ 198 Interest on lease liabilities 56 254 Operating lease costs: 712 Short-term lease costs: 82 Total lease cost $ 1,048 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 56 Operating cash flows from operating leases 712 Financing cash flows from finance leases 171 $ 939 December 31, 2020 Weighted-average remaining lease term - finance leases (months) 29 Weighted-average remaining lease term - operating leases (months) 23 Weighted-average discount rate - finance leases 12.1 % Weighted-average discount rate - operating leases 8.6 % |
OPTION PLANS (Tables)
OPTION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Non-vested restricted shares activity | Shares Available for Future Issuance Unvested shares Weighted Average Grant Date Fair Value Balance at December 31, 2018 1,901,817 2,387,500 $ 0.12 Authorized 15,000,000 - $ - Granted (5,500,000 ) 5,500,000 $ 0.02 Vested - (2,077,089 ) $ 0.08 Forfeited 290,203 (290,203 ) $ 0.14 Balance at December 31, 2019 11,692,020 5,520,208 $ 0.03 Authorized - - $ - Granted (1,000,000 ) 1,000,000 $ 0.02 Vested - (1,799,923 ) $ 0.05 Forfeited 328,619 (328,619 ) $ 0.10 Expired (15,059 ) - $ - Balance at December 31, 2020 11,005,580 4,391,666 $ 0.02 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Geographical breakdown of income (loss) before provision for income taxes | Year ended December 31, 2020 2019 Domestic $ (74 ) $ (152 ) Foreign 431 (119 ) Income (loss) before provision for income taxes $ 357 $ (271 ) |
Provision for income taxes | Year ended December 31, 2020 2019 Current provision (benefit) Federal $ - $ - State 78 43 Foreign (7 ) 16 Total current provision (benefit) 71 59 Deferred provision (benefit) Federal 41 41 State 11 11 Foreign (124 ) - Total deferred provision (benefit) (72 ) 52 Total income tax (benefit) provision $ (1 ) $ 111 Effective income tax rate -0.28 % - 41.02 % |
Reconciliation of effective income tax rate | Year ended December 31, 2020 2019 % % Federal statutory rate 21.00 21.00 State income taxes 19.39 (16.91 ) Change in valuation allowance relating to operations 2.13 12.81 Foreign tax rate differential (61.99 ) (15.27 ) R&D credit (1.39 ) 5.64 Nondeductible expenses 8.06 (29.32 ) Other 12.52 (18.97 ) (0.28 ) (41.02 ) |
Deferred tax assets and liabilities | December 31, 2020 December 31, 2019 Deferred Tax Assets: Net operating loss carryforwards $ 12,026 $ 12,517 Amortization 344 338 Stock-based compensation 6 6 Allowance for doubtful accounts 110 84 Reserve for slow moving inventory 47 169 Tax credits 449 444 Expense accruals 543 457 Excess interest carryforwards - 171 Deferred revenue 1,392 1,159 Total gross deferred taxes 14,917 15,345 Valuation allowance (12,145 ) (12,327 ) Net deferred tax assets 2,772 3,018 Deferred Tax Liabilities: Deferred commissions (370 ) (302 ) Goodwill (1,445 ) (1,186 ) Differences in timing of revenue recognition - (124 ) Depreciation (686 ) (1,207 ) Total deferred tax liabilities (2,501 ) (2,819 ) Total deferred tax assets (liabilities) 271 199 Recorded as: Non-current deferred tax assets 271 323 Non-current deferred tax liabilities - (124 ) Total deferred tax assets (liabilities) $ 271 $ 199 |
Valuation allowance activity | 2020 2019 Valuation allowance, January 1, $ 12,327 $ 12,362 Change in valuation allowance (182 ) (35 ) Valuation allowance, December 31, $ 12,145 $ 12,327 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended |
Dec. 31, 2020Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 3 |
REVISIONS (Details)
REVISIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | ||
Managed IT systems and services | $ 69,850 | $ 75,515 |
Gross profit | 38,571 | 42,432 |
Operating expenses | ||
Selling, general and administrative | 37,054 | 41,028 |
Operating income | 772 | 591 |
Net income (loss) | 358 | (382) |
Comprehensive income (loss) | $ 500 | $ (380) |
Earnings (loss) per common share | ||
- basic | $ .00 | $ 0 |
- diluted | $ .00 | $ 0 |
As Reported | ||
Revenues | ||
Managed IT systems and services | $ 45,736 | |
Gross profit | 42,663 | |
Operating expenses | ||
Selling, general and administrative | 40,838 | |
Operating income | 1,012 | |
Net income (loss) | 39 | |
Comprehensive income (loss) | $ 41 | |
Earnings (loss) per common share | ||
- basic | $ 0 | |
- diluted | $ 0 | |
Adjustment | ||
Revenues | ||
Managed IT systems and services | $ (231) | |
Gross profit | (231) | |
Operating expenses | ||
Selling, general and administrative | 190 | |
Operating income | (421) | |
Net income (loss) | (421) | |
Comprehensive income (loss) | $ (421) | |
Earnings (loss) per common share | ||
- basic | $ 0 | |
- diluted | $ 0 | |
Managed IT Systems and Services | ||
Revenues | ||
Managed IT systems and services | $ 43,894 | $ 45,505 |
Managed IT Systems and Services | As Reported | ||
Revenues | ||
Managed IT systems and services | 45,736 | |
Managed IT Systems and Services | Adjustment | ||
Revenues | ||
Managed IT systems and services | $ (231) |
REVISIONS (Details 1)
REVISIONS (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts payable | $ 6,285 | $ 7,654 | |
Accumulated deficit | $ (57,002) | (57,360) | $ (56,978) |
As Reported | |||
Accounts payable | 6,179 | ||
Accumulated deficit | (55,885) | (55,924) | |
Adjustment | |||
Accounts payable | 1,475 | ||
Accumulated deficit | $ (1,475) | $ (1,054) |
REVISIONS (Details 2)
REVISIONS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net income (loss) | $ 358 | $ (382) |
Accounts payable | $ (1,369) | 316 |
As Reported | ||
Net income (loss) | 39 | |
Accounts payable | (105) | |
Adjustment | ||
Net income (loss) | (421) | |
Accounts payable | $ 421 |
REVISIONS (Details 3)
REVISIONS (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated deficit | $ (57,002) | $ (57,360) | $ (56,978) |
Total shareholders' equity | 5,085 | 4,314 | 4,557 |
Net income (loss) | $ 358 | (382) | |
As Reported | |||
Accumulated deficit | (55,885) | (55,924) | |
Total shareholders' equity | 5,789 | 5,611 | |
Net income (loss) | 39 | ||
Adjustment | |||
Accumulated deficit | (1,475) | (1,054) | |
Total shareholders' equity | (1,475) | $ (1,054) | |
Net income (loss) | $ (421) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 69,850 | $ 75,515 |
Network Services | ||
Revenue | 39,908 | 39,962 |
Software Sales and Support | ||
Revenue | 3,986 | 5,543 |
Commissions | ||
Revenue | 22,865 | 26,208 |
Medical Equipment Sales | ||
Revenue | 2,789 | 2,778 |
Medical Equipment Service | ||
Revenue | 302 | 1,024 |
Managed IT Systems and Services | ||
Revenue | 43,894 | 45,505 |
Managed IT Systems and Services | Network Services | ||
Revenue | 39,908 | 39,962 |
Managed IT Systems and Services | Software Sales and Support | ||
Revenue | 3,986 | 5,543 |
Managed IT Systems and Services | Commissions | ||
Revenue | 0 | 0 |
Managed IT Systems and Services | Medical Equipment Sales | ||
Revenue | 0 | 0 |
Managed IT Systems and Services | Medical Equipment Service | ||
Revenue | 0 | 0 |
Professional Sales Services | ||
Revenue | 22,865 | 26,208 |
Professional Sales Services | Network Services | ||
Revenue | 0 | 0 |
Professional Sales Services | Software Sales and Support | ||
Revenue | 0 | 0 |
Professional Sales Services | Commissions | ||
Revenue | 22,865 | 26,208 |
Professional Sales Services | Medical Equipment Sales | ||
Revenue | 0 | 0 |
Professional Sales Services | Medical Equipment Service | ||
Revenue | 0 | 0 |
Equipment Sales and Services | ||
Revenue | 3,091 | 3,802 |
Equipment Sales and Services | Network Services | ||
Revenue | 0 | 0 |
Equipment Sales and Services | Software Sales and Support | ||
Revenue | 0 | 0 |
Equipment Sales and Services | Commissions | ||
Revenue | 0 | 0 |
Equipment Sales and Services | Medical Equipment Sales | ||
Revenue | 2,789 | 2,778 |
Equipment Sales and Services | Medical Equipment Service | ||
Revenue | $ 302 | $ 1,024 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 69,850 | $ 75,515 |
Revenue Recognized over Time | ||
Revenue | 40,894 | 41,223 |
Revenue Recognized at a Point in Time | ||
Revenue | 28,956 | 34,292 |
Managed IT Systems and Services | ||
Revenue | 43,894 | 45,505 |
Managed IT Systems and Services | Revenue Recognized over Time | ||
Revenue | 40,660 | 40,628 |
Managed IT Systems and Services | Revenue Recognized at a Point in Time | ||
Revenue | 3,234 | 4,877 |
Professional Sales Services | ||
Revenue | 22,865 | 26,208 |
Professional Sales Services | Revenue Recognized over Time | ||
Revenue | 0 | 0 |
Professional Sales Services | Revenue Recognized at a Point in Time | ||
Revenue | 22,865 | 26,208 |
Equipment Sales and Services | ||
Revenue | 3,091 | 3,802 |
Equipment Sales and Services | Revenue Recognized over Time | ||
Revenue | 234 | 595 |
Equipment Sales and Services | Revenue Recognized at a Point in Time | ||
Revenue | $ 2,857 | $ 3,207 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) $ in Thousands | Dec. 31, 2020USD ($) |
2021 | |
Unfulfilled performance obligations | $ 38,686 |
2022 | |
Unfulfilled performance obligations | 17,825 |
2023 | |
Unfulfilled performance obligations | 5,657 |
Thereafter | |
Unfulfilled performance obligations | $ 8,631 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts and commission adjustments, beginning balance | $ 4,285 | $ 3,994 |
Provision for losses on accounts receivable | 663 | 507 |
Direct write-offs, net of recoveries | (542) | (528) |
Commission adjustments | (186) | 312 |
Deconsolidate EECP Global (see Note N) | (12) | 0 |
Allowance for doubtful accounts and commission adjustments, ending balance | $ 4,208 | $ 4,285 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Basic weighted average shares outstanding (in thousands) | 169,932 | 167,843 |
Dilutive effect of unvested restricted shares (in thousands) | 914 | 0 |
Diluted weighted average shares outstanding (in thousands) | 170,846 | 167,843 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock | ||
Common stock equivalents excluded from computation of diluted earnings per share (in thousands) | 76 | 1,267 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Contract liabilities | $ 553 | $ 568 |
Advance of customer acceptance of equipment | 17,689 | 18,565 |
Customer order reductions | 1,118 | 1,270 |
Post-delivery services and varying duration service contracts | 15 | $ 778 |
Revenues recognized | 4,900 | |
Capitalized sales commissions | $ 4,037 | |
Restricted shares of common stock granted | 1,000,000 | 5,500,000 |
Fair value of shares vested | $ 86 | $ 178 |
Weighted average grant date fair value | $ .02 | $ 0.02 |
Share-based compensation expense | $ 88 | $ 141 |
Unrecognized expense related to existing share-based arrangements | 76 | |
FDIC uninsured amount | 582 | 352 |
Capitalized software development costs | 541 | 494 |
Foreign currency translation gain | $ 142 | $ 2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 69,850 | $ 75,515 |
Gross profit | 38,571 | 42,432 |
Operating income (loss) | 772 | 591 |
Depreciation and amortization | 2,462 | 2,681 |
Capital expenditures | 1,000 | 1,205 |
Total assets | 50,376 | 54,364 |
Information Technology Segment | ||
Revenues | 43,894 | 45,505 |
Gross profit | 17,682 | 18,790 |
Operating income (loss) | (1,247) | (1,170) |
Depreciation and amortization | 2,010 | 2,213 |
Capital expenditures | 960 | 1,149 |
Total assets | 28,110 | 30,079 |
Professional Sales Service Segment | ||
Revenues | 22,865 | 26,208 |
Gross profit | 18,608 | 21,287 |
Operating income (loss) | 2,977 | 3,626 |
Depreciation and amortization | 161 | 170 |
Capital expenditures | 26 | 0 |
Total assets | 9,171 | 16,257 |
Equipment Segment | ||
Revenues | 3,091 | 3,802 |
Gross profit | 2,281 | 2,355 |
Operating income (loss) | (155) | (855) |
Depreciation and amortization | 291 | 298 |
Capital expenditures | 12 | 54 |
Total assets | 6,668 | 6,370 |
Corporate | ||
Operating income (loss) | (803) | (1,010) |
Depreciation and amortization | 0 | 0 |
Capital expenditures | 2 | 2 |
Total assets | $ 6,427 | $ 1,658 |
SEGMENT REPORTING (Details 1)
SEGMENT REPORTING (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 69,850 | $ 75,515 |
Domestic (United States) | ||
Revenues | 67,184 | 73,019 |
Non-Domestic (Foreign) | ||
Revenues | $ 2,666 | $ 2,496 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts and other receivables | $ 9,776 | $ 15,852 |
GEHC | Sales Revenue, Net | ||
Concentration risk percentage | 33.00% | 35.00% |
GEHC | Accounts and Other Receivables | ||
Concentration risk percentage | 52.00% | 69.00% |
Accounts and other receivables | $ 5,100 | $ 10,900 |
ACCOUNTS AND OTHER RECEIVABLE_2
ACCOUNTS AND OTHER RECEIVABLES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Trade receivables | $ 13,960 | $ 20,110 |
Due from employees | 24 | 27 |
Allowance for doubtful accounts and commission adjustments | (4,208) | (4,285) |
Accounts and other receivables, net | $ 9,776 | $ 15,852 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 669 | $ 650 |
Work in process | 4 | 181 |
Finished goods | 711 | 1,110 |
Inventories | $ 1,384 | $ 1,941 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Reserves for slow moving inventories | $ 167 | $ 390 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property and equipment, gross | $ 12,718 | $ 12,514 |
Less: accumulated depreciation | (8,833) | (7,560) |
Property and equipment, net | 3,885 | 4,954 |
Office, Laboratory and Other Equipment | ||
Property and equipment, gross | 2,328 | 2,476 |
Equipment Furnished for Customer or Clinical Uses | ||
Property and equipment, gross | 9,176 | 8,796 |
Right of Use Assets - Finance Leases | ||
Property and equipment, gross | 1,115 | 1,115 |
Furniture and Fixtures | ||
Property and equipment, gross | $ 99 | $ 127 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Accumulated amortization of ROU assets | $ 636 | $ 438 |
Depreciation expense | $ 1,556 | $ 1,738 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning balance | $ 17,271 | $ 17,309 |
Foreign currency translation adjustment | 82 | (38) |
Sale of equity in EECP Global | (1,665) | 0 |
Goodwill, ending balance | $ 15,688 | $ 17,271 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible assets, net | $ 3,949 | $ 4,301 |
Customer-Related | ||
Costs | 5,831 | 5,831 |
Accumulated amortization | (3,947) | (3,553) |
Intangible assets, net | 1,884 | 2,278 |
Patents and Technology | ||
Costs | 1,894 | 2,363 |
Accumulated amortization | (1,521) | (1,752) |
Intangible assets, net | 373 | 611 |
Software | ||
Costs | 3,394 | 2,840 |
Accumulated amortization | (1,702) | (1,428) |
Intangible assets, net | $ 1,692 | $ 1,412 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES (Details 2) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 1,064 |
2022 | 768 |
2023 | 543 |
2024 | 474 |
2025 | 408 |
Total | $ 3,257 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 906 | $ 943 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Deferred commission expense - noncurrent | $ 1,683 | $ 1,770 |
Trade receivables - noncurrent | 448 | 631 |
Other, net of allowance for loss on loan receivable of $412 at December 31, 2020 and 2019 | 59 | 185 |
Total | $ 2,190 | $ 2,586 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred revenue, beginning balance | $ 19,343 | $ 18,086 |
Deconsolidate EECP Global (see Note N) | (769) | 0 |
Additions | 7,904 | 11,767 |
Recognized as revenue | (8,774) | (10,510) |
Deferred revenue, ending balance | 17,704 | 19,343 |
Less: current portion | 11,516 | 12,345 |
Long-term deferred revenue at end of year | 6,188 | 6,998 |
Extended Service Contracts | ||
Additions | 144 | 363 |
Recognized as revenue | (140) | (566) |
In Service and Training | ||
Additions | 3 | 13 |
Recognized as revenue | 0 | (15) |
Service Arrangements | ||
Additions | 5 | 25 |
Recognized as revenue | (5) | (30) |
Commission Revenues | ||
Additions | 7,752 | 11,366 |
Recognized as revenue | $ (8,629) | $ (9,899) |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 1,044 | $ 1,509 |
Accrued expenses - other | 1,854 | 1,818 |
Other liabilities | 1,969 | 2,017 |
Accrued expenses and other liabilities | $ 4,867 | $ 5,344 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and lease obligations | $ 11,749 | $ 12,074 |
Less: current portion (including related parties) | (5,970) | (3,933) |
Total | 5,779 | 8,141 |
Notes Payable | ||
Debt and lease obligations | 3,803 | 300 |
Notes Payable - MedTech | ||
Debt and lease obligations | 3,600 | 4,800 |
Notes Payable - Related Parties | ||
Debt and lease obligations | 0 | 1,253 |
Line of Credit | ||
Debt and lease obligations | $ 4,346 | $ 5,721 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Finance leases | $ 190 | $ 170 |
Operating leases | 540 | 549 |
Lease liabilities - current | 730 | 719 |
Finance leases | 246 | 437 |
Operating leases | 469 | 321 |
Lease liabilities - net of current portion | $ 715 | $ 758 |
LEASES (Details 1)
LEASES (Details 1) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 227 |
2022 | 200 |
2023 | 62 |
Undiscounted lease payments | 489 |
Amount representing interest | (53) |
Discounted lease liabilities | 436 |
2021 | 613 |
2022 | 374 |
2023 | 98 |
Undiscounted lease payments | 1,085 |
Amount representing interest | (76) |
Discounted lease liabilities | 1,009 |
2021 | 840 |
2022 | 574 |
2023 | 160 |
Undiscounted lease payments | 1,574 |
Amount representing interest | (129) |
Discounted lease liabilities | $ 1,445 |
LEASES (Details 2)
LEASES (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Lease costs: | |
Amortization of right-of-use assets | $ 198 |
Interest on lease liabilities | 56 |
Finance lease costs | 254 |
Operating lease costs | 712 |
Short-term lease costs | 82 |
Total lease cost | 1,048 |
Other information: | |
Operating cash flows from finance leases | 56 |
Operating cash flows from operating leases | 712 |
Financing cash flows from finance leases | 171 |
Cash paid for amounts included in the measurement of lease liabilities: | $ 939 |
Weighted-average remaining lease term - finance leases | 29 months |
Weighted-average remaining lease term - operating leases | 23 months |
Weighted-average discount rate - finance leases | 12.10% |
Weighted-average discount rate - operating leases | 8.60% |
SALE OF EQUITY IN THE EECP BU_2
SALE OF EQUITY IN THE EECP BUSINESS (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Proceeds from Issuance or Sale of Equity [Abstract] | |
EECP Global income (loss) | $ 11 |
Payable due to a related party | $ 233 |
OPTION PLANS (Details)
OPTION PLANS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Weighted average grant date fair value | ||
Granted | $ .02 | $ 0.02 |
Restricted Stock | ||
Shares available for future issuance | ||
Balance, beginning of period | 11,692,020 | 1,901,817 |
Authorized | 0 | 15,000,000 |
Granted | (1,000,000) | (5,500,000) |
Vested | 0 | 0 |
Forfeited | 328,619 | 290,203 |
Expired | (15,059) | |
Balance, end of period | 11,005,580 | 11,692,020 |
Unvested shares | ||
Balance, beginning of period | 5,520,208 | 2,387,500 |
Authorized | 0 | 0 |
Granted | 1,000,000 | 5,500,000 |
Vested | (1,799,923) | (2,077,089) |
Forfeited | (328,619) | (290,203) |
Expired | 0 | |
Balance, end of period | 4,391,666 | 5,520,208 |
Weighted average grant date fair value | ||
Balance, beginning of period | $ 0.03 | $ 0.12 |
Authorized | .00 | .00 |
Granted | .02 | 0.02 |
Vested | .05 | 0.08 |
Forfeited | .10 | 0.14 |
Expired | .00 | |
Balance, end of period | $ .02 | $ 0.03 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (74) | $ (152) |
Foreign | 431 | (119) |
Income (loss) before provision for income taxes | $ 357 | $ (271) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current provision (benefit) | ||
Federal | $ 0 | $ 0 |
State | 78 | 43 |
Foreign | (7) | 16 |
Total current (benefit) provision | 71 | 59 |
Deferred provision (benefit) | ||
Federal | 41 | 41 |
State | 11 | 11 |
Foreign | (124) | 0 |
Total deferred provision | (72) | 52 |
Total provision for income taxes | $ (1) | $ 111 |
Effective income tax rate | (0.28%) | (41.02%) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
State income taxes | 19.39% | (16.91%) |
Change in valuation allowance relating to operations | 2.13% | 12.81% |
Foreign tax rate differential | (61.99%) | (15.27%) |
R&D credit | (1.39%) | 5.64% |
Nondeductible expenses | 8.06% | (29.32%) |
Other | 12.52% | (18.97%) |
Total | (0.28%) | (41.02%) |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets | |||
Net operating loss carryforwards | $ 12,026 | $ 12,517 | |
Amortization | 344 | 338 | |
Stock-based compensation | 6 | 6 | |
Allowance for doubtful accounts | 110 | 84 | |
Reserve for slow moving inventory | 47 | 169 | |
Tax credits | 449 | 444 | |
Expense accruals | 543 | 457 | |
Excess interest carryforwards | 0 | 171 | |
Deferred revenue | 1,392 | 1,159 | |
Total gross deferred taxes | 14,917 | 15,345 | |
Valuation allowance | (12,145) | (12,327) | $ (12,362) |
Net deferred tax assets | 2,772 | 3,018 | |
Deferred Tax Liabilities | |||
Deferred commissions | (370) | (302) | |
Goodwill | (1,445) | (1,186) | |
Differences in timing of revenue recognition | 0 | (124) | |
Depreciation | (686) | (1,207) | |
Total deferred tax liabilities | (2,501) | (2,819) | |
Total deferred tax assets (liabilities) | 271 | 199 | |
Recorded as | |||
Non-current deferred tax assets | 271 | 323 | |
Non-current deferred tax liabilities | 0 | (124) | |
Total deferred tax assets (liabilities) | $ 271 | $ 199 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance, beginning of period | $ 12,327 | $ 12,362 |
Change in valuation allowance | (182) | (35) |
Valuation allowance, end of period | $ 12,145 | $ 12,327 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax benefit (expense) | $ 1 | $ (111) | |
Deferred tax assets | 14,917 | 15,345 | |
Increase (decrease) in deferred tax assets | (182) | (35) | |
Valuation allowance | 12,145 | $ 12,327 | $ 12,362 |
Net operating loss carryforwards | $ 45,000 | ||
Minimum | |||
Net operating loss carryforwards expiration date | Dec. 31, 2020 | ||
Maximum | |||
Net operating loss carryforwards expiration date | Dec. 31, 2037 |
401(k) PLANS (Details Narrative
401(k) PLANS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Company's discretionary annual contributions | $ 114 | $ 118 |