Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | ZYNEX INC | |
Entity Central Index Key | 846,475 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | ZYXI | |
Entity Common Stock, Shares Outstanding | 33,116,334 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 4,366 | $ 5,565 |
Accounts receivable, net | 2,668 | 2,185 |
Inventory, net | 710 | 423 |
Prepaid expenses and other assets | 615 | 198 |
Total current assets | 8,359 | 8,371 |
Property and equipment, net | 575 | 188 |
Deposits | 375 | 370 |
Total assets | 9,309 | 8,929 |
Current liabilities: | ||
Current portion of unsecured subordinated promissory notes | 7 | 231 |
Current portion of capital leases | 93 | 123 |
Accounts payable and accrued expenses | 2,112 | 2,243 |
Accrued payroll and related taxes | 661 | 538 |
Deferred insurance reimbursement | 880 | 880 |
Total current liabilities | 3,753 | 4,015 |
Long-term liabilities: | ||
Deferred rent | 329 | 0 |
Warranty liability | 12 | 12 |
Total liabilities | 4,094 | 4,027 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized; 33,101,834 issued and 32,606,743 outstanding as of March 31, 2018 and 32,864,877 issued and 32,778,040 outstanding as of December 31, 2017 | 33 | 33 |
Additional paid-in capital | 7,761 | 7,612 |
Treasury stock 495,091 and 86,837 shares, at March 31, 2018 and December 31, 2017, respectively, at cost | (2,000) | (243) |
Accumulated deficit | (490) | (2,411) |
Total Zynex, Inc. stockholders' equity | 5,304 | 4,991 |
Non-controlling interest | (89) | (89) |
Total stockholders' equity | 5,215 | 4,902 |
Total liabilities and stockholders' equity | $ 9,309 | $ 8,929 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 33,101,834 | 32,864,877 |
Common Stock, Shares, Outstanding | 32,606,743 | 32,778,040 |
Treasury Stock, Shares | 495,091 | 86,837 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
NET REVENUE | |||
Devices | $ 1,588 | $ 1,384 | |
Supplies | 5,288 | 2,052 | |
Total Net revenue | 6,876 | 3,436 | |
COSTS OF REVENUE AND OPERATING EXPENSES | |||
Costs of revenue - device & supply | 1,236 | 923 | |
Selling, general and administrative expense | 3,685 | 2,030 | |
Total costs of revenue and operating expenses | 4,921 | 2,953 | |
Income from operations | 1,955 | 483 | |
Other expense | |||
Interest expense | (115) | (121) | |
Income from operations before income taxes | 1,840 | 362 | |
Income tax expense (benefit) | (81) | 9 | |
Net Income | 1,921 | 353 | |
Plus: net loss - noncontrolling interest | 0 | 0 | |
Net income - attributable to Zynex, Inc. | [1] | $ 1,921 | $ 353 |
Net income per share attributable to Zynex, Inc.: | |||
Basic | $ 0.06 | $ 0.01 | |
Diluted | $ 0.06 | $ 0.01 | |
Weighted average basic shares outstanding | 32,601 | 31,418 | |
Weighted average diluted shares outstanding | 34,414 | 32,036 | |
[1] | There is no difference between net income and comprehensive income |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net cash provided by operating activities | $ 993 | $ 23 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (160) | (57) |
Net cash used in investing activities | (160) | (57) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net (repayments) borrowings on line of credit | 0 | (600) |
Principal payments on subordinated | (331) | |
Proceeds from unsecured subordinated promissory notes | 0 | 1,035 |
Payment of commission and placement agent fees and related expenses | 0 | (155) |
Payments on capital lease obligations | (30) | (31) |
Purchase of treasury stock | (1,757) | 0 |
Proceeds from the issuance of stock | 86 | 0 |
Net cash (used in) provided by financing activities | (2,032) | 249 |
Net (decrease) increase in cash and cash equivalents | (1,199) | 215 |
Cash and cash equivalents at beginning of period | 5,565 | 247 |
Cash and cash equivalents at end of period | 4,366 | 462 |
Supplemental disclosure of cash and non-cash transactions: | ||
Interest paid | 8 | 121 |
Property and Equipment purchased and included in accrued liabilities but not settled | $ 253 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Organization Zynex, Inc. (a Nevada corporation) has its headquarters in Englewood, Colorado. We operate one primary business segment, medical devices which include Electrotherapy and Pain Management Products. As of March 31, 2018, the Company’s only active subsidiary is Zynex Medical, Inc. (“ZMI,” a wholly-owned Colorado corporation) through which the Company conducts most of its operations. One other subsidiary, Zynex Europe, ApS (“ZEU,” a wholly-owned Denmark corporation), did not generate material revenues during the three months ended March 31, 2018 and 2017 from international sales and marketing. Zynex Monitoring Solutions, Inc. (“ZMS,” a wholly-owned Colorado corporation) has developed a blood volume monitoring device, but it is awaiting approval by the U.S. Food and Drug Administration (“FDA”) as well as CE Marking in Europe, therefore, ZMS has achieved no revenues to date. The term “the Company” refers to Zynex, Inc. and its active and inactive subsidiaries. Nature of Business ZMI designs, manufactures and markets medical devices that treat chronic and acute pain, as well as activate and exercise muscles for rehabilitative purposes with electrical stimulation. ZMI devices are intended for pain management to reduce reliance on drugs and medications and provide rehabilitation and increased mobility through the utilization of non-invasive muscle stimulation, electromyography technology, interferential current (“IFC”), neuromuscular electrical stimulation (“NMES”) and transcutaneous electrical nerve stimulation (“TENS”). All our medical devices are intended to be patient friendly and designed for home use. The ZMI devices are small, portable, battery operated and include an electrical pulse generator which is connected to the body via electrodes. All of our medical devices are marketed in the U.S. and are subject to FDA regulation and approval. Our products require a physician’s prescription before they can be dispensed in the U.S. ZMI’s primary product is the NexWave device. The NexWave is marketed to physicians and therapists by our field sales representatives. The NexWave requires consumable supplies, such as electrodes and batteries, which are shipped to patients on a recurring monthly basis, as needed. During the three months ended March 31, 2018 and 2017, the Company generated substantially all of its revenue ( 99.99 The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company’s accounting policies and other financial information is included in the audited consolidated financial statements as filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Amounts as of December 31, 2017, are derived from those audited consolidated financial statements. These interim condensed consolidated financial statements should be read in conjunction with the annual audited financial statements, accounting policies and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, which has previously been filed with the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2018 and the results of its operations and its cash flows for the periods presented. The results of operations for the three months ended March 31, 2018, are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year. The accompanying consolidated financial statements include the accounts of Zynex, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Non-controlling interest in the equity of a subsidiary is accounted for and reported as stockholders’ equity. Non-controlling interest represents the 20 Certain reclassifications have been made to the 2017 financial statements to conform to the consolidated 2018 financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. We reclassified amounts between device and supplies revenue for all of the quarters ended during 2017. The change was due to enhanced information which allowed us to perform a more detailed analysis of revenue and the related classifications. The reclassification did not change total net revenue. Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most significant management estimates used in the preparation of the accompanying consolidated financial statements are associated with the allowance for billing adjustments and uncollectible accounts receivable, the reserve for obsolete and damaged inventory, stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. On January 1, 2018 the company adopted the new accounting standard on revenue recognition issued by the Financial Accounting Standards Board (“FASB”). Pursuant to the revenue from contracts with customer’s standards the Company recognizes revenue when it transfers promised goods to customers in an amount that reflects the consideration to which the company expects to be entitled, known as the transaction price. The company elected to use the modified retrospective method which resulted in immaterial changes to previously issued financial statements and retained earnings. Revenue is generated primarily from sales in the United States of our electrotherapy devices and associated supplies. Sales are primarily made with, and shipped, direct to the patient with a small amount of revenue generated from sales to distributors. Revenue is recognized on medical devices when we receive notice that the device has been prescribed by a doctor and delivered to the patient. Supplies revenue is recognized once delivered to the patient. Supplies needed for the device can be set up as a recurring shipment or ordered thru the customer support team or online store as needed. Being in the healthcare industry there is often a third party involved that will pay on the patients behalf. The terms of the separate arrangement can impact certain aspects of the contracts, with patients covered by third party payors, such as performance obligations and transaction price, but for purposes of revenue recognition the contract with the customer refers to the arrangement between the Company and the patient. The company does not report any deferred revenue as each performance obligation is met upon delivery of goods to the patient. There are no substantial costs incurred through support or warranty obligations. A significant portion of the Company’s revenues are derived, and the related receivables are due, from a commercial health insurance or government agency (collectively “Third-party Payors”). Transaction price is estimated with variable consideration using the most likely amount technique for Third-party Payor reimbursement deductions, known throughout the health care industry as “billing adjustments” whereby the Third-party Payors unilaterally reduce the amount they reimburse for the Company’s products, refund requests, and for the timing and values of amounts to be billed. Supplies are billed only upon shipment. Devices can be billed upon shipment or over billing cycles. Billing cycles can be over a variable period and are estimated in amounts such that the likelihood that a significant reversal of revenue will not occur. Roughly 15 66 The basis of estimates include historical rates of collection, the aging of the receivables, trends in the historical reimbursement rates by insurance groups, determined using the portfolio approach, and current relationships and experience with the Third-party Payors. A change in the way estimates are determined can result from a number of factors, including experience and training of billing personnel, changes in the reimbursement policies or practices of Third-party Payors, or changes in industry rates of reimbursement. The company monitors the variability and uncertain timing over payor groups in our portfolios. If there is a change in our payor mix over time, it could affect our net revenue and related receivables. We believe we have a sufficient history of collection experience to estimate the net collectible amounts by payor. However, changes to the allowance for billing adjustments, which are recorded as a reduction of transaction price, have historically fluctuated and may continue to fluctuate significantly from quarter to quarter and year to year. The Company frequently receives refund requests from insurance providers relating to specific patients and dates of service. Billing and reimbursement disputes are very common in the Company’s industry. These requests are sometimes related to a limited number of patients or products; at other times, they include a significant number of refund claims in a single request. The Company reviews and evaluates these requests and determines if any refund request is appropriate. The Company also reviews these refund claims when it is rebilling or pursuing reimbursement from insurance providers. The Company frequently has significant offsets against such refund requests, and sometimes amounts are due to the Company in excess of the amounts of refunds requested by the insurance providers. Therefore, at the time of receipt of such refund requests, the Company is generally unable to determine if a refund request is valid and should be accrued. Such refunds are recorded when the amount is fixed and determinable, however management maintains an allowance for estimated future refunds which we believe is sufficient to cover future claims in connection with its estimates of variable consideration recorded at the time sales are recorded. The Company’s financial instruments include cash, accounts receivable, accounts payable and income taxes, for which current carrying amounts approximate fair value due to their short-term nature. Financial instruments also included the notes payable related to our private placement and capitalized leases, the carrying value of which approximates fair value because the interest rates on the outstanding borrowings are at rates that approximate market rates for borrowings with similar terms and average maturities. Inventory, which primarily represents parts and supplies, are valued at the lower of cost (average) or market. The Company monitors inventory for turnover and obsolescence and records losses for excess and obsolete inventory, as appropriate. The Company provides reserves for estimated excess and obsolete inventories equal to the difference between the costs of inventories on hand and the estimated market value based upon assumptions about future demand. If future demand is less favorable than currently projected by management, additional inventory write-downs may be required. Total gross inventories at March 31, 2018 were $ 0.7 0.4 We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We have identified our Chief Executive Officer and Chief Financial Officer as our chief operating decision-makers (“CODM”). We currently operate our business as one operating segment which includes two revenue types: Devices and Supplies. We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized. On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35 21 The Company is subject to the provisions of the Financial Accounting Standards Board (“FASB”) ASC 740-10, Income Taxes, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 118 requires that the Company include in its financial statements the reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Pursuant to the SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The final impact on the Company from the Tax Act’s transition tax legislation may differ from the aforementioned estimates due to the complexity of calculating and supporting with primary evidence such U.S. tax attributes such as accumulated foreign earnings and profits, foreign tax paid, and other tax components involved in foreign tax credit calculations for prior years back to 1998. Such differences could be material, due to, among other things, changes in interpretations of the Tax Act, future legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition tax's reasonable estimate. The Company will continue to evaluate the impact of the U.S. Tax Act and will record any resulting tax adjustments during 2018. In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2017-12 on our consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact that the adoption of ASU 2016-13 will have on our financial condition, results of operations and cash flows. In February 2018, the FASB issued Accounting Standards Update No. 2018-02, In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our financial condition, results of operations and cash flows. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a material impact on the Company’s consolidated financial statements. Recent Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09“Revenue from Contracts with Customers” (Topic 606) which amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company adopted the new ASU as of January 1, 2018 using the modified retrospective method and resulted in no material changes to previously stated financial statements. For further details see the revenue recognition description in Note 1. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | (2) BALANCE SHEET COMPONENTS Property and equipment: March 31,2018 December 31,2017 Office furniture and equipment $ 1,033 $ 998 Assembly equipment 128 128 Vehicles 76 76 Leasehold improvements 378 - $ 1,615 $ 1,202 Less accumulated depreciation (1,040) (1,014) $ 575 $ 188 Assets acquired under capital lease: March 31,2018 December 31,2017 Original book value $ 461 $ 461 Accumulated depreciation (395) (379) Net book value $ 66 $ 82 Included in total assets at March 31, 2018 are $ 0.2 Total depreciation expense related to our property and equipment was $ 26,000 0.1 Included in computer and office & manufacturing equipment at March 31, 2018 and December 31, 2017 are assets under capital lease. Depreciation expense related to assets under capital leases was $ 16,000 23,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | (3) EARNINGS PER SHARE Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding and the number of dilutive potential common share equivalents during the period, calculated using the treasury-stock method for outstanding stock options. For the Three Months Ended March 31, 2018 2017 Basic income per share: Net income available to common stockholders $ 1,921 $ 353 Basic weighted average shares outstanding 32,601 31,418 Basic income per share: $ 0.06 $ 0.01 Diluted income per share: Net income available to common stockholders $ 1,921 $ 353 Weighted average shares outstanding 32,601 31,418 Effect of dilutive securities - options and restricted stock 1,813 618 Diluted weighted average shares outstanding 34,414 32,036 Diluted income per share: $ 0.06 $ 0.01 For the three months ended March 31, 2018 and 2017, 0.2 1.1 Prior to their issuance on August 28, 2017, the dilutive securities calculation included 776,250 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | (4) STOCK-BASED COMPENSATION PLANS In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,000,000 0.6 During the three months ended March 31, 2018, no Stock Option awards were granted under the 2017 Stock Plan. During the three months ended March 31, 2018, 65,000 The Company previously reserved 3,000,000 1.3 The following summarizes stock-based compensation expenses recorded in the condensed consolidated statements During the three months ended March 31, 2018 and 2017, the Company recorded compensation expense related to stock options of approximately $ 63,000 24,000 statements During the three months ended March 31, 2018, there were no options granted, only the aforementioned restricted stock grants. During the three months ended March 31, 2017, the Company granted options to purchase up to 0.2 0.21 0.28 The Company received proceeds of $ 0.1 for 2017. There were no options granted during the three months ended March 31,2018 For the Three Months Ended March 31, 2018 2017 Expected term (years) - 6.25 Risk-free interest rate - % 1.64 % Expected volatility - % 129.04 % Expected dividend yield - % 0.00 % A summary of stock option and restricted stock Weighted- Average Weighted- Remaining Aggregate Number of Average Contractual Intrinsic Shares Exercise Term Value (in thousands) Price (Years) (in thousands) Outstanding at December 31, 2017 2,136 $ 0.54 6.31 $ 5,645 Granted 65 0.00 Forfeited (6) 1.28 Exercised (237) 0.36 Outstanding at March 31, 2018 1,958 $ 0.54 6.27 $ 5,579 Exercisable at March 31, 2018 1,261 $ 0.40 4.99 $ 3,720 As of March 31, 2018, the Company had approximately $ 0.6 2.97 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | (5) STOCKHOLDERS’ EQUITY Treasury Stock Beginning on December 6, 2017, and continuing through March 6, 2018, we had the ability through our stock purchase program to re-purchase our common stock at prevailing market prices either in the open market or through privately negotiated transactions up to $ 2.0 From the inception of the plan through March 6, 2018, we purchased 495,091 2.0 4.04 Warrants In October 2017, 150,000 In connection with the agreement entered into on March 28, 2016, with Triumph Bank, the Lender suspended this monthly payment requirement for February, March and April of 2016 up to an aggregate cap of $ 250,000 50,000 Number of Warrants Weighted Weighted Aggregate Outstanding at December 31, 2017 200 $ 1.86 5.80 $ 264 Granted - $ - Exercised - - Forfeited - $ - Outstanding at March 31, 2018 200 $ 1.86 5.62 $ 305 There were no warrants granted during the three months ended March 31, 2018 and 2017. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (6) INCOME TAXES The company recorded an income tax (benefit) provision of ($ 0.1 ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. As of December 31, 2017, our deferred tax assets were fully offset by a valuation allowance. Based upon the weight of available evidence, which includes recent operating performance, and forecasting our future results, we released a portion of the valuation allowance against our deferred tax assets during the period ending March 31, 2018. Since the deferred tax assets are expected to be utilized in the current year and in connection with interim reporting requirements, we have adjusted our annual effective tax rate to recognize the benefit ratably over all quarters of 2018. We will continue to reassess valuation allowance considerations on a quarterly basis. No taxes were paid in the three months ended March 31, 2018 and 2017. |
PRIVATE PLACEMENT MEMORANDUM
PRIVATE PLACEMENT MEMORANDUM | 3 Months Ended |
Mar. 31, 2018 | |
Private Placement Memorandum Disclosure [Abstract] | |
PRIVATE PLACEMENT MEMORANDUM | (7) PRIVATE PLACEMENT MEMORANDUM Commencing in November of 2016, the Company conducted a private placement on a “best efforts, minimum-maximum” basis of 12% unsecured subordinated promissory notes, for a minimum of $ 1,000,000 1,500,000 1,035,000 5 10 3 155,000 776,250 255,000 776,250 255,000 342,000 107,000 37,000 The table below summarizes the cash and non-cash components of the private placement memorandum (in thousands): March 31, 2018 Proceeds from unsecured subordinated promissory notes $ 1,035 Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses (155) Principal payments on promissory notes (981) Non-cash activity Common stock issued to placement agent (255) Obligation to issue common stock to private placement noteholders (255) Amortization of issuance costs and debt discount 618 Unsecured subordinated promissory notes, net of issuance and debt discount 7 Current portion of unsecured subordinated promissory notes (7) Long-term portion of unsecured subordinated promissory notes $ - |
DEFERRED INSURANCE REIMBURSEMEN
DEFERRED INSURANCE REIMBURSEMENT | 3 Months Ended |
Mar. 31, 2018 | |
Insurance [Abstract] | |
DEFERRED INSURANCE REIMBURSEMENT | (8) During the first quarter of 2016, the Company collected $880,000 from a single insurance company for accounts receivable. The accounts receivable had been previously reduced to zero by the allowance for billing adjustments. Subsequent to March 31, 2016, the insurance company verbally communicated to the Company that this payment was made in error and requested it be refunded to the insurance company. The Company recorded this $880,000 insurance reimbursement as a deferred insurance liability. However, the Company is disputing the refund request and has initiated an internal review review |
CAPITAL LEASES AND OTHER OBLIGA
CAPITAL LEASES AND OTHER OBLIGATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Leases, Capital [Abstract] | |
CAPITAL LEASES AND OTHER OBLIGATIONS | (9) CAPITAL LEASES AND OTHER OBLIGATIONS On October 20, 2017 the Company entered into a sublease agreement with CSG Systems Inc. for approximately 41,715 June 30, 2025 first year of the Sublease, the rent per square foot is $7.50, increasing to $19.75 during the second year of the Sublease and each year thereafter for the Initial Term increasing by an additional $1 per square foot. 0.2 Our prior headquarters lease in Lone Tree, Colorado contained a termination clause which allowed the Company to terminate the lease at any time with three months written notice. We provided notice to the landlord at the end of October 2017. We entered into a new month to month lease at our Lone Tree, Colorado location for warehouse and production space which will be transitioned to our new Englewood, Colorado location during the second quarter of 2018. The lease is for 12,494 rentable square feet at $26.50 per square foot and can be terminated at any time with thirty days’ notice. Termination notice was given on April 3, 2018. The Company also leases certain equipment under capital leases which expire on various dates through 2018. Imputed interest rates on the leases range from approximately 2 10 0.5 0.4 Operating Leases Capital 2018 $ 463 $ 125 2019 830 - 2020 873 - 2021 914 - 2022 956 Thereafter 495 - Total minimum lease payments $ 4,531 125 Less: Amount representing interest (2) Principal balance of capital lease obligation 123 Less: Current portion of capital lease obligation (123) Long-term portion of capital lease obligation $ - |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | (10) CONCENTRATIONS For the three months ended March 31, 2018, the Company sourced approximately 86 10 45 The Company had receivables from a private health insurance carrier at March 31, 2017 and December 31, 2017, that made up approximately 21 24 |
LITIGATION
LITIGATION | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | (11) LITIGATION From time to time, the Company may become party to litigation and other claims in the ordinary course of business. To the extent that such claims and litigation arise, management would provide for them if losses are determined to be both probable and estimable. The Company is currently not a party to any material pending legal proceedings. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | ( 12) RELATED PARTY TRANSACTIONS The Company employs Mr. Martin Sandgaard and Mr. Joachim Sandgaard, both sons of Thomas Sandgaard. Compensation was $ 54,000 44,000 respectively. 3 100,000 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Zynex, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Non-controlling Interest | Non-controlling Interest Non-controlling interest in the equity of a subsidiary is accounted for and reported as stockholders’ equity. Non-controlling interest represents the 20 |
Reclassifications | Certain reclassifications have been made to the 2017 financial statements to conform to the consolidated 2018 financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. We reclassified amounts between device and supplies revenue for all of the quarters ended during 2017. The change was due to enhanced information which allowed us to perform a more detailed analysis of revenue and the related classifications. The reclassification did not change total net revenue. |
Use of Estimates | Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most significant management estimates used in the preparation of the accompanying consolidated financial statements are associated with the allowance for billing adjustments and uncollectible accounts receivable, the reserve for obsolete and damaged inventory, stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. |
Revenue Recognition, Allowance for Contractual Adjustments and Collectability | On January 1, 2018 the company adopted the new accounting standard on revenue recognition issued by the Financial Accounting Standards Board (“FASB”). Pursuant to the revenue from contracts with customer’s standards the Company recognizes revenue when it transfers promised goods to customers in an amount that reflects the consideration to which the company expects to be entitled, known as the transaction price. The company elected to use the modified retrospective method which resulted in immaterial changes to previously issued financial statements and retained earnings. Revenue is generated primarily from sales in the United States of our electrotherapy devices and associated supplies. Sales are primarily made with, and shipped, direct to the patient with a small amount of revenue generated from sales to distributors. Revenue is recognized on medical devices when we receive notice that the device has been prescribed by a doctor and delivered to the patient. Supplies revenue is recognized once delivered to the patient. Supplies needed for the device can be set up as a recurring shipment or ordered thru the customer support team or online store as needed. Being in the healthcare industry there is often a third party involved that will pay on the patients behalf. The terms of the separate arrangement can impact certain aspects of the contracts, with patients covered by third party payors, such as performance obligations and transaction price, but for purposes of revenue recognition the contract with the customer refers to the arrangement between the Company and the patient. The company does not report any deferred revenue as each performance obligation is met upon delivery of goods to the patient. There are no substantial costs incurred through support or warranty obligations. A significant portion of the Company’s revenues are derived, and the related receivables are due, from a commercial health insurance or government agency (collectively “Third-party Payors”). Transaction price is estimated with variable consideration using the most likely amount technique for Third-party Payor reimbursement deductions, known throughout the health care industry as “billing adjustments” whereby the Third-party Payors unilaterally reduce the amount they reimburse for the Company’s products, refund requests, and for the timing and values of amounts to be billed. Supplies are billed only upon shipment. Devices can be billed upon shipment or over billing cycles. Billing cycles can be over a variable period and are estimated in amounts such that the likelihood that a significant reversal of revenue will not occur. Roughly 15 66 The basis of estimates include historical rates of collection, the aging of the receivables, trends in the historical reimbursement rates by insurance groups, determined using the portfolio approach, and current relationships and experience with the Third-party Payors. A change in the way estimates are determined can result from a number of factors, including experience and training of billing personnel, changes in the reimbursement policies or practices of Third-party Payors, or changes in industry rates of reimbursement. The company monitors the variability and uncertain timing over payor groups in our portfolios. If there is a change in our payor mix over time, it could affect our net revenue and related receivables. We believe we have a sufficient history of collection experience to estimate the net collectible amounts by payor. However, changes to the allowance for billing adjustments, which are recorded as a reduction of transaction price, have historically fluctuated and may continue to fluctuate significantly from quarter to quarter and year to year. The Company frequently receives refund requests from insurance providers relating to specific patients and dates of service. Billing and reimbursement disputes are very common in the Company’s industry. These requests are sometimes related to a limited number of patients or products; at other times, they include a significant number of refund claims in a single request. The Company reviews and evaluates these requests and determines if any refund request is appropriate. The Company also reviews these refund claims when it is rebilling or pursuing reimbursement from insurance providers. The Company frequently has significant offsets against such refund requests, and sometimes amounts are due to the Company in excess of the amounts of refunds requested by the insurance providers. Therefore, at the time of receipt of such refund requests, the Company is generally unable to determine if a refund request is valid and should be accrued. Such refunds are recorded when the amount is fixed and determinable, however management maintains an allowance for estimated future refunds which we believe is sufficient to cover future claims in connection with its estimates of variable consideration recorded at the time sales are recorded. |
Fair Value of Financial Instruments | The Company’s financial instruments include cash, accounts receivable, accounts payable and income taxes, for which current carrying amounts approximate fair value due to their short-term nature. Financial instruments also included the notes payable related to our private placement and capitalized leases, the carrying value of which approximates fair value because the interest rates on the outstanding borrowings are at rates that approximate market rates for borrowings with similar terms and average maturities. |
Inventory | Inventory Inventory, which primarily represents parts and supplies, are valued at the lower of cost (average) or market. The Company monitors inventory for turnover and obsolescence and records losses for excess and obsolete inventory, as appropriate. The Company provides reserves for estimated excess and obsolete inventories equal to the difference between the costs of inventories on hand and the estimated market value based upon assumptions about future demand. If future demand is less favorable than currently projected by management, additional inventory write-downs may be required. Total gross inventories at March 31, 2018 were $ 0.7 0.4 |
Segment Information | Segment Information We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We have identified our Chief Executive Officer and Chief Financial Officer as our chief operating decision-makers (“CODM”). We currently operate our business as one operating segment which includes two revenue types: Devices and Supplies. |
Income Taxes | Income Taxes We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized. On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35 21 The Company is subject to the provisions of the Financial Accounting Standards Board (“FASB”) ASC 740-10, Income Taxes, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 118 requires that the Company include in its financial statements the reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Pursuant to the SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The final impact on the Company from the Tax Act’s transition tax legislation may differ from the aforementioned estimates due to the complexity of calculating and supporting with primary evidence such U.S. tax attributes such as accumulated foreign earnings and profits, foreign tax paid, and other tax components involved in foreign tax credit calculations for prior years back to 1998. Such differences could be material, due to, among other things, changes in interpretations of the Tax Act, future legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition tax's reasonable estimate. The Company will continue to evaluate the impact of the U.S. Tax Act and will record any resulting tax adjustments during 2018. |
Recent Accounting Pronouncements | In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2017-12 on our consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact that the adoption of ASU 2016-13 will have on our financial condition, results of operations and cash flows. In February 2018, the FASB issued Accounting Standards Update No. 2018-02, In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our financial condition, results of operations and cash flows. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a material impact on the Company’s consolidated financial statements. Recent Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09“Revenue from Contracts with Customers” (Topic 606) which amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company adopted the new ASU as of January 1, 2018 using the modified retrospective method and resulted in no material changes to previously stated financial statements. For further details see the revenue recognition description in Note 1. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Balance Sheet | Property and equipment: March 31,2018 December 31,2017 Office furniture and equipment $ 1,033 $ 998 Assembly equipment 128 128 Vehicles 76 76 Leasehold improvements 378 - $ 1,615 $ 1,202 Less accumulated depreciation (1,040) (1,014) $ 575 $ 188 Assets acquired under capital lease: March 31,2018 December 31,2017 Original book value $ 461 $ 461 Accumulated depreciation (395) (379) Net book value $ 66 $ 82 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings (Loss) Per Share | The calculation of basic and diluted earnings per share for the three months ended March 31, 2018 and 2017 are as follows: For the Three Months Ended March 31, 2018 2017 Basic income per share: Net income available to common stockholders $ 1,921 $ 353 Basic weighted average shares outstanding 32,601 31,418 Basic income per share: $ 0.06 $ 0.01 Diluted income per share: Net income available to common stockholders $ 1,921 $ 353 Weighted average shares outstanding 32,601 31,418 Effect of dilutive securities - options and restricted stock 1,813 618 Diluted weighted average shares outstanding 34,414 32,036 Diluted income per share: $ 0.06 $ 0.01 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Fair Value of Stock Options Grants | The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions for 2017. There were no options granted during the three months ended March 31,2018 For the Three Months Ended March 31, 2018 2017 Expected term (years) - 6.25 Risk-free interest rate - % 1.64 % Expected volatility - % 129.04 % Expected dividend yield - % 0.00 % |
Summary of Stock Option Activity Under the Option Plan | A summary of stock option and restricted stock Weighted- Average Weighted- Remaining Aggregate Number of Average Contractual Intrinsic Shares Exercise Term Value (in thousands) Price (Years) (in thousands) Outstanding at December 31, 2017 2,136 $ 0.54 6.31 $ 5,645 Granted 65 0.00 Forfeited (6) 1.28 Exercised (237) 0.36 Outstanding at March 31, 2018 1,958 $ 0.54 6.27 $ 5,579 Exercisable at March 31, 2018 1,261 $ 0.40 4.99 $ 3,720 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of stock warrant activity | Number of Warrants Weighted Weighted Aggregate Outstanding at December 31, 2017 200 $ 1.86 5.80 $ 264 Granted - $ - Exercised - - Forfeited - $ - Outstanding at March 31, 2018 200 $ 1.86 5.62 $ 305 |
PRIVATE PLACEMENT MEMORANDUM (T
PRIVATE PLACEMENT MEMORANDUM (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Private Placement Memorandum Disclosure [Abstract] | |
Schedule of Cash and Non-Cash Components Of The Private Placement Memorandum | The table below summarizes the cash and non-cash components of the private placement memorandum (in thousands): March 31, 2018 Proceeds from unsecured subordinated promissory notes $ 1,035 Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses (155) Principal payments on promissory notes (981) Non-cash activity Common stock issued to placement agent (255) Obligation to issue common stock to private placement noteholders (255) Amortization of issuance costs and debt discount 618 Unsecured subordinated promissory notes, net of issuance and debt discount 7 Current portion of unsecured subordinated promissory notes (7) Long-term portion of unsecured subordinated promissory notes $ - |
CAPITAL LEASES AND OTHER OBLI24
CAPITAL LEASES AND OTHER OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Leases, Capital [Abstract] | |
Future Minimum Commitments Under Non-Cancelable Operating Leases and Capital Leases | Future minimum commitments under non-cancelable operating leases and capital leases as of December 31, 2017 are as follows (in thousands): Operating Leases Capital 2018 $ 463 $ 125 2019 830 - 2020 873 - 2021 914 - 2022 956 Thereafter 495 - Total minimum lease payments $ 4,531 125 Less: Amount representing interest (2) Principal balance of capital lease obligation 123 Less: Current portion of capital lease obligation (123) Long-term portion of capital lease obligation $ - |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 20.00% | |||
Percentage Of Revenues | 99.99% | |||
Percentage Billing Cycle on Total Revenue | 15.00% | |||
Percentage Billing Cycle on Device Revenue | 66.00% | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||
Inventory, Net | $ 710 | $ 423 | ||
Scenario, Plan [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||
North America [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Percentage Of Revenues | 99.99% |
BALANCE SHEET COMPONENTS (Detai
BALANCE SHEET COMPONENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment, Gross | $ 1,615 | $ 1,202 |
Less accumulated depreciation | (1,040) | (1,014) |
Property and Equipment, Net | 575 | 188 |
Capital Leases, Balance Sheet, Assets by Major Class, Net [Abstract] | ||
Original book value | 461 | 461 |
Accumulated depreciation | (395) | (379) |
Net book value | 66 | 82 |
Office furniture and equipment | ||
Property, Plant and Equipment, Gross | 1,033 | 998 |
Capital Leases, Balance Sheet, Assets by Major Class, Net [Abstract] | ||
Original book value | 461 | 461 |
Assembly equipment | ||
Property, Plant and Equipment, Gross | 128 | 128 |
Vehicles | ||
Property, Plant and Equipment, Gross | 76 | 76 |
Leasehold improvements | ||
Property, Plant and Equipment, Gross | $ 378 | $ 0 |
BALANCE SHEET COMPONENTS (Det27
BALANCE SHEET COMPONENTS (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Depreciation | $ 26,000 | $ 100,000 |
Property and equipment Purchased Not Settled | 253,000 | 0 |
Assets Held under Capital Leases [Member] | ||
Depreciation | 16,000 | $ 23,000 |
Leasehold Improvements [Member] | ||
Property and equipment Purchased Not Settled | $ 200,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Basic income per share: | |||
Net income available to common stockholders | [1] | $ 1,921 | $ 353 |
Basic weighted average shares outstanding | 32,601 | 31,418 | |
Basic income per share: | $ 0.06 | $ 0.01 | |
Diluted income per share: | |||
Net income available to common stockholders | [1] | $ 1,921 | $ 353 |
Weighted average shares outstanding | 32,601 | 31,418 | |
Effect of dilutive securities - options and restricted stock | 1,813 | 618 | |
Diluted weighted average shares outstanding | 34,414 | 32,036 | |
Diluted income per share: | $ 0.06 | $ 0.01 | |
[1] | There is no difference between net income and comprehensive income |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 1 Months Ended | 3 Months Ended | |
Aug. 28, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 200,000 | 1,100,000 | |
Weighted Average Number Diluted Shares Outstanding Adjustment, Total | 1,813,000 | 618,000 | |
Common Stock [Member] | Private Placement [Member] | |||
Weighted Average Number Diluted Shares Outstanding Adjustment, Total | 776,250 |
STOCK-BASED COMPENSATION PLAN30
STOCK-BASED COMPENSATION PLANS (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair value of stock option grants | ||
Expected term (years) | 0 years | 6 years 3 months |
Risk-free interest rate | 0.00% | 1.64% |
Expected volatility | 0.00% | 129.04% |
Expected dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION PLAN31
STOCK-BASED COMPENSATION PLANS (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Summary of stock option activity under the option Plan | |||
Balance Beginning | 2,136 | ||
Number of Shares, Granted | 65 | 200 | |
Number of Shares, Forfeited | (6) | ||
Number of Shares, Exercised | (237) | ||
Balance Ending | 1,958 | 2,136 | |
Number of Shares, Exercisable at March 31, 2018 | 1,261 | ||
Weighted Average Exercise Price, Outstanding Beginning | $ 0.54 | ||
Weighted Average Exercise Price, Granted | 0 | $ 0.21 | |
Weighted Average Exercise Price, Forfeited | 1.28 | ||
Weighted Average Exercise Price, Exercised | 0.36 | ||
Weighted Average Exercise Price, Outstanding Ending | 0.54 | $ 0.54 | |
Weighted Average Exercise Price, Exercisable | $ 0.4 | ||
Weighted Average Remaining Contractual Life, Outstanding | 6 years 3 months 7 days | 6 years 3 months 22 days | |
Weighted Average Remaining Contractual Life Exercisable | 4 years 11 months 26 days | ||
Aggregate Intrinsic Value, Outstanding | $ 5,579 | $ 5,645 | |
Aggregate Intrinsic Value, Exercisable | $ 3,720 |
STOCK-BASED COMPENSATION PLAN32
STOCK-BASED COMPENSATION PLANS (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares under option, granted | 65,000 | 200,000 | |
Weighted Average Exercise Price, Granted | $ 0 | $ 0.21 | |
Unrecognized compensation expense related to stock options | $ 600,000 | ||
Weighted-average period of unrecognized compensation expense related to stock options | 2 years 11 months 19 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.28 | ||
Proceeds from Stock Options Exercised | $ 100,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 1,958,000 | 2,136,000 | |
Management [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 65,000 | ||
Selling, General And Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 63,000 | $ 24,000 | |
2005 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,000,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 1,300,000 | ||
Stock Incentive Plan 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 600,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Balance Beginning | 2,136 | ||
Shares under option, granted | 65 | 200 | |
Number of Shares, Exercised | 237 | ||
Number of Warrants, Forfeited | 6 | ||
Balance Ending | 1,958 | 2,136 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.54 | ||
Weighted Average Exercise Price, Granted | 0 | $ 0.21 | |
Weighted Average Exercise Price, Exercised | 0.36 | ||
Weighted Average Exercise Price, Forfeited | 1.28 | ||
Weighted Average Exercise Price, Outstanding Ending | $ 0.54 | $ 0.54 | |
Weighted Average Remaining Contractual Life (Years) | 6 years 3 months 7 days | 6 years 3 months 22 days | |
Warrant [Member] | |||
Balance Beginning | 200 | ||
Shares under option, granted | 0 | ||
Number of Shares, Exercised | 0 | ||
Number of Warrants, Forfeited | 0 | ||
Balance Ending | 200 | 200 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 1.86 | ||
Weighted Average Exercise Price, Granted | 0 | ||
Weighted Average Exercise Price, Exercised | 0 | ||
Weighted Average Exercise Price, Forfeited | 0 | ||
Weighted Average Exercise Price, Outstanding Ending | $ 1.86 | $ 1.86 | |
Weighted Average Remaining Contractual Life (Years) | 5 years 7 months 13 days | 5 years 9 months 18 days | |
Aggregate Intrinsic Value Exercisable Balance | $ 264 | ||
Aggregate Intrinsic Value Exercisable Balance | $ 305 | $ 264 |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) - USD ($) | 1 Months Ended | 37 Months Ended | ||
Oct. 31, 2017 | Mar. 28, 2016 | Mar. 06, 2018 | Mar. 31, 2018 | |
Stock Repurchase Program, Authorized Amount | $ 2,000,000 | |||
Stock Repurchased During Period, Shares | 495,091 | |||
Treasury Stock Acquired, Average Cost Per Share | $ 4.04 | |||
Common Stock Warrants Issued For Professional Services | 150,000 | |||
Stock Repurchased During Period, Value | $ 2,000,000 | |||
TriumphBank [Member] | ||||
Debt Conversion, Original Debt, Amount | $ 250,000 | |||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 50,000 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes [Line Items] | ||
Income Tax Expense (Benefit) | $ (81) | $ 9 |
PRIVATE PLACEMENT MEMORANDUM (D
PRIVATE PLACEMENT MEMORANDUM (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Proceeds from unsecured subordinated promissory notes | $ 0 | $ 1,035 | |
Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses | 0 | $ (155) | |
Principal payments on promissory notes | (331) | ||
Non-cash activity | |||
Current portion of unsecured subordinated promissory notes | (7) | $ (231) | |
Private Placement Memorandum [Member] | |||
Proceeds from unsecured subordinated promissory notes | 1,035 | ||
Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses | (155) | ||
Principal payments on promissory notes | (981) | ||
Non-cash activity | |||
Common stock issued to placement agent | (255) | ||
Obligation to issue common stock to private placement noteholders | (255) | ||
Amortization of issuance costs and debt discount | 618 | ||
Unsecured subordinated promissory notes, net of issuance and debt discount | 7 | ||
Current portion of unsecured subordinated promissory notes | (7) | ||
Long-term portion of unsecured subordinated promissory notes | $ 0 |
PRIVATE PLACEMENT MEMORANDUM 37
PRIVATE PLACEMENT MEMORANDUM (Details Textual) - Newbridge Securities Corporation [Member] - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Nov. 30, 2016 | |
Non Accountable Expense Allowance | $ 155,000 | |||
Commission And Fees To Placement Agent | $ 255,000 | |||
Stock to be Issued For Services | 776,250 | |||
Stock Issued During Period, Shares, Issued for Services | 776,250 | |||
Notes Payable, Noncurrent | $ 255,000 | |||
Repayments of Unsecured Debt | $ 342,000 | |||
Amortization of Debt Issuance Costs and Discounts | $ 107,000 | $ 37,000 | ||
Percentage Of Commissions In Cash | 10.00% | |||
Non Accountable Expense Allowance Percentage | 3.00% | |||
Unsecured Debt [Member] | ||||
Funds Available For Repayment Of Note,Percentage | 5.00% | |||
Debt Instrument, Face Amount | $ 1,035,000 | |||
Unsecured Debt [Member] | Minimum [Member] | ||||
Debt Instrument, Face Amount | $ 1,000,000 | |||
Unsecured Debt [Member] | Maximum [Member] | ||||
Debt Instrument, Face Amount | $ 1,500,000 |
DEFERRED INSURANCE REIMBURSEM38
DEFERRED INSURANCE REIMBURSEMENT (Details Textual) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2016 |
Liability for Claims and Claims Adjustment Expense, Total | $ 880 | $ 880 | $ 880 |
CAPITAL LEASES AND OTHER OBLI39
CAPITAL LEASES AND OTHER OBLIGATIONS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Operating Leases | ||
2,018 | $ 463 | |
2,019 | 830 | |
2,020 | 873 | |
2,021 | 914 | |
2,022 | 956 | |
Thereafter | 495 | |
Total minimum lease payments | 4,531 | |
Capital Leases | ||
2,018 | 125 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
2,022 | ||
Thereafter | 0 | |
Total minimum lease payments | 125 | |
Less: Amount representing interest | (2) | |
Principal balance of capital lease obligation | 123 | |
Less: Current portion of capital lease obligation | $ (93) | (123) |
Long-term portion of capital lease obligation | $ 0 |
CAPITAL LEASES AND OTHER OBLI40
CAPITAL LEASES AND OTHER OBLIGATIONS (Details Textual) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Oct. 20, 2017USD ($)a | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Cost of assets under capital lease | $ 461 | $ 461 | |
Accumulated depreciation | 395 | 379 | |
Land Subject to Ground Leases | a | 41,715 | ||
Tenant Improvements | $ 200 | ||
Lessee Operating Sublease Rent Description | first year of the Sublease, the rent per square foot is $7.50, increasing to $19.75 during the second year of the Sublease and each year thereafter for the Initial Term increasing by an additional $1 per square foot. | ||
Lessee, Operating Sublease, Option to Extend | June 30, 2025 | ||
Accounts Payable [Member] | |||
Debt Instrument [Line Items] | |||
Accumulated depreciation | $ 395 | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Imputed interest rate on lease | 10.00% | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Imputed interest rate on lease | 2.00% | ||
Office furniture and equipment | |||
Debt Instrument [Line Items] | |||
Cost of assets under capital lease | $ 461 | $ 461 |
CONCENTRATIONS (Details Textual
CONCENTRATIONS (Details Textual) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Supplier Concentration Risk [Member] | Minimum [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | ||
Net Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 21.00% | 24.00% | |
Two Vendor [Member] | Supplier Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 86.00% | 45.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Compensation paid | $ 54,000 | $ 44,000 | |
Employment Arrangement | Immediate Family Members of Management or Principal Owner | |||
Related Party Transaction [Line Items] | |||
Lump sum payment | $ 100,000 | ||
Agreement term | 3 years |