Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 11, 2013 | |
Document Document And Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'ZYNEX INC | ' |
Entity Central Index Key | '0000846475 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 31,148,234 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash | $468 | $823 |
Accounts receivable, net | 8,824 | 12,224 |
Inventory | 6,131 | 6,160 |
Prepaid expenses | 178 | 243 |
Deferred tax assets | 1,855 | 1,855 |
Other current assets | 1,712 | 57 |
Total current assets | 19,168 | 21,362 |
Property and equipment, net | 3,282 | 3,851 |
Deposits | 573 | 171 |
Deferred financing fees, net | 60 | 98 |
Intangible assets, net | 64 | 203 |
Goodwill | 212 | 251 |
Total assets | 23,359 | 25,936 |
Current Liabilities: | ' | ' |
Line of credit | 6,291 | 5,906 |
Current portion of notes payable and capital lease obligations | 108 | 144 |
Accounts payable | 2,289 | 2,057 |
Income taxes payable | 1,046 | 1,430 |
Accrued payroll and payroll taxes | 734 | 899 |
Deferred rent | 750 | 371 |
Current portion of contingent consideration | 9 | 21 |
Other accrued liabilities | 383 | 1,265 |
Total current liabilities | 11,610 | 12,093 |
Notes payable and capital lease obligations, less current portion | 121 | 114 |
Deferred rent | 1,439 | 785 |
Deferred tax liabilities | 786 | 786 |
Warranty liability | 14 | 20 |
Contingent consideration, less current portion | 22 | 83 |
Total liabilities | 13,992 | 13,881 |
Stockholders’ Equity: | ' | ' |
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued or outstanding | ' | ' |
Common stock, $.001 par value, 100,000,000 shares authorized, 31,148,234 shares issued and outstanding at September 30, 2013, and December 31, 2012 | 31 | 31 |
Paid-in capital | 5,551 | 5,453 |
Retained earnings | 3,808 | 6,566 |
Total Zynex, Inc. stockholders’ equity | 9,390 | 12,050 |
Noncontrolling interest | -23 | 5 |
Total Stockholders’ equity | 9,367 | 12,055 |
Total liabilities and stockholders’ equity | $23,359 | $25,936 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 31,148,234 | 31,148,234 |
Common stock, shares outstanding | 31,148,234 | 31,148,234 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net revenue: | ' | ' | ' | ' |
Rental | $1,284 | $2,281 | $4,606 | $6,780 |
Sales | 3,907 | 7,821 | 13,725 | 22,292 |
Total net revenue | 5,191 | 10,102 | 18,331 | 29,072 |
Cost of revenue: | ' | ' | ' | ' |
Rental | 257 | 279 | 956 | 810 |
Sales | 1,289 | 1,937 | 4,664 | 5,005 |
Total cost of revenue | 1,546 | 2,216 | 5,620 | 5,815 |
Gross profit | 3,645 | 7,886 | 12,711 | 23,257 |
Selling, general and administrative expense | 4,713 | 7,174 | 16,699 | 21,127 |
(Loss) income from operations | -1,068 | 712 | -3,988 | 2,130 |
Other expense: | ' | ' | ' | ' |
Interest expense | -136 | -119 | -480 | -293 |
Other income (expense) | ' | -6 | 72 | -13 |
Total other income (expense) | -136 | -125 | -408 | -306 |
(Loss) income before income tax | -1,204 | 587 | -4,396 | 1,824 |
Income tax benefit (expense) | 455 | -229 | 1,610 | -673 |
Net (loss) income | -749 | 358 | -2,786 | 1,151 |
Plus: Net loss – noncontrolling interest | 11 | ' | 28 | ' |
Net (loss) income – attributable to Zynex, Inc.: | ($738) | $358 | ($2,758) | $1,151 |
Net (loss) income per share: | ' | ' | ' | ' |
Basic | ($0.02) | $0.01 | ($0.09) | $0.04 |
Diluted | ($0.02) | $0.01 | ($0.09) | $0.04 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 |
Diluted | 31,148,234 | 31,316,836 | 31,148,234 | 31,202,842 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) | Total | Common Stock | Paid in Capital | Retained Earnings | Noncontrolling Interest |
In Thousands, except Share data | |||||
Balance at Dec. 31, 2012 | $12,055 | $31 | $5,453 | $6,566 | $5 |
Balance, shares at Dec. 31, 2012 | 31,148,234 | ' | ' | ' | ' |
Employee stock-based compensation | 98 | ' | 98 | ' | ' |
Net loss | -2,786 | ' | ' | -2,758 | -28 |
Balance at Sep. 30, 2013 | $9,367 | $31 | $5,551 | $3,808 | ($23) |
Balance, shares at Sep. 30, 2013 | 31,148,234 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($2,786) | $1,151 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ' | ' |
Depreciation expense | 608 | 647 |
Warranty expense | -6 | ' |
Change in the value of contingent consideration | -70 | 14 |
Provision for losses on uncollectible accounts receivable | 442 | 325 |
Amortization of intangible assets | 39 | 33 |
Impairment of intangible assets | 100 | ' |
Impairment of goodwill | 39 | ' |
Amortization of financing fees | 38 | 37 |
Issuance of common stock for services | ' | 20 |
Provision for obsolete inventory | 293 | 228 |
Deferred rent | 1,033 | -222 |
Employee stock-based compensation expense | 98 | 150 |
Deferred tax expense | ' | -50 |
Gain on asset disposal | -6 | ' |
Changes in operating assets and liabilities, net of business acquisition (in 2012): | ' | ' |
Accounts receivable | 2,959 | -1,593 |
Inventory | -265 | -2,291 |
Prepaid expenses | 65 | 83 |
Deposit and other current assets | -2,057 | 41 |
Accounts payable | 232 | 264 |
Accrued liabilities | -1,048 | 222 |
Income taxes payable | -384 | -259 |
Net cash used in operating activities | -676 | -1,200 |
Cash flows from investing activities: | ' | ' |
Purchases of equipment | -501 | -388 |
Change in inventory used for rental | 550 | -794 |
Payments on contingent consideration | -3 | ' |
Cash paid for domain name | ' | -18 |
Cash paid for acquisition | ' | -245 |
Net cash provided by (used in) investing activities | 46 | -1,445 |
Cash flows from financing activities: | ' | ' |
Net borrowings from line of credit | 385 | 2,788 |
Issuance of common stock | ' | 10 |
Deferred financing fees | ' | -2 |
Payments on notes payable and capital lease obligations | -110 | -97 |
Net cash provided by financing activities | 275 | 2,699 |
Net (decrease) increase in cash | -355 | 54 |
Cash at beginning of period | 823 | 789 |
Cash at end of period | 468 | 843 |
Supplemental cash flow information: | ' | ' |
Interest paid | 449 | 259 |
Income taxes paid, net of tax refunds (including interest and penalties) | 384 | 1,016 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Common stock issuances for business acquisition | ' | 158 |
Increase in contingent consideration for business acquisition | ' | 135 |
Equipment acquired through capital lease | $137 | ' |
Unaudited_Condensed_Consolidat
Unaudited Condensed Consolidated Financial Statements and Managements' Plans | 9 Months Ended |
Sep. 30, 2013 | |
Unaudited Condensed Consolidated Financial Statements and Managements' Plans | ' |
(1) UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND MANAGEMENTS’ PLANS | |
Zynex, Inc. (a Nevada corporation) and its subsidiaries, Zynex Medical, Inc. (ZMI) (a Colorado corporation, wholly-owned), Zynex NeuroDiagnostics, Inc. (ZND) (a Colorado corporation, wholly-owned), Zynex Monitoring Solutions Inc. (ZMS) (a Colorado corporation, wholly-owned), Zynex Billing and Consulting, LLC (ZBC) (a Colorado limited liability company, 80% majority-owned) and Zynex Europe, ApS (ZEU) (a Denmark corporation, wholly-owned), are collectively referred to as the “Company”. | |
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, 2012. Amounts as of December 31, 2012 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, 2012, 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 September 30, 2013 and the results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2013 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. | |
For the nine months ended September 30, 2013 and 2012, the Company reported negative cash flows from operations of $676 and $1,200, respectively. In addition, the Company’s line of credit increased from $5,906 at December 31, 2012 to $6,291 at September 30, 2013, primarily driven by the Company’s net loss and working capital requirements. Maximum borrowings under the line of credit are $7,000, subject to adjustments to its accounts receivable borrowing base. As of September 30, 2013, the Company did not have any additional availability under its line of credit. As of September 30, 2013, the Company was not in compliance with one of the financial covenants under the line of credit. As a result, all amounts due under the credit agreement are callable by the lender. The Company is currently in discussions with the lender and expects to receive a waiver; however, no assurance can be given. If a waiver is not obtained, in addition to demanding immediate payment of amounts outstanding under the line of credit, the lender can restrict or prevent us from borrowing while in default, which could have a material adverse impact on our cash flow and liquidity. | |
Management developed the Company’s operating plans for 2013 to emphasize cash flow, and under which the Company is making operational billing changes to increase cash collections as well as implementing various cost modifications to reduce expenses. However, during the first nine months of 2013, the Company encountered industry challenges related to health care reform, including the Affordable Care Act and reimbursement changes from government and third party payors, which has caused uncertainty to exist at the medical practitioner level causing a delay and decline in demand for the Company’s ZMI electrotherapy products. In an effort to minimize the impact of health care reform and changes in reimbursement, the Company has made reductions in its fixed expenses by cutting its annual employee costs by approximately $4,200 through headcount reductions. These headcount reductions were executed during the second and third quarters of 2013. The Company also renegotiated its existing building lease, under which, among other things, base rent has been lowered and the Company is now operating in an approximate twelve month free rent period, which began May 1, 2013, which is expected to result in cash savings of approximately $1,500. The Company is monitoring the demand for its ZMI electrotherapy products and will make additional expense adjustments as necessary in future periods. Additionally, the Company recently added new products that are less impacted by insurance reimbursement to the Company’s ZMI sales channel and is pursuing other opportunities, including the manufacturing and distribution of topical and transdermal pain creams. In ZND, the Company is distributing electroencephalography (EEG) sleep diagnostic products, mobile sleep diagnostic products and a sleep apnea treatment device in the US, which are all capital goods that are not subject to insurance reimbursement. The Company is also investing in its ZBC division where increased service based revenue is expected going forward through the addition of medical practitioner billing contracts. The Company believes these actions will serve to diversify its product mix and further reduce dependency on insurance reimbursement. Management believes that as a result of the restructuring activities completed during the second and third quarters of 2013, the Company’s cash flows from operating activities and limited borrowing availability under the line of credit will be sufficient to fund cash requirements through the next twelve months. |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Significant Accounting Policies | ' |
(2) SIGNIFICANT ACCOUNTING POLICIES | |
PRINCIPLES OF CONSOLIDATION | |
The accompanying unaudited condensed consolidated financial statements include the accounts of Zynex, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
NONCONTROLLING INTEREST | |
Noncontrolling interest in the equity of a subsidiary is accounted for and reported as stockholders equity. Noncontrolling interest represents the 20% ownership in the Company’s majority-owned subsidiary, ZBC. In 2012, the noncontrolling interest member contributed $10 of property and equipment to ZBC. | |
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 condensed consolidated financial statements are associated with the allowance for contractual adjustments and uncollectible accounts receivable, the reserve for obsolete and damaged inventory, stock-based compensation, valuation of goodwill and other long-lived assets, and income taxes. | |
REVENUE RECOGNITION, ALLOWANCE FOR CONTRACTUAL ADJUSTMENTS AND COLLECTIBILITY | |
The Company recognizes revenue when each of the following four conditions are met: 1) a contract or sales arrangement exists, 2) products have been shipped and title has transferred, or rental services have been rendered, 3) the price of the products or services is fixed or determinable, and 4) collectability is reasonably assured. Accordingly, the Company recognizes revenue, both rental and sales, when products have been delivered to the patient and the patient’s insurance (if the patient has insurance) has been verified. For medical products that are sold from inventories consigned at clinic locations, the Company recognizes revenue when it receives notice that the product has been prescribed and delivered to the patient and the patient’s insurance coverage has been verified or preauthorization has been obtained from the insurance company, when required. Revenue from the rental of products is normally on a month-to-month basis and is recognized ratably over the products’ rental period. Revenue from sales to distributors is recognized when the Company ships its products, which fulfills its order and transfers title. Revenue is reported net, after adjustments for estimated insurance company or governmental agency (collectively “Third-party Payors”) reimbursement deductions. The deductions are known throughout the health care industry as “contractual adjustments” whereby the Third-party Payors unilaterally reduce the amount they reimburse for the Company’s products. | |
A significant portion of the Company’s revenues are derived, and the related receivables are due, from Third-party Payors. The nature of these receivables within this industry has typically resulted in long collection cycles. The process of determining what products will be reimbursed by Third-party Payors and the amounts that they will reimburse is complex and depends on conditions and procedures that vary among providers and may change from time to time. The Company maintains an allowance for contractual adjustments and records additions to the allowance to account for the risk of nonpayment. Contractual adjustments result from reimbursements from Third-party Payors that are less than amounts claimed or where the amount claimed by the Company exceeds the Third-party Payors’ usual, customary and reasonable reimbursement rate. The Company determines the amount of the allowance, and adjusts it at the end of each reporting period, based on a number of factors, including historical rates of collection, the aging of the receivables, trends in the historical rates of collection and current relationships and experience with the Third-party Payors. If the rates of collection of past-due receivables recorded for previous fiscal periods changes, or if there is a trend in the rates of collection on those receivables, the Company may be required to change the rate at which it provides for additions to the allowance. A change in the rates of the Company’s collections 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. Accordingly, changes to the allowance for contractual adjustments, which are recorded in the income statement as a reduction of revenue, have historically fluctuated and may continue to fluctuate significantly from quarter to quarter. | |
(2) SIGNIFICANT ACCOUNTING POLICIES (continued) | |
Due to the nature of the industry, the reimbursement environment in which the Company operates and changes in health care reform, estimates are required to record net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of third-party billing arrangements and the uncertainty of reimbursement amounts for certain products or services from payors or an unanticipated requirement to refund payments previously received may result in adjustments to amounts originally recorded. Due to continuing changes in the health care industry and third-party reimbursement, as well as changes in our billing practices to increase cash collections, it is possible that management’s estimates could change in the near term, which could have an impact on our results of operations and cash flows. Any differences between estimated settlements and final determinations are reflected as an increase or a reduction to revenue in the period when such final determinations are known. | |
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 that insurance provider. 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. | |
As of September 30, 2013, the Company believes it has an adequate allowance for contractual adjustments relating to all known insurance disputes and refund requests. However, no assurances can be given with respect to such estimates of reimbursements and offsets or the ultimate outcome of any refund requests. | |
In addition to the allowance for contractual adjustments, the Company records an allowance for uncollectible accounts receivable. Uncollectible accounts receivable are primarily a result of: non-payment from patients who have been direct billed for co-payments or deductibles, lack of appropriate insurance coverage and disallowances of charges by Third-party Payors. If there is a change to a material insurance provider contract or policy, application by a provider, a decline in the economic condition of providers or a significant turnover of Company billing personnel resulting in diminished collection effectiveness, the estimate of the allowance for uncollectible accounts receivable may not be adequate and may result in an increase in the future. At September 30, 2013 and December 31, 2012, the allowance for uncollectible accounts receivable is $1,837. | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The Company’s financial instruments at September 30, 2013 include cash, accounts receivable and accounts payable, for which current carrying amounts approximate fair value due to their short-term nature. Financial instruments at September 30, 2013 also include the line of credit and notes payable, 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 | |
Inventories, which primarily represent finished goods, are valued at the lower of cost (average) or market. Finished goods include products held at the Company’s headquarters and at different locations by health care providers or other parties for rental or sale to patients. Total (gross) inventories at September 30, 2013 included $6,037 of finished goods, $354 of parts, and $1,215 of supplies. | |
The Company monitors inventory for turnover and obsolescence, and records losses for excess and obsolete inventory as appropriate. At September 30, 2013, the Company had an allowance for obsolete and damaged inventory of approximately $1,475. The allowance for obsolete and damaged inventory was approximately $1,181 at December 31, 2012. The Company had $1,505 of open purchase commitments at September 30, 2013. | |
(2) SIGNIFICANT ACCOUNTING POLICIES (continued) | |
PROPERTY AND EQUIPMENT | |
Property and equipment are stated at cost. Products on rental contracts are placed in property and equipment and depreciated over their estimated useful life. The Company removes the cost and the related accumulated depreciation from the accounts of assets sold or retired, and the resulting gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the useful life of the asset. As rental inventory contributes directly to the revenue generating process, the Company classifies the depreciation of rental inventory in cost of revenue. | |
Repairs and maintenance costs are charged to expense as incurred. | |
GOODWILL AND INTANGIBLE ASSETS | |
Goodwill represents the excess of the purchase price over the fair value of the net assets of the business acquired. Authoritative guidance requires that goodwill be assessed for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment assessment requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments are required to estimate the fair value of a reporting unit including estimating future cash flows, determining appropriate discount rates and other assumptions. When conducting its goodwill impairment assessment, the Company initially performs a qualitative evaluation to determine if it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a two-step goodwill impairment test. | |
The Company determined, based on its qualitative evaluation, that it was necessary to perform the two-step goodwill impairment test during the second quarter of 2013, primarily because of the significant decline in sales in its ZMI electrotherapy products. In March 2012, the Company acquired substantially all of the assets and business of NeuroDyne Medical Corp. (NeuroDyne). The Company modified its business forecast for NeuroDyne during the second quarter of 2013, resulting in reduced estimated sales and cash flow, as compared to the original business forecast at the time of the acquisition. Management, therefore performed the two-step goodwill impairment test during the second quarter of 2013, and determined that goodwill related to NeuroDyne was impaired and recorded a $39 goodwill impairment charge during the three months ended June 30, 2013. | |
Intangible assets with estimable lives are amortized in a pattern consistent with the asset’s identifiable cash flows or using a straight- line method over their remaining estimated benefit periods if the pattern of cash flows is not estimable. The Company reviews the carrying value of intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of their carrying amounts to the undiscounted cash flows that the asset or asset group is expected to generate. If the carrying amount of the assets exceeds the undiscounted cash flows the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. The Company’s intangible assets primarily relate to the asset acquisition of NeuroDyne. The Company modified its business forecast for NeuroDyne during the second quarter of 2013, resulting in reduced estimated sales and cash flow, as compared to the original business forecast at the time of the acquisition. Therefore, the Company recorded an impairment charge of $100 during the three months ended June 30, 2013 related to certain NeuroDyne intangible assets. The Company utilized a discounted cash flow (DCF) model to determine fair value for both goodwill and intangible assets as of June 30, 2013. | |
STOCK-BASED COMPENSATION | |
The Company accounts for stock-based compensation through recognition of the cost of employee services received in exchange for an award of equity instruments, which is measured based on the grant date fair value of the award that is ultimately expected to vest during the period. The stock-based compensation expenses are recognized over the period during which an employee is required to provide service in exchange for the award (the requisite service period, which in the Company’s case is the same as the vesting period). |
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Property and Equipment | ' | |||||||||||||
(3) PROPERTY AND EQUIPMENT | ||||||||||||||
Property and equipment as of September 30, 2013 and December 31, 2012 consist of the following: | ||||||||||||||
September 30, | December 31, | Useful | ||||||||||||
2013 | 2012 | lives | ||||||||||||
(UNAUDITED) | ||||||||||||||
Office furniture and equipment | $ | 2,365 | $ | 1,836 | 3‑7 years | |||||||||
Rental inventory | 2,398 | 3,147 | 5 years | |||||||||||
Vehicles | 76 | 76 | 5 years | |||||||||||
Leasehold improvements | 375 | 375 | 2‑6 years | |||||||||||
Assembly equipment | 171 | 168 | 7 years | |||||||||||
5,385 | 5,602 | |||||||||||||
Less accumulated depreciation | (2,103 | ) | (1,751 | ) | ||||||||||
$ | 3,282 | $ | 3,851 | |||||||||||
Leases
Leases | 9 Months Ended |
Sep. 30, 2013 | |
Leases | ' |
(4) LEASES | |
The Company has commitments under various operating and capital leases that are payable in monthly installments. On June 18, 2013, the Company renegotiated its existing building lease and entered into a new lease agreement for its existing building in Lone Tree, Colorado, effective May 1, 2013. The lease, which expires in November 2023, provides for two five-year renewal options at the then market rental rate. Under the lease, no rental payments are due for the first six months. For the remaining months of the lease, base monthly rent begins at $129 and escalates at $3 per month (or $0.50 per square foot) every twelve months, resulting in a monthly rent of $157 by January 2023. The Company anticipates that for accounting purposes, it will have an annual rental expense of $1,420 throughout the term of the lease. The lease includes a $101 refund from the landlord for amounts previously overpaid for operating expenses, which amounts shall be deducted from the Company’s rent in November 2013. The lease also includes a tenant allowance of $1,130, of which $565 is to be used for leasehold improvements and $565 may be used to apply to rent in December 2013 and beyond. Such allowances are included in the Company’s deferred rent liability and deposit accounts. The lease contains customary events of default, termination, maintenance, indemnification and other lease terms. |
Intangible_Assets
Intangible Assets | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Intangible Assets | ' | |||||||||||||
(5) INTANGIBLE ASSETS | ||||||||||||||
Intangible assets as of September 30, 2013 and December 31, 2012, consist of the following: | ||||||||||||||
September 30, 2013 | December 31, 2012 | Amortization Life | ||||||||||||
Years | ||||||||||||||
(UNAUDITED) | ||||||||||||||
Trade names | $ | 33 | $ | 72 | 5 | |||||||||
Non-compete agreement | 26 | 26 | 5 | |||||||||||
Technology | 74 | 135 | 5 | |||||||||||
Domain Name | 18 | 18 | 1 | |||||||||||
Total intangible assets, gross | 151 | 251 | ||||||||||||
Less: accumulated amortization | (87 | ) | (48 | ) | ||||||||||
Total intangible assets, net | $ | 64 | $ | 203 | ||||||||||
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Earnings (Loss) Per Share | ' | ||||||||||||||||||||
(6) EARNINGS (LOSS) PER SHARE | |||||||||||||||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) 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. | |||||||||||||||||||||
(6) EARNINGS (LOSS) PER SHARE (continued) | |||||||||||||||||||||
The calculation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Basic: | |||||||||||||||||||||
Net (loss) income applicable to common stockholders | $ | (738 | ) | $ | 358 | $ | (2,758 | ) | $ | 1,151 | |||||||||||
Weighted average shares outstanding – basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 | |||||||||||||||||
Net (loss) income per share – basic | $ | (0.02 | ) | $ | 0.01 | $ | (0.09 | ) | $ | 0.04 | |||||||||||
Diluted: | |||||||||||||||||||||
Net (loss) income applicable to common stockholders | $ | (738 | ) | $ | 358 | $ | (2,758 | ) | $ | 1,151 | |||||||||||
Weighted average shares outstanding – basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 | |||||||||||||||||
Dilutive securities | — | 185,928 | — | 167,870 | |||||||||||||||||
Weighted average shares outstanding – diluted | 31,148,234 | 31,316,836 | 31,148,234 | 31,202,842 | |||||||||||||||||
Net (loss) income per share – diluted | $ | (0.02 | ) | $ | 0.01 | $ | (0.09 | ) | $ | 0.04 | |||||||||||
Potential common share equivalents as of September 30, 2012 of 1,061,375, related to certain outstanding stock options, were not included in the computation of diluted earnings per share during the three and nine months ended September 30, 2012 because the effect would have been anti-dilutive, as the option exercise prices exceeded the average market price of the Company’s common stock. The effect of these shares, if any, on the diluted earnings per share calculation may vary significantly depending on fluctuations in the stock price. | |||||||||||||||||||||
The effects of potential common stock equivalents, related to certain outstanding options for the three and nine months ended September 30, 2013 have not been included in the computation of diluted net loss per share because the impact of the potential shares would decrease the loss per share. |
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Stock-Based Compensation Plans | ' | |||||||||||||||||
(7) STOCK-BASED COMPENSATION PLANS | ||||||||||||||||||
The Company has reserved 3,000,000 shares of common stock for issuance under its 2005 Stock Option Plan (the “Option Plan”). Vesting provisions are determined by the Board of Directors. All stock options under the Option Plan expire no later than ten years from the date of grant. | ||||||||||||||||||
In the three months ended September 30, 2013 and 2012, the Company recorded compensation expense related to stock options of $29 and $60, respectively. In the nine months ended September 30, 2013 and 2012, the Company recorded compensation expense related to stock options of $98 and $150, respectively. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the three months ended September 30, 2013 and 2012 included $2 and $7, respectively, in cost of goods sold and $27 and $53, respectively, in selling, general and administrative expenses. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 2013 and 2012 included $9 and $20, respectively, in cost of goods sold and $89 and $130, respectively, in selling, general and administrative expenses. | ||||||||||||||||||
In the nine months ended September 30, 2013, the Company granted options to purchase up to 356,000 shares of common stock to employees at exercise prices that ranged from $0.32 to $0.48. In the nine months ended September 30, 2012, the Company granted options to purchase up to 322,500 shares of common stock to employees at exercise prices that ranged from $0.70 to $0.81 per share. | ||||||||||||||||||
(7) STOCK-BASED COMPENSATION PLANS (continued) | ||||||||||||||||||
The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions during the nine months ended September 30, 2013 and 2012: | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Weighted average expected term | 6.25 years | 6.17 years | ||||||||||||||||
Weighted average volatility | 111 | % | 134 | % | ||||||||||||||
Weighted average risk-free interest rate | 1.3 | % | 1.0 | % | ||||||||||||||
Dividend yield | 0 | % | 0 | % | ||||||||||||||
A summary of stock option activity under the Option Plan for the nine months ended September 30, 2013 is presented below: | ||||||||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||||||||
Under | Average | Average | Intrinsic | |||||||||||||||
Option | Exercise | Remaining | Value | |||||||||||||||
Price | Contractual | |||||||||||||||||
Life | ||||||||||||||||||
Outstanding at January 1, 2013 | 1,501,500 | $ | 0.95 | |||||||||||||||
Granted | 356,000 | $ | 0.37 | |||||||||||||||
Exercised | — | $ | — | |||||||||||||||
Forfeited | (374,500 | ) | $ | 0.88 | ||||||||||||||
Outstanding at September 30, 2013 | 1,483,000 | $ | 0.83 | 7.0 years | $ | 75 | ||||||||||||
Exercisable at September 30, 2013 | 843,997 | $ | 1.04 | 5.7 years | $ | 75 | ||||||||||||
A summary of status of the Company’s non-vested share awards as of and for the nine months ended September 30, 2013 is presented below: | ||||||||||||||||||
Nonvested Shares | Weighted Average | |||||||||||||||||
Under Option | Grant Date Fair Value | |||||||||||||||||
Non-vested at January 1, 2013 | 690,877 | $ | 0.69 | |||||||||||||||
Granted | 356,000 | $ | 0.31 | |||||||||||||||
Vested | (251,999 | ) | $ | 0.77 | ||||||||||||||
Forfeited | (155,875 | ) | $ | 0.81 | ||||||||||||||
Non-vested at September 30, 2013 | 639,003 | $ | 0.49 | |||||||||||||||
As of September 30, 2013, the Company had approximately $163 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of approximately 3 years. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Fair Value Measurements | ' | |||||||||
(8) FAIR VALUE MEASUREMENTS | ||||||||||
The Company measures certain assets and liabilities pursuant to accounting guidance which establishes a three-tier fair value hierarchy and prioritizes the inputs used in measuring fair value. Theses tiers include: | ||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. | ||||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | ||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. | ||||||||||
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: | ||||||||||
September 30, 2013 | Significant | |||||||||
Unobservable | ||||||||||
Inputs | ||||||||||
(Level 3) | ||||||||||
Liabilities: | ||||||||||
Contingent consideration | $ | 31 | $ | 31 | ||||||
The fair value of the contingent consideration was determined using a discounted cash flow model at the acquisition date and is revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the obligations. Contingent payments of $3 were made during the period. | ||||||||||
Changes in the fair value of these obligations are recorded as income or expense within the line item "Other income (expense)" in the Company's consolidated statements of operations. Accretion expense related to the increase in the net present value of the contingent liabilities is also included in the line item "Other income (expense)" in the Company's consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs. | ||||||||||
Changes in the fair value of the Level 3 liabilities for the nine months ended September 30, 2013: | ||||||||||
Balance at January 1, 2013 | $ | 104 | ||||||||
Payments | (3 | ) | ||||||||
Accretion expense | 4 | |||||||||
Change in fair value of contingent consideration | (74 | ) | ||||||||
Balance at September 30, 2013 | $ | 31 | ||||||||
The Company modified its financial forecasts for NeuroDyne, at June 30, 2013, as a result of reduced sales and cash flow since the acquisition in March 2012. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | ' |
(9) INCOME TAXES | |
The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. The Company’s effective income tax rate for the three and nine months ended September 30, 2013 was approximately 38% and 37%, respectively. The Company paid income taxes of $20 and $384 (net of $175 state tax refunds) during the three and nine months ended September 30, 2013, respectively, which was included in income taxes payable at December 31, 2012. |
Line_of_Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2013 | |
Line of Credit | ' |
(10) LINE OF CREDIT | |
The Company has an asset-backed revolving credit facility of up to $7,000, subject to reserves and reductions to the extent of changes in the Company’s asset borrowing base, under a Loan and Security Agreement, as amended, (the “Doral Agreement”) with Doral Healthcare Finance, a division of Doral Money, Inc. Borrowings under the Doral Agreement bear interest at a variable rate equal to the greater of (i) the British Bankers’ Association LIBOR rate as published in The Wall Street Journal for dollar deposits in the amount of $1,000 with a maturity of one month or (ii) 3% per annum, plus, in each case, a margin of 3.75%. The Doral Agreement requires monthly interest payments in arrears on the first date of each month. The Doral Agreement will mature on December 19, 2014. The Company may terminate the Doral Agreement at any time prior to the maturity date upon thirty days’ prior written notice and upon payment in full of all outstanding obligations under the Doral Agreement. If the Company terminates the Doral Agreement, the Company must pay a specified early termination fee. As of September 30, 2013, $6,291 was outstanding under the Doral Agreement and zero was available for borrowing based on the Company’s current borrowing base. | |
The Doral Agreement requires a lockbox arrangement whereby all receipts are swept daily to reduce borrowings outstanding. This arrangement causes the Doral Agreement to be classified as a current liability. | |
As of September 30, 2013, the effective interest rate under the Doral Agreement was 8% (7% interest rate and 1% fees). | |
The Doral Agreement contains certain customary restrictive and financial covenants for asset-backed credit facilities. As of September 30, 2013, the Company was not in compliance with one of the financial covenants under the Doral Agreement. As a result, all amounts due under the credit agreement are callable by the lender. The Company is currently in discussions with the lender and expects to receive a waiver; however, no assurance can be given. If a waiver is not obtained, in addition to demanding immediate payment of amounts outstanding under the Credit Agreement, the lender can restrict or prevent the Company from borrowing while in default, which could have a material adverse impact on the Company’s cash flow and liquidity. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2013 | |
Concentrations | ' |
(11) CONCENTRATIONS | |
The Company sourced approximately 34% and 23% of its electrotherapy products from one contract manufacturer during the three and nine months ended September 30, 2013. Management believes that its relationships with suppliers are strong; however, if necessary these relationships can be replaced. If the relationships were to be replaced, there may be a short-term disruption to operations, a period of time in which products may not be available and additional expenses may be incurred. | |
The Company had receivables from a private health insurance carrier at September 30, 2013 that made up approximately 7% of the net accounts receivable balance. The Company had receivable from a different private health insurance carrier that made up approximately 22% of net accounts receivable at December 31, 2012. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2013 | |
Litigation | ' |
(12) 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. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Segment Reporting | ' | ||||||||||||||||||||||||||||||||
(13) SEGMENT REPORTING | |||||||||||||||||||||||||||||||||
At September 30, 2013, the Company has determined that it has three reporting segments comprised of the following subsidiaries, ZMI and ZBC, ZND and ZEU, and ZMS. This determination was made based on the nature of the products and services offered to customers or the nature of the function in the organization. The accounting policies for each of these segments are the same as those described in Note 2, and inter-segment transactions are eliminated. | |||||||||||||||||||||||||||||||||
Net revenue was primarily generated from sales in the United States. | |||||||||||||||||||||||||||||||||
ZMI & | ZND & | ZMS | TOTAL | ||||||||||||||||||||||||||||||
ZBC | ZEU | ||||||||||||||||||||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, 2013 | |||||||||||||||||||||||||||||||||
Sales | $ | 5,138 | $ | 53 | $ | 0 | $ | 5,191 | |||||||||||||||||||||||||
Gross profit | 3,612 | 33 | 0 | 3,645 | |||||||||||||||||||||||||||||
Total assets | 22,361 | 986 | 12 | 23,359 | |||||||||||||||||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, 2012 | |||||||||||||||||||||||||||||||||
Sales | $ | 10,003 | 99 | $ | 0 | $ | 10,102 | ||||||||||||||||||||||||||
Gross profit | 7,834 | 52 | 0 | 7,886 | |||||||||||||||||||||||||||||
Total assets | 25,494 | 692 | 7 | 26,193 | |||||||||||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2013 | |||||||||||||||||||||||||||||||||
Sales | $ | 18,102 | $ | 229 | $ | 0 | $ | 18,331 | |||||||||||||||||||||||||
Gross profit | 12,570 | 141 | 0 | 12,711 | |||||||||||||||||||||||||||||
Total assets | 22,361 | 986 | 12 | 23,359 | |||||||||||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2012 | |||||||||||||||||||||||||||||||||
Sales | $ | 28,845 | 227 | $ | 0 | $ | 29,072 | ||||||||||||||||||||||||||
Gross profit | 23,119 | 138 | 0 | 23,257 | |||||||||||||||||||||||||||||
Total assets | 25,494 | 692 | 7 | 26,193 | |||||||||||||||||||||||||||||
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Principles of Consolidation | ' |
PRINCIPLES OF CONSOLIDATION | |
The accompanying unaudited condensed consolidated financial statements include the accounts of Zynex, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
Noncontrolling Interest | ' |
NONCONTROLLING INTEREST | |
Noncontrolling interest in the equity of a subsidiary is accounted for and reported as stockholders equity. Noncontrolling interest represents the 20% ownership in the Company’s majority-owned subsidiary, ZBC. In 2012, the noncontrolling interest member contributed $10 of property and equipment to ZBC. | |
Use of Estimates | ' |
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 condensed consolidated financial statements are associated with the allowance for contractual adjustments and uncollectible accounts receivable, the reserve for obsolete and damaged inventory, stock-based compensation, valuation of goodwill and other long-lived assets, and income taxes. | |
Revenue Recognition, Allowance for Contractual Adjustments and Collectibility | ' |
REVENUE RECOGNITION, ALLOWANCE FOR CONTRACTUAL ADJUSTMENTS AND COLLECTIBILITY | |
The Company recognizes revenue when each of the following four conditions are met: 1) a contract or sales arrangement exists, 2) products have been shipped and title has transferred, or rental services have been rendered, 3) the price of the products or services is fixed or determinable, and 4) collectability is reasonably assured. Accordingly, the Company recognizes revenue, both rental and sales, when products have been delivered to the patient and the patient’s insurance (if the patient has insurance) has been verified. For medical products that are sold from inventories consigned at clinic locations, the Company recognizes revenue when it receives notice that the product has been prescribed and delivered to the patient and the patient’s insurance coverage has been verified or preauthorization has been obtained from the insurance company, when required. Revenue from the rental of products is normally on a month-to-month basis and is recognized ratably over the products’ rental period. Revenue from sales to distributors is recognized when the Company ships its products, which fulfills its order and transfers title. Revenue is reported net, after adjustments for estimated insurance company or governmental agency (collectively “Third-party Payors”) reimbursement deductions. The deductions are known throughout the health care industry as “contractual adjustments” whereby the Third-party Payors unilaterally reduce the amount they reimburse for the Company’s products. | |
A significant portion of the Company’s revenues are derived, and the related receivables are due, from Third-party Payors. The nature of these receivables within this industry has typically resulted in long collection cycles. The process of determining what products will be reimbursed by Third-party Payors and the amounts that they will reimburse is complex and depends on conditions and procedures that vary among providers and may change from time to time. The Company maintains an allowance for contractual adjustments and records additions to the allowance to account for the risk of nonpayment. Contractual adjustments result from reimbursements from Third-party Payors that are less than amounts claimed or where the amount claimed by the Company exceeds the Third-party Payors’ usual, customary and reasonable reimbursement rate. The Company determines the amount of the allowance, and adjusts it at the end of each reporting period, based on a number of factors, including historical rates of collection, the aging of the receivables, trends in the historical rates of collection and current relationships and experience with the Third-party Payors. If the rates of collection of past-due receivables recorded for previous fiscal periods changes, or if there is a trend in the rates of collection on those receivables, the Company may be required to change the rate at which it provides for additions to the allowance. A change in the rates of the Company’s collections 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. Accordingly, changes to the allowance for contractual adjustments, which are recorded in the income statement as a reduction of revenue, have historically fluctuated and may continue to fluctuate significantly from quarter to quarter. | |
(2) SIGNIFICANT ACCOUNTING POLICIES (continued) | |
Due to the nature of the industry, the reimbursement environment in which the Company operates and changes in health care reform, estimates are required to record net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of third-party billing arrangements and the uncertainty of reimbursement amounts for certain products or services from payors or an unanticipated requirement to refund payments previously received may result in adjustments to amounts originally recorded. Due to continuing changes in the health care industry and third-party reimbursement, as well as changes in our billing practices to increase cash collections, it is possible that management’s estimates could change in the near term, which could have an impact on our results of operations and cash flows. Any differences between estimated settlements and final determinations are reflected as an increase or a reduction to revenue in the period when such final determinations are known. | |
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 that insurance provider. 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. | |
As of September 30, 2013, the Company believes it has an adequate allowance for contractual adjustments relating to all known insurance disputes and refund requests. However, no assurances can be given with respect to such estimates of reimbursements and offsets or the ultimate outcome of any refund requests. | |
In addition to the allowance for contractual adjustments, the Company records an allowance for uncollectible accounts receivable. Uncollectible accounts receivable are primarily a result of: non-payment from patients who have been direct billed for co-payments or deductibles, lack of appropriate insurance coverage and disallowances of charges by Third-party Payors. If there is a change to a material insurance provider contract or policy, application by a provider, a decline in the economic condition of providers or a significant turnover of Company billing personnel resulting in diminished collection effectiveness, the estimate of the allowance for uncollectible accounts receivable may not be adequate and may result in an increase in the future. At September 30, 2013 and December 31, 2012, the allowance for uncollectible accounts receivable is $1,837. | |
Fair Value of Financial Instruments | ' |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The Company’s financial instruments at September 30, 2013 include cash, accounts receivable and accounts payable, for which current carrying amounts approximate fair value due to their short-term nature. Financial instruments at September 30, 2013 also include the line of credit and notes payable, 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 | |
Inventories, which primarily represent finished goods, are valued at the lower of cost (average) or market. Finished goods include products held at the Company’s headquarters and at different locations by health care providers or other parties for rental or sale to patients. Total (gross) inventories at September 30, 2013 included $6,037 of finished goods, $354 of parts, and $1,215 of supplies. | |
The Company monitors inventory for turnover and obsolescence, and records losses for excess and obsolete inventory as appropriate. At September 30, 2013, the Company had an allowance for obsolete and damaged inventory of approximately $1,475. The allowance for obsolete and damaged inventory was approximately $1,181 at December 31, 2012. The Company had $1,505 of open purchase commitments at September 30, 2013. | |
Property and Equipment | ' |
(2) SIGNIFICANT ACCOUNTING POLICIES (continued) | |
PROPERTY AND EQUIPMENT | |
Property and equipment are stated at cost. Products on rental contracts are placed in property and equipment and depreciated over their estimated useful life. The Company removes the cost and the related accumulated depreciation from the accounts of assets sold or retired, and the resulting gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the useful life of the asset. As rental inventory contributes directly to the revenue generating process, the Company classifies the depreciation of rental inventory in cost of revenue. | |
Repairs and maintenance costs are charged to expense as incurred. | |
Goodwill and Intangible Assets | ' |
GOODWILL AND INTANGIBLE ASSETS | |
Goodwill represents the excess of the purchase price over the fair value of the net assets of the business acquired. Authoritative guidance requires that goodwill be assessed for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment assessment requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments are required to estimate the fair value of a reporting unit including estimating future cash flows, determining appropriate discount rates and other assumptions. When conducting its goodwill impairment assessment, the Company initially performs a qualitative evaluation to determine if it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a two-step goodwill impairment test. | |
The Company determined, based on its qualitative evaluation, that it was necessary to perform the two-step goodwill impairment test during the second quarter of 2013, primarily because of the significant decline in sales in its ZMI electrotherapy products. In March 2012, the Company acquired substantially all of the assets and business of NeuroDyne Medical Corp. (NeuroDyne). The Company modified its business forecast for NeuroDyne during the second quarter of 2013, resulting in reduced estimated sales and cash flow, as compared to the original business forecast at the time of the acquisition. Management, therefore performed the two-step goodwill impairment test during the second quarter of 2013, and determined that goodwill related to NeuroDyne was impaired and recorded a $39 goodwill impairment charge during the three months ended June 30, 2013. | |
Intangible assets with estimable lives are amortized in a pattern consistent with the asset’s identifiable cash flows or using a straight- line method over their remaining estimated benefit periods if the pattern of cash flows is not estimable. The Company reviews the carrying value of intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of their carrying amounts to the undiscounted cash flows that the asset or asset group is expected to generate. If the carrying amount of the assets exceeds the undiscounted cash flows the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. The Company’s intangible assets primarily relate to the asset acquisition of NeuroDyne. The Company modified its business forecast for NeuroDyne during the second quarter of 2013, resulting in reduced estimated sales and cash flow, as compared to the original business forecast at the time of the acquisition. Therefore, the Company recorded an impairment charge of $100 during the three months ended June 30, 2013 related to certain NeuroDyne intangible assets. The Company utilized a discounted cash flow (DCF) model to determine fair value for both goodwill and intangible assets as of June 30, 2013. | |
Share-based Compensation | ' |
STOCK-BASED COMPENSATION | |
The Company accounts for stock-based compensation through recognition of the cost of employee services received in exchange for an award of equity instruments, which is measured based on the grant date fair value of the award that is ultimately expected to vest during the period. The stock-based compensation expenses are recognized over the period during which an employee is required to provide service in exchange for the award (the requisite service period, which in the Company’s case is the same as the vesting period). |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Property and Equipment | ' | |||||||||||||
Property and equipment as of September 30, 2013 and December 31, 2012 consist of the following: | ||||||||||||||
September 30, | December 31, | Useful | ||||||||||||
2013 | 2012 | lives | ||||||||||||
(UNAUDITED) | ||||||||||||||
Office furniture and equipment | $ | 2,365 | $ | 1,836 | 3‑7 years | |||||||||
Rental inventory | 2,398 | 3,147 | 5 years | |||||||||||
Vehicles | 76 | 76 | 5 years | |||||||||||
Leasehold improvements | 375 | 375 | 2‑6 years | |||||||||||
Assembly equipment | 171 | 168 | 7 years | |||||||||||
5,385 | 5,602 | |||||||||||||
Less accumulated depreciation | (2,103 | ) | (1,751 | ) | ||||||||||
$ | 3,282 | $ | 3,851 | |||||||||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Acquisition of Intangible Assets | ' | |||||||||||||
Intangible assets as of September 30, 2013 and December 31, 2012, consist of the following: | ||||||||||||||
September 30, 2013 | December 31, 2012 | Amortization Life | ||||||||||||
Years | ||||||||||||||
(UNAUDITED) | ||||||||||||||
Trade names | $ | 33 | $ | 72 | 5 | |||||||||
Non-compete agreement | 26 | 26 | 5 | |||||||||||
Technology | 74 | 135 | 5 | |||||||||||
Domain Name | 18 | 18 | 1 | |||||||||||
Total intangible assets, gross | 151 | 251 | ||||||||||||
Less: accumulated amortization | (87 | ) | (48 | ) | ||||||||||
Total intangible assets, net | $ | 64 | $ | 203 | ||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Calculation of Basic and Diluted (Loss) Per Share | ' | ||||||||||||||||||||
The calculation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Basic: | |||||||||||||||||||||
Net (loss) income applicable to common stockholders | $ | (738 | ) | $ | 358 | $ | (2,758 | ) | $ | 1,151 | |||||||||||
Weighted average shares outstanding – basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 | |||||||||||||||||
Net (loss) income per share – basic | $ | (0.02 | ) | $ | 0.01 | $ | (0.09 | ) | $ | 0.04 | |||||||||||
Diluted: | |||||||||||||||||||||
Net (loss) income applicable to common stockholders | $ | (738 | ) | $ | 358 | $ | (2,758 | ) | $ | 1,151 | |||||||||||
Weighted average shares outstanding – basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 | |||||||||||||||||
Dilutive securities | — | 185,928 | — | 167,870 | |||||||||||||||||
Weighted average shares outstanding – diluted | 31,148,234 | 31,316,836 | 31,148,234 | 31,202,842 | |||||||||||||||||
Net (loss) income per share – diluted | $ | (0.02 | ) | $ | 0.01 | $ | (0.09 | ) | $ | 0.04 | |||||||||||
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
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 during the nine months ended September 30, 2013 and 2012: | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Weighted average expected term | 6.25 years | 6.17 years | ||||||||||||||||
Weighted average volatility | 111 | % | 134 | % | ||||||||||||||
Weighted average risk-free interest rate | 1.3 | % | 1.0 | % | ||||||||||||||
Dividend yield | 0 | % | 0 | % | ||||||||||||||
Summary of Stock Option Activity Under the Option Plan | ' | |||||||||||||||||
A summary of stock option activity under the Option Plan for the nine months ended September 30, 2013 is presented below: | ||||||||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||||||||
Under | Average | Average | Intrinsic | |||||||||||||||
Option | Exercise | Remaining | Value | |||||||||||||||
Price | Contractual | |||||||||||||||||
Life | ||||||||||||||||||
Outstanding at January 1, 2013 | 1,501,500 | $ | 0.95 | |||||||||||||||
Granted | 356,000 | $ | 0.37 | |||||||||||||||
Exercised | — | $ | — | |||||||||||||||
Forfeited | (374,500 | ) | $ | 0.88 | ||||||||||||||
Outstanding at September 30, 2013 | 1,483,000 | $ | 0.83 | 7.0 years | $ | 75 | ||||||||||||
Exercisable at September 30, 2013 | 843,997 | $ | 1.04 | 5.7 years | $ | 75 | ||||||||||||
Summary of Status of the Company's Non-Vested Share Awards | ' | |||||||||||||||||
A summary of status of the Company’s non-vested share awards as of and for the nine months ended September 30, 2013 is presented below: | ||||||||||||||||||
Nonvested Shares | Weighted Average | |||||||||||||||||
Under Option | Grant Date Fair Value | |||||||||||||||||
Non-vested at January 1, 2013 | 690,877 | $ | 0.69 | |||||||||||||||
Granted | 356,000 | $ | 0.31 | |||||||||||||||
Vested | (251,999 | ) | $ | 0.77 | ||||||||||||||
Forfeited | (155,875 | ) | $ | 0.81 | ||||||||||||||
Non-vested at September 30, 2013 | 639,003 | $ | 0.49 | |||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Fair Value of Assets and Liabilities on a Recurring Basis | ' | |||||||||
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: | ||||||||||
September 30, 2013 | Significant | |||||||||
Unobservable | ||||||||||
Inputs | ||||||||||
(Level 3) | ||||||||||
Liabilities: | ||||||||||
Contingent consideration | $ | 31 | $ | 31 | ||||||
Changes in the Fair Value of the Level 3 Liabilities | ' | |||||||||
Changes in the fair value of the Level 3 liabilities for the nine months ended September 30, 2013: | ||||||||||
Balance at January 1, 2013 | $ | 104 | ||||||||
Payments | (3 | ) | ||||||||
Accretion expense | 4 | |||||||||
Change in fair value of contingent consideration | (74 | ) | ||||||||
Balance at September 30, 2013 | $ | 31 | ||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Summarized Information about Reported Segment | ' | ||||||||||||||||||||||||||||||||
Net revenue was primarily generated from sales in the United States. | |||||||||||||||||||||||||||||||||
ZMI & | ZND & | ZMS | TOTAL | ||||||||||||||||||||||||||||||
ZBC | ZEU | ||||||||||||||||||||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, 2013 | |||||||||||||||||||||||||||||||||
Sales | $ | 5,138 | $ | 53 | $ | 0 | $ | 5,191 | |||||||||||||||||||||||||
Gross profit | 3,612 | 33 | 0 | 3,645 | |||||||||||||||||||||||||||||
Total assets | 22,361 | 986 | 12 | 23,359 | |||||||||||||||||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, 2012 | |||||||||||||||||||||||||||||||||
Sales | $ | 10,003 | 99 | $ | 0 | $ | 10,102 | ||||||||||||||||||||||||||
Gross profit | 7,834 | 52 | 0 | 7,886 | |||||||||||||||||||||||||||||
Total assets | 25,494 | 692 | 7 | 26,193 | |||||||||||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2013 | |||||||||||||||||||||||||||||||||
Sales | $ | 18,102 | $ | 229 | $ | 0 | $ | 18,331 | |||||||||||||||||||||||||
Gross profit | 12,570 | 141 | 0 | 12,711 | |||||||||||||||||||||||||||||
Total assets | 22,361 | 986 | 12 | 23,359 | |||||||||||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2012 | |||||||||||||||||||||||||||||||||
Sales | $ | 28,845 | 227 | $ | 0 | $ | 29,072 | ||||||||||||||||||||||||||
Gross profit | 23,119 | 138 | 0 | 23,257 | |||||||||||||||||||||||||||||
Total assets | 25,494 | 692 | 7 | 26,193 | |||||||||||||||||||||||||||||
Unaudited_Condensed_Consolidat1
Unaudited Condensed Consolidated Financial Statements and Managements' Plans (Details Textual) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Unaudited Condensed Consolidated Financial Statements (Textual) [Abstract] | ' | ' | ' |
Percentage of limited liability | 80.00% | ' | ' |
Negative cash flows from operations | ($676) | ($1,200) | ' |
Maximum borrowings under line of credit | 7,000 | ' | ' |
Line of credit | 6,291 | ' | 5,906 |
Fixed expenses reduced by cutting annual employee costs through headcount reduction | 4,200 | ' | ' |
Cash savings due to renegotiated existing building lease | $1,500 | ' | ' |
Significant_Accounting_Policie2
Significant Accounting Policies (Details) (USD $) | 9 Months Ended | 12 Months Ended | 3 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2013 |
Neuro Dyne | |||
Significant Accounting Policies [Abstract] | ' | ' | ' |
Equity and Noncontrolling interest | 20.00% | ' | ' |
Noncontrolling interest member contributed | ' | $10 | ' |
Allowance for uncollectible accounts receivable | 1,837 | 1,837 | ' |
Inventory finished goods | 6,037 | ' | ' |
Inventory parts | 354 | ' | ' |
Inventory supplies | 1,215 | ' | ' |
Reserve for obsolete and damaged inventory | 1,475 | 1,181 | ' |
Open purchase commitments | 1,505 | ' | ' |
Impairment of goodwill | 39 | ' | 39 |
Impairment of intangible assets | $100 | ' | $100 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | $5,385 | $5,602 |
Less accumulated depreciation | -2,103 | -1,751 |
Property and Equipment, Net | 3,282 | 3,851 |
Office furniture and equipment | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 2,365 | 1,836 |
Office furniture and equipment | Minimum | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment Useful Life | '3 years | ' |
Office furniture and equipment | Maximum | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment Useful Life | '7 years | ' |
Rental inventory | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 2,398 | 3,147 |
Property and Equipment Useful Life | '5 years | ' |
Vehicles | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 76 | 76 |
Property and Equipment Useful Life | '5 years | ' |
Leasehold improvements | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 375 | 375 |
Leasehold improvements | Minimum | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment Useful Life | '2 years | ' |
Leasehold improvements | Maximum | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment Useful Life | '6 years | ' |
Assembly equipment | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | $171 | $168 |
Property and Equipment Useful Life | '7 years | ' |
Leases_Details
Leases (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Leases [Abstract] | ' |
Lease expiry year | '2023-11 |
Lease renewal options | 'Two five-year renewal options |
Base monthly rent expense | $129,000 |
Increase in base monthly rental expense per month | 3 |
Increase in base monthly rental expenses per square foot | 0.5 |
Monthly rent expense after January 2023 | 157,000 |
Lease rent escalation | '2023-01 |
Annual rental expense | 1,420,000 |
Refund from landlord | 101,000 |
Tenant allowance | 1,130,000 |
Allowance used for leasehold improvements | 565,000 |
Amount used to apply to rent in month eight and beyond | $565,000 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Acquisition of intangible assets | ' | ' |
Total intangible assets, gross | $151 | $251 |
Less: accumulated amortization | -87 | -48 |
Total intangible assets, net | 64 | 203 |
Trade names | ' | ' |
Acquisition of intangible assets | ' | ' |
Total intangible assets, gross | 33 | 72 |
Amortization Life Years | '5 years | ' |
Non-compete agreement | ' | ' |
Acquisition of intangible assets | ' | ' |
Total intangible assets, gross | 26 | 26 |
Amortization Life Years | '5 years | ' |
Technology | ' | ' |
Acquisition of intangible assets | ' | ' |
Total intangible assets, gross | 74 | 135 |
Amortization Life Years | '5 years | ' |
Domain Name | ' | ' |
Acquisition of intangible assets | ' | ' |
Total intangible assets, gross | $18 | $18 |
Amortization Life Years | '1 year | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Basic: | ' | ' | ' | ' |
Net (loss) income applicable to common stockholders | ($738) | $358 | ($2,758) | $1,151 |
Weighted average shares outstanding – basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 |
Net (loss) income per share – basic | ($0.02) | $0.01 | ($0.09) | $0.04 |
Diluted: | ' | ' | ' | ' |
Net (loss) income applicable to common stockholders | ($738) | $358 | ($2,758) | $1,151 |
Weighted average shares outstanding – basic | 31,148,234 | 31,130,908 | 31,148,234 | 31,034,972 |
Dilutive securities | ' | 185,928 | ' | 167,870 |
Weighted average shares outstanding – diluted | 31,148,234 | 31,316,836 | 31,148,234 | 31,202,842 |
Net (loss) income per share – diluted | ($0.02) | $0.01 | ($0.09) | $0.04 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2012 | Sep. 30, 2012 | |
Earnings Per Share [Abstract] | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 1,061,375 | 1,061,375 |
StockBased_Compensation_Plans_1
Stock-Based Compensation Plans (Details 2) (USD $) | 9 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Summary of stock option activity under the option Plan | ' | ' |
Shares under option outstanding beginning balance | 1,501,500 | ' |
Shares under option, granted | 356,000 | 322,500 |
Shares under option, exercised | ' | ' |
Shares under option, forfeited | -374,500 | ' |
Shares under option outstanding ending balance | 1,483,000 | ' |
Shares under option, exercisable ending balance | 843,997 | ' |
Weighted average exercise price outstanding beginning balance | $0.95 | ' |
Weighted average exercise price, granted | $0.37 | ' |
Weighted average exercise price, exercised | ' | ' |
Weighted average exercise price, forfeited | $0.88 | ' |
Weighted average exercise price outstanding ending balance | $0.83 | ' |
Weighted average exercise price, exercisable ending balance | $1.04 | ' |
Outstanding, weighted average exercise remaining contractual life | '7 years | ' |
Exercisable, weighted average exercise remaining contractual life | '5 years 8 months 12 days | ' |
Outstanding aggregate intrinsic value | $75 | ' |
Exercisable aggregate intrinsic value | $75 | ' |
StockBased_Compensation_Plans_2
Stock-Based Compensation Plans (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Summary of status of the Company's non-vested share awards | ' |
Nonvested shares under option at January 1, 2013 | 690,877 |
Nonvested share under option, granted | 356,000 |
Nonvested share under option, vested | -251,999 |
Nonvested share under option, forfeited | -155,875 |
Nonvested shares under option at June 30, 2013 | 639,003 |
Weighted average grant date fair value at January 1, 2013 | $0.69 |
Weighted average grant date fair value, granted | $0.31 |
Weighted average grant date fair value, vested | $0.77 |
Weighted average grant date fair value, forfeited | $0.81 |
Weighted average grant date fair value at June 30, 2013 | $0.49 |
StockBased_Compensation_Plans_3
Stock-Based Compensation Plans (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stock-based compensation plans [Abstract] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,000,000 | ' | 3,000,000 | ' |
Stock Options Under Option Plan Maximum Expiry Period | ' | ' | '10 years | ' |
Stock Based Compensation Plans (Additional Textual) [Abstract] | ' | ' | ' | ' |
Employee stock-based compensation expense | $29 | $60 | $98 | $150 |
Unrecognized compensation expense related to stock options | 163 | ' | 163 | ' |
Weighted-average period of unrecognized compensation expense related to stock option | ' | ' | '3 years | ' |
Granted options to purchase of common stock | ' | ' | 356,000 | 322,500 |
Minimum Exercise price of options to purchase | ' | ' | $0.32 | $0.70 |
Maximum Exercise price of options to purchase | ' | ' | $0.48 | $0.81 |
Cost of Sales | ' | ' | ' | ' |
Stock-based compensation plans [Abstract] | ' | ' | ' | ' |
Stock based compensation including cost of good sold | 2 | 7 | 9 | 20 |
Selling, General and Administrative Expenses | ' | ' | ' | ' |
Stock-based compensation plans [Abstract] | ' | ' | ' | ' |
Stock based compensation including cost of good sold | $27 | $53 | $89 | $130 |
StockBased_Compensation_Plans_4
Stock-Based Compensation Plans (Details 1) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Fair value of stock option grants | ' | ' |
Weighted average expected term | '6 years 3 months | '6 years 2 months 1 day |
Weighted average volatility | 111.00% | 134.00% |
Weighted average risk-free interest rate | 1.30% | 1.00% |
Dividend yield | 0.00% | 0.00% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring, USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Liabilities: | ' |
Contingent consideration | $31 |
Fair Value, Inputs, Level 3 | ' |
Liabilities: | ' |
Contingent consideration | $31 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Changes in the fair value of the Level 3 liabilities | ' |
Balance at January 1, 2013 | $104 |
Payments | -3 |
Accretion expense | 4 |
Change in fair value of contingent consideration | -74 |
Balance at September 30, 2013 | $31 |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details Textual) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Fair Value Measurements [Abstract] | ' |
Contingent payments | $3 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
Income taxes [Abstract] | ' | ' | ' |
Statutory rate | 38.00% | 37.00% | ' |
Income taxes paid | $20 | $384 | $1,016 |
State tax refunds | $175 | $175 | ' |
Line_of_Credit_Details
Line of Credit (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Line of Credit Facility [Abstract] | ' |
Maximum borrowings under line of credit | $7,000 |
Line of Credit (Additional Textual) [Abstract] | ' |
Dollar deposits in amount | 1,000 |
Base rate for variable interest rate for borrowings | 3.00% |
Basis spread on variable interest rate | 3.75% |
Line of credit agreement maturity notice period | '30 days |
Date of Maturity | 19-Dec-14 |
Dollar deposit maturity period | '1 month |
RLOC | ' |
Line of Credit Facility [Abstract] | ' |
Maximum borrowings under line of credit | 7,000 |
Interest rate description | 'LIBOR rate as published in The Wall Street Journal for dollar deposits in the amount of $1,000 with a maturity of one month or (ii) 3% per annum, plus, in each case, a margin of 3.75%. |
Outstanding amount on the Credit Agreement | 6,291 |
Remaining amount available for borrowing | $0 |
Effective interest rate under the Credit Agreement | 8.00% |
Interest rate | 7.00% |
Fees include in effective interest rate under the credit agreement | 1.00% |
Concentrations_Details
Concentrations (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Line of Credit Facility [Abstract] | ' | ' | ' |
Purchased electrotherapy products Percentage | 34.00% | 23.00% | ' |
Accounts receivable received by the company from a private health insurance company | 7.00% | 7.00% | 22.00% |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | $5,191 | $10,102 | $18,331 | $29,072 | ' |
Gross profit | 3,645 | 7,886 | 12,711 | 23,257 | ' |
Total assets | 23,359 | 26,193 | 23,359 | 26,193 | 25,936 |
Reporting Segments | Zynex Medical | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 5,138 | 10,003 | 18,102 | 28,845 | ' |
Gross profit | 3,612 | 7,834 | 12,570 | 23,119 | ' |
Total assets | 22,361 | 25,494 | 22,361 | 25,494 | ' |
Reporting Segments | Zynex NeuroDiagnostics | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 53 | 99 | 229 | 227 | ' |
Gross profit | 33 | 52 | 141 | 138 | ' |
Total assets | 986 | 692 | 986 | 692 | ' |
Reporting Segments | Zynex Monitoring Solutions | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 0 | 0 | 0 | 0 | ' |
Gross profit | 0 | 0 | 0 | 0 | ' |
Total assets | $12 | $7 | $12 | $7 | ' |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Segment | |
Segment Reporting (Textual) [Abstract] | ' |
Number of reporting segments | 3 |