Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | May 31, 2019 | Sep. 28, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | ENCISION INC | ||
Entity Central Index Key | 0000930775 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,421,459 | ||
Entity Common Stock, Shares Outstanding | 11,558,355 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 273,348 | $ 114,538 |
Restricted cash | 25,000 | 25,000 |
Accounts receivable, net of allowance for doubtful accounts of $26,000 at March 31, 2019 and $20,500 at March 31, 2018 | 1,009,106 | 962,639 |
Inventories, net of reserve for obsolescence of $50,000 at March 31, 2019 and $21,000 at March 31, 2018 | 1,472,543 | 1,437,159 |
Prepaid expenses | 130,016 | 74,830 |
Total current assets | 2,910,013 | 2,614,166 |
Equipment: | ||
Furniture, fixtures and equipment, at cost | 3,061,329 | 3,021,968 |
Accumulated depreciation | (2,811,761) | (2,673,037) |
Equipment, net | 249,568 | 348,931 |
Patents, net of accumulated amortization of $266,028 at March 31, 2019 and $238,571 at March 31, 2018 | 248,579 | 270,504 |
Other assets | 19,548 | 18,873 |
TOTAL ASSETS | 3,427,708 | 3,252,474 |
Current liabilities: | ||
Accounts payable | 578,956 | 466,418 |
Accrued compensation | 295,875 | 257,133 |
Other accrued liabilities | 126,434 | 284,550 |
Deferred rent | 0 | 30,384 |
Total current liabilities | 1,001,265 | 1,038,485 |
Long-term liability: | ||
Deferred rent | 74,821 | 10,128 |
Total liabilities | 1,076,086 | 1,048,613 |
Shareholders' equity: | ||
Preferred stock, no par value: 10,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock and additional paid-in capital, no par value: 100,000,000 shares authorized; 11,558,355 and 10,683,355 issued and outstanding at March 31, 2019 and 2018, respectively | 24,201,769 | 23,817,912 |
Accumulated (deficit) | (21,850,147) | (21,614,051) |
Total shareholders' equity | 2,351,622 | 2,203,861 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 3,427,708 | $ 3,252,474 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 26,000 | $ 20,500 |
Inventories, reserve for obsolescence | 50,000 | 21,000 |
Accumulated amortization | $ 266,028 | $ 238,571 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock and additional paid-in capital, shares authorized | 100,000,000 | 100,000,000 |
Common stock and additional paid-in capital, shares issued | 11,558,355 | 10,683,355 |
Common stock and additional paid-in capital, shares outstanding | 11,558,355 | 10,683,355 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
NET REVENUE | $ 8,802,456 | $ 8,754,279 |
COST OF REVENUE | 4,130,856 | 3,747,256 |
GROSS PROFIT | 4,671,600 | 5,007,023 |
OPERATING EXPENSES: | ||
Sales and marketing | 2,763,065 | 2,311,767 |
General and administrative | 1,315,401 | 1,457,342 |
Research and development | 779,493 | 842,081 |
Total operating expenses | 4,857,959 | 4,611,190 |
OPERATING INCOME (LOSS) | (186,359) | 395,833 |
Interest expense, net | (50,334) | (60,643) |
Other income, net | 597 | 369 |
Interest and other income, net | (49,737) | (60,274) |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | (236,096) | 335,559 |
Provision for income taxes | 0 | 0 |
NET INCOME (LOSS) | $ (236,096) | $ 335,559 |
Net income (loss) per share-basic and diluted | $ (0.02) | $ 0.03 |
Weighted average shares-basic | 10,932,670 | 10,683,355 |
Weighted average shares-diluted | 10,932,670 | 10,707,126 |
Statements of Shareholders' Equ
Statements of Shareholders' Equity - USD ($) | Common Stock and Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Mar. 31, 2017 | 10,683,355 | ||
Beginning Balance, Amount at Mar. 31, 2017 | $ 23,752,131 | $ (21,949,610) | $ 1,802,521 |
Net income (loss) | 335,559 | 335,559 | |
Compensation expense related to equities | $ 65,781 | 65,781 | |
Ending Balance, Shares at Mar. 31, 2018 | 10,683,355 | ||
Ending Balance, Amount at Mar. 31, 2018 | $ 23,817,912 | (21,614,051) | 2,203,861 |
Net income (loss) | (236,096) | (236,096) | |
Compensation expense related to equities | $ 37,027 | 37,027 | |
Common stock issued, Shares | 875,000 | ||
Common stock issued, Amount | $ 346,830 | 346,830 | |
Ending Balance, Shares at Mar. 31, 2019 | 11,558,355 | ||
Ending Balance, Amount at Mar. 31, 2019 | $ 24,201,769 | $ (21,850,147) | $ 2,351,622 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from (used in) operating activities: | ||
Net income (loss) | $ (236,096) | $ 335,559 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 182,066 | 202,895 |
Stock-based compensation expense related to stock options | 37,027 | 65,781 |
(Recovery from) provision for doubtful accounts, net change | 5,500 | (12,500) |
(Recovery from) provision for inventory obsolescence, net change | 29,000 | (29,000) |
Change in operating assets and liabilities: | ||
Accounts receivable | (51,967) | 92,142 |
Inventories | (64,384) | (279,747) |
Prepaid expenses and other assets | (55,861) | (14,963) |
Accounts payable | 112,538 | 63,504 |
Accrued compensation and other accrued liabilities | (85,065) | (4,230) |
Net cash provided by (used in) operating activities | (127,242) | 419,441 |
Cash flows (used in) investing activities: | ||
Acquisition of property and equipment | (55,246) | (56,562) |
Patent costs | (5,532) | (43,403) |
Net cash (used in) investing activities | (60,778) | (99,965) |
Cash flows from (used in) financing activities: | ||
Paydowns to credit facility, net change | 0 | (275,055) |
Change in restricted cash | 0 | 25,000 |
Proceeds from the issuance of common stock | 350,000 | 0 |
Cost of the issuance of common stock | (3,170) | 0 |
Net cash provided by (used in) financing activities | 346,830 | (250,055) |
Net increase in cash, cash equivalents and restricted cash | 158,810 | 69,421 |
Cash, cash equivalents and restricted cash, beginning of fiscal year | 139,538 | 70,117 |
Cash, cash equivalents and restricted cash, end of fiscal year | 298,348 | 139,538 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the year for interest | $ 42,914 | $ 50,643 |
Description of Business
Description of Business | 12 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business and Basis of Presentation Encision Inc. is a medical device company that designs, develops, manufactures and markets patented surgical instruments that provide greater safety to patients undergoing minimally-invasive surgery. We believe that our patented AEM ® We have an accumulated deficit of $21,850,147 at March 31, 2019. Operating funds have been provided primarily by issuances of our common stock and warrants, the exercise of stock options to purchase our common stock, and by operating profits. Our liquidity has diminished because of prior years’ operating losses, and we may be required to seek additional capital in the future. Our strategic marketing and sales plan is designed to expand the use of our products in surgically active hospitals in the United States. We had a net (loss) income available to shareholders of $(236,096) and 335,559 for the fiscal years ended March 31, 2019 and 2018, respectively. As of March 31, 2019, we had cash and cash equivalents of $273,348, working capital of $1,908,748 and a line of credit of $1 million. During the fiscal year ended March 31, 2019, the Company used cash in operations of $127,242. The principal difference between the net loss of $236,096 and cash used in operations was the non-cash expenses of depreciation, amortization and stock-based compensation expense related to stock options, for a total of $219,093. The principal reason for our loss for the fiscal year ended March 31, 2019 was higher material costs as a result of the governmental tariffs. These facts and circumstances were initial indicators that created uncertainty about our ability to continue as a going concern. To address this uncertainty, management has developed plans to ensure that we have the working capital necessary to fund operations. We had continued revenue growth of seven percent from our AEM product revenue. Management concludes that it is probable that our cash resources and our $1 million line of credit will be sufficient to meet our cash requirements for twelve months from the issuance of the consolidated financial statements. In the event that the governmental tariffs are reduced or eliminated then we expect that the higher material costs that we experienced will be reduced. We are increasing our pricing on products to mitigate somewhat our higher material costs. Therefore, the accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates in the Preparation of Financial Statements. Cash, Cash Equivalents and Restricted Cash Fair Value of Financial Instruments. Concentration of Credit Risk. We have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. We maintain the majority of our cash balances with one financial institution in the form of demand deposits. Accounts receivable are typically unsecured and are derived from transactions with and from entities in the healthcare industry primarily located in the United States. Accordingly, we may be exposed to credit risk generally associated with the healthcare industry. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We charge interest on past due accounts on a case-by-case basis. A summary of the activity in our allowance for doubtful accounts is as follows: Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 20,500 $ 33,000 Provision for (recoveries of) estimated losses (560 ) (10,982 ) Write-off of uncollectible accounts 6,060 (1,518 ) Balance, end of year $ 26,000 $ 20,500 The net accounts receivable balance at March 31, 2019 of $1,009,106 included no more than 8% from any one customer. The net accounts receivable balance at March 31, 2018 of $962,639 included no more than 7% from any one customer. Warranty Accrual. We provide for the estimated cost of product warranties at the time sales are recognized. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers, our warranty obligation is based upon historical experience and is also affected by product failure rates and material usage in correcting a product failure. Should actual product failure rates or material usage costs differ from our estimates, revisions to the estimated warranty liability would be required. A summary of our warranty claims activity, included in other accrued liabilities, is as follows: Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 10,000 $ 20,000 Provision for estimated warranty claims 4,592 (10,741 ) Claims made (4,592 ) (741 ) Balance, end of year $ 10,000 $ 10,000 Inventories. Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. We reduce inventory for estimated obsolete or unmarketable inventory equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. At March 31, 2019 and 2018, inventory consisted of the following: March 31, 2019 March 31, 2018 Raw materials $ 1,063,780 $ 941,964 Finished goods 458,763 516,195 Total gross inventories 1,522,543 1,458,159 Less reserve for obsolescence (50,000 ) (21,000 ) Total net inventories $ 1,472,543 $ 1,437,159 A summary of the activity in our inventory reserve for obsolescence is as follows: Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 21,000 $ 50,000 Provision for estimated obsolescence 29,000 3,816 Write-off of obsolete inventory — (32,816 ) Balance, end of year $ 50,000 $ 21,000 Property and Equipment. Long-Lived Assets. Patents. March 31, 2019 March 31, 2018 Patents issued $ 447,430 $ 447,430 Accumulated amortization (254,992 ) (233,390 ) Patents issued, net of accumulated amortization 192,438 214,040 Patent applications 67,176 61,645 Accumulated amortization (11,035 ) (5,181 ) Patent applications, net of accumulated amortization 56,141 56,464 Total net patents and patent applications $ 248,579 $ 270,504 The expected annual amortization expense related to patents and patent applications as of March 31, 2019, for the next five fiscal years, is as follows: Fiscal Year Amount 2020 $ 27,456 2021 24,599 2022 23,876 2023 20,958 2024 and following 151,690 Total $ 248,579 Other Accrued Liabilities. March 31, 2019 March 31, 2018 Bonus $ — $ 108,000 Warranty 10,000 10,000 Sales commissions 50,129 45,068 Lease normalization — 23,939 Sales and use tax 22,494 17,434 Marketing fees 4,041 7,278 Professional fees — 37,500 Payroll taxes 27,188 24,114 Miscellaneous 12,582 11,217 Total other accrued liabilities $ 126,434 $ 284,550 Income Taxes. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The cumulative effect of adopting ASC 740 on April 1, 2007 has been recorded net in deferred tax assets, which resulted in no ASC 740 liability on the balance sheet. The total amount of unrecognized tax benefits as of the date of adoption was zero. There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit the Company’s tax returns from fiscal year ended March 31, 1999 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the statements of operations. There have been no income tax related interest or penalties assessed or recorded. Because the Company has provided a full valuation allowance on all of its deferred tax assets, the adoption of ASC 740 had no impact on our effective tax rate. Revenue Recognition. Sales Taxes. Research and Development Expenses Advertising Costs. Stock-Based Compensation. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying statements of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Stock-based compensation expense recognized in our statements of operations for fiscal years 2019 and 2018 included compensation expense for share-based payment awards granted prior to, but not yet vested as of March 31, 2019, based on the grant date fair value. Compensation expense for all share-based payment is recognized using the straight-line, single-option method. As stock-based compensation expense recognized in the accompanying statements of operations for fiscal years 2019 and 2018 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We used the Black-Scholes option-pricing model (“Black-Scholes model”) to determine fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. Stock-based compensation expense recognized under ASC 718 for fiscal years 2019 and 2018 was $37,027 and $65,781, respectively, which consisted of stock-based compensation expense related to director and employee stock options. Stock-based compensation expense related to director and employee stock options under ASC 718 for fiscal years 2019 and 2018 was allocated as follows: Years Ended March 31, 2019 March 31, 2018 Cost of sales $ 2,026 $ 2,157 Sales and marketing 4,034 13,679 General and administrative 28,919 45,513 Research and development 2,048 4,432 Stock-based compensation expense $ 37,027 $ 65,781 Segment Reporting. Basic and Diluted Income per Common Share. The following table presents the calculation of basic and diluted net income (loss) per share: Years Ended March 31, 2019 March 31, 2018 Net income (loss) $ (236,096 ) $ 335,559 Weighted-average shares — basic 10,932,670 10,683,355 Effect of dilutive potential common shares — 23,771 Weighted-average shares — basic and diluted 10,932,670 10,707,126 Net loss per share — basic and diluted $ (0.02 ) $ 0.03 Antidilutive equity units 990,286 983,765 Recent Accounting Pronouncements. ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning April 1, 2018, and adopted the new accounting standard using the modified retrospective transition approach. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure under the new standard. Based on the results of the evaluation, we have determined that the adoption of the new standard presents no material impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. Within the opening balances for the fiscal year beginning April 1, 2019, we will recognize leased assets and corresponding liabilities in other long-term assets of $1,280,000. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | 3. Shareholders’ Equity Stock Option Plans. Under ASC 718, the value of each employee stock option was estimated on the date of grant using the Black-Scholes model for the purpose of financial information in accordance with ASC 718. The use of a Black-Scholes model requires the use of actual employee exercise behavior data and the use of a number of assumptions including expected volatility, risk-free interest rate and expected dividends. Employee stock options for 437,000 and 200,000 shares of stock were granted during fiscal years 2019 and 2018, respectively. As of March 31, 2019, $186,000 of total unrecognized compensation costs related to nonvested stock is expected to be recognized over a period of five years. The assumptions for employee stock options are summarized as follows: Years Ended March 31, 2019 March 31, 2018 Risk-free interest rate 2.2% to 3.1% 1.8% to 1.9% Expected life (in years) 5.0 5.0 Expected volatility 87% to 91% 93% to 95% Expected dividend 0% 0% Cumulative compensation cost recognized in net income or loss with respect to options that are forfeited prior to vesting is adjusted as a reduction of compensation expense in the period of forfeiture. The volatility of the stock is based on the historical volatility for the period that approximates the expected lives of the options being valued. Fair value computations are highly sensitive to the volatility factor; the greater the volatility, the higher the computed fair value of options granted. The total fair value of options granted was computed to be approximately $107,000 and $65,000, for the fiscal years ended March 31, 2019 and 2018, respectively. For disclosure purposes, these amounts are amortized ratably over the vesting periods of the options. Effects of stock-based compensation, net of the effect of forfeitures, totaled $37,027 and $65,781 for fiscal years 2019 and 2018, respectively. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the use of assumptions, including the expected stock price volatility. Because our employee stock options have characteristics significantly different than those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our employee stock options. A summary of our stock option activity and related information for equity compensation plans approved by security holders for each of the fiscal years ended March 31, 2019 and 2018 is as follows: STOCK OPTIONS OUTSTANDING Number Outstanding Weighted-Average Exercise Price per Share BALANCE AT MARCH 31, 2017 685,000 $ 0.63 Granted 200,000 0.45 Forfeited/expired (126,750 ) 0.75 BALANCE AT MARCH 31, 2018 758,250 $ 0.56 Granted 152,000 0.36 Forfeited/expired (238,250 ) 0.79 BALANCE AT MARCH 31, 2019 672,000 $ 0.43 A summary of our stock option activity and related information for equity compensation plans not approved by security holders for the fiscal year ended March 31, 2019 is as follows: STOCK OPTIONS OUTSTANDING Number Outstanding Weighted-Average Exercise Price per Share BALANCE AT MARCH 31, 2017 245,000 $ 0.96 Granted — — Forfeited/expired (20,000 ) — BALANCE AT MARCH 31, 2018 225,000 1.00 Granted 285,000 0.35 Forfeited/expired (216,000 ) 0.83 BALANCE AT MARCH 31, 2019 294,000 $ 0.49 The following table summarizes information about employee stock options outstanding and exercisable at March 31, 2019: STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (in Years) Weighted-Average Exercise Price per Share Number Exercisable Weighted-Average Exercise Price per Share $0.30 - $0.35 505,000 3.9 $ 0.33 126,564 $ 0.31 $0.38 - $0.50 359,000 3.5 $ 0.43 109,223 $ 0.47 $0.70 - $1.15 102,000 0.4 $ 0.59 96,355 $ 0.93 966,000 3.4 $ 0.39 332,142 $ 0.54 A summary of our RSU activity and related information for equity compensation plans approved by security holders for the fiscal year ended March 31, 2019 is as follows: RSUs OUTSTANDING Number Outstanding Weighted-Average Exercise Price per Share BALANCE AT MARCH 31, 2018 24,286 $ 0.62 Granted — — Forfeited/expired — — BALANCE AT MARCH 31, 2019 24,286 $ 0.62 The 966,000 options outstanding as of March 31, 2019 are nonqualified stock options. The exercise price of all options granted through March 31, 2019 has been equal to or greater than the fair market value, as determined by our Board of Directors or based upon publicly quoted market values of our common stock on the date of the grant. As of March 31, 2019, 24,286 equity units for our common stock remain available for grant under the Plan. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 4. Commitments and Contingencies Effective November 9, 2017, we extended our noncancelable lease agreement through July 31, 2024 for our facilities at 6797 Winchester Circle, Boulder, Colorado. The lease includes base rent abatement for the first two months, or $55,583, and $145,000 of leasehold improvements granted by the landlord. At the start of the lease on August 1, 2019, the $145,000 will be recorded on our condensed balance sheets as leasehold improvements and deferred rent. The leasehold improvements will be amortized over the lesser of the lease term or the assets life and the deferred rent will be amortized against rent expense over the lease term. Lease expense was $305,735 and $252,911 for the fiscal years ended March 31, 2019 and 2018, respectively. The minimum future lease payment, by fiscal year, as of March 31, 2019 is as follows: Fiscal Year Amount 2020 322,738 2021 343,167 2022 357,667 2023 372,167 2024 386,667 2025 130,500 Total $ 1,912,906 On July 31, 2018, we signed a new line of credit agreement with Bank of America Merrill Lynch. The facility provides for up to $1 million revolving line of credit and is secured by accounts receivable and inventory. The interest rate is a rate per year equal to the LIBOR Daily Floating Rate plus 2.75 percentage points. There is a minimum quarterly EBITDA covenant and a minimum Collateral Coverage ratio of 2. Minimum Collateral Coverage is the ratio of gross accounts receivable plus inventory to the line of credit commitment. As of March 31, 2019, we had no borrowings from the credit facility and had an additional $1 million available to borrow. For the quarters ended December 31, 2018 and March 31, 2019, we were not in compliance with the minimum quarterly EBITDA covenant. We are subject to regulation by the United States Food and Drug Administration (“FDA”). The FDA provides regulations governing the manufacture and sale of our products and regularly inspects us and other manufacturers to determine our and their compliance with these regulations. As of March 31, 2019, we believe we were in substantial compliance with all known regulations. FDA inspections are conducted periodically at the discretion of the FDA. We were last inspected in December 2012 and were notified of five observations from that inspection, none of which we believe to be material. Our obligation with respect to employee severance benefits is minimized by the “at will” nature of the employee relationships. Our total obligation with respect to contingent severance benefit obligations was none as of March 31, 2019 and 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes We account for income taxes under ASC 740, which requires the use of the liability method. ASC 740 provides that deferred income tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred income tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred income tax assets and liabilities are expected to be settled or realized. The following is a reconciliation between the effective rate and the federal statutory rate used in determining deferred tax assets: Years Ended March 31, 2019 March 31, 2018 Expected income tax rate $ (50,000 ) $ 103,000 State income taxes, net of federal tax benefit (8,000 ) 12,000 Change in valuation allowance 92,000 (1,650,000 ) Other permanent differences 20,000 27,000 Research credits (54,000 ) — Rate change — 1,491,000 Other differences — 17,000 Income tax expense $ — $ — The components of the net accumulated deferred income tax asset (liability) are as follows: Years Ended March 31, 2019 March 31, 2018 Other deferred assets $ 64,000 $ 45,000 Valuation allowance (64,000 ) (45,000 ) Current deferred tax assets — — Credits and net operating loss carryforwards 2,742,000 3,003,000 Valuation allowance (2,742,000 ) (3,003,000 ) Long-term deferred tax assets — — Total deferred tax assets — — Valuation allowance — — Long-term deferred tax liabilities — — Total deferred tax liabilities — — Net deferred tax assets (liabilities) $ — $ — The primary components of our deferred tax assets are described below: Years Ended March 31, 2019 March 31, 2018 Differences in reporting long-term assets $ 64,000 $ 45,000 Credits and net operating loss carryforwards 2,742,000 3,003,000 Less valuation allowance (2,806,000 ) (3,048,000 ) Total deferred tax assets $ — $ — In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which net operating losses and reversal of timing differences may offset taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance. As of March 31, 2019, we had approximately $10 million of net operating loss carryovers for tax purposes. Additionally, we have approximately $292,000 of research and development tax credits available to offset future federal income taxes. The net operating loss and credit carryovers begin to expire in the fiscal year ended March 31, 2020. In the fiscal year ended March 31, 2020, net operating loss of approximately $1,1 million will expire if sufficient taxable income is not available to use it. In fiscal years ended after March 31, 2019, net operating losses expire at various dates through March 31, 2039. Our net operating loss carryovers at March 31, 2019 include $455,000 in income tax deductions related to stock options which will be tax effected and the benefit will be reflected as a credit to additional paid-in capital when realized. As such, these deductions are not reflected in our deferred tax assets. The Internal Revenue Code contains provisions, which may limit the net operating loss carryforwards available to be used in any given year if certain events occur, including significant changes in ownership interests. |
Major Customers_Suppliers
Major Customers/Suppliers | 12 Months Ended |
Mar. 31, 2019 | |
Major Customers/Suppliers | |
Major Customers/Suppliers | 6. Major Customers/Suppliers We depend on sales that are generated from hospitals’ ongoing usage of AEM surgical instruments. In fiscal year 2019, we generated sales from over 300 hospitals that have changed to AEM products, but no hospital customer contributed more than 5% to the total sales. We have a relationship with ATL Technology, LLC who accounted for approximately 27%, Aeroswiss, Inc. who accounted for approximately 18%, and Bovie Medical Company who accounted for approximately 11%, respectively, of our purchases in fiscal year 2019. |
Defined Contribution Employee B
Defined Contribution Employee Benefit Plan | 12 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Defined Contribution Employee Benefit Plan | 7. Defined Contribution Employee Benefit Plan We have adopted a 401(k) Profit Sharing Plan which covers all full-time employees who have completed at least three months of full-time continuous service and are age eighteen or older. Participants may defer up to 20% of their gross pay up to a maximum limit determined by law. Participants are immediately vested in their contributions. We may make discretionary contributions based on corporate financial results for the fiscal year. To date, we have not made contributions to the 401(k) Profit Sharing Plan. Vesting in a contribution account (our contribution) is based on years of service, with a participant fully vested after five years of credited service. |
Related Party Transaction
Related Party Transaction | 12 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | 8. Related Party Transaction We paid consulting fees of $67,102 and $73,195 to an entity owned by one of our directors in fiscal years 2019 and 2018, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events Management evaluated all activity of us and concluded that, as of the date the financial statements were issued, no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. |
Concentration of Credit Risk | Concentration of Credit Risk. We have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. We maintain the majority of our cash balances with one financial institution in the form of demand deposits. Accounts receivable are typically unsecured and are derived from transactions with and from entities in the healthcare industry primarily located in the United States. Accordingly, we may be exposed to credit risk generally associated with the healthcare industry. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We charge interest on past due accounts on a case-by-case basis. A summary of the activity in our allowance for doubtful accounts is as follows: Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 20,500 $ 33,000 Provision for (recoveries of) estimated losses (560 ) (10,982 ) Write-off of uncollectible accounts 6,060 (1,518 ) Balance, end of year $ 26,000 $ 20,500 The net accounts receivable balance at March 31, 2019 of $1,009,106 included no more than 8% from any one customer. The net accounts receivable balance at March 31, 2018 of $962,639 included no more than 7% from any one customer. |
Warranty Accrual | Warranty Accrual. We provide for the estimated cost of product warranties at the time sales are recognized. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers, our warranty obligation is based upon historical experience and is also affected by product failure rates and material usage in correcting a product failure. Should actual product failure rates or material usage costs differ from our estimates, revisions to the estimated warranty liability would be required. A summary of our warranty claims activity, included in other accrued liabilities, is as follows: Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 10,000 $ 20,000 Provision for estimated warranty claims 4,592 (10,741 ) Claims made (4,592 ) (741 ) Balance, end of year $ 10,000 $ 10,000 |
Inventories | Inventories. Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. We reduce inventory for estimated obsolete or unmarketable inventory equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. At March 31, 2019 and 2018, inventory consisted of the following: March 31, 2019 March 31, 2018 Raw materials $ 1,063,780 $ 941,964 Finished goods 458,763 516,195 Total gross inventories 1,522,543 1,458,159 Less reserve for obsolescence (50,000 ) (21,000 ) Total net inventories $ 1,472,543 $ 1,437,159 A summary of the activity in our inventory reserve for obsolescence is as follows: Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 21,000 $ 50,000 Provision for estimated obsolescence 29,000 3,816 Write-off of obsolete inventory — (32,816 ) Balance, end of year $ 50,000 $ 21,000 |
Property and Equipment | Property and Equipment. |
Long-Lived Assets | Long-Lived Assets. |
Patents | Patents. March 31, 2019 March 31, 2018 Patents issued $ 447,430 $ 447,430 Accumulated amortization (254,992 ) (233,390 ) Patents issued, net of accumulated amortization 192,438 214,040 Patent applications 67,176 61,645 Accumulated amortization (11,035 ) (5,181 ) Patent applications, net of accumulated amortization 56,141 56,464 Total net patents and patent applications $ 248,579 $ 270,504 The expected annual amortization expense related to patents and patent applications as of March 31, 2019, for the next five fiscal years, is as follows: Fiscal Year Amount 2020 $ 27,456 2021 24,599 2022 23,876 2023 20,958 2024 and following 151,690 Total $ 248,579 |
Other Accrued Liabilities | Other Accrued Liabilities. March 31, 2019 March 31, 2018 Bonus $ — $ 108,000 Warranty 10,000 10,000 Sales commissions 50,129 45,068 Lease normalization — 23,939 Sales and use tax 22,494 17,434 Marketing fees 4,041 7,278 Professional fees — 37,500 Payroll taxes 27,188 24,114 Miscellaneous 12,582 11,217 Total other accrued liabilities $ 126,434 $ 284,550 |
Income Taxes | Income Taxes. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The cumulative effect of adopting ASC 740 on April 1, 2007 has been recorded net in deferred tax assets, which resulted in no ASC 740 liability on the balance sheet. The total amount of unrecognized tax benefits as of the date of adoption was zero. There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit the Company’s tax returns from fiscal year ended March 31, 1999 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the statements of operations. There have been no income tax related interest or penalties assessed or recorded. Because the Company has provided a full valuation allowance on all of its deferred tax assets, the adoption of ASC 740 had no impact on our effective tax rate. |
Revenue Recognition | Revenue Recognition. |
Sales Taxes | Sales Taxes. |
Research and Development Expenses | Research and Development Expenses |
Advertising Costs | Advertising Costs. |
Stock-Based Compensation | Stock-Based Compensation. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying statements of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Stock-based compensation expense recognized in our statements of operations for fiscal years 2019 and 2018 included compensation expense for share-based payment awards granted prior to, but not yet vested as of March 31, 2019, based on the grant date fair value. Compensation expense for all share-based payment is recognized using the straight-line, single-option method. As stock-based compensation expense recognized in the accompanying statements of operations for fiscal years 2019 and 2018 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We used the Black-Scholes option-pricing model (“Black-Scholes model”) to determine fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. Stock-based compensation expense recognized under ASC 718 for fiscal years 2019 and 2018 was $37,027 and $65,781, respectively, which consisted of stock-based compensation expense related to director and employee stock options. Stock-based compensation expense related to director and employee stock options under ASC 718 for fiscal years 2019 and 2018 was allocated as follows: Years Ended March 31, 2019 March 31, 2018 Cost of sales $ 2,026 $ 2,157 Sales and marketing 4,034 13,679 General and administrative 28,919 45,513 Research and development 2,048 4,432 Stock-based compensation expense $ 37,027 $ 65,781 |
Segment Reporting | Segment Reporting. |
Basic and Diluted Income per Common Share | Basic and Diluted Income per Common Share. The following table presents the calculation of basic and diluted net income (loss) per share: Years Ended March 31, 2019 March 31, 2018 Net income (loss) $ (236,096 ) $ 335,559 Weighted-average shares — basic 10,932,670 10,683,355 Effect of dilutive potential common shares — 23,771 Weighted-average shares — basic and diluted 10,932,670 10,707,126 Net loss per share — basic and diluted $ (0.02 ) $ 0.03 Antidilutive equity units 990,286 983,765 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning April 1, 2018, and adopted the new accounting standard using the modified retrospective transition approach. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure under the new standard. Based on the results of the evaluation, we have determined that the adoption of the new standard presents no material impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. Within the opening balances for the fiscal year beginning April 1, 2019, we will recognize leased assets and corresponding liabilities in other long-term assets of $1,280,000. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of the activity in allowance for doubtful accounts | Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 20,500 $ 33,000 Provision for (recoveries of) estimated losses (560 ) (10,982 ) Write-off of uncollectible accounts 6,060 (1,518 ) Balance, end of year $ 26,000 $ 20,500 |
Summary of warranty claims activity, included in other accrued liabilities | Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 10,000 $ 20,000 Provision for estimated warranty claims 4,592 (10,741 ) Claims made (4,592 ) (741 ) Balance, end of year $ 10,000 $ 10,000 |
Schedule of inventory | March 31, 2019 March 31, 2018 Raw materials $ 1,063,780 $ 941,964 Finished goods 458,763 516,195 Total gross inventories 1,522,543 1,458,159 Less reserve for obsolescence (50,000 ) (21,000 ) Total net inventories $ 1,472,543 $ 1,437,159 |
Summary of the activity in inventory reserve for obsolescence | Years Ended March 31, 2019 March 31, 2018 Balance, beginning of year $ 21,000 $ 50,000 Provision for estimated obsolescence 29,000 3,816 Write-off of obsolete inventory — (32,816 ) Balance, end of year $ 50,000 $ 21,000 |
Summary of patents | March 31, 2019 March 31, 2018 Patents issued $ 447,430 $ 447,430 Accumulated amortization (254,992 ) (233,390 ) Patents issued, net of accumulated amortization 192,438 214,040 Patent applications 67,176 61,645 Accumulated amortization (11,035 ) (5,181 ) Patent applications, net of accumulated amortization 56,141 56,464 Total net patents and patent applications $ 248,579 $ 270,504 |
Schedule of expected annual amortization expense related to patents and patent applications for the next five fiscal years | Fiscal Year Amount 2020 $ 27,456 2021 24,599 2022 23,876 2023 20,958 2024 and following 151,690 Total $ 248,579 |
Schedule of other accrued liabilities | March 31, 2019 March 31, 2018 Bonus $ — $ 108,000 Warranty 10,000 10,000 Sales commissions 50,129 45,068 Lease normalization — 23,939 Sales and use tax 22,494 17,434 Marketing fees 4,041 7,278 Professional fees — 37,500 Payroll taxes 27,188 24,114 Miscellaneous 12,582 11,217 Total other accrued liabilities $ 126,434 $ 284,550 |
Schedule of stock-based compensation expense related to employee stock options | Years Ended March 31, 2019 March 31, 2018 Cost of sales $ 2,026 $ 2,157 Sales and marketing 4,034 13,679 General and administrative 28,919 45,513 Research and development 2,048 4,432 Stock-based compensation expense $ 37,027 $ 65,781 |
Schedule of calculation of basic and diluted net income (loss) per share | Years Ended March 31, 2019 March 31, 2018 Net income (loss) $ (236,096 ) $ 335,559 Weighted-average shares — basic 10,932,670 10,683,355 Effect of dilutive potential common shares — 23,771 Weighted-average shares — basic and diluted 10,932,670 10,707,126 Net loss per share — basic and diluted $ (0.02 ) $ 0.03 Antidilutive equity units 990,286 983,765 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Summary of assumptions for employee stock options | Years Ended March 31, 2019 March 31, 2018 Risk-free interest rate 2.2% to 3.1% 1.8% to 1.9% Expected life (in years) 5.0 5.0 Expected volatility 87% to 91% 93% to 95% Expected dividend 0% 0% |
Summary of information about employee stock options outstanding and exercisable | STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (in Years) Weighted-Average Exercise Price per Share Number Exercisable Weighted-Average Exercise Price per Share $0.30 - $0.35 505,000 3.9 $ 0.33 126,564 $ 0.31 $0.38 - $0.50 359,000 3.5 $ 0.43 109,223 $ 0.47 $0.70 - $1.15 102,000 0.4 $ 0.59 96,355 $ 0.93 966,000 3.4 $ 0.39 332,142 $ 0.54 |
Summary of RSU activity and related information for equity compensation plans | RSUs OUTSTANDING Number Outstanding Weighted-Average Exercise Price per Share BALANCE AT MARCH 31, 2018 24,286 $ 0.62 Granted — — Forfeited/expired — — BALANCE AT MARCH 31, 2019 24,286 $ 0.62 |
Equity Compensation Plans Approved [Member] | |
Summary of stock option activity and related information for equity compensation plans | STOCK OPTIONS OUTSTANDING Number Outstanding Weighted-Average Exercise Price per Share BALANCE AT MARCH 31, 2017 685,000 $ 0.63 Granted 200,000 0.45 Forfeited/expired (126,750 ) 0.75 BALANCE AT MARCH 31, 2018 758,250 $ 0.56 Granted 152,000 0.36 Forfeited/expired (238,250 ) 0.79 BALANCE AT MARCH 31, 2019 672,000 $ 0.43 |
Equity Compensation Plans Not Approved [Member] | |
Summary of stock option activity and related information for equity compensation plans | STOCK OPTIONS OUTSTANDING Number Outstanding Weighted-Average Exercise Price per Share BALANCE AT MARCH 31, 2017 245,000 $ 0.96 Granted — — Forfeited/expired (20,000 ) — BALANCE AT MARCH 31, 2018 225,000 1.00 Granted 285,000 0.35 Forfeited/expired (216,000 ) 0.83 BALANCE AT MARCH 31, 2019 294,000 $ 0.49 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum future lease payments, by fiscal year | Fiscal Year Amount 2020 322,738 2021 343,167 2022 357,667 2023 372,167 2024 386,667 2025 130,500 Total $ 1,912,906 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes | Years Ended March 31, 2019 March 31, 2018 Expected income tax rate $ (50,000 ) $ 103,000 State income taxes, net of federal tax benefit (8,000 ) 12,000 Change in valuation allowance 92,000 (1,650,000 ) Other permanent differences 20,000 27,000 Research credits (54,000 ) — Rate change — 1,491,000 Other differences — 17,000 Income tax expense $ — $ — |
Schedule of components of the deferred tax asset | The components of the net accumulated deferred income tax asset (liability) are as follows: Years Ended March 31, 2019 March 31, 2018 Other deferred assets $ 64,000 $ 45,000 Valuation allowance (64,000 ) (45,000 ) Current deferred tax assets — — Credits and net operating loss carryforwards 2,742,000 3,003,000 Valuation allowance (2,742,000 ) (3,003,000 ) Long-term deferred tax assets — — Total deferred tax assets — — Valuation allowance — — Long-term deferred tax liabilities — — Total deferred tax liabilities — — Net deferred tax assets (liabilities) $ — $ — The primary components of our deferred tax assets are described below: Years Ended March 31, 2019 March 31, 2018 Differences in reporting long-term assets $ 64,000 $ 45,000 Credits and net operating loss carryforwards 2,742,000 3,003,000 Less valuation allowance (2,806,000 ) (3,048,000 ) Total deferred tax assets $ — $ — |
Description of Business and Bas
Description of Business and Basis of Presentation (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 21,850,147 | $ 21,614,051 |
Net (loss) income available to shareholders | (236,096) | 335,559 |
Cash and cash equivalents | 273,348 | 114,538 |
Working capital | 1,908,748 | |
Line of credit | 1,000,000 | |
Net cash provided by (used in) operating activities | (127,242) | 419,441 |
Net loss | (236,096) | $ 335,559 |
Non-cash expenses | $ 219,093 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Balance, beginning of year | $ 20,500 | $ 33,000 |
Provision for (recoveries of) estimated losses | (560) | (10,982) |
Write-off of uncollectible accounts | 6,060 | (1,518) |
Balance, end of year | $ 26,000 | $ 20,500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Balance, beginning of year | $ 10,000 | $ 20,000 |
Provision for estimated warranty claims | 4,592 | (10,741) |
Claims made | (4,592) | (741) |
Balance, end of year | $ 10,000 | $ 10,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Accounting Policies [Abstract] | ||
Raw materials | $ 1,063,780 | $ 941,964 |
Finished goods | 458,763 | 516,195 |
Total gross inventories | 1,522,543 | 1,458,159 |
Less reserve for obsolescence | (50,000) | (21,000) |
Total net inventories | $ 1,472,543 | $ 1,437,159 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Balance, beginning of year | $ 21,000 | $ 50,000 |
Provision for estimated obsolescence | 29,000 | 3,816 |
Write-off of obsolete inventory | 0 | (32,816) |
Balance, end of year | $ 50,000 | $ 21,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Accumulated amortization | $ (266,028) | $ (238,571) |
Total net patents and patent applications | 248,579 | 270,504 |
Patents [Member] | ||
Patents issued | 447,430 | 447,430 |
Accumulated amortization | (254,992) | (233,390) |
Patents issued, net of accumulated amortization | 192,438 | 214,040 |
Patent applications | 67,176 | 61,645 |
Accumulated amortization | (11,035) | (5,181) |
Patent applications, net of accumulated amortization | 56,141 | 56,464 |
Total net patents and patent applications | $ 248,579 | $ 270,504 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Expected annual amortization expense related to patents and patent applications | ||
2020 | $ 27,456 | |
2021 | 24,599 | |
2022 | 23,876 | |
2023 | 20,958 | |
2024 and following | 151,690 | |
Total | $ 248,579 | $ 270,504 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details 6) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Accounting Policies [Abstract] | ||
Bonus | $ 0 | $ 108,000 |
Warranty | 10,000 | 10,000 |
Sales commissions | 50,129 | 45,068 |
Lease normalization | 0 | 23,939 |
Sales and use tax | 22,494 | 17,434 |
Marketing fees | 4,041 | 7,278 |
Professional fees | 0 | 37,500 |
Payroll taxes | 27,188 | 24,114 |
Miscellaneous | 12,582 | 11,217 |
Total other accrued liabilities | $ 126,434 | $ 284,550 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details 7) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-based compensation expense related to grants of employee stock options | $ 37,027 | $ 65,781 |
Cost Of Sales [Member] | ||
Stock-based compensation expense related to grants of employee stock options | 2,026 | 2,157 |
Selling And Marketing Expense [Member] | ||
Stock-based compensation expense related to grants of employee stock options | 4,034 | 13,679 |
General And Administrative Expense [Member] | ||
Stock-based compensation expense related to grants of employee stock options | 28,919 | 45,513 |
Research And Development Expense [Member] | ||
Stock-based compensation expense related to grants of employee stock options | $ 2,048 | $ 4,432 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details 8) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Net income (loss) | $ (236,096) | $ 335,559 |
Weighted-average shares - basic | 10,932,670 | 10,683,355 |
Effect of dilutive potential common shares | 0 | 23,771 |
Weighted-average shares - basic and diluted | 10,932,670 | 10,707,126 |
Net loss per share-basic and diluted | $ (0.02) | $ 0.03 |
Antidilutive equity units | 990,286 | 983,765 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 1,009,106 | $ 962,639 |
Depreciation expense | 154,609 | 176,016 |
Stock based compensation | 37,027 | $ 65,781 |
Leased assets | $ 1,280,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity [Abstract] | ||
Risk-free interest rate, minimum | 2.20% | 1.80% |
Risk-free interest rate, maximum | 3.10% | 1.90% |
Expected life | 5 years | 5 years |
Expected volatility, minimum | 87.00% | 93.00% |
Expected volatility, maximum | 91.00% | 95.00% |
Expected dividend | 0.00% | 0.00% |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity Compensation Plans Approved [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at the beginning of the period | 758,250 | 685,000 |
Granted | 152,000 | 200,000 |
Forfeited/expired | (238,250) | (126,750) |
Balance at the end of the period | 672,000 | 758,250 |
Balance at the beginning of the period | $ 0.56 | $ 0.63 |
Granted | 0.36 | 0.45 |
Forfeited/expired | 0.79 | 0.75 |
Balance at the end of the period | $ 0.43 | $ 0.56 |
Equity Compensation Plans Not Approved [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at the beginning of the period | 225,000 | 245,000 |
Granted | 285,000 | 0 |
Forfeited/expired | (216,000) | (20,000) |
Balance at the end of the period | 294,000 | 225,000 |
Balance at the beginning of the period | $ 1 | $ 0.96 |
Granted | 0.35 | 0 |
Forfeited/expired | 0.83 | .00 |
Balance at the end of the period | $ 0.49 | $ 1 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - Employee Stock Option [Member] | 12 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number Outstanding | shares | 966,000 |
Weighted-Average Remaining Contractual Life | 3 years 4 months 24 days |
Weighted-Average Exercise Price per Share | $ / shares | $ 0.39 |
Number Exercisable | shares | 332,142 |
Exercisable Weighted-Average Exercise Price per Share | $ / shares | $ 0.54 |
$0.30 - $0.35 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number Outstanding | shares | 505,000 |
Weighted-Average Remaining Contractual Life | 3 years 10 months 25 days |
Weighted-Average Exercise Price per Share | $ / shares | $ 0.33 |
Number Exercisable | shares | 126,564 |
Exercisable Weighted-Average Exercise Price per Share | $ / shares | $ 0.31 |
$0.38 - $0.50 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number Outstanding | shares | 359,000 |
Weighted-Average Remaining Contractual Life | 3 years 6 months |
Weighted-Average Exercise Price per Share | $ / shares | $ 0.43 |
Number Exercisable | shares | 109,223 |
Exercisable Weighted-Average Exercise Price per Share | $ / shares | $ 0.47 |
$0.70 - $1.15 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number Outstanding | shares | 102,000 |
Weighted-Average Remaining Contractual Life | 4 months 24 days |
Weighted-Average Exercise Price per Share | $ / shares | $ 0.59 |
Number Exercisable | shares | 96,355 |
Exercisable Weighted-Average Exercise Price per Share | $ / shares | $ 0.93 |
Shareholders' Equity (Details 3
Shareholders' Equity (Details 3) - Restricted Stock Units R S U [Member] | 12 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Balance at the beginning of the period | shares | 24,286 |
Granted | shares | 0 |
Forfeited/expired | shares | 0 |
Balance at the end of the period | shares | 24,286 |
Balance at the beginning of the period | $ / shares | $ 0.62 |
Granted | $ / shares | 0 |
Forfeited/expired | $ / shares | 0 |
Balance at the end of the period | $ / shares | $ 0.62 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee stock options granted | 437,000 | 200,000 |
Unrecognized compensation costs | $ 186,000 | |
Fair value of stock options | 107,000 | $ 64,898 |
Stock-based compensation, net of the effect of forfeitures | $ 37,027 | $ 65,781 |
Employee Stock Option [Member] | ||
Nonqualified stock options outstanding | 966,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Mar. 31, 2019USD ($) |
Minimum future lease payments, by fiscal year | |
2020 | $ 322,738 |
2021 | 343,167 |
2022 | 357,667 |
2023 | 372,167 |
2024 | 386,667 |
2025 | 130,500 |
Total | $ 1,912,906 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Additional current borrowing capacity available to borrow | $ 1,000,000 | |
Lease expense | $ 305,735 | $ 252,911 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | $ (50,000) | $ 103,000 |
State income taxes, net of federal tax benefit | (8,000) | 12,000 |
Change in valuation allowance | 92,000 | (1,650,000) |
Other permanent differences | 20,000 | 27,000 |
Research credits | (54,000) | 0 |
Rate change | 0 | 1,491,000 |
Other differences | 0 | 17,000 |
Income tax expense | $ 0 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Other deferred assets | $ 64,000 | $ 45,000 |
Valuation allowance | (64,000) | (45,000) |
Current deferred tax assets | 0 | 0 |
Credits and net operating loss carryforwards | 2,742,000 | 3,003,000 |
Valuation allowance | (2,742,000) | (3,003,000) |
Long-term deferred tax assets | 0 | 0 |
Total deferred tax assets | 0 | 0 |
Valuation allowance | 0 | 0 |
Long-term deferred tax liabilities | 0 | 0 |
Total deferred tax liabilities | 0 | 0 |
Net deferred tax assets (liabilities) | $ 0 | $ 0 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Differences in reporting long-term assets | $ 64,000 | $ 45,000 |
Credits and net operating loss carryforwards | 2,742,000 | 3,003,000 |
Less valuation allowance | (2,806,000) | (3,048,000) |
Total deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Mar. 31, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryovers | $ 10,000,000 |
Operating loss carryforward expiration | Mar. 31, 2039 |
Research and development tax credits | $ 292,000 |
Major Customers_Suppliers (Deta
Major Customers/Suppliers (Details) | 12 Months Ended |
Mar. 31, 2019 | |
ATL Technology, LLC | |
Major Customers and Suppliers [Line Items] | |
Concentration percentage | 27.00% |
Aeroswiss | |
Major Customers and Suppliers [Line Items] | |
Concentration percentage | 18.00% |
Bovie Medical | |
Major Customers and Suppliers [Line Items] | |
Concentration percentage | 11.00% |
Related Party Transaction (Deta
Related Party Transaction (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Director [Member] | ||
Related Party Transaction [Line Items] | ||
Consulting fees paid | $ 67,102 | $ 73,195 |