Retractable (RVP) 10-K2 Apr 182017 FY Annual reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Mar. 01, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	RETRACTABLE TECHNOLOGIES INC
Entity Central Index Key	946,563
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 17,327,372
Entity Common Stock, Shares Outstanding		32,666,454
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 14,877,899	$ 16,199,043
Accounts receivable, net of allowance for doubtful accounts of $101,872 and $1,731,985, respectively	5,105,556	3,267,838
Inventories, net	6,206,161	7,017,224
Other current assets	418,154	192,548
Total current assets	26,607,770	26,676,653
Property, plant, and equipment, net	11,353,202	12,092,037
Income taxes receivable	188,456
Other assets	6,052	10,289
Total assets	38,155,480	38,778,979
Current liabilities:
Accounts payable	4,957,750	4,471,756
Current portion of long-term debt	410,949	430,393
Accrued compensation	547,021	536,456
Dividends payable	55,113	55,113
Accrued royalties to shareholder	793,489	659,443
Insurance proceeds	466,293
Other accrued liabilities	657,923	1,008,699
Income taxes payable	11,407	10,584
Total current liabilities	7,899,945	7,172,444
Long-term debt, net of current maturities	3,081,409	3,498,244
Total liabilities	10,981,354	10,670,688
Commitments and contingencies - See Note 8
Preferred stock, $1 par value:
Common Stock, no par value; authorized: 100,000,000 shares; outstanding: 32,666,454 and 29,666,454, respectively
Additional paid-in capital	62,092,206	59,290,333
Accumulated deficit	(35,699,525)	(31,963,487)
Total stockholders' equity	27,174,126	28,108,291
Total liabilities and stockholders' equity	38,155,480	38,778,979
Series I, Class B
Preferred stock, $1 par value:
Preferred stock	98,500	98,500
Series II, Class B
Preferred stock, $1 par value:
Preferred stock	171,200	171,200
Series III, Class B
Preferred stock, $1 par value:
Preferred stock	129,245	129,245
Series IV, Class B
Preferred stock, $1 par value:
Preferred stock	342,500	342,500
Series V, Class B
Preferred stock, $1 par value:
Preferred stock	$ 40,000	$ 40,000

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 101,872	$ 1,731,985
Common stock, par value (in dollars per share)	$ 0	$ 0
Common Stock, authorized shares	100,000,000	100,000,000
Common Stock, outstanding shares	32,666,454	29,666,454
Preferred Class B
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, authorized shares	5,000,000	5,000,000
Series I, Class B
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, outstanding shares	98,500	98,500
Preferred Stock, liquidation preference (in dollars)	$ 615,625	$ 615,625
Series II, Class B
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, outstanding shares	171,200	171,200
Preferred Stock, liquidation preference (in dollars)	$ 2,140,000	$ 2,140,000
Series III, Class B
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, outstanding shares	129,245	129,245
Preferred Stock, liquidation preference (in dollars)	$ 1,615,563	$ 1,615,563
Series IV, Class B
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, outstanding shares	342,500	342,500
Preferred Stock, liquidation preference (in dollars)	$ 3,767,500	$ 3,767,500
Series V, Class B
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, outstanding shares	40,000	40,000
Preferred Stock, liquidation preference (in dollars)	$ 176,000	$ 176,000

STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
STATEMENTS OF OPERATIONS - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
STATEMENTS OF OPERATIONS
Sales, net	$ 34,493,838	$ 29,826,636	$ 29,552,200
Cost of Sales
Costs of manufactured product	21,658,062	16,957,073	16,509,446
Royalty expense to shareholders	2,864,188	2,527,508	2,477,583
Total cost of sales	24,522,250	19,484,581	18,987,029
Gross profit	9,971,588	10,342,055	10,565,171
Operating expenses:
Sales and marketing	4,658,548	4,025,786	3,837,491
Research and development	740,567	571,842	607,527
General and administrative	8,351,053	8,795,310	9,328,029
Impairment of assets		456,119
Total operating expenses	13,750,168	13,849,057	13,773,047
Loss from operations	(3,778,580)	(3,507,002)	(3,207,876)
Litigation proceeds			7,724,826
Interest and other income	65,695	26,522	24,917
Interest expense, net	(210,761)	(213,295)	(219,672)
Income (loss) before income taxes	(3,923,646)	(3,693,775)	4,322,195
Provision (benefit) for income taxes	(187,608)	1,132	7,877
Net income (loss)	(3,736,038)	(3,694,907)	4,314,318
Preferred Stock dividend requirements	(704,996)	(704,996)	(709,351)
Deemed capital contribution on extinguishment of preferred stock			2,305,678
Income (loss) applicable to common shareholders	$ (4,441,034)	$ (4,399,903)	$ 5,910,645
Basic earnings (loss) per share (in dollars per share)	$ (0.14)	$ (0.15)	$ 0.21
Diluted earnings (loss) per share (in dollars per share)	$ (0.14)	$ (0.15)	$ 0.20
Weighted average common shares outstanding:
Basic (in shares)	31,958,121	29,354,437	27,822,593
Diluted (in shares)	31,958,121	29,354,437	29,481,294

STATEMENTS OF CHANGES IN STOCKH

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Preferred StockSeries I, Class B	Preferred StockSeries II, Class B	Preferred StockSeries III, Class B	Preferred StockSeries IV, Class B	Preferred StockSeries V, Class B	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock	Total
Balance at Dec. 31, 2014	$ 98,500	$ 176,200	$ 130,245	$ 542,500	$ 40,000		$ 59,273,769	$ (32,582,898)	$ (1,096,609)	$ 26,581,707
Balance (in shares) at Dec. 31, 2014	98,500	176,200	130,245	542,500	40,000	27,613,397
Increase (Decrease) in Stockholders' Equity
Conversion of Preferred Stock into Common Stock		$ (5,000)	$ (1,000)	$ (200,000)			206,000
Conversion of Preferred Stock into Common Stock (in shares)		(5,000)	(1,000)	(200,000)		206,000
Stock options exercised							283,933			283,933
Stock options exercised (in shares)						272,477
Issuance of new Common stock (in shares)						528,000
Registration of new shares							(60,101)			(60,101)
Retirement of treasury stock							(1,096,609)		$ 1,096,609
Dividends							(338,956)			(338,956)
Net loss								4,314,318		4,314,318
Balance at Dec. 31, 2015	$ 98,500	$ 171,200	$ 129,245	$ 342,500	$ 40,000		58,268,036	(28,268,580)		30,780,901
Balance (in shares) at Dec. 31, 2015	98,500	171,200	129,245	342,500	40,000	28,619,874
Increase (Decrease) in Stockholders' Equity
Stock options exercised							855,021			855,021
Stock options exercised (in shares)						1,046,580
Dividends							(220,450)			(220,450)
Stock option compensation							387,726			387,726
Net loss								(3,694,907)		(3,694,907)
Balance at Dec. 31, 2016	$ 98,500	$ 171,200	$ 129,245	$ 342,500	$ 40,000		59,290,333	(31,963,487)		28,108,291
Balance (in shares) at Dec. 31, 2016	98,500	171,200	129,245	342,500	40,000	29,666,454
Increase (Decrease) in Stockholders' Equity
Stock options exercised (in shares)						3,000,000
Issuance of new Common stock							2,350,100			2,350,100
Dividends							(220,450)			(220,450)
Stock option compensation							672,223			672,223
Net loss								(3,736,038)		(3,736,038)
Balance at Dec. 31, 2017	$ 98,500	$ 171,200	$ 129,245	$ 342,500	$ 40,000		$ 62,092,206	$ (35,699,525)		$ 27,174,126
Balance (in shares) at Dec. 31, 2017	98,500	171,200	129,245	342,500	40,000	32,666,454

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities
Net income (loss)	$ (3,736,038)	$ (3,694,907)	$ 4,314,318
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization	834,951	872,868	858,391
Share-based compensation	672,223	387,726
Inventories reserve		176,424
Provision for doubtful accounts	24,272	92,000	116,395
Impairment of assets		456,119
(Increase) decrease in assets:
Inventories	811,063	(897,023)	(1,633,077)
Accounts receivable	(1,861,990)	1,541,159	624,699
Other current assets	(225,606)	1,375,484	(373,977)
Income taxes receivable	(188,456)
Other assets		(750)
Increase (decrease) in liabilities:
Accounts payable	485,994	(1,225,762)	554,722
Litigation proceeds subject to stipulation			(7,724,826)
Other accrued liabilities	(205,342)	119,342	11,312
Income taxes payable		2,408	(114)
Insurance proceeds	466,293
Net cash used by operating activities	(2,922,636)	(794,912)	(3,252,157)
Cash flows from investing activities
Purchase of property, plant, and equipment	(91,878)	(1,947,172)	(1,465,010)
Changes in restricted cash			600,897
Net cash used by investing activities	(91,878)	(1,947,172)	(864,113)
Cash flows from financing activities
Repayments of long-term debt	(436,280)	(263,200)	(184,447)
Proceeds from long-term debt		525,017	276,495
Proceeds from sale of common stock	2,350,100
Proceeds from the exercise of stock options		855,021	283,933
Stock registration fees			(60,101)
Payment of Preferred Stock dividends	(220,450)	(220,755)	(283,543)
Net cash provided by financing activities	1,693,370	896,083	32,337
Net decrease in cash and cash equivalents	(1,321,144)	(1,846,001)	(4,083,933)
Cash and cash equivalents at:
Beginning of period	16,199,043	18,045,044	18,045,044
End of period	14,877,899	16,199,043	18,045,044
Supplemental schedule of cash flow information:
Interest paid	210,761	213,295	219,672
Income taxes paid	1,031	2,000	3,700
Supplemental schedule of noncash investing and financing activities:
Preferred dividends declared, not paid	$ 55,113	$ 55,113	$ 55,414

BUSINESS OF THE COMPANY AND BAS

BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION	12 Months Ended
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION	Dec. 31, 2017
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION	1. BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION Business of the Company Retractable Technologies, Inc. (the “Company”) was incorporated in Texas on May 9, 1994, and designs, develops, manufactures, and markets safety syringes and other safety medical products for the healthcare profession. The Company began to develop its manufacturing operations in 1995. The Company’s manufacturing and administrative facilities are located in Little Elm, Texas. The Company’s products are the VanishPoint ® 0.5mL insulin syringe; 1mL tuberculin, insulin, and allergy antigen syringes; 0.5mL, 1mL, 2mL, 3mL, 5mL, and 10mL syringes; the small diameter tube adapter; the blood collection tube holder; the allergy tray; the IV safety catheter; the Patient Safe ® syringes; the Patient Safe ® Luer Cap; the VanishPoint ® Blood Collection Set; and the EasyPoint ® needle. The Company also sells VanishPoint ® autodisable syringes in the international market in addition to the Company’s other products.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and investments with original maturities of three months or less. Accounts receivable The Company records trade receivables when revenue is recognized. No product has been consigned to customers. The Company’s allowance for doubtful accounts is primarily determined by review of specific trade receivables. Those accounts that are doubtful of collection are included in the allowance. This provision is reviewed to determine the adequacy of the allowance for doubtful accounts. Trade receivables are charged off when there is certainty as to their being uncollectible. Trade receivables are considered delinquent when payment has not been made within contract terms. The Company requires certain customers to make a prepayment prior to beginning production or shipment of their order. Customers may apply such prepayments to their outstanding invoices or pay the invoice and continue to carry forward the deposit for future orders. Such amounts are included in Other accrued liabilities on the Balance Sheets and are shown in Note 6, Other Accrued Liabilities. The Company records an allowance for estimated returns as a reduction to Accounts receivable and Gross sales. Historically, returns have been immaterial. Inventories Inventories are valued at the lower of cost or net realizable value, with cost being determined using actual average cost. The Company compares the average cost to the net realizable value and records the lower value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Management considers such factors as the amount of inventory on hand and in the distribution channel, estimated time to sell such inventory, the shelf life of inventory, and current market conditions when determining excess or obsolete inventories. A reserve is established for any excess or obsolete inventories or they may be written off. Property, plant, and equipment Property, plant, and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Cost includes major expenditures for improvements and replacements which extend useful lives or increase capacity and interest cost associated with significant capital additions. Gains or losses from property disposals are included in income. Depreciation and amortization are calculated using the straight-line method over the following useful lives: Production equipment 3 to 13 years Office furniture and equipment 3 to 10 years Buildings 39 years Building improvements 15 years Long-lived assets The Company assesses the recoverability of long-lived assets using an assessment of the estimated undiscounted future cash flows related to such assets. In the event that assets are found to be carried at amounts which are in excess of estimated gross future cash flows, the assets will be adjusted for impairment to a level commensurate with fair value determined using a discounted cash flow analysis or appraised values of the underlying assets. During 2016, the Company recognized an impairment charge of $456,119 associated with its Patient Safe ® production equipment. The Company determined it was more cost effective to outsource this production through an overseas manufacturer, and thus the Company’s Patient Safe ® production equipment was taken out of service. Minimal cash flows were expected to be generated by this equipment. Accordingly, the Company reduced the carrying value of the Patient Safe ® production equipment to an estimated fair value of zero. The Company’s property, plant, and equipment primarily consist of buildings, land, assembly equipment, molding machines, molds, office equipment, furniture, and fixtures. Financial instruments The Company estimates the fair value of financial instruments through the use of public market prices, quotes from financial institutions, and other available information. Judgment is required in interpreting data to develop estimates of fair value and, accordingly, amounts are not necessarily indicative of the amounts that could be realized in a current market exchange. Short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on Management’s estimates, equals their recorded values. The fair value of long-term liabilities, based on Management’s estimates, approximates their reported values. Concentration risks The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Cash balances, some of which exceed federally insured limits, are maintained in financial institutions; however, Management believes the institutions are of high credit quality. The majority of accounts receivable are due from companies which are well-established entities. As a consequence, Management considers any exposure from concentrations of credit risks to be limited. The following table reflects our significant customers in 2017, 2016, and 2015: Years Ended December 31, 2017 2016 2015 Number of significant customers Aggregate dollar amount of net sales to significant customers $ 14.0 million $ 9.4 million $ 13.5 million Percentage of net sales to significant customers % % % The Company decreased its allowance for doubtful accounts by approximately $1.6 million in 2017 due to a write-off of debit rebates. The Company manufactures syringes in Little Elm, Texas as well as utilizing manufacturers in China. The Company purchases most of its product components from single suppliers, including needle adhesives and packaging materials. There are multiple sources of these materials. The Company obtained roughly 90.4% of its VanishPoint ® syringes in 2017 from its primary Chinese manufacturer. Purchases from this Chinese manufacturer aggregated 86.3% and 77.7% of VanishPoint ® finished products in 2016 and 2015, respectively. In the event that the Company becomes unable to purchase products from its Chinese manufacturers, the Company would need to find an alternate manufacturer for its blood collection set, IV catheter, Patient Safe ® syringe, 0.5mL insulin syringe, 0.5mL autodisable syringe, and 2mL, 5mL, and 10mL syringes and would increase domestic production for the 1mL and 3mL syringes. Revenue recognition Revenue is recognized for sales when title and risk of ownership passes to the customer, generally upon shipment. Under certain contracts, revenue is recorded on the basis of sales price to distributors, less contractual pricing allowances. Contractual pricing allowances consist of: (i) rebates granted to distributors who provide tracking reports which show, among other things, the facility that purchased the products, and (ii) a provision for estimated contractual pricing allowances for products for which the Company has not received tracking reports. Rebates are recorded when issued and are applied against the customer’s receivable balance. Distributors receive a rebate for the difference between the Wholesale Acquisition Cost and the appropriate contract price as reflected on a tracking report provided by the distributor to the Company. If product is sold by a distributor to an entity that has no contract, there is a standard rebate (lower than a contracted rebate) given to the distributor. One of the purposes of the rebate is to encourage distributors to submit tracking reports to the Company. The provision for contractual pricing allowances is reviewed at the end of each quarter and adjusted for changes in levels of products for which there is no tracking report. Additionally, if it becomes clear that tracking reports will not be provided by individual distributors, the provision is further adjusted. The estimated contractual allowance is included in Accounts payable in the Balance Sheets and deducted from revenues in the Statements of Operations. Accounts payable included estimated contractual allowances for $4,115,628 and $3,591,534 as of December 31, 2017 and 2016, respectively. The terms and conditions of contractual pricing allowances are governed by contracts between the Company and its distributors. Revenue for shipments directly to end-users is recognized when title and risk of ownership pass from the Company. Any product shipped or distributed for evaluation purposes is expensed. The Company’s domestic return policy is set forth in its standard Distribution Agreement. This policy provides that a customer may return incorrect shipments within 10 days following arrival at the distributor’s facility. In all such cases, the distributor must obtain an authorization code from the Company and affix the code to the returned product. The Company will not accept returned goods without a returned goods authorization number. The Company may refund the customer’s money or replace the product. The Company’s domestic return policy also generally provides that a customer may return product that is overstocked. Overstocking returns are limited to two times in each 12-month period up to 1% of distributor’s total purchase of products for the prior 12-month period. All product overstocks and returns are subject to inspection and acceptance by the Company. The Company’s international distribution agreements generally do not provide for any returns. Litigation proceeds Proceeds from litigation are recognized when realizable. Generally, realization is not reasonably assured and expected until proceeds are collected. Income taxes The Tax Cuts and Job Act (“the Act”) was enacted on December 22, 2017, and the U.S. federal corporate tax rate was reduced from 35% to 21%. U.S. generally accepted accounting principles require companies to account for the effects of changes in income tax rates and laws in the period the change is enacted. Financial results, including provisional amounts, have been calculated for the income tax effects of the change. The U.S. Securities and Exchange Commission issued Staff Accounting Bulletin 118 (SAB 118) allowing companies to use provisioned estimates to record the effects of the Act. SAB 118 allows companies to complete accounting for these effects no later than one year from the enactment date of the Act. The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in the financial statements based on whether it is “more-likely-than-not” that a tax position will be sustained based upon the technical merits of the position. Measurement of the tax position is based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company provides for deferred income taxes through utilizing an asset and liability approach for financial accounting and reporting based on the tax effects of differences between the financial statement and tax bases of assets and liabilities, based on enacted rates expected to be in effect when such differences reverse in future periods. Deferred tax assets are periodically reviewed for realizability. The Company has established a valuation allowance for its net deferred tax asset as future taxable income cannot be reasonably assured. Penalties and interest related to income tax are classified as General and administrative expense and Interest expense, respectively, in the Statements of Operations. Earnings per share The Company computes basic earnings per share (“EPS”) by dividing net earnings for the period (adjusted for any cumulative dividends for the period) by the weighted average number of common shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect, if any, of the common stock deliverable pursuant to stock options or common stock issuable upon the conversion of convertible preferred stock. The calculation of diluted EPS excluded 79,441 and 783,730 shares of Common Stock underlying issued and outstanding stock options at December 31, 2017 and December 31, 2016, respectively, as their effect was antidilutive. The potential dilution, if any, is shown on the following schedule: Years Ended December 31, 2017 2016 2015 Net income (loss) $ ) $ ) $ Preferred dividend requirements ) ) ) Deemed capital contribution on extinguishment of preferred stock — — Income (loss) applicable to common shareholders $ ) $ ) $ Weighted average common shares outstanding Weighted average common and common equivalent shares outstanding - assuming dilution Basic earnings (loss) per share $ ) $ ) $ Diluted earnings (loss) per share $ ) $ ) $ The Financial Accounting Standards Board Accounting Standards Codification 260-10-S99-2, Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock, requires the gain or loss on extinguishment of equity-classified preferred stock to be included in net income per common stockholder used to calculate earnings per share (similar to the treatment of dividends paid on preferred stock). The difference between (1) the fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock (net of issuance costs) is subtracted from (or added to) net income to arrive at income available to common stockholders in the calculation of earnings per share. The Company has determined to apply this guidance to its accounting treatment of the preferred stock transaction described in Note 18. From a legal standpoint, the transaction was neither a redemption nor conversion pursuant of the terms of the Certificate of Designation, Preferences, Rights and Limitations of the Series IV Class B Convertible Preferred Stock. Shipping and handling costs The Company classifies shipping and handling costs as part of Cost of sales in the Statements of Operations. Research and development costs Research and development costs are expensed as incurred. Share-based compensation The Company’s share-based payments are accounted for using the fair value method. The Company records share-based compensation expense on a straight-line basis over the requisite service period. The Company incurred the following share-based compensation costs: Years Ended December 31, 2017 2016 2015 Cost of sales $ $ $ — Sales and marketing — Research and development — General and administrative — $ $ $ — Options awarded to employees in 2016 were amortized over twelve months. The Company amortized four months’ expense for options granted in September 2016 and amortized the remainder in 2017. Non-employee Directors’ option expense was all expensed in the fourth quarter of 2016. The Company early-adopted FASB Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” for its annual period ended December 31, 2016. This ASU addresses several aspects of the accounting for share-based compensation transactions including: (a) income tax consequences when awards vest or are settled, (b) classification of awards as either equity or liabilities, (c) a policy election to account for forfeitures as they occur rather than on an estimated basis and (d) classification of excess tax impacts on the statement of cash flows. As a result of adoption, excess tax benefits in 2016 resulting from the exercise of non-qualified stock options were recognized in the income tax provision rather than in additional-paid-in capital. As there were previously no excess income tax benefits recognized in additional-paid-in capital or other material changes to the Company’s accounting for share based compensation resulting from adoption of this ASU, no cumulative effect adjustments were required. Insurance Proceeds Receipts from insurance up to the amount of any loss recognized by the Company are considered recoveries. Any such recoveries are recorded when they are received. Insurance recoveries are not recognized as a component of earnings (loss) from operations until all repairs are made. Recent pronouncements In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The updated guidance is effective for the Company’s quarter ending March 31, 2018, with early adoption permitted. The Company does not expect ASU 2016-18 to have a material effect on its financial statements as the Company currently holds no restricted cash or restricted cash equivalents. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Payments” (ASU 2016-15), clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for the Company’s quarter ending March 31, 2018. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, “Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. This ASU is effective for the Company’s quarter ending March 31, 2020 with early application permitted for the Company’s quarter ending March 31, 2019. The Company is currently assessing the impact that adoption of this guidance will have on its financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (topic 842). Under the new ASU, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance lessor accounting is largely unchanged. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. This ASU is effective for the Company’s quarter ending March 31, 2019, with early adoption permitted. The Company is currently evaluating the impact of this standard. In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which provides guidance for revenue recognition. This ASU’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. In July 2015, the FASB voted to delay the effective date of this ASU by one year. The ASU will now be effective commencing with the Company’s quarter ending March 31, 2018. Early adoption of this ASU is allowed no sooner than the original effective date. Management’s assessment is that the implementation of the amended guidance will not have a material impact on the Company’s balance sheet, statements of operations, changes in stockholders’ equity and cash flows, but will include expanded disclosures. The Company’s revenue is generated from sales of finished goods (disposable medical devices). Revenue from these sales will continue to be recognized when title of the products is passed to the customer. Management expects materially similar results under the amended guidance as compared to the Company’s current policies and procedures regarding revenue recognition. The Company will adopt this amended guidance on a Modified Retrospective basis in the first quarter of 2018.

INVENTORIES

INVENTORIES	12 Months Ended
INVENTORIES	Dec. 31, 2017
INVENTORIES
INVENTORIES	3. INVENTORIES Inventories consist of the following: Year Ended December 31, 2017 2016 Raw materials $ $ Finished goods Inventory reserve ) ) $ $

PROPERTY, PLANT, AND EQUIPMENT

PROPERTY, PLANT, AND EQUIPMENT	12 Months Ended
PROPERTY, PLANT, AND EQUIPMENT	Dec. 31, 2017
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT	4. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consist of the following: December 31, 2017 2016 Land $ $ Buildings and building improvements Production equipment Office furniture and equipment Construction in progress Accumulated depreciation ) ) $ $ Depreciation expense for the years ended December 31, 2017, 2016, and 2015 was $830,715; $867,080; and $849,804, respectively.

LICENSE AGREEMENT

LICENSE AGREEMENT	12 Months Ended
LICENSE AGREEMENT	Dec. 31, 2017
LICENSE AGREEMENT
LICENSE AGREEMENT	5. LICENSE AGREEMENT In 1995, the Company entered into a license agreement with the Chief Executive Officer of the Company for the exclusive right to manufacture, market, and distribute products utilizing automated retraction technology, which agreement has been amended twice. This technology is the subject of various patents and patent applications owned by such officer of the Company. The initial licensing fee of $500,000 was amortized over 17 years. The license agreement also provides for quarterly payments of a 5% royalty fee on gross sales. The royalty fee expense is recognized in the period in which it is earned. Royalty fees of $2,864,188; $2,527,508; and $2,477,583 are included in Cost of sales for the years ended December 31, 2017, 2016, and 2015, respectively. Royalties payable under this agreement aggregated $793,489 and $659,443 at December 31, 2017, and 2016, respectively. Gross sales upon which royalties are based were $57,283,780; $50,550,165; and $49,551,660 for 2017, 2016, and 2015, respectively.

OTHER ACCRUED LIABILITIES

OTHER ACCRUED LIABILITIES	12 Months Ended
OTHER ACCRUED LIABILITIES	Dec. 31, 2017
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES	6. OTHER ACCRUED LIABILITIES Other accrued liabilities consist of the following: December 31, 2017 2016 Prepayments from customers $ $ Accrued property taxes — Accrued professional fees Other accrued expenses $ $

LONG-TERM DEBT

LONG-TERM DEBT	12 Months Ended
LONG-TERM DEBT	Dec. 31, 2017
LONG-TERM DEBT
LONG-TERM DEBT	7. LONG-TERM DEBT Long-term debt consists of the following: December 31, 2017 2016 Loan from American First National Bank. It has a 20 year amortization and 10 year maturity from December 10, 2009. The loan, in the original amount of $4,209,608, provided funding for the expansion of the warehouse, additional office space, and a new Controlled Environment. The loan is secured by the Company’s land and buildings. The interest rate is 5.968%. $ $ Note payable to Deutsche Leasing USA, Inc. The interest rate is 3.69%. The original amount of the note was $276,495 with a 36 month maturity ending in July 2018. Beginning August 2015, the loan became payable in equal installments of principal and interest of approximately $8,100. Collateralized by molding machines and ancillary equipment. Note payable to Deutsche Leasing USA, Inc. The interest rate is 4.25%. The original amount of the note was $525,017 with a 36 month maturity ending in November 2019. Beginning December 2016, the loan became payable in equal installments of principal and interest of approximately $15,500. Collateralized by molding machines and ancillary equipment. Less: current portion ) ) $ $ The fair value of long-term liabilities, based on Management’s estimates, approximates their reported values. The aggregate maturities of long-term debt as of December 31, 2017, are as follows: 2018 $ 2019 $

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	8. COMMITMENTS AND CONTINGENCIES In May 2010, the Company and an officer’s suit against Becton, Dickinson and Company (“BD”) in the U.S. District Court for the Eastern District of Texas, Marshall Division alleging violations of antitrust acts, false advertising, product disparagement, tortious interference, and unfair competition was reopened. The trial commenced on September 9, 2013 in the U.S. District Court for the Eastern District of Texas, Tyler Division, and the jury found that BD illegally engaged in anticompetitive conduct with the intent to acquire or maintain monopoly power in the safety syringe market and engaged in false advertising under the Lanham Act. The jury awarded the Company $113,508,014 in damages, which was trebled pursuant to statute. The Court granted injunctive relief to take effect January 15, 2015 including, among other things, a requirement to notify certain customers and others regarding misleading disclosures. In connection with BD’s subsequent appeal, on December 2, 2016, the United States Court of Appeals for the Fifth Circuit overturned the antitrust damages. The finding of false advertising liability was affirmed and the case was remanded to the Eastern District of Texas for a redetermination as to the amount of damages to which the Company is entitled. On August 17, 2017, District Court for the Eastern District of Texas issued the Court’s Final Judgment ordering that the Company take nothing in its suit against BD and dismissing the case. The Company filed a notice of Appeal with the United States Court of Appeals for the Fifth Circuit on November 3, 2017. In September 2007, BD and MDC Investment Holdings, Inc. (“MDC”) sued the Company in the United States District Court for the Eastern District of Texas, Texarkana Division, initially alleging that the Company is infringing two U.S. patents of MDC (6,179,812 and 7,090,656) that are licensed to BD. BD and MDC seek injunctive relief and unspecified damages. The Company counterclaimed for declarations of non-infringement, invalidity, and unenforceability of the asserted patents. The plaintiffs subsequently dropped allegations with regard to patent no. 7,090,656 and the Company subsequently dropped its counterclaims for unenforceability of the asserted patents. On June 30, 2015, the Court ordered that further proceedings in this matter be stayed and that this case remain administratively closed until resolution of all appeals in the case detailed in the preceding paragraph. The case remains stayed as a result of the ongoing proceedings regarding the Lanham Act claims in the separate proceeding described above. Operating Leases In 2010, the Company entered into a non-cancellable operating lease for additional office space. Rent expense under this lease for the years ended December 31, 2017, 2016, and 2015 was $77,015; $74,772; and $64,683, respectively. The Company renewed the lease in 2015. Future annual minimum rental payments as of December 31, 2017, are presented below: 2018 $ 2019 2020 Total $

INCOME TAXES

INCOME TAXES	12 Months Ended
INCOME TAXES	Dec. 31, 2017
INCOME TAXES
INCOME TAXES	9. INCOME TAXES The provision (benefit) for income taxes consists of the following: For the Years Ended December 31, 2017 2016 2015 Current tax provision (benefit) Federal $ — $ — $ — State Total current provision (benefit) Deferred tax provision (benefit) Federal ) — — State — — — Total deferred tax provision (benefit) ) — — Total income tax provision (benefit) $ ) $ $ The Company has $24.9 million in tax benefits attributable to net operating losses for federal tax purposes. The loss carry forwards will begin to expire in 2028 for federal tax purposes and will begin to expire for state tax purposes in 2021. The Company also has credits for alternative minimum taxes (“AMT”) paid of $202 thousand. The alternative minimum tax was repealed with the enactment of the Act. AMT credits carried over may be used to offset regular tax liability for any tax year. Any unused credits are 50% refundable for tax years 2018-2020, and 100% refundable for tax years beginning 2021. The Company has recorded the AMT credit as a tax receivable on its financial statements rather than as a deferred tax asset, as this amount is a refundable credit. Deferred taxes are provided for those items reported in different periods for income tax and financial reporting purposes. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: December 31, 2017 2016 Deferred tax assets Net operating loss carry forwards $ $ Credit for alternative minimum tax paid — Accrued expenses and reserves Employee stock option expense Nonemployee stock option expense Inventory Impairment Deferred tax assets Deferred tax liabilities Property and equipment ) ) Deferred tax liabilities ) ) Net deferred assets Valuation allowance ) ) Net deferred tax assets $ — $ — The Company has made a reasonable estimate of the effects of the Act on its existing deferred tax balances. The Company adjusted its deferred tax valuation account to offset the expected decrease in its deferred tax assets as a result of the change. The Company will adjust its calculations as additional facts and circumstances are known. Utilization of the net operating loss carry forwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. Deferred income tax calculations reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss carry forwards, and are stated at the U.S. tax rate of 21% beginning in 2018. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. The Company has fully reserved these future tax deductions. The valuation allowance decreased $3,371,379 for 2017. The valuation allowance increased $1,445,361 for 2016. A reconciliation of income taxes based on the federal statutory rate and the effective income tax rate is summarized as follows: December 31, 2017 2016 2015 Income tax at the federal statutory rate % % % State tax, net of federal tax Change in valuation allowance ) ) Permanent differences Return-to-provision and other ) ) ) Tax Reform and Jobs Act tax rate change ) — — Incentive stock options ) — — Effective tax rate % % % The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. The Company’s federal income tax returns for all tax years ended on or after December 31, 2014, remain subject to examination by the Internal Revenue Service. The Company’s state and local income tax returns are subject to examination by the respective state and local authorities over various statutes of limitations, most ranging from three to five years from the date of filing.

STOCK OPTION GRANTS AND EXERCIS

STOCK OPTION GRANTS AND EXERCISES	12 Months Ended
STOCK OPTION GRANTS AND EXERCISES	Dec. 31, 2017
STOCK OPTION GRANTS AND EXERCISES
STOCK OPTION GRANTS AND EXERCISES	10. STOCK OPTION GRANTS AND EXERCISES On September 9, 2016, the Compensation and Benefits Committee approved grants of incentive stock options to the Company’s employees under the First Amended 2008 Stock Option Plan with exercise prices at fair market value ($2.75 per share), a ten-year term, and one-year vesting period, except to the extent that such vesting period would violate the First Amended 2008 Stock Option Plan. In total, the stock options are exercisable into 500,400 shares of Common Stock. The value of an option for the purchase of one underlying common share was valued at $1.783, using the Black Scholes Option Pricing Model using a risk-free rate of 1.51%, a volatility factor of 67.1%, and a 7.1 year expected life. On December 27, 2016, the Compensation and Benefits Committee approved grants of stock options to the Company’s chief financial officer, general counsel, and all three independent directors for 50,000 shares each with ten-year terms under the First Amended 2008 Stock Option Plan with exercise prices at fair market value ($1.05 per share). The executive officers’ options vested on December 27, 2017 and the independent directors’ options vested immediately. The value of an option for the purchase of one underlying common share was valued at $0.728, using the Black Scholes Option Pricing Model using a risk-free rate of 2.37%, a volatility factor of 72.5%, and a 7.1 year expected life. No stock options were exercised in 2017. Stock options were exercised at various dates in 2016 and 2015 and, consequently, a total of 1,046,580 shares of Common Stock were issued in 2016 and 272,477 shares of Common Stock were issued in 2015 for an aggregate payment of $855,021 in 2016 and $283,933 in 2015. These options were granted in 2008 and 2009 at exercise prices of $0.81 and $1.30.

DIVIDENDS

DIVIDENDS	12 Months Ended
DIVIDENDS	Dec. 31, 2017
DIVIDENDS
DIVIDENDS	11. DIVIDENDS The Board declared and the Company paid dividends to Series I and Series II Class B Preferred Shareholders in the following amounts: $37,891 and $132,926, respectively, on April 30, 2015, and paid such preferred shareholders $12,313 and $44,050, respectively, on July 20, 2015 and October 22, 2015; and paid such preferred shareholders $12,313 and $43,101, respectively, on February 1, 2016. The Board declared and the Company paid dividends to Series I and Series II Class B Preferred Shareholders in the following amounts: $12,313 and $42,800, respectively, on April 21, 2016, July 28, 2016, October 20, 2016, January 6, 2017, April 24, 2017, July 20, 2017, October 20, 2017, and January 19, 2018.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	12 Months Ended
STOCKHOLDERS' EQUITY	Dec. 31, 2017
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	12. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 5,000,000 shares of Preferred Stock Class A with a par value of One Dollar ($1.00) per share; 5,000,000 shares of Preferred Stock Class B with a par value of One Dollar ($1.00) per share; and 5,000,000 shares of Preferred Stock Class C with a par value of One Dollar ($1.00) per share. The Company has one class of Preferred Stock outstanding: Class B Convertible Preferred Stock (“Class B Stock”). The Class B Stock has five series: Series I, Series II, Series III, Series IV, and Series V. The Class B Stock has been allocated among Series I, II, III, IV, and V in the amounts of 98,500; 171,200; 129,245; 342,500; and 40,000 shares, respectively as of December 31, 2017. The remaining 4,218,555 authorized shares have not been assigned a series. Series I Class B Stock There were 98,500 shares of $1 par value Series I Class B Stock outstanding at December 31, 2017 and 2016. Holders of Series I Class B Stock are entitled to receive a cumulative annual dividend of $0.50 per share, payable quarterly if declared by the Board of Directors. The Company paid dividends of $49,250; $49,250; and $62,516 in 2017, 2016, and 2015, respectively. At December 31, 2017, no dividends were in arrears. Series I Class B Stock is redeemable after three years from the date of issuance at the option of the Company at a price of $7.50 per share, plus all unpaid dividends. Each share of Series I Class B Stock may, at the option of the stockholder, be converted to one share of Common Stock after three years from the date of issuance or in the event the Company files an initial registration statement under the Securities Act of 1933. No shares of Series I Class B Stock were converted into Common Stock in 2017 or 2016. In the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, holders of Series I Class B Stock then outstanding are entitled to $6.25 per share, plus all unpaid dividends prior to any distributions to holders of Series II Class B Stock, Series III Class B Stock, Series IV Class B Stock, Series V Class B Stock, or Common Stock. Series II Class B Stock There were 171,200 shares of $1 par value Series II Class B Stock outstanding at December 31, 2017 and 2016. Holders of Series II Class B Stock are entitled to receive a cumulative annual dividend of $1.00 per share, payable quarterly if declared by the Board of Directors. Holders of Series II Class B Stock generally have no voting rights until dividends are in arrears and unpaid for twelve consecutive quarters. In such case, the holders of Series II Class B Stock have the right to elect one-third of the Board of Directors of the Company. The Company paid dividends of $171,200; $171,200; and $221,026 in 2017, 2016, and 2015, respectively. At December 31, 2017, no dividends were in arrears. Series II Class B Stock is redeemable after three years from the date of issuance at the option of the Company at a price of $15.00 per share plus all unpaid dividends. Each share of Series II Class B Stock may, at the option of the stockholder, be converted to one share of Common Stock after three years from the date of issuance or in the event the Company files an initial registration statement under the Securities Act of 1933. No shares were converted in 2017 or 2016. In the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, holders of Series II Class B Stock then outstanding are entitled to $12.50 per share, plus all unpaid dividends, after distribution obligations to holders of Series I Class B Stock have been satisfied and prior to any distributions to holders of Series III Class B Stock, Series IV Class B Stock, Series V Class B Stock, or Common Stock. Series III Class B Stock There were 129,245 shares of $1 par value Series III Class B Stock outstanding at December 31, 2017 and 2016. Holders of Series III Class B Stock are entitled to receive a cumulative annual dividend of $1.00 per share, payable quarterly if declared by the Board of Directors. At December 31, 2017, approximately $4,145,604 of dividends which have not been declared were in arrears. Series III Class B Stock is redeemable after three years from the date of issuance at the option of the Company at a price of $15.00 per share, plus all unpaid dividends. Each share of Series III Class B Stock may, at the option of the stockholder, be converted to one share of Common Stock after three years from the date of issuance or in the event the Company files an initial registration statement under the Securities Act of 1933. No shares were converted in 2017 or 2016. In the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, holders of Series III Class B Stock then outstanding are entitled to $12.50 per share, plus all unpaid dividends, after distribution obligations to Series I Class B Stock and Series II Class B Stock have been satisfied and prior to any distributions to holders of Series IV Class B Stock, Series V Class B Stock, or Common Stock. Series IV Class B Stock There were 342,500 shares of $1 par value Series IV Class B Stock outstanding at December 31, 2017 and 2016. Holders of Series IV Class B Stock are entitled to receive a cumulative annual dividend of $1.00 per share, payable quarterly, if declared by the Board of Directors. At December 31, 2017, approximately $6,141,118 of dividends which have not been declared were in arrears. Series IV Class B Stock is redeemable after three years from the date of issuance at the option of the Company at a price of $11.00 per share plus all unpaid dividends. Each share of Series IV Class B Stock may, at the option of the stockholder any time subsequent to three years from date of issuance, be converted into one share of Common Stock, or in the event the Company files an initial registration statement under the Securities Act of 1933. No shares of Series IV Class B Stock were converted into Common Stock in 2017 or 2016. In the event of voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Series IV Class B Stock then outstanding are entitled to receive liquidating distributions of $11.00 per share, unpaid dividends after distribution obligations to Series I Class B Stock, Series II Class B Stock, and Series III Class B Stock have been satisfied and prior to any distribution to holders of Series V Class B Stock or Common Stock. Series V Class B Stock There were 40,000 shares of $1 par value Series V Class B Stock outstanding at December 31, 2017 and 2016. Holders of Series V Class B Stock are entitled to receive a cumulative annual dividend of $0.32 per share, payable quarterly, if declared by the Board of Directors. At December 31, 2017, approximately $996,035 of dividends which have not been declared were in arrears. Series V Class B Stock is redeemable after two years from the date of issuance at the option of the Company at a price of $4.40 per share plus all unpaid dividends. Each share of Series V Class B Stock may, at the option of the stockholder any time subsequent to the date of issuance, be converted into Common Stock. No shares of Series V Class B Stock were converted into Common Stock in 2017 or 2016. In the event of voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Series V Class B Stock then outstanding are entitled to receive liquidating distributions of $4.40 per share, plus unpaid dividends after distribution obligations to Series I Class B Stock, Series II Class B Stock, Series III Class B Stock, and Series IV Class B Stock have been satisfied and prior to any distribution to the holders of the Common Stock. Common stock The Company is authorized to issue 100,000,000 shares of no par value Common Stock, of which 32,666,454 and 29,666,454 shares were outstanding at December 31, 2017, and 2016, respectively. Additionally, a total of 2,644,464 shares of Common Stock are issuable upon the conversion of Preferred Stock and the exercise of stock options.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2017
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS The Company has a license agreement with the Chief Executive Officer of the Company. See Note 5. In 2016, the Company granted a right to three of its executive officers to purchase shares of Common Stock directly from the Company at market prices. Thomas J. Shaw, CEO, exercised his purchase rights on January 12, 2017, buying two million shares at market price for an aggregate purchase price of $1.78 million, and he exercised the remainder of his purchase rights on August 23, 2017 by purchasing one million shares at market price for aggregate consideration of $570,100. Mr. Cowan, CFO, and Ms. Larios, Vice President and General Counsel, are authorized to purchase 500,000 shares each at market price any time prior to December 9, 2018. The approximate dollar value of these potential future purchases cannot be predicted. In November 2016, the Company granted a stock option to its Chief Executive Officer for the purchase of three million shares of Common Stock. Such stock option terminated by its terms before becoming exercisable following a December 27, 2016 shareholder vote against such option.

STOCK OPTIONS

STOCK OPTIONS	12 Months Ended
STOCK OPTIONS	Dec. 31, 2017
STOCK OPTIONS
STOCK OPTIONS	14. STOCK OPTIONS Stock options The Company has approved stock option plans for the granting of stock options to employees, Directors, and consultants. Options for the purchase of 3,649,508 shares of Common Stock have been issued under the 2008 Stock Option Plan, which, pursuant to a 2014 amendment, authorizes a total of 6,000,000 shares of Common Stock upon the exercise of stock options. Options for the purchase of 1,863,019 shares under the 2008 Stock Option Plan were outstanding as of December 31, 2017. 2,350,492 shares are available for future issuance under the 2008 Stock Option Plan until July 25, 2018. A stock option for 3,000,000 shares granted to Thomas J. Shaw on November 2, 2016 terminated by its terms prior to becoming exercisable following a December 27, 2016 shareholder vote against such option. The Compensation and Benefits Committee administers all plans and determines and/or recommends to the Board exercise prices at which options are granted. All executive compensation, including the granting of stock options, is determined by the Compensation and Benefits Committee. Shares issued upon exercise of options come from the Company’s authorized but unissued Common Stock. The options vested over periods up to three years from the date of grant and generally expire ten years after the date of grant. Unvested options issued under the 2008 Stock Option Plan expire immediately after termination of employment. Employee options A summary of Director, officer, and employee options granted and outstanding under the 2008 Stock Option Plan is presented below: Years Ended December 31, 2017 2016 2015 Shares Weighted Shares Weighted Shares Weighted Outstanding at beginning of period $ $ $ Granted — $ — $ — $ — Exercised — $ — ) $ ) ) $ ) Forfeited ) $ ) ) $ ) ) $ ) Outstanding at end of period $ $ $ Exercisable at end of period $ $ $ No options were issued in 2017 or 2015 to employees. 600,400 employee stock options were issued in 2016. A grant of three million options to the Company’s chief executive officer terminated by its terms prior to becoming exercisable. The fair value of the September 2016 grants exercisable into 500,400 shares was $1.783 per share of underlying Common Stock and was estimated on the date of the grant using the Black Scholes pricing model with the following assumptions: expected volatility of 67.1%, risk free interest rate of 1.51%, and an expected life of 7.1 years. These options were issued under the First Amended 2008 Stock Option Plan. The fair value of the December 2016 grants exercisable into 100,000 shares was $0.728 per share of underlying Common Stock and was estimated on the date of the grant using the Black Scholes pricing model with the following assumptions: expected volatility of 72.5%, risk free interest rate of 2.37%, and an expected life of 7.1 years. These options were issued under the First Amended 2008 Stock Option Plan. No options were issued to non-employee directors in 2017 or 2015. 150,000 stock options were issued to non-employee directors in 2016. The fair value of the 2016 grants was $0.728 per share of underlying Common Stock and was estimated on the date of the grant using the Black Scholes pricing model with the following assumptions: expected volatility of 72.5%, risk free interest rate of 2.37%, and an expected life of 7.1 years. These options were issued under the First Amended 2008 Stock Option Plan. The following table summarizes information about Director, officer, and employee options outstanding under the stock option plan at December 31, 2017: Exercise Prices Shares Outstanding Weighted Average Shares Exercisable $ 1.30 $ 1.46 $ 0.81 $ 1.05 $ 2.75 Non-employee options A summary of options outstanding during the years ended December 31 and held by non-employees is as follows: Years Ended December 31, 2017 2016 2015 Shares Weighted Shares Weighted Shares Weighted Outstanding at beginning of period $ $ $ Granted — $ — — $ — — $ — Exercised — $ — — $ — ) $ ) Forfeited — $ — — $ — — $ — Outstanding at end of period $ $ $ Exercisable at end of period $ $ $ The following table summarizes information about non-employee options outstanding under the stock option plan at December 31, 2017: Exercise Shares Weighted Average Shares $ 0.81 The Company recorded $388 thousand of stock-based compensation expense in 2016. In 2017, the Company recognized stock-based compensation expense of $672 thousand. The Company recorded no stock-based compensation expense in 2015. The total intrinsic value of options exercised was $0; $1,414,892; and $856,269 in 2017, 2016, and 2015, respectively. There were no options outstanding and exercisable with exercise prices lower than market price at December 31, 2017. Options Pricing Models — Assumptions The expected life is based on the Company’s historical experience with option exercise trends. The assumptions for expected volatility is based on a calculation of volatility over the five-years preceding the grant date. Risk-free interest rates are set using grant-date U.S. Treasury yield curves. In its calculations, the Company assumed no dividends.

401(k) PLAN

401(k) PLAN	12 Months Ended
401(k) PLAN	Dec. 31, 2017
401(k) PLAN
401(k) PLAN	15. 401(k) PLAN The Company implemented an employee savings and retirement plan (the “401(k) Plan”) in 2005 that is intended to be a tax-qualified plan covering substantially all employees. The 401(k) Plan is available to all employees on the first day of the month after 90 days of service. Under the terms of the 401(k) Plan, employees may elect to contribute up to 88% of their compensation, or the statutory prescribed limit, if less. The Company may, at its discretion, match employee contributions. In the first quarter of 2016, the Company reinstituted a policy of matching. For 2016 and 2017, the Company matched each participant’s elective deferrals up to 2% of the participant’s compensation for the pay period. The total match was $122,369 in 2016 and $145,474 in 2017. The Company did not match contributions in 2015.

BUSINESS SEGMENTS

BUSINESS SEGMENTS	12 Months Ended
BUSINESS SEGMENTS	Dec. 31, 2017
BUSINESS SEGMENTS
BUSINESS SEGMENTS	16. BUSINESS SEGMENTS The following is a summary of the Company’s sales and long-lived assets by geography: 2017 2016 2015 U.S. sales $ $ $ North and South America sales (excluding U.S.) Other international sales Total sales $ $ $ Long-lived assets U.S. $ $ $ International $ $ $ The Company does not operate in separate reportable segments. The Company has minimal long-lived assets in foreign countries. Shipments to international customers generally require a prepayment either by wire transfer or an irrevocable confirmed letter of credit. The Company does extend credit to international customers on some occasions depending upon certain criteria, including, but not limited to, the credit worthiness of the customer, the stability of the country, banking restrictions, and the size of the order. All transactions are in U.S. currency.

TREASURY SHARES

TREASURY SHARES	12 Months Ended
TREASURY SHARES	Dec. 31, 2017
TREASURY SHARES
TREASURY SHARES	17. TREASURY SHARES The Board of Directors of the Company cancelled all treasury shares effective August 11, 2015.

PREFERRED STOCK TRANSACTION

PREFERRED STOCK TRANSACTION	12 Months Ended
PREFERRED STOCK TRANSACTION	Dec. 31, 2017
PREFERRED STOCK TRANSACTION
PREFERRED STOCK TRANSACTION	18. PREFERRED STOCK TRANSACTION The Company exchanged 728,000 shares of Common Stock for 200,000 shares of our Series IV Class B Convertible Preferred Stock as of November 30, 2015, pursuant to an agreement with a shareholder. Such shareholder agreed to waive all unpaid dividends in arrears associated with the tendered preferred stock, equaling $3,094,795. The fair value of the common stock issued ($2,606,240) over the carrying value of the preferred stock extinguished ($2,000,000) was $606,240. The excess of the dividend arrearage waived less the excess value of common stock issued, less the preferred dividend requirements for 2015 through the extinguishment date ($182,877) resulted in a deemed capital contribution of $2,305,678 for purposes of computing net income available to common shareholders. Future dividend requirements of $200,000 per year were avoided as a result of this transaction.

BONUSES

BONUSES	12 Months Ended
BONUSES	Dec. 31, 2017
BONUSES
BONUSES	19. BONUSES In February of 2017, Mr. Cowan and Ms. Larios were each granted cash bonuses of $250,000. Ms. Larios received her bonus in the first quarter of 2017. Mr. Cowan received his bonus in the fourth quarter of 2017.

STORM DAMAGE AND INSURANCE PROC

STORM DAMAGE AND INSURANCE PROCEEDS	12 Months Ended
STORM DAMAGE AND INSURANCE PROCEEDS	Dec. 31, 2017
STORM DAMAGE AND INSURANCE PROCEEDS
STORM DAMAGE AND INSURANCE PROCEEDS	20. STORM DAMAGE AND INSURANCE PROCEEDS On March 26, 2017, a hail storm passed through Little Elm, Texas, resulting in damage to the Company’s two buildings. During April 2017, the Company performed an inspection of its facilities and determined that possible roof damage had been sustained. In late April 2017, the Company’s insurance carrier inspected the two buildings and confirmed that damage occurred from the hail storm. This damage was principally to the roofs of the buildings but also many of the HVAC units and a wall alongside one of the buildings. The Company’s insurance carrier has assessed damages of $1,009,960 and the Company’s deductible is $5,000. The Company has received these funds from its carrier. At this time, the Company does not expect the cost of repairs to the roofs, the wall, and to the HVAC units to exceed its coverage. Repairs commenced during the third quarter of 2017 and should be completed in the first half of 2018. During 2017, the Company incurred and recognized $538,667 in repairs due to the storm damage. There is $466,293 of remaining insurance proceeds. This repair expense was offset by the insurance proceeds, resulting in no impact to the Statement of Operations. These costs and offsets are included in General and administrative expense in the Statement of Operations.

Schedule II-Schedule of Valuati

Schedule II-Schedule of Valuation and Qualifying Accounts	12 Months Ended
Schedule II-Schedule of Valuation and Qualifying Accounts	Dec. 31, 2017
Schedule II - Schedule of Valuation and Qualifying Accounts
Schedule II - Schedule of Valuation and Qualifying Accounts	Schedule of Valuation and Qualifying Accounts for the years ended December 31, 2017, 2016, and 2015: Balance at Additions Deductions Balance at Provision for Inventories Fiscal year ended 2015 $ $ — $ — $ Fiscal year ended 2016 $ $ $ $ Fiscal year ended 2017 $ $ — $ $ Provision for Accounts Receivable Fiscal year ended 2015 $ $ $ $ Fiscal year ended 2016 $ $ $ $ Fiscal year ended 2017 $ $ $ $ Balance at Additions Deductions Balance at Deferred Tax Valuation Fiscal year ended 2015 $ $ — $ $ Fiscal year ended 2016 $ $ $ — $ Fiscal year ended 2017 $ $ — $ $ Provision for Rebates (A) (B) (C) Fiscal year ended 2015 $ $ $ $ Fiscal year ended 2016 $ $ $ $ Fiscal year ended 2017 $ $ $ $ (A) Represents estimated rebates deducted from gross revenues (B) Represents rebates credited to the distributor and charge offs against the allowance (C) Includes $4,115,628; $3,591,534; and $3,733,199 in Accounts payable for 2017, 2016, and 2015, respectively.

SUMMARY OF SIGNIFICANT ACCOUN28

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting estimates	Accounting estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.
Cash and cash equivalents	Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and investments with original maturities of three months or less.
Accounts receivable	Accounts receivable The Company records trade receivables when revenue is recognized. No product has been consigned to customers. The Company’s allowance for doubtful accounts is primarily determined by review of specific trade receivables. Those accounts that are doubtful of collection are included in the allowance. This provision is reviewed to determine the adequacy of the allowance for doubtful accounts. Trade receivables are charged off when there is certainty as to their being uncollectible. Trade receivables are considered delinquent when payment has not been made within contract terms. The Company requires certain customers to make a prepayment prior to beginning production or shipment of their order. Customers may apply such prepayments to their outstanding invoices or pay the invoice and continue to carry forward the deposit for future orders. Such amounts are included in Other accrued liabilities on the Balance Sheets and are shown in Note 6, Other Accrued Liabilities. The Company records an allowance for estimated returns as a reduction to Accounts receivable and Gross sales. Historically, returns have been immaterial.
Inventories	Inventories Inventories are valued at the lower of cost or net realizable value, with cost being determined using actual average cost. The Company compares the average cost to the net realizable value and records the lower value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Management considers such factors as the amount of inventory on hand and in the distribution channel, estimated time to sell such inventory, the shelf life of inventory, and current market conditions when determining excess or obsolete inventories. A reserve is established for any excess or obsolete inventories or they may be written off.
Property, plant, and equipment	Property, plant, and equipment Property, plant, and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Cost includes major expenditures for improvements and replacements which extend useful lives or increase capacity and interest cost associated with significant capital additions. Gains or losses from property disposals are included in income. Depreciation and amortization are calculated using the straight-line method over the following useful lives: Production equipment 3 to 13 years Office furniture and equipment 3 to 10 years Buildings 39 years Building improvements 15 years
Long-lived assets	Long-lived assets The Company assesses the recoverability of long-lived assets using an assessment of the estimated undiscounted future cash flows related to such assets. In the event that assets are found to be carried at amounts which are in excess of estimated gross future cash flows, the assets will be adjusted for impairment to a level commensurate with fair value determined using a discounted cash flow analysis or appraised values of the underlying assets. During 2016, the Company recognized an impairment charge of $456,119 associated with its Patient Safe ® production equipment. The Company determined it was more cost effective to outsource this production through an overseas manufacturer, and thus the Company’s Patient Safe ® production equipment was taken out of service. Minimal cash flows were expected to be generated by this equipment. Accordingly, the Company reduced the carrying value of the Patient Safe ® production equipment to an estimated fair value of zero. The Company’s property, plant, and equipment primarily consist of buildings, land, assembly equipment, molding machines, molds, office equipment, furniture, and fixtures.
Financial instruments	Financial instruments The Company estimates the fair value of financial instruments through the use of public market prices, quotes from financial institutions, and other available information. Judgment is required in interpreting data to develop estimates of fair value and, accordingly, amounts are not necessarily indicative of the amounts that could be realized in a current market exchange. Short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on Management’s estimates, equals their recorded values. The fair value of long-term liabilities, based on Management’s estimates, approximates their reported values.
Concentration risks	Concentration risks The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Cash balances, some of which exceed federally insured limits, are maintained in financial institutions; however, Management believes the institutions are of high credit quality. The majority of accounts receivable are due from companies which are well-established entities. As a consequence, Management considers any exposure from concentrations of credit risks to be limited. The following table reflects our significant customers in 2017, 2016, and 2015: Years Ended December 31, 2017 2016 2015 Number of significant customers Aggregate dollar amount of net sales to significant customers $ 14.0 million $ 9.4 million $ 13.5 million Percentage of net sales to significant customers % % % The Company decreased its allowance for doubtful accounts by approximately $1.6 million in 2017 due to a write-off of debit rebates. The Company manufactures syringes in Little Elm, Texas as well as utilizing manufacturers in China. The Company purchases most of its product components from single suppliers, including needle adhesives and packaging materials. There are multiple sources of these materials. The Company obtained roughly 90.4% of its VanishPoint ® syringes in 2017 from its primary Chinese manufacturer. Purchases from this Chinese manufacturer aggregated 86.3% and 77.7% of VanishPoint ® finished products in 2016 and 2015, respectively. In the event that the Company becomes unable to purchase products from its Chinese manufacturers, the Company would need to find an alternate manufacturer for its blood collection set, IV catheter, Patient Safe ® syringe, 0.5mL insulin syringe, 0.5mL autodisable syringe, and 2mL, 5mL, and 10mL syringes and would increase domestic production for the 1mL and 3mL syringes.
Revenue recognition	Revenue recognition Revenue is recognized for sales when title and risk of ownership passes to the customer, generally upon shipment. Under certain contracts, revenue is recorded on the basis of sales price to distributors, less contractual pricing allowances. Contractual pricing allowances consist of: (i) rebates granted to distributors who provide tracking reports which show, among other things, the facility that purchased the products, and (ii) a provision for estimated contractual pricing allowances for products for which the Company has not received tracking reports. Rebates are recorded when issued and are applied against the customer’s receivable balance. Distributors receive a rebate for the difference between the Wholesale Acquisition Cost and the appropriate contract price as reflected on a tracking report provided by the distributor to the Company. If product is sold by a distributor to an entity that has no contract, there is a standard rebate (lower than a contracted rebate) given to the distributor. One of the purposes of the rebate is to encourage distributors to submit tracking reports to the Company. The provision for contractual pricing allowances is reviewed at the end of each quarter and adjusted for changes in levels of products for which there is no tracking report. Additionally, if it becomes clear that tracking reports will not be provided by individual distributors, the provision is further adjusted. The estimated contractual allowance is included in Accounts payable in the Balance Sheets and deducted from revenues in the Statements of Operations. Accounts payable included estimated contractual allowances for $4,115,628 and $3,591,534 as of December 31, 2017 and 2016, respectively. The terms and conditions of contractual pricing allowances are governed by contracts between the Company and its distributors. Revenue for shipments directly to end-users is recognized when title and risk of ownership pass from the Company. Any product shipped or distributed for evaluation purposes is expensed. The Company’s domestic return policy is set forth in its standard Distribution Agreement. This policy provides that a customer may return incorrect shipments within 10 days following arrival at the distributor’s facility. In all such cases, the distributor must obtain an authorization code from the Company and affix the code to the returned product. The Company will not accept returned goods without a returned goods authorization number. The Company may refund the customer’s money or replace the product. The Company’s domestic return policy also generally provides that a customer may return product that is overstocked. Overstocking returns are limited to two times in each 12-month period up to 1% of distributor’s total purchase of products for the prior 12-month period. All product overstocks and returns are subject to inspection and acceptance by the Company. The Company’s international distribution agreements generally do not provide for any returns.
Litigation proceeds	Litigation proceeds Proceeds from litigation are recognized when realizable. Generally, realization is not reasonably assured and expected until proceeds are collected.
Income taxes	Income taxes The Tax Cuts and Job Act (“the Act”) was enacted on December 22, 2017, and the U.S. federal corporate tax rate was reduced from 35% to 21%. U.S. generally accepted accounting principles require companies to account for the effects of changes in income tax rates and laws in the period the change is enacted. Financial results, including provisional amounts, have been calculated for the income tax effects of the change. The U.S. Securities and Exchange Commission issued Staff Accounting Bulletin 118 (SAB 118) allowing companies to use provisioned estimates to record the effects of the Act. SAB 118 allows companies to complete accounting for these effects no later than one year from the enactment date of the Act. The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in the financial statements based on whether it is “more-likely-than-not” that a tax position will be sustained based upon the technical merits of the position. Measurement of the tax position is based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company provides for deferred income taxes through utilizing an asset and liability approach for financial accounting and reporting based on the tax effects of differences between the financial statement and tax bases of assets and liabilities, based on enacted rates expected to be in effect when such differences reverse in future periods. Deferred tax assets are periodically reviewed for realizability. The Company has established a valuation allowance for its net deferred tax asset as future taxable income cannot be reasonably assured. Penalties and interest related to income tax are classified as General and administrative expense and Interest expense, respectively, in the Statements of Operations.
Earnings per share	Earnings per share The Company computes basic earnings per share (“EPS”) by dividing net earnings for the period (adjusted for any cumulative dividends for the period) by the weighted average number of common shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect, if any, of the common stock deliverable pursuant to stock options or common stock issuable upon the conversion of convertible preferred stock. The calculation of diluted EPS excluded 79,441 and 783,730 shares of Common Stock underlying issued and outstanding stock options at December 31, 2017 and December 31, 2016, respectively, as their effect was antidilutive. The potential dilution, if any, is shown on the following schedule: Years Ended December 31, 2017 2016 2015 Net income (loss) $ ) $ ) $ Preferred dividend requirements ) ) ) Deemed capital contribution on extinguishment of preferred stock — — Income (loss) applicable to common shareholders $ ) $ ) $ Weighted average common shares outstanding Weighted average common and common equivalent shares outstanding - assuming dilution Basic earnings (loss) per share $ ) $ ) $ Diluted earnings (loss) per share $ ) $ ) $ The Financial Accounting Standards Board Accounting Standards Codification 260-10-S99-2, Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock, requires the gain or loss on extinguishment of equity-classified preferred stock to be included in net income per common stockholder used to calculate earnings per share (similar to the treatment of dividends paid on preferred stock). The difference between (1) the fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock (net of issuance costs) is subtracted from (or added to) net income to arrive at income available to common stockholders in the calculation of earnings per share. The Company has determined to apply this guidance to its accounting treatment of the preferred stock transaction described in Note 18. From a legal standpoint, the transaction was neither a redemption nor conversion pursuant of the terms of the Certificate of Designation, Preferences, Rights and Limitations of the Series IV Class B Convertible Preferred Stock.
Shipping and handling costs	Shipping and handling costs The Company classifies shipping and handling costs as part of Cost of sales in the Statements of Operations.
Research and development costs	Research and development costs Research and development costs are expensed as incurred.
Share-based compensation	Share-based compensation The Company’s share-based payments are accounted for using the fair value method. The Company records share-based compensation expense on a straight-line basis over the requisite service period. The Company incurred the following share-based compensation costs: Years Ended December 31, 2017 2016 2015 Cost of sales $ $ $ — Sales and marketing — Research and development — General and administrative — $ $ $ — Options awarded to employees in 2016 were amortized over twelve months. The Company amortized four months’ expense for options granted in September 2016 and amortized the remainder in 2017. Non-employee Directors’ option expense was all expensed in the fourth quarter of 2016. The Company early-adopted FASB Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” for its annual period ended December 31, 2016. This ASU addresses several aspects of the accounting for share-based compensation transactions including: (a) income tax consequences when awards vest or are settled, (b) classification of awards as either equity or liabilities, (c) a policy election to account for forfeitures as they occur rather than on an estimated basis and (d) classification of excess tax impacts on the statement of cash flows. As a result of adoption, excess tax benefits in 2016 resulting from the exercise of non-qualified stock options were recognized in the income tax provision rather than in additional-paid-in capital. As there were previously no excess income tax benefits recognized in additional-paid-in capital or other material changes to the Company’s accounting for share based compensation resulting from adoption of this ASU, no cumulative effect adjustments were required.
Insurance Proceeds	Insurance Proceeds Receipts from insurance up to the amount of any loss recognized by the Company are considered recoveries. Any such recoveries are recorded when they are received. Insurance recoveries are not recognized as a component of earnings (loss) from operations until all repairs are made.
Recent pronouncements	Recent pronouncements In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The updated guidance is effective for the Company’s quarter ending March 31, 2018, with early adoption permitted. The Company does not expect ASU 2016-18 to have a material effect on its financial statements as the Company currently holds no restricted cash or restricted cash equivalents. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Payments” (ASU 2016-15), clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for the Company’s quarter ending March 31, 2018. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, “Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. This ASU is effective for the Company’s quarter ending March 31, 2020 with early application permitted for the Company’s quarter ending March 31, 2019. The Company is currently assessing the impact that adoption of this guidance will have on its financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (topic 842). Under the new ASU, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance lessor accounting is largely unchanged. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. This ASU is effective for the Company’s quarter ending March 31, 2019, with early adoption permitted. The Company is currently evaluating the impact of this standard. In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which provides guidance for revenue recognition. This ASU’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. In July 2015, the FASB voted to delay the effective date of this ASU by one year. The ASU will now be effective commencing with the Company’s quarter ending March 31, 2018. Early adoption of this ASU is allowed no sooner than the original effective date. Management’s assessment is that the implementation of the amended guidance will not have a material impact on the Company’s balance sheet, statements of operations, changes in stockholders’ equity and cash flows, but will include expanded disclosures. The Company’s revenue is generated from sales of finished goods (disposable medical devices). Revenue from these sales will continue to be recognized when title of the products is passed to the customer. Management expects materially similar results under the amended guidance as compared to the Company’s current policies and procedures regarding revenue recognition. The Company will adopt this amended guidance on a Modified Retrospective basis in the first quarter of 2018.

SUMMARY OF SIGNIFICANT ACCOUN29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of estimated useful lives of property, plant and equipment	Production equipment 3 to 13 years Office furniture and equipment 3 to 10 years Buildings 39 years Building improvements 15 years
Schedule of significant customers	Years Ended December 31, 2017 2016 2015 Number of significant customers Aggregate dollar amount of net sales to significant customers $ 14.0 million $ 9.4 million $ 13.5 million Percentage of net sales to significant customers % % %
Schedule of earnings per share	Years Ended December 31, 2017 2016 2015 Net income (loss) $ ) $ ) $ Preferred dividend requirements ) ) ) Deemed capital contribution on extinguishment of preferred stock — — Income (loss) applicable to common shareholders $ ) $ ) $ Weighted average common shares outstanding Weighted average common and common equivalent shares outstanding - assuming dilution Basic earnings (loss) per share $ ) $ ) $ Diluted earnings (loss) per share $ ) $ ) $
Schedule of share-based compensation costs	Years Ended December 31, 2017 2016 2015 Cost of sales $ $ $ — Sales and marketing — Research and development — General and administrative — $ $ $ —

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
INVENTORIES (Tables)	Dec. 31, 2017
INVENTORIES
Schedule of inventories	Year Ended December 31, 2017 2016 Raw materials $ $ Finished goods Inventory reserve ) ) $ $

PROPERTY, PLANT, AND EQUIPMENT

PROPERTY, PLANT, AND EQUIPMENT (Tables)	12 Months Ended
PROPERTY, PLANT, AND EQUIPMENT (Tables)	Dec. 31, 2017
PROPERTY, PLANT, AND EQUIPMENT
Schedule of property, plant, and equipment	December 31, 2017 2016 Land $ $ Buildings and building improvements Production equipment Office furniture and equipment Construction in progress Accumulated depreciation ) ) $ $

OTHER ACCRUED LIABILITIES (Tabl

OTHER ACCRUED LIABILITIES (Tables)	12 Months Ended
OTHER ACCRUED LIABILITIES (Tables)	Dec. 31, 2017
OTHER ACCRUED LIABILITIES
Schedule of other accrued liabilities	December 31, 2017 2016 Prepayments from customers $ $ Accrued property taxes — Accrued professional fees Other accrued expenses $ $

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	12 Months Ended
LONG-TERM DEBT (Tables)	Dec. 31, 2017
LONG-TERM DEBT
Schedule of long-term debt	December 31, 2017 2016 Loan from American First National Bank. It has a 20 year amortization and 10 year maturity from December 10, 2009. The loan, in the original amount of $4,209,608, provided funding for the expansion of the warehouse, additional office space, and a new Controlled Environment. The loan is secured by the Company’s land and buildings. The interest rate is 5.968%. $ $ Note payable to Deutsche Leasing USA, Inc. The interest rate is 3.69%. The original amount of the note was $276,495 with a 36 month maturity ending in July 2018. Beginning August 2015, the loan became payable in equal installments of principal and interest of approximately $8,100. Collateralized by molding machines and ancillary equipment. Note payable to Deutsche Leasing USA, Inc. The interest rate is 4.25%. The original amount of the note was $525,017 with a 36 month maturity ending in November 2019. Beginning December 2016, the loan became payable in equal installments of principal and interest of approximately $15,500. Collateralized by molding machines and ancillary equipment. Less: current portion ) ) $ $
Schedule of aggregate maturities of long-term debt	The aggregate maturities of long-term debt as of December 31, 2017, are as follows: 2018 $ 2019 $

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Tables)	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES
Schedule of future annual minimum rental payments under non-cancellable operating lease	Future annual minimum rental payments as of December 31, 2017, are presented below: 2018 $ 2019 2020 Total $

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
INCOME TAXES (Tables)	Dec. 31, 2017
INCOME TAXES
Schedule of provision (benefit) for income taxes	For the Years Ended December 31, 2017 2016 2015 Current tax provision (benefit) Federal $ — $ — $ — State Total current provision (benefit) Deferred tax provision (benefit) Federal ) — — State — — — Total deferred tax provision (benefit) ) — — Total income tax provision (benefit) $ ) $ $
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities	December 31, 2017 2016 Deferred tax assets Net operating loss carry forwards $ $ Credit for alternative minimum tax paid — Accrued expenses and reserves Employee stock option expense Nonemployee stock option expense Inventory Impairment Deferred tax assets Deferred tax liabilities Property and equipment ) ) Deferred tax liabilities ) ) Net deferred assets Valuation allowance ) ) Net deferred tax assets $ — $ —
Schedule of reconciliation of income taxes based on the federal statutory rate and the effective income tax rate	December 31, 2017 2016 2015 Income tax at the federal statutory rate % % % State tax, net of federal tax Change in valuation allowance ) ) Permanent differences Return-to-provision and other ) ) ) Tax Reform and Jobs Act tax rate change ) — — Incentive stock options ) — — Effective tax rate % % %

STOCK OPTIONS (Tables)

STOCK OPTIONS (Tables)	12 Months Ended
STOCK OPTIONS (Tables)	Dec. 31, 2017
Director, officer, and employee
STOCK OPTIONS
Summary of options outstanding	Years Ended December 31, 2017 2016 2015 Shares Weighted Shares Weighted Shares Weighted Outstanding at beginning of period $ $ $ Granted — $ — $ — $ — Exercised — $ — ) $ ) ) $ ) Forfeited ) $ ) ) $ ) ) $ ) Outstanding at end of period $ $ $ Exercisable at end of period $ $ $
Schedule of information about stock options by range of exercise prices	The following table summarizes information about Director, officer, and employee options outstanding under the stock option plan at December 31, 2017: Exercise Prices Shares Outstanding Weighted Average Shares Exercisable $ 1.30 $ 1.46 $ 0.81 $ 1.05 $ 2.75
Non Employees
STOCK OPTIONS
Summary of options outstanding	Years Ended December 31, 2017 2016 2015 Shares Weighted Shares Weighted Shares Weighted Outstanding at beginning of period $ $ $ Granted — $ — — $ — — $ — Exercised — $ — — $ — ) $ ) Forfeited — $ — — $ — — $ — Outstanding at end of period $ $ $ Exercisable at end of period $ $ $
Schedule of information about stock options by range of exercise prices	The following table summarizes information about non-employee options outstanding under the stock option plan at December 31, 2017: Exercise Shares Weighted Average Shares $ 0.81

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	12 Months Ended
BUSINESS SEGMENTS (Tables)	Dec. 31, 2017
BUSINESS SEGMENTS
Summary of sales and long-lived assets by geography	2017 2016 2015 U.S. sales $ $ $ North and South America sales (excluding U.S.) Other international sales Total sales $ $ $ Long-lived assets U.S. $ $ $ International $ $ $

SUMMARY OF SIGNIFICANT ACCOUN38

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable, Property, plant and equipment and Long-lived assets (Details)	12 Months Ended
	Dec. 31, 2017item	Dec. 31, 2016USD ($)
Accounts receivable
Number of products consigned to customers \| item	0
Long-lived assets
Impairment charge		$ 456,119
Production equipment
Long-lived assets
Impairment charge		$ 456,119
Production equipment \| Minimum
Property, plant, and equipment
Useful lives	3 years
Production equipment \| Maximum
Property, plant, and equipment
Useful lives	13 years
Office furniture and equipment \| Minimum
Property, plant, and equipment
Useful lives	3 years
Office furniture and equipment \| Maximum
Property, plant, and equipment
Useful lives	10 years
Buildings
Property, plant, and equipment
Useful lives	39 years
Building Improvements
Property, plant, and equipment
Useful lives	15 years

SUMMARY OF SIGNIFICANT ACCOUN39

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration risks, Revenue recognition, Litigation proceeds & Income taxes(Details)	Jan. 01, 2018	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)item	Dec. 31, 2015USD ($)item
Concentration risks
Number of significant customers \| item		2	1	2
Aggregate dollar amount of net sales to significant customers		$ 34,493,838	$ 29,826,636	$ 29,552,200
Revenue recognition
Estimated contractual allowance		$ 4,115,628	$ 3,591,534
Period for return of incorrect shipments		10 days
Number of times overstocking returns are limited \| item		2
Period for return of product due to overstock		12 months
Maximum percentage of distributor's total purchase for the prior 12-month period		1.00%
Income taxes
Income tax at the federal statutory rate (as a percent)		35.00%	35.00%	35.00%
Customer Concentration Risk
Concentration risks
Decrease in allowance for doubtful accounts			$ 1,600,000
Forecast
Income taxes
Income tax at the federal statutory rate (as a percent)	21.00%
Sales \| Customer Concentration Risk
Concentration risks
Aggregate dollar amount of net sales to significant customers		$ 14,000,000	$ 9,400,000	$ 13,500,000
Percentage of net sales to significant customers (as a percent)		40.50%	31.40%	45.70%
Cost of Goods, Product Line \| Supplier Concentration Risk
Concentration risks
Percentage of net sales to significant customers (as a percent)		90.40%	86.30%	77.70%

SUMMARY OF SIGNIFICANT ACCOUN40

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings per share
Stock options excluded from calculation of diluted EPS	79,441	783,730
Net loss	$ (3,736,038)	$ (3,694,907)	$ 4,314,318
Preferred dividend requirements	(704,996)	(704,996)	(709,351)
Deemed capital contribution on extinguishment of preferred stock			2,305,678
Income (loss) applicable to common shareholders	$ (4,441,034)	$ (4,399,903)	$ 5,910,645
Weighted average common shares outstanding	31,958,121	29,354,437	27,822,593
Weighted average common and common equivalent shares outstanding - assuming dilution	31,958,121	29,354,437	29,481,294
Basic loss per share (in dollars per share)	$ (0.14)	$ (0.15)	$ 0.21
Diluted loss per share (in dollars per share)	$ (0.14)	$ (0.15)	$ 0.20

SUMMARY OF SIGNIFICANT ACCOUN41

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-based compensation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based compensation costs:
Share-based compensation expense	$ 672,223	$ 387,726	$ 0	$ 0
Stock options
Share-based compensation costs:
Options amortization period		12 months
September 2016 grant \| Stock options
Share-based compensation costs:
Amortized period for options granted		4 months
Cost of Sales
Share-based compensation costs:
Share-based compensation expense	272,811	$ 141,782
Selling and Marketing Expense
Share-based compensation costs:
Share-based compensation expense	143,255	77,583
Research and Development Expense
Share-based compensation costs:
Share-based compensation expense	45,174	23,623
General and Administrative Expense
Share-based compensation costs:
Share-based compensation expense	$ 210,983	$ 144,738

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
INVENTORIES
Raw materials	$ 1,511,339	$ 1,303,278
Finished goods	5,289,761	6,309,469
Inventory, gross	6,801,100	7,612,747
Inventory reserve	(594,939)	(595,523)
Inventory, net	$ 6,206,161	$ 7,017,224

PROPERTY, PLANT, AND EQUIPMEN43

PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($)	12 Months Ended
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, plant, and equipment
Property, plant and equipment, gross	$ 35,137,112	$ 35,045,231
Accumulated depreciation	(23,783,910)	(22,953,194)
Property, plant and equipment, net	11,353,202	12,092,037
Depreciation expense	830,715	867,080	$ 849,804
Land
Property, plant, and equipment
Property, plant and equipment, gross	261,893	261,893
Building and building Improvements
Property, plant, and equipment
Property, plant and equipment, gross	11,566,115	11,561,320
Production equipment
Property, plant, and equipment
Property, plant and equipment, gross	19,742,577	17,864,346
Office furniture and equipment
Property, plant, and equipment
Property, plant and equipment, gross	3,500,834	3,415,985
Construction in Progress
Property, plant, and equipment
Property, plant and equipment, gross	$ 65,693	$ 1,941,687

LICENSE AGREEMENT (Details)

LICENSE AGREEMENT (Details) - USD ($)	12 Months Ended
LICENSE AGREEMENT (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
LICENSE AGREEMENT
Royalty fees	$ 2,864,188	$ 2,527,508	$ 2,477,583
Licensing Agreements
LICENSE AGREEMENT
Initial licensing fee	$ 500,000
Amortization period of license fee	17 years
Quarterly payments as a percentage of royalty fee on gross sales	5.00%
Royalty fees	$ 2,864,188	2,527,508	2,477,583
Royalty payable under the license agreement	793,489	659,443
Gross sales upon which royalties are based	$ 57,283,780	$ 50,550,165	$ 49,551,660

OTHER ACCRUED LIABILITIES (Deta

OTHER ACCRUED LIABILITIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
OTHER ACCRUED LIABILITIES
Prepayments from customers	$ 355,742	$ 692,922
Accrued property taxes	14,681
Accrued professional fees	231,826	266,747
Other accrued expenses	55,674	49,030
Other accrued liabilities	$ 657,923	$ 1,008,699

LONG-TERM DEBT (Details)

LONG-TERM DEBT (Details) - USD ($)	1 Months Ended				12 Months Ended
LONG-TERM DEBT (Details) - USD ($)	Dec. 31, 2016	Nov. 30, 2016	Aug. 31, 2015	Jul. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 10, 2009
Long-term debt
Long term debt total	$ 3,928,637				$ 3,492,358	$ 3,928,637
Less: current portion	(430,393)				(410,949)	(430,393)
Long term debt, excluding current maturities	3,498,244				3,081,409	3,498,244
Loans Payable
Long-term debt
Long term debt total	$ 3,269,397				$ 3,094,301	$ 3,269,397
Amortization period					20 years	20 years
Maturity period of debt instrument					10 years	10 years
Interest rate (as a percent)	5.968%				5.968%	5.968%
Original amount of note							$ 4,209,608
Note Payable To Deutsche Leasing USA Inc 3.69 Percent Due July 2018
Long-term debt
Long term debt total	$ 149,727				$ 56,180	$ 149,727
Maturity period of debt instrument				36 months
Interest rate (as a percent)	3.69%				3.69%	3.69%
Original amount of note				$ 276,495
Principal and interest repayment			$ 8,100
Note payable to Deutsche Leasing USA, Inc. due November 2019
Long-term debt
Long term debt total	$ 509,513				$ 341,877	$ 509,513
Maturity period of debt instrument		36 months
Interest rate (as a percent)	4.25%				4.25%	4.25%
Original amount of note		$ 525,017
Principal and interest repayment	$ 15,500

LONG-TERM DEBT - Future maturit

LONG-TERM DEBT - Future maturities (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Aggregate maturities of long-term debt
2,018	$ 410,949
2,019	3,081,409
Long term debt total	$ 3,492,358	$ 3,928,637

COMMITMENTS AND CONTINGENCIES48

COMMITMENTS AND CONTINGENCIES (Details)	Sep. 09, 2013USD ($)	Sep. 30, 2007item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Operating Leases
Rent expense under operating lease			$ 77,015	$ 74,772	$ 64,683
Future annual minimum rental payments
2,018			79,331
2,019			81,694
2,020			84,155
Total			$ 245,180
Becton Dickinson and Company Case
COMMITMENTS AND CONTINGENCIES
Value of damages awarded	$ 113,508,014
BD and MDC Investment Holdings Inc Case
COMMITMENTS AND CONTINGENCIES
Number of U.S. patents infringed upon \| item		2

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
INCOME TAXES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current tax provision (benefit)
State	$ 848	$ 1,132	$ 7,877
Total current provision (benefit)	848	1,132	7,877
Deferred tax provision (benefit)
Federal	(188,456)
Total deferred tax provision (benefit)	(188,456)
Total income tax provision (benefit)	(187,608)	1,132	$ 7,877
Tax benefits attributable to net operating losses for federal tax purposes	24,900,000
Deferred tax assets
Net operating loss carry forwards	6,127,210	7,651,971
Credit for alternative minimum tax paid		201,773
Accrued expenses and reserves	509,666	1,348,032
Employee stock option expense	76,150	117,613
Nonemployee stock option expense	8,268	12,770
Inventory	224,353	361,437
Impairment	112,000	172,983
Deferred tax assets	7,057,647	9,866,579
Deferred tax liabilities
Property and equipment	(1,231,693)	(669,246)
Deferred tax liabilities	(1,231,693)	(669,246)
Net deferred assets	5,825,954	9,197,333
Valuation allowance	(5,825,954)	(9,197,333)
Increase (decrease) in valuation allowance	$ (3,371,379)	$ 1,445,361
Reconciliation of income taxes based on the federal statutory rate and the effective income tax rate
Income tax at the federal statutory rate (as a percent)	35.00%	35.00%	35.00%
State tax, net of federal tax (as a percent)	2.90%	2.90%	2.90%
Change in valuation allowance (as a percent)	85.90%	(39.10%)	(37.80%)
Permanent differences (as a percent)	5.70%	4.70%	0.70%
Return-to-provision and other (as a percent)	(37.60%)	(3.50%)	(0.60%)
Tax Reform and Jobs Act tax rate change	(81.10%)
Incentive stock options (as a percent)	(6.00%)
Effective tax rate (as a percent)	4.80%	0.00%	0.20%
Minimum
Reconciliation of income taxes based on the federal statutory rate and the effective income tax rate
State and local income tax returns, period subject to examination	3 years
Maximum
Reconciliation of income taxes based on the federal statutory rate and the effective income tax rate
State and local income tax returns, period subject to examination	5 years

STOCK OPTION GRANTS (Details)

STOCK OPTION GRANTS (Details) - Stock options - $ / shares	Dec. 27, 2016	Sep. 09, 2016
STOCK OPTIONS
Exercise price (in dollars per share)		$ 2.75
Term of option plan		10 years
Vesting period		1 year
Exercisable (in shares)		500,400
Exercisable (in dollars per share)		$ 1.783
Risk-free rate (as a percent)		1.51%
Volatility factor (as a percent)		67.10%
Expected life		7 years 1 month 6 days
Chief financial officer, general counsel, and directors
STOCK OPTIONS
Exercise price (in dollars per share)	$ 1.05
Granted (in shares)	50,000
Term of option plan	10 years
Exercisable (in dollars per share)	$ 0.728
Risk-free rate (as a percent)	2.37%
Volatility factor (as a percent)	72.50%
Expected life	7 years 1 month 6 days

STOCK OPTION EXERCISES (Details

STOCK OPTION EXERCISES (Details) - USD ($)	12 Months Ended
STOCK OPTION EXERCISES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2009	Dec. 31, 2008
STOCK OPTION EXERCISES
Aggregate consideration from issue of common stock		$ 855,021	$ 283,933
Stock Option
STOCK OPTION EXERCISES
Number of common stock issued on exercise of stock options (in shares)	0	1,046,580	272,477
Aggregate consideration from issue of common stock		$ 855,021	$ 283,933
Granted (in dollars per share)				$ 1.30	$ 0.81

DIVIDENDS (Details)

DIVIDENDS (Details) - USD ($)	Jan. 19, 2018	Oct. 20, 2017	Jul. 20, 2017	Apr. 24, 2017	Jan. 06, 2017	Oct. 20, 2016	Jul. 28, 2016	Apr. 21, 2016	Feb. 01, 2016	Oct. 22, 2015	Jul. 20, 2015	Apr. 30, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Dividends
Preferred dividends declared													$ 55,113	$ 55,113	$ 55,414
Series I, Class B
Dividends
Preferred dividends declared	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 12,313	$ 37,891
Series II, Class B
Dividends
Preferred dividends declared	$ 42,800	$ 42,800	$ 42,800	$ 42,800	$ 42,800	$ 42,800	$ 42,800	$ 42,800	$ 43,101	$ 44,050	$ 44,050	$ 132,926

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	Nov. 30, 2015USD ($)shares	Dec. 31, 2017USD ($)item$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares	Dec. 31, 2015USD ($)
Stock repurchase program
Number of classes of preferred stock outstanding \| item		1
Dividend paid \| $		$ 220,450	$ 220,755	$ 283,543
Common stock authorized (in shares) \| shares		100,000,000	100,000,000
Common stock outstanding (in shares) \| shares		32,666,454	29,666,454
Preferred Class A
Stock repurchase program
Preferred stock authorized (in shares) \| shares		5,000,000
Preferred stock par value (in dollars per share)		$ 1
Preferred Class B
Stock repurchase program
Preferred stock authorized (in shares) \| shares		5,000,000	5,000,000
Preferred stock par value (in dollars per share)		$ 1	$ 1
Number of series of preferred stock class B \| item		5
Preferred stock, remaining authorized shares to which series have Not been assigned \| shares		4,218,555
Series I, Class B
Stock repurchase program
Preferred stock par value (in dollars per share)		$ 1	$ 1
Preferred stock outstanding (in shares) \| shares		98,500	98,500
Cumulative annual dividend payable quarterly (in dollars per share)		$ 0.50
Dividend paid \| $		$ 49,250	$ 49,250	62,516
Preferred stock dividend in arrears \| $		$ 0
Period after which stock is redeemable at the option of the entity		3 years
Preferred stock redemption price (in dollars per share)		$ 7.50
Preferred stock conversion ratio		1
Period after which stock can be converted at the option of the stockholders		3 years
Number of shares of preferred stock converted into common stock \| shares		0	0
Amount per share the holders of the preferred stock entitled to in voluntary or involuntary dissolution, liquidation or winding up of the Company (in dollars per share)		$ 6.25
Series II, Class B
Stock repurchase program
Preferred stock par value (in dollars per share)		$ 1	$ 1
Preferred stock outstanding (in shares) \| shares		171,200	171,200
Cumulative annual dividend payable quarterly (in dollars per share)		$ 1
Dividend paid \| $		$ 171,200	$ 171,200	$ 221,026
Preferred stock dividend in arrears \| $		$ 0
Period after which stock is redeemable at the option of the entity		3 years
Preferred stock redemption price (in dollars per share)		$ 15
Preferred stock conversion ratio		1
Period after which stock can be converted at the option of the stockholders		3 years
Number of shares of preferred stock converted into common stock \| shares		0
Amount per share the holders of the preferred stock entitled to in voluntary or involuntary dissolution, liquidation or winding up of the Company (in dollars per share)		$ 12.50
Number of consecutive quarters in which preferred stockholders have no voting right until dividends are in arrears \| item		12
Right of preferred stock holders to elect a specified proportion of board of directors		0.33
Series III, Class B
Stock repurchase program
Preferred stock par value (in dollars per share)		$ 1	$ 1
Preferred stock outstanding (in shares) \| shares		129,245	129,245
Cumulative annual dividend payable quarterly (in dollars per share)		$ 1
Preferred stock dividend in arrears \| $		$ 4,145,604
Period after which stock is redeemable at the option of the entity		3 years
Preferred stock redemption price (in dollars per share)		$ 15
Preferred stock conversion ratio		1
Period after which stock can be converted at the option of the stockholders		3 years
Number of shares of preferred stock converted into common stock \| shares		0
Amount per share the holders of the preferred stock entitled to in voluntary or involuntary dissolution, liquidation or winding up of the Company (in dollars per share)		$ 12.50
Series IV, Class B
Stock repurchase program
Preferred stock par value (in dollars per share)		$ 1	$ 1
Preferred stock outstanding (in shares) \| shares		342,500	342,500
Cumulative annual dividend payable quarterly (in dollars per share)		$ 1
Preferred stock dividend in arrears \| $	$ 3,094,795	$ 6,141,118
Period after which stock is redeemable at the option of the entity		3 years
Preferred stock redemption price (in dollars per share)		$ 11
Preferred stock conversion ratio		1
Period after which stock can be converted at the option of the stockholders		3 years
Number of shares of preferred stock converted into common stock \| shares		0	0
Amount per share the holders of the preferred stock entitled to in voluntary or involuntary dissolution, liquidation or winding up of the Company (in dollars per share)		$ 11
Number of shares issued for convertible preferred stock \| shares	728,000
Series V, Class B
Stock repurchase program
Preferred stock par value (in dollars per share)		$ 1	$ 1
Preferred stock outstanding (in shares) \| shares		40,000	40,000
Cumulative annual dividend payable quarterly (in dollars per share)		$ 0.32
Preferred stock dividend in arrears \| $		$ 996,035
Period after which stock is redeemable at the option of the entity		2 years
Preferred stock redemption price (in dollars per share)		$ 4.40
Number of shares of preferred stock converted into common stock \| shares		0	0
Amount per share the holders of the preferred stock entitled to in voluntary or involuntary dissolution, liquidation or winding up of the Company (in dollars per share)		$ 4.40
Preferred Class C
Stock repurchase program
Preferred stock authorized (in shares) \| shares		5,000,000
Preferred stock par value (in dollars per share)		$ 1
Common Stock
Stock repurchase program
Common stock authorized (in shares) \| shares		100,000,000	100,000,000
Common stock no par value (in dollars per share)		$ 0	$ 0
Common stock outstanding (in shares) \| shares		32,666,454	29,666,454
Number of shares issued for convertible preferred stock \| shares		2,644,464

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details)	Aug. 23, 2017USD ($)shares	Jan. 12, 2017USD ($)shares	Dec. 27, 2016shares	Nov. 02, 2016shares	Dec. 31, 2017USD ($)item	Dec. 09, 2018shares
RELATED PARTY TRANSACTIONS
Number of executive officers authorized to purchase common stock \| item					3
Issuance of new Common stock \| $					$ 2,350,100
Thomas J. Shaw \| Private Placement
RELATED PARTY TRANSACTIONS
Issuance of new Common stock (in shares)	1,000,000	2,000,000
Issuance of new Common stock \| $	$ 570,100	$ 1,780,000
Granted (in shares)				3,000,000
Thomas J. Shaw \| Stock options
RELATED PARTY TRANSACTIONS
Granted (in shares)				3,000,000
Shares terminated			3,000,000
Douglas W. Cowan \| Private Placement
RELATED PARTY TRANSACTIONS
Number of shares authorized for purchase						500,000
Michele M. Larios \| Private Placement
RELATED PARTY TRANSACTIONS
Number of shares authorized for purchase						500,000

STOCK OPTIONS - Share based com

STOCK OPTIONS - Share based compensation (Details) - $ / shares	Dec. 27, 2016	Nov. 02, 2016	Sep. 09, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2009	Dec. 31, 2008
Stock Option Plan 2008
STOCK OPTIONS
Shares available for future issuance				2,350,492
Stock Option
STOCK OPTIONS
Expire term				10 years
Number of options
Exercised (in shares)				0	(1,046,580)	(272,477)
Weighted-Average Exercise Price
Granted (in dollars per share)								$ 1.30	$ 0.81
Stock Option \| Maximum
STOCK OPTIONS
Vesting period				3 years
Stock Option \| Director, officer, and employee
STOCK OPTIONS
Shares terminated				12,400	10,970	1,690
Exercisable (in shares)				1,803,119	1,218,519	2,125,069
Exercisable (in dollars per share)				$ 1.51	$ 1.06	$ 0.94
Number of options
Outstanding at beginning of period (in shares)				1,817,919	2,125,069	2,386,736
Granted (in shares)					750,400
Exercised (in shares)					(1,046,580)	(259,977)
Forfeited (in shares)				(12,400)	(10,970)	(1,690)
Outstanding at end of period (in shares)				1,805,519	1,817,919	2,125,069	2,386,736
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)				$ 1.52	$ 0.94	$ 0.95
Granted (in dollars per share)					2.18
Exercise price (in dollars per share)					(0.82)	(1.05)
Forfeited (in dollars per share)				(2.75)	(1.08)	(1.30)
Outstanding at end of period (in dollars per share)				$ 1.51	$ 1.52	$ 0.94	$ 0.95
Stock Option \| Employees
STOCK OPTIONS
Options issued (in shares)						0	0
Stock Option \| Director
Number of options
Granted (in shares)					150,000
Stock Option \| Non Employees
STOCK OPTIONS
Exercisable (in shares)				57,500	57,500	57,500
Exercisable (in dollars per share)				$ 0.81	$ 0.81	$ 0.81
Number of options
Outstanding at beginning of period (in shares)				57,500	57,500	70,000
Exercised (in shares)						(12,500)
Outstanding at end of period (in shares)				57,500	57,500	57,500	70,000
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)				$ 0.81	$ 0.81	$ 0.81
Exercise price (in dollars per share)						(0.81)
Outstanding at end of period (in dollars per share)				$ 0.81	$ 0.81	$ 0.81	$ 0.81
Stock Option \| Stock Option Plan 2008
STOCK OPTIONS
Shares of common stock authorized for exercise of options				6,000,000
Number of options
Granted (in shares)				3,649,508
Outstanding at end of period (in shares)				1,863,019
Stock options
STOCK OPTIONS
Vesting period			1 year
Exercisable (in shares)			500,400
Exercisable (in dollars per share)			$ 1.783
Weighted-Average Exercise Price
Exercise price (in dollars per share)			$ (2.75)
Stock options \| Thomas J. Shaw
STOCK OPTIONS
Shares terminated	3,000,000
Number of options
Granted (in shares)		3,000,000
Forfeited (in shares)	(3,000,000)

STOCK OPTIONS - Additional deta

STOCK OPTIONS - Additional details (Details) - USD ($)	Dec. 27, 2016	Sep. 09, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Share-based compensation expense			$ 672,223	$ 387,726	$ 0	$ 0
Total intrinsic value of options exercised			0	$ 1,414,892	$ 856,269
Assumed dividends			0
Unrecognized stock-based compensation expense			$ 672,000
Stock Option
Fair value assumptions
Number of common stock issued on exercise of stock options (in shares)			0	1,046,580	272,477
Stock options
Fair value assumptions
Risk-free rate (as a percent)		1.51%
Expected life		7 years 1 month 6 days
Director, officer, and employee \| Stock Option
Stock Options Outstanding
Shares terminated			12,400	10,970	1,690
Exercise price (in dollars per share)			$ 1.51	$ 1.52	$ 0.94	$ 0.95
Fair value assumptions
Number of common stock issued on exercise of stock options (in shares)				1,046,580	259,977
Director, officer, and employee \| Stock Option \| Exercise Price Dollars 1.30
Stock Options Outstanding
Exercise price (in dollars per share)			$ 1.30
Shares Outstanding			478,416
Weighted Average Remaining Contractual Life			10 months 17 days
Shares Exercisable			478,416
Director, officer, and employee \| Stock Option \| $1.46
Stock Options Outstanding
Exercise price (in dollars per share)			$ 1.46
Shares Outstanding			50,000
Weighted Average Remaining Contractual Life			5 years 4 months 13 days
Shares Exercisable			50,000
Director, officer, and employee \| Stock Option \| Exercise Price Dollars 0.81
Stock Options Outstanding
Exercise price (in dollars per share)			$ 0.81
Shares Outstanding			540,103
Weighted Average Remaining Contractual Life			1 year 6 months 15 days
Shares Exercisable			540,103
Director, officer, and employee \| Stock Option \| Exercise Price Dollars 1.05
Stock Options Outstanding
Exercise price (in dollars per share)			$ 1.05
Shares Outstanding			250,000
Weighted Average Remaining Contractual Life			8 years 11 months 27 days
Shares Exercisable			250,000
Director, officer, and employee \| Stock Option \| Exercise Price Dollars 2.75
Stock Options Outstanding
Exercise price (in dollars per share)			$ 2.75
Shares Outstanding			487,000
Weighted Average Remaining Contractual Life			8 years 8 months 12 days
Shares Exercisable			484,600
Thomas J. Shaw \| Stock options
Stock Options Outstanding
Shares terminated	3,000,000
Employees \| Stock Option
Stock Options Outstanding
Options issued (in shares)					0	0
Employees \| September 2016 grant \| Stock Option
Fair value assumptions
Number of common stock issued on exercise of stock options (in shares)				500,400
Weighted average fair value of options granted during period (in dollars per share)				$ 1.783
Annualized standard deviation (as a percent)				67.10%
Risk-free rate (as a percent)				1.51%
Expected life				7 years 1 month 6 days
Employees \| December 2016 grant \| Stock Option
Fair value assumptions
Number of common stock issued on exercise of stock options (in shares)				100,000
Weighted average fair value of options granted during period (in dollars per share)				$ 0.728
Annualized standard deviation (as a percent)				72.50%
Risk-free rate (as a percent)				2.37%
Expected life				7 years 1 month 6 days
Director \| Stock Option
Fair value assumptions
Weighted average fair value of options granted during period (in dollars per share)				$ 0.728
Annualized standard deviation (as a percent)				72.50%
Risk-free rate (as a percent)				2.37%
Expected life				7 years 1 month 6 days
Non Employees \| Stock Option
Stock Options Outstanding
Exercise price (in dollars per share)			$ 0.81	$ 0.81	$ 0.81	$ 0.81
Fair value assumptions
Number of common stock issued on exercise of stock options (in shares)					12,500
Non Employees \| Stock Option \| Exercise Price Dollars 0.81
Stock Options Outstanding
Exercise price (in dollars per share)				$ 0.81
Shares Outstanding				57,500
Weighted Average Remaining Contractual Life				1 year 6 months 15 days
Shares Exercisable				57,500

401(k) PLAN (Details)

401(k) PLAN (Details) - USD ($)	12 Months Ended
401(k) PLAN (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Defined Contribution Plan Disclosure [Line Items]
Employee service period	90 days
401(k) PLAN
Defined Contribution Plan Disclosure [Line Items]
Maximum percentage of compensation that employees may elect to contribute	88.00%
Employer Matching Contribution, Percent of Match	2.00%
Employer Discretionary Contribution Amount	$ 145,474	$ 122,369

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details) - USD ($)	12 Months Ended
BUSINESS SEGMENTS (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Sales by geography
Total sales	$ 34,493,838	$ 29,826,636	$ 29,552,200
UNITED STATES
Sales by geography
Total sales	27,015,712	26,308,246	23,029,976
Long-lived assets
Long-lived assets	11,215,583	11,930,293	11,282,192
North and South America Excluding United States
Sales by geography
Total sales	6,380,745	2,741,518	5,668,785
Other International
Sales by geography
Total sales	1,097,381	776,872	853,439
International
Long-lived assets
Long-lived assets	$ 137,619	$ 161,744	$ 185,869

PREFERRED STOCK TRANSACTION (De

PREFERRED STOCK TRANSACTION (Details) - USD ($)	Nov. 30, 2015	Dec. 31, 2017	Dec. 31, 2015
Common stock fair value in excess carrying value		$ 606,240
Excess Dividend arrearage waived			$ 182,877
Deemed capital contribution on extinguishment of preferred stock			$ 2,305,678
Series IV, Class B
Number of common stock exchanged for convertible preferred stock	728,000
Number of shares converted	$ 200,000
Preferred stock dividend in arrears	$ 3,094,795	6,141,118
Future dividend requirements avoided as a result of conversion of shares		$ 200,000
Common Stock
Number of common stock exchanged for convertible preferred stock		2,644,464
Common Stock \| Fair Value
Shareholders equity fair value disclosure		$ 2,606,240
Preferred Stock \| Carrying Value
Shareholders equity fair value disclosure		$ 2,000,000

BONUSES (Details)

BONUSES (Details)	Feb. 28, 2017USD ($)
Michele M. Larios
Cash bonus granted	$ 250,000
Douglas W. Cowan
Cash bonus granted	$ 250,000

STORM DAMAGE AND INSURANCE PR61

STORM DAMAGE AND INSURANCE PROCEEDS (Details)	Mar. 26, 2017USD ($)building	Dec. 31, 2017USD ($)
STORM DAMAGE AND INSURANCE PROCEEDS
Number of buildings damaged due to storm \| building	2
Insurance proceeds for assessed damages	$ 1,009,960
Deduction of insurance proceeds for assessed damages	$ 5,000
Repair expenses due to the storm damage		$ 538,667
Remaining insurance proceeds		$ 466,293

Schedule II-Schedule of Valua62

Schedule II-Schedule of Valuation and Qualifying Accounts (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Provision for Inventories
Movement in schedule of valuation and qualifying accounts
Balance at beginning of period	$ 595,523	$ 681,395	$ 681,395
Additions		176,424
Deductions	584	262,296
Balance at end of period	594,939	595,523	681,395
Provision for Accounts Receivables
Movement in schedule of valuation and qualifying accounts
Balance at beginning of period	1,731,985	1,795,481	1,725,806
Additions	24,272	92,000	116,395
Deductions	1,654,385	155,496	46,720
Balance at end of period	101,872	1,731,985	1,795,481
Deferred Tax Valuation
Movement in schedule of valuation and qualifying accounts
Balance at beginning of period	9,197,333	7,751,972	9,385,456
Additions		1,445,361
Deductions	3,371,379		1,633,484
Balance at end of period	5,825,954	9,197,333	7,751,972
Provision for Rebates
Movement in schedule of valuation and qualifying accounts
Balance at beginning of period	38,983,285	41,171,880	33,838,780
Additions	21,738,072	19,693,872	19,488,956
Deductions	55,927,164	21,882,467	12,155,856
Balance at end of period	4,794,193	38,983,285	41,171,880
Accounts payable
Movement in schedule of valuation and qualifying accounts
Balance at beginning of period	3,591,534	3,733,199
Balance at end of period	$ 4,115,628	$ 3,591,534	$ 3,733,199