Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Cover | ||
Entity Registrant Name | RETRACTABLE TECHNOLOGIES INC | |
Entity Central Index Key | 0000946563 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,682,454 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 7,605,134 | $ 5,934,749 |
Accounts receivable, net | 5,193,840 | 6,564,371 |
Investments in debt and equity securities, at fair value | 7,649,081 | 7,771,660 |
Inventories, net | 6,373,132 | 7,450,592 |
Income taxes receivable | 100,785 | 50,392 |
Other current assets | 669,767 | 635,201 |
Total current assets | 27,591,739 | 28,406,965 |
Property, plant, and equipment, net | 10,607,718 | 10,632,057 |
Income taxes receivable | 50,393 | |
Other assets | 67,832 | 88,315 |
Total assets | 38,267,289 | 39,177,730 |
Current liabilities: | ||
Accounts payable | 4,434,967 | 5,007,604 |
Current portion of long-term debt | 264,579 | 260,939 |
Accrued compensation | 774,659 | 607,339 |
Dividends payable | 54,800 | 54,800 |
Accrued royalties to shareholder | 869,108 | 921,445 |
Other accrued liabilities | 822,882 | 1,387,149 |
Income taxes payable | 618 | 17,944 |
Total current liabilities | 7,221,613 | 8,257,220 |
Long-term debt, net of current maturities | 2,310,248 | 2,378,055 |
Total liabilities | 9,531,861 | 10,635,275 |
Commitments and contingencies - See Note 8 | ||
Preferred stock, $1 par value: | ||
Common stock, no par value | ||
Additional paid-in capital | 61,538,444 | 61,660,744 |
Accumulated deficit | (33,568,461) | (33,891,234) |
Total stockholders' equity | 28,735,428 | 28,542,455 |
Total liabilities and stockholders' equity | 38,267,289 | 39,177,730 |
Series I, Class B | ||
Preferred stock, $1 par value: | ||
Preferred stock | 96,000 | 96,000 |
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 | 126,745 | 129,245 |
Series IV, Class B | ||
Preferred stock, $1 par value: | ||
Preferred stock | 337,500 | 342,500 |
Series V, Class B | ||
Preferred stock, $1 par value: | ||
Preferred stock | $ 34,000 | $ 34,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONDENSED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Sales, net | $ 11,202,217 | $ 7,932,474 |
Cost of sales | ||
Total cost of sales | 7,671,783 | 5,442,155 |
Gross profit | 3,530,434 | 2,490,319 |
Operating expenses | ||
Sales and marketing | 1,135,980 | 875,546 |
Research and development | 138,537 | 127,456 |
General and administrative | 1,775,204 | 1,662,095 |
Total operating expenses | 3,049,721 | 2,665,097 |
Income (loss) from operations | 480,713 | (174,778) |
Interest and other income (expense) | (141,417) | 91,432 |
Interest expense | (33,849) | (45,875) |
Income (loss) before income taxes | 305,447 | (129,221) |
Provision (benefit) for income taxes | (17,326) | |
Net income (loss) | 322,773 | (129,221) |
Preferred Stock dividend requirements | (174,143) | (176,249) |
Income (loss) applicable to common shareholders | $ 148,630 | $ (305,470) |
Basic earnings (loss) per share | $ 0 | $ (0.01) |
Diluted earnings (loss) per share | $ 0 | $ (0.01) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 32,681,204 | 32,666,454 |
Diluted (in shares) | 32,745,972 | 32,666,454 |
Costs of manufactured product | ||
Cost of sales | ||
Total cost of sales | $ 6,802,675 | $ 4,776,744 |
Royalty expense to shareholder | ||
Cost of sales | ||
Total cost of sales | $ 869,108 | $ 665,411 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ 322,773 | $ (129,221) |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 210,369 | 211,754 |
Net unrealized gains on investments | 164,342 | (43,102) |
Provision for doubtful accounts | 125,000 | |
(Increase) decrease in operating assets: | ||
Accounts receivable | 1,245,531 | 263,928 |
Inventories | 1,077,460 | 130,992 |
Other current assets | (34,566) | (73,290) |
Other assets | 20,483 | |
Decrease in operating liabilities | ||
Accounts payable | (572,637) | (522,320) |
Accrued liabilities | (466,610) | (554,745) |
Net cash provided (used) by operating activities | 2,092,145 | (716,004) |
Cash flows from investing activities | ||
Purchase of property, plant, and equipment | (186,030) | (29,485) |
Purchase of debt and equity securities | (41,763) | (4,515,612) |
Net cash used by investing activities | (227,793) | (4,545,097) |
Cash flows from financing activities | ||
Repayments of long-term debt | (64,167) | (102,454) |
Repurchase of preferred stock | (75,000) | |
Payment of preferred stock dividends | (54,800) | (55,113) |
Net cash used by financing activities | (193,967) | (157,567) |
Net increase (decrease) in cash and cash equivalents | 1,670,385 | (5,418,668) |
Cash and cash equivalents at: | ||
Beginning of period | 5,934,749 | 9,647,292 |
End of period | 7,605,134 | 4,228,624 |
Supplemental schedule of cash flow information: | ||
Interest paid | 33,851 | 45,875 |
Supplemental schedule of noncash investing and financing activities: | ||
Preferred dividends declared, not paid | $ 54,800 | $ 55,113 |
CONDENSED STATEMENTS OF CHANGES
CONDENSED 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 | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 98,500 | $ 171,200 | $ 129,245 | $ 342,500 | $ 40,000 | $ 61,871,756 | $ (37,039,468) | $ 25,613,733 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Dividends | (55,112) | (55,112) | ||||||
Net income (loss) | (129,221) | (129,221) | ||||||
Balance at Mar. 31, 2019 | 98,500 | 171,200 | 129,245 | 342,500 | 40,000 | 61,816,644 | (37,168,689) | 25,429,400 |
Balance at Dec. 31, 2019 | 96,000 | 171,200 | 129,245 | 342,500 | 34,000 | 61,660,744 | (33,891,234) | 28,542,455 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Exchange of Preferred Stock for Common Stock | (2,500) | (5,000) | (67,500) | (75,000) | ||||
Dividends | (54,800) | (54,800) | ||||||
Net income (loss) | 322,773 | 322,773 | ||||||
Balance at Mar. 31, 2020 | $ 96,000 | $ 171,200 | $ 126,745 | $ 337,500 | $ 34,000 | $ 61,538,444 | $ (33,568,461) | $ 28,735,428 |
BUSINESS OF THE COMPANY AND BAS
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
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 blood collection tube holder; the small diameter tube adapter; 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 . Basis of presentation The accompanying condensed financial statements are unaudited and, in the opinion of Management, reflect all adjustments that are necessary for a fair presentation of the financial position and results of operations for the periods presented. All such adjustments are of a normal and recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the entire year. The unaudited condensed financial statements should be read in conjunction with the financial statement disclosures contained in the Company’s audited financial statements incorporated into its Form 10-K filed on March 30, 2020 for the year ended December 31, 2019. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
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 Allowance for bad debt was $271 thousand and $147 thousand as of March 31, 2020 and December 31, 2019, respectively. 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 Condensed 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 insignificant. 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. Investments in Debt and Equity Securities The Company holds high-grade exchange-traded and closed-end funds (ETFs), mutual funds, and debt securities as investments. These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. Net unrealized and realized gains or losses on investments in debt and equity securities are reflected as a component of Interest and other income. Realized gains or losses on investments in debt and equity securities are recognized using the specific identification method. 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 disposals are included in operations. The Company's property, plant, and equipment primarily consist of buildings, land, assembly equipment, molding machines, molds, office equipment, furniture, and fixtures. 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. Fair Value Measurements For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model. 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. Investments in equity securities consist primarily of exchange-traded and closed-end funds and mutual funds and are reported at their fair value based upon quoted prices in active markets. Investments in U.S. Treasury Notes are reported at their fair value based upon quoted prices in active markets. Investments in certificates of deposit (CD) with original maturities of greater than three months are reported at their estimated fair value based upon the duration of the CD and the interest rate earned on the CD versus current interest rates of similar duration CDs. 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, certificates of deposit, U.S. Treasury Notes, exchange-traded and closed-end funds, mutual funds, 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 Company assesses market risk in debt and equity securities through consultation with its outside investment advisors. Management is responsible for directing investment activity based on current economic conditions. 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 for the first quarters of 2020 and 2019: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Number of significant customers 3 3 Aggregate dollar amount of net sales to significant customers $ 5.4 million $ 3.9 million Percentage of net sales to significant customers 48.2 % 48.6 % The Company manufactures some of its products in Little Elm, Texas as well as utilizing manufacturers in China. The Company obtained roughly 80.3% and 76.1% of its products in the first three months of 2020 and 2019, respectively, from its Chinese manufacturers. 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 and EasyPoint ® needles. Revenue recognition The Company recognizes revenue when it has satisfied all performance obligations to the customer, generally when title and risk of loss pass to the customer. Payments from customers with approved credit terms are typically due 30 days from the invoice date. 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 recognized in the period the related sales are recognized and 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 Condensed Balance Sheets and deducted from Revenues in the Condensed Statements of Operations. Accounts payable included estimated contractual allowances for $3,113,608 and $3,586,726 as of March 31, 2020 and December 31, 2019, 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. End-users do not receive any contractual allowances on their purchases. Any product shipped or distributed for evaluation purposes is expensed. The Company provides product warranties that: i) the products are fit for medical use as generally defined within the boundaries of United States FDA approval; ii) the products are not defective; and iii) the products will conform to the descriptions set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written directions for use. The Company has historically not incurred significant warranty claims. The Company’s domestic return 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’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. The Company requires certain customers to pay in advance of product shipment. Such prepayments from customers are recorded in Other accrued liabilities and are generally recognized as revenue within 30 to 60 days of receipt at the time product is shipped. The Company recognizes revenue from licensing agreements when collection of such amounts from third parties is reasonably assured. If the Company licenses its products for sale, the Company is obligated to pay Thomas J. Shaw, the owner of certain patented technology, a certain percentage of such revenue pursuant to the terms of the Technology License Agreement between the Company and Mr. Shaw. Disaggregated information of revenue recognized from contracts with customers and licensing fees recognized are as follows: For the three months ended March 31, 2020: Blood Total Collection EasyPoint ® Other Product Geographic Segment Syringes Products Needles Products Sales U.S. sales $ 6,972,935 $ 580,123 $ 765,860 $ 17,879 $ 8,336,797 North and South America sales (excluding U.S.) 2,054,784 2,700 1,496 687,420 2,746,400 Other international sales 114,830 1,740 — 2,450 119,020 Total $ 9,142,549 $ 584,563 $ 767,356 $ 707,749 $ 11,202,217 For the three months ended March 31, 2019: Blood Total Collection EasyPoint ® Other Product Geographic Segment Syringes Products Needles Products Sales U.S. sales $ 5,625,387 $ 451,077 $ 48,472 $ 14,975 $ 6,139,911 North and South America sales (excluding U.S.) 1,330,330 3,863 252 925 1,335,370 Other international sales 241,243 210,700 — 5,250 457,193 Total $ 7,196,960 $ 665,640 $ 48,724 $ 21,150 $ 7,932,474 Income taxes 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 taxes are classified as General and administrative expense and Interest expense, respectively, in the Condensed Statements of Operations. Earnings per share The Company computes basic earnings or loss 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 382,800 and 1,357,803 shares of common Stock underlying issued and outstanding stock option at March 31, 2020 and 2019, respectively, as their effect was antidilutive. All common stock issuable upon the conversion of convertible preferred stock is excluded from the calculation of of diluted EPS as their effect was antidilutive for all periods presented. The potential dilution, if any, is shown on the following schedule: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Net income (loss) $ 322,773 $ (129,221) Preferred stock dividend requirements (174,143) (176,249) Income (loss) applicable to common shareholders $ 148,630 $ (305,470) Weighted average common shares outstanding 32,681,204 32,666,454 Weighted average common and common equivalent shares outstanding — assuming dilution 32,745,972 32,666,454 Basic earnings (loss) per share $ 0.00 $ (0.01) Diluted earnings (loss) per share $ 0.00 $ (0.01) Shipping and handling costs The Company classifies shipping and handling costs as part of Cost of sales in the Condensed Statements of Operations. Research and development costs Research and development costs are expensed as incurred. Leases The Company determines if an arrangement is a lease at inception. Operating and finance leases are included in Other assets, Other accrued liabilities, and Other long-term liabilities on the Condensed Balance Sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on information available at the commencement date was used in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of twelve months or less are not recorded on the Condensed Balance Sheets; however, rent expense is recognized on a straight-line basis over the lease term. Recently Adopted Pronouncements The Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” as well as subsequent clarifying amendments on January 1, 2020 effective for the quarter ended March 31, 2020. 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 previously will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The adoption of ASU 2016-13, as well as the Targeted Transition Relief as provided by ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326) – Targeted Transition Relief” did not have a material impact on the Company’s financial statements. The Company adopted ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a Consensus of the FASB Emerging Issues Task Force)" on January 1, 2020 effective for the quarter ended March 31, 2020. This amendment requires that implemented costs incurred in a hosting arrangement that is a service contract should be accounted for in accordance with ASC 350-40 Internal-Use Software. Accordingly, costs incurred during the preliminary project and post-implementation stages are expensed and costs associated with the application development phase are capitalized. The amendment also requires that capitalized costs be amortized over the term of the hosting arrangement and that capitalized costs should be evaluated for impairment. The adoption of this ASU did not have a material impact on the Company's financial statements or disclosures. In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The amendment modifies, among other things, disclosure requirements on fair value measurements and eliminates certain disclosures related to transfers and valuation levels of Level 3 fair value measurements. Additionally, the amendment requires disclosure of changes in unrealized gains and losses in other comprehensive income for Level 3 fair value measurements and certain qualitative factors related to significant unobservable inputs used in Level 3 valuations. The amendment is effective for annual periods beginning after December 15, 2019 and interim periods within the annual period. The adoption of ASU 2018-13 does not currently have a material effect on the Company's financial statements , as the Company does not currently have any investments classified as Level 3 fair value measurements. Recently Issued Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes. The new standard intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within the annual period, with early adoption permitted. Adoption of the standard requires certain changes to primarily be made prospectively, with some changes to be made retrospectively. The Company is currently evaluating the impact adoption of ASU 2019-12 will have on its financial statements. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORIES | |
INVENTORIES | 3. INVENTORIES Inventories consist of the following: March 31, 2020 December 31, 2019 Raw materials $ 1,335,568 $ 1,254,313 Finished goods 5,334,772 6,493,487 6,670,340 7,747,800 Inventory reserve (297,208) (297,208) $ 6,373,132 $ 7,450,592 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 4. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows: · Level 1 – quoted market prices in active markets for identical assets and liabilities · Level 2 – inputs other than quoted prices that are directly or indirectly observable · Level 3 - unobservable inputs where there is little or no market activity The following tables summarize the values of assets designated as Investments in debt and equity securities: March 31, 2020 Level 1 Level 2 Level 3 Total Mutual funds and exchange traded funds $ 6,575,762 $ — $ — $ 6,575,762 Certificates of deposit — 1,073,319 — 1,073,319 $ 6,575,762 $ 1,073,319 $ — $ 7,649,081 December 31, 2019 Level 1 Level 2 Level 3 Total Mutual funds and exchange traded funds $ 6,708,746 $ — $ — $ 6,708,746 Certificates of deposit — 1,062,914 — 1,062,914 $ 6,708,746 $ 1,062,914 $ — $ 7,771,660 The Company holds high-grade exchange-traded and closed-end funds (ETFs), mutual funds, and debt securities as investments. These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. The Company intends to hold these assets for possible future operating requirements. The following table summarizes gross unrealized gains and losses from Investments in debt and equity securities: March 31, 2020 Gross Unrealized Aggregate Cost Gains Losses Fair Value Mutual funds and exchange traded funds $ 6,634,108 $ — $ (58,346) $ 6,575,762 Certificates of deposit 1,050,000 23,319 — 1,073,319 $ 7,684,108 $ 23,319 (58,346) $ 7,649,081 December 31, 2019 Gross Unrealized Aggregate Cost Gains Losses Fair Value Mutual funds and exchange traded funds $ 6,592,345 $ 116,401 $ — $ 6,708,746 Certificates of deposit 1,050,000 12,914 — 1,062,914 $ 7,642,345 $ 129,315 — $ 7,771,660 Unrealized gains (losses) on investments in debt and equity securities was ($164,342) and $43,102 for the three months ended March 31, 2020 and 2019, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | 5. INCOME TAXES The Company’s effective tax rate on the net income (loss) before income taxes was 0.2% and 0.0% for the three months ended March 31, 2020 and March 31, 2019, respectively. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
OTHER ACCRUED LIABILITIES | |
OTHER ACCRUED LIABILITIES | 6. OTHER ACCRUED LIABILITIES Other accrued liabilities consist of the following: March 31, 2020 December 31, 2019 Prepayments from customers $ 273,584 $ 998,601 Accrued property taxes 117,000 — Accrued professional fees 303,000 263,757 Other accrued expenses 129,298 124,791 $ $ |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES On November 7, 2019, the Company filed a lawsuit in the 44 th District Court of Dallas County, Texas (No. DC-19-17946) against Locke Lord, LLP and Roy Hardin in connection with their legal representation of the Company in its previous litigation against Becton, Dickinson and Company ("BD"). The Company alleges that the defendants breached their fiduciary duties, committed malpractice, and were negligent in their representation of the Company. The Company seeks actual and exemplary damages, disgorgement, costs, and interest. The defendants have filed a motion to dismiss and the Court has scheduled a hearing on such motion on June 3, 2020. |
BUSINESS SEGMENT
BUSINESS SEGMENT | 3 Months Ended |
Mar. 31, 2020 | |
BUSINESS SEGMENT | |
BUSINESS SEGMENT | 8. BUSINESS SEGMENT The Company does not operate in separate reportable segments. 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. Revenues by geography are as follows: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 U.S. sales $ 8,336,797 $ 6,139,911 North and South America sales (excluding U.S.) 2,746,400 1,335,370 Other international sales 119,020 457,193 Total sales $ 11,202,217 $ 7,932,474 Long-lived assets by geography are as follows: March 31, 2020 December 31, 2019 Long-lived assets U.S. $ 10,524,380 $ 10,542,688 International 83,338 89,369 Total $ 10,607,718 $ 10,632,057 |
DIVIDENDS
DIVIDENDS | 3 Months Ended |
Mar. 31, 2020 | |
DIVIDENDS | |
DIVIDENDS | 9. 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 January 18, 2019 and April 22, 2019. The Board declared and the Company paid dividends to Series I and Series II Class B Preferred Shareholders in the following amounts: $12,000 and $42,800, respectively, on July 19, 2019 , October 21, 2019 , January 22, 2020 and April 20, 2020. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
LEASES | 10. LEASES The Company has operating leases for a corporate office and equipment. The leases have a remaining lease term of less than one year. The Company currently has no finance leases. The right-of-use (" ROU") asset is determined based on the lease liability adjusted for lease incentives received. Lease expense is recognized on a straight-line basis over the lease term. The leases may include various expenses incidental to the use of the property, such as common area maintenance, property taxes and insurance. These costs are separate from the minimum rent payment and are not considered in the determination of the lease liability and ROU asset. The Company has not noted any material instances in its leases where these costs were combined with the minimum rent payment and has therefore elected the policy to not separate lease from non-lease components if they are combined with the minimum rent payment. The option periods are not included in the determination of the lease liability and right-of-use asset as the Company is not reasonably certain if it will extend at the time of lease commencement. The operating lease cost component of the lease expense was $20,283 for the 3-month period ended March 31, 2020. The cash paid for amounts included in the measurement of lease liabilities as a component of cash flows related to leases was $20,283 for the three months ended March 31, 2020. The operating lease cost component of the lease expense was $19,854 at March 31, 2019. The cash paid for amounts included in the measurement of lease liabilities as a component of cash flows related to leases was $19,854 for the three months ended March 31, 2019. Assets and liabilities associated with these leases included in the Condensed Balance Sheets are as follows: March 31, 2020 December 31, 2019 OPERATING LEASES Other assets $ 62,077 $ 82,359 Other accrued liabilities $ 62,077 $ 82,359 Other long-term liabilities — — Total operating lease liabilities $ 62,077 $ 82,359 The weighted average remaining lease term is nine months and the weighted average discount rate is 4.0%. Future minimum payments under non-cancelable operating leases and financing leases consist of the following at March 31, 2020: Year ending December 31, 2020 $ Less imputed interest (1,039) Total $ 62,077 |
EXCHANGE OF COMMON STOCK FOR PR
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2020 | |
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK | |
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK | 11. EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK Effective January 13, 2020, the Company agreed with two preferred stockholders to purchase outstanding Class B Convertible Preferred Stock (the "Preferred Stock") for cash and Common Stock. Such preferred stockholders tendered to the Company a total of 2,500 shares of Series III Preferred Stock and 5,000 shares of Series IV Preferred Stock. A total of $75,000 and 7,500 shares of Common Stock were issued as consideration therefor. In accordance with the terms of the agreements, the preferred stockholders agreed to waive all unpaid dividends in arrears associated with their Preferred Stock, which resulted in a waiver of a total of $149,795 in unpaid dividends in arrears. |
COVID-19
COVID-19 | 3 Months Ended |
Mar. 31, 2020 | |
COVID-19 | |
COVID-19 | 12. COVID-19 To date, the Company's manufacturing facility in Little Elm, Texas has continued to operate due to its status as an essential business. As a result of the COVID-19 pandemic, the Company has implemented certain safety precautions at its facility to reduce the risk of the potential spread of the novel coronavirus. The Company has implemented arrangements to reduce the number of office staff employees working on-site at the production facility, as well as instituting personal distancing policies and monitoring of essential production staff to minimize the risk of infection. Such precautions have not reduced the Company's ability or capacity to operate at normal manufacturing levels. The Company continues to monitor the evolving situation and will work to further mitigate risks to our staff and to our customers. At this time, the Company believes that it has sufficient inventory, manufacturing capacity, and the ability to source products to meet current demand. The Company is unable to predict with certainty the course of the pandemic and resulting potential effect on our ability to maintain current operational functionality. The Company is continuing to evaluate the ever-changing circumstances surrounding this pandemic as relates to its ability to continue to source materials and products, maintain a workforce, and operate our business effectively and efficiently. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS On April 17, 2020, the Company entered into a promissory note in the principal amount of $1,363,000 (the "PPP Loan") in favor of Independent Bank (the "Lender") pursuant to the Paycheck Protection Program (the "PPP") of the Coronavirus Aid, Relief, and Economic Security Act, administered by the U.S. Small Business Administration ("SBA"). The PPP Loan matures on April 17, 2022 and bears interest at a rate of 1.0% per annum. Commencing November 17, 2020, the Company is required to pay the Lender equal monthly payments of principal and interest as necessary to fully amortize the principal amount outstanding by the maturity date. The PPP Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The PPP Loan is unsecured and is a non-recourse obligation. All or a portion of the PPP Loan may be forgiven upon application to the Lender during the 8-week period beginning on the date of first disbursement for certain expenditure amounts, including payroll costs, in accordance with the requirements under the PPP. In the event all or any portion of the PPP Loan is forgiven, the amount forgiven is applied to outstanding principal. On May 1, 2020, the Company was awarded a delivery order under an existing contract by the Department of Health and Human Services of the United States to supply automated retraction safety syringes. The total fixed price under the delivery order is $83,788,440. The existing contract was executed in September 2018, but the order placed on May 1, 2020 is unusually significant to the Company. The Company expects to increase both domestic and foreign production and add additional personnel in response to this material delivery order. The Company expects to perform under this delivery order during 2020 and a portion of 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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 Allowance for bad debt was $271 thousand and $147 thousand as of March 31, 2020 and December 31, 2019, respectively. 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 Condensed 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 insignificant. |
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. |
Investments in Debt and Equity Securities | Investments in Debt and Equity Securities The Company holds high-grade exchange-traded and closed-end funds (ETFs), mutual funds, and debt securities as investments. These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. Net unrealized and realized gains or losses on investments in debt and equity securities are reflected as a component of Interest and other income. Realized gains or losses on investments in debt and equity securities are recognized using the specific identification method. |
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 disposals are included in operations. The Company's property, plant, and equipment primarily consist of buildings, land, assembly equipment, molding machines, molds, office equipment, furniture, and fixtures. 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. |
Fair Value Measurements | Fair Value Measurements For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model. |
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. Investments in equity securities consist primarily of exchange-traded and closed-end funds and mutual funds and are reported at their fair value based upon quoted prices in active markets. Investments in U.S. Treasury Notes are reported at their fair value based upon quoted prices in active markets. Investments in certificates of deposit (CD) with original maturities of greater than three months are reported at their estimated fair value based upon the duration of the CD and the interest rate earned on the CD versus current interest rates of similar duration CDs. 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, certificates of deposit, U.S. Treasury Notes, exchange-traded and closed-end funds, mutual funds, 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 Company assesses market risk in debt and equity securities through consultation with its outside investment advisors. Management is responsible for directing investment activity based on current economic conditions. 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 for the first quarters of 2020 and 2019: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Number of significant customers 3 3 Aggregate dollar amount of net sales to significant customers $ 5.4 million $ 3.9 million Percentage of net sales to significant customers 48.2 % 48.6 % The Company manufactures some of its products in Little Elm, Texas as well as utilizing manufacturers in China. The Company obtained roughly 80.3% and 76.1% of its products in the first three months of 2020 and 2019, respectively, from its Chinese manufacturers. 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 and EasyPoint ® needles. |
Revenue recognition | Revenue recognition The Company recognizes revenue when it has satisfied all performance obligations to the customer, generally when title and risk of loss pass to the customer. Payments from customers with approved credit terms are typically due 30 days from the invoice date. 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 recognized in the period the related sales are recognized and 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 Condensed Balance Sheets and deducted from Revenues in the Condensed Statements of Operations. Accounts payable included estimated contractual allowances for $3,113,608 and $3,586,726 as of March 31, 2020 and December 31, 2019, 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. End-users do not receive any contractual allowances on their purchases. Any product shipped or distributed for evaluation purposes is expensed. The Company provides product warranties that: i) the products are fit for medical use as generally defined within the boundaries of United States FDA approval; ii) the products are not defective; and iii) the products will conform to the descriptions set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written directions for use. The Company has historically not incurred significant warranty claims. The Company’s domestic return 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’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. The Company requires certain customers to pay in advance of product shipment. Such prepayments from customers are recorded in Other accrued liabilities and are generally recognized as revenue within 30 to 60 days of receipt at the time product is shipped. The Company recognizes revenue from licensing agreements when collection of such amounts from third parties is reasonably assured. If the Company licenses its products for sale, the Company is obligated to pay Thomas J. Shaw, the owner of certain patented technology, a certain percentage of such revenue pursuant to the terms of the Technology License Agreement between the Company and Mr. Shaw. Disaggregated information of revenue recognized from contracts with customers and licensing fees recognized are as follows: For the three months ended March 31, 2020: Blood Total Collection EasyPoint ® Other Product Geographic Segment Syringes Products Needles Products Sales U.S. sales $ 6,972,935 $ 580,123 $ 765,860 $ 17,879 $ 8,336,797 North and South America sales (excluding U.S.) 2,054,784 2,700 1,496 687,420 2,746,400 Other international sales 114,830 1,740 — 2,450 119,020 Total $ 9,142,549 $ 584,563 $ 767,356 $ 707,749 $ 11,202,217 For the three months ended March 31, 2019: Blood Total Collection EasyPoint ® Other Product Geographic Segment Syringes Products Needles Products Sales U.S. sales $ 5,625,387 $ 451,077 $ 48,472 $ 14,975 $ 6,139,911 North and South America sales (excluding U.S.) 1,330,330 3,863 252 925 1,335,370 Other international sales 241,243 210,700 — 5,250 457,193 Total $ 7,196,960 $ 665,640 $ 48,724 $ 21,150 $ 7,932,474 |
Income taxes | Income taxes 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 taxes are classified as General and administrative expense and Interest expense, respectively, in the Condensed Statements of Operations. |
Earnings per share | Earnings per share The Company computes basic earnings or loss 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 382,800 and 1,357,803 shares of common Stock underlying issued and outstanding stock option at March 31, 2020 and 2019, respectively, as their effect was antidilutive. All common stock issuable upon the conversion of convertible preferred stock is excluded from the calculation of of diluted EPS as their effect was antidilutive for all periods presented. The potential dilution, if any, is shown on the following schedule: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Net income (loss) $ 322,773 $ (129,221) Preferred stock dividend requirements (174,143) (176,249) Income (loss) applicable to common shareholders $ 148,630 $ (305,470) Weighted average common shares outstanding 32,681,204 32,666,454 Weighted average common and common equivalent shares outstanding — assuming dilution 32,745,972 32,666,454 Basic earnings (loss) per share $ 0.00 $ (0.01) Diluted earnings (loss) per share $ 0.00 $ (0.01) |
Shipping and handling costs | Shipping and handling costs The Company classifies shipping and handling costs as part of Cost of sales in the Condensed Statements of Operations. |
Research and development costs | Research and development costs Research and development costs are expensed as incurred. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating and finance leases are included in Other assets, Other accrued liabilities, and Other long-term liabilities on the Condensed Balance Sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on information available at the commencement date was used in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of twelve months or less are not recorded on the Condensed Balance Sheets; however, rent expense is recognized on a straight-line basis over the lease term. |
Recently Adopted Pronouncements and Recently Issued Pronouncements | Recently Adopted Pronouncements The Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” as well as subsequent clarifying amendments on January 1, 2020 effective for the quarter ended March 31, 2020. 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 previously will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The adoption of ASU 2016-13, as well as the Targeted Transition Relief as provided by ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326) – Targeted Transition Relief” did not have a material impact on the Company’s financial statements. The Company adopted ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a Consensus of the FASB Emerging Issues Task Force)" on January 1, 2020 effective for the quarter ended March 31, 2020. This amendment requires that implemented costs incurred in a hosting arrangement that is a service contract should be accounted for in accordance with ASC 350-40 Internal-Use Software. Accordingly, costs incurred during the preliminary project and post-implementation stages are expensed and costs associated with the application development phase are capitalized. The amendment also requires that capitalized costs be amortized over the term of the hosting arrangement and that capitalized costs should be evaluated for impairment. The adoption of this ASU did not have a material impact on the Company's financial statements or disclosures. In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The amendment modifies, among other things, disclosure requirements on fair value measurements and eliminates certain disclosures related to transfers and valuation levels of Level 3 fair value measurements. Additionally, the amendment requires disclosure of changes in unrealized gains and losses in other comprehensive income for Level 3 fair value measurements and certain qualitative factors related to significant unobservable inputs used in Level 3 valuations. The amendment is effective for annual periods beginning after December 15, 2019 and interim periods within the annual period. The adoption of ASU 2018-13 does not currently have a material effect on the Company's financial statements , as the Company does not currently have any investments classified as Level 3 fair value measurements. Recently Issued Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes. The new standard intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within the annual period, with early adoption permitted. Adoption of the standard requires certain changes to primarily be made prospectively, with some changes to be made retrospectively. The Company is currently evaluating the impact adoption of ASU 2019-12 will have on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 | Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Number of significant customers 3 3 Aggregate dollar amount of net sales to significant customers $ 5.4 million $ 3.9 million Percentage of net sales to significant customers 48.2 % 48.6 % |
Schedule of disaggregated information of revenue recognized from contracts with customers and licensing fees | For the three months ended March 31, 2020: Blood Total Collection EasyPoint ® Other Product Geographic Segment Syringes Products Needles Products Sales U.S. sales $ 6,972,935 $ 580,123 $ 765,860 $ 17,879 $ 8,336,797 North and South America sales (excluding U.S.) 2,054,784 2,700 1,496 687,420 2,746,400 Other international sales 114,830 1,740 — 2,450 119,020 Total $ 9,142,549 $ 584,563 $ 767,356 $ 707,749 $ 11,202,217 For the three months ended March 31, 2019: Blood Total Collection EasyPoint ® Other Product Geographic Segment Syringes Products Needles Products Sales U.S. sales $ 5,625,387 $ 451,077 $ 48,472 $ 14,975 $ 6,139,911 North and South America sales (excluding U.S.) 1,330,330 3,863 252 925 1,335,370 Other international sales 241,243 210,700 — 5,250 457,193 Total $ 7,196,960 $ 665,640 $ 48,724 $ 21,150 $ 7,932,474 |
Schedule of earnings per share | Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Net income (loss) $ 322,773 $ (129,221) Preferred stock dividend requirements (174,143) (176,249) Income (loss) applicable to common shareholders $ 148,630 $ (305,470) Weighted average common shares outstanding 32,681,204 32,666,454 Weighted average common and common equivalent shares outstanding — assuming dilution 32,745,972 32,666,454 Basic earnings (loss) per share $ 0.00 $ (0.01) Diluted earnings (loss) per share $ 0.00 $ (0.01) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORIES | |
Schedule of inventories | March 31, 2020 December 31, 2019 Raw materials $ 1,335,568 $ 1,254,313 Finished goods 5,334,772 6,493,487 6,670,340 7,747,800 Inventory reserve (297,208) (297,208) $ 6,373,132 $ 7,450,592 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Summary of value of assets designated as investments in debt and equity securities | March 31, 2020 Level 1 Level 2 Level 3 Total Mutual funds and exchange traded funds $ 6,575,762 $ — $ — $ 6,575,762 Certificates of deposit — 1,073,319 — 1,073,319 $ 6,575,762 $ 1,073,319 $ — $ 7,649,081 December 31, 2019 Level 1 Level 2 Level 3 Total Mutual funds and exchange traded funds $ 6,708,746 $ — $ — $ 6,708,746 Certificates of deposit — 1,062,914 — 1,062,914 $ 6,708,746 $ 1,062,914 $ — $ 7,771,660 |
Schedule of unrealized gains (losses) on investments in equity securities | March 31, 2020 Gross Unrealized Aggregate Cost Gains Losses Fair Value Mutual funds and exchange traded funds $ 6,634,108 $ — $ (58,346) $ 6,575,762 Certificates of deposit 1,050,000 23,319 — 1,073,319 $ 7,684,108 $ 23,319 (58,346) $ 7,649,081 December 31, 2019 Gross Unrealized Aggregate Cost Gains Losses Fair Value Mutual funds and exchange traded funds $ 6,592,345 $ 116,401 $ — $ 6,708,746 Certificates of deposit 1,050,000 12,914 — 1,062,914 $ 7,642,345 $ 129,315 — $ 7,771,660 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
OTHER ACCRUED LIABILITIES | |
Schedule of other accrued liabilities | March 31, 2020 December 31, 2019 Prepayments from customers $ 273,584 $ 998,601 Accrued property taxes 117,000 — Accrued professional fees 303,000 263,757 Other accrued expenses 129,298 124,791 $ $ |
BUSINESS SEGMENT (Tables)
BUSINESS SEGMENT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
BUSINESS SEGMENT | |
Schedule of company's sales and long-lived assets by geography | Revenues by geography are as follows: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 U.S. sales $ 8,336,797 $ 6,139,911 North and South America sales (excluding U.S.) 2,746,400 1,335,370 Other international sales 119,020 457,193 Total sales $ 11,202,217 $ 7,932,474 Long-lived assets by geography are as follows: March 31, 2020 December 31, 2019 Long-lived assets U.S. $ 10,524,380 $ 10,542,688 International 83,338 89,369 Total $ 10,607,718 $ 10,632,057 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Schedule of assets and liabilities relating to leases included in the Condensed Balance Sheets | Assets and liabilities associated with these leases included in the Condensed Balance Sheets are as follows: March 31, 2020 December 31, 2019 OPERATING LEASES Other assets $ 62,077 $ 82,359 Other accrued liabilities $ 62,077 $ 82,359 Other long-term liabilities — — Total operating lease liabilities $ 62,077 $ 82,359 |
Schedule of future minimum payments under non-cancelable operating leases and financing leases | Future minimum payments under non-cancelable operating leases and financing leases consist of the following at March 31, 2020: Year ending December 31, 2020 $ Less imputed interest (1,039) Total $ 62,077 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts receivable | ||
Allowance for bad debt | $ 271 | $ 147 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, plant and equipment (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Production equipment | Minimum | |
Property, plant, and equipment | |
Useful lives (in years) | 3 years |
Production equipment | Maximum | |
Property, plant, and equipment | |
Useful lives (in years) | 13 years |
Office furniture and equipment | Minimum | |
Property, plant, and equipment | |
Useful lives (in years) | 3 years |
Office furniture and equipment | Maximum | |
Property, plant, and equipment | |
Useful lives (in years) | 10 years |
Buildings | |
Property, plant, and equipment | |
Useful lives (in years) | 39 years |
Building Improvements | |
Property, plant, and equipment | |
Useful lives (in years) | 15 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration risks (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)customer | Mar. 31, 2019USD ($)customer | |
Concentration risks | ||
Aggregate dollar amount of net sales to significant customers | $ 11,202,217 | $ 7,932,474 |
Customer Concentration Risk | ||
Concentration risks | ||
Number of significant customers | customer | 3 | 3 |
Aggregate dollar amount of net sales to significant customers | $ 5,400,000 | $ 3,900,000 |
Percentage of net sales to significant customers | 48.20% | 48.60% |
Supplier Concentration Risk | ||
Concentration risks | ||
Percentage of net sales to significant customers | 80.30% | 76.10% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)item | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Revenue recognition | |||
Estimated contractual allowance | $ 3,113,608 | $ 3,586,726 | |
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% | ||
Sales, net | $ 11,202,217 | $ 7,932,474 | |
Minimum | |||
Revenue recognition | |||
Period of revenue recognition | 30 days | ||
Maximum | |||
Revenue recognition | |||
Period of revenue recognition | 60 days | ||
Syringes | |||
Revenue recognition | |||
Sales, net | $ 9,142,549 | 7,196,960 | |
Blood Collection Products | |||
Revenue recognition | |||
Sales, net | 584,563 | 665,640 | |
Easy Point Needles | |||
Revenue recognition | |||
Sales, net | 767,356 | 48,724 | |
Other Products | |||
Revenue recognition | |||
Sales, net | 707,749 | 21,150 | |
U.S. | |||
Revenue recognition | |||
Sales, net | 8,336,797 | 6,139,911 | |
U.S. | Syringes | |||
Revenue recognition | |||
Sales, net | 6,972,935 | 5,625,387 | |
U.S. | Blood Collection Products | |||
Revenue recognition | |||
Sales, net | 580,123 | 451,077 | |
U.S. | Easy Point Needles | |||
Revenue recognition | |||
Sales, net | 765,860 | 48,472 | |
U.S. | Other Products | |||
Revenue recognition | |||
Sales, net | 17,879 | 14,975 | |
North and South America sales (excluding U.S.) | |||
Revenue recognition | |||
Sales, net | 2,746,400 | 1,335,370 | |
North and South America sales (excluding U.S.) | Syringes | |||
Revenue recognition | |||
Sales, net | 2,054,784 | 1,330,330 | |
North and South America sales (excluding U.S.) | Blood Collection Products | |||
Revenue recognition | |||
Sales, net | 2,700 | 3,863 | |
North and South America sales (excluding U.S.) | Easy Point Needles | |||
Revenue recognition | |||
Sales, net | 1,496 | 252 | |
North and South America sales (excluding U.S.) | Other Products | |||
Revenue recognition | |||
Sales, net | 687,420 | 925 | |
Other international sales | |||
Revenue recognition | |||
Sales, net | 119,020 | 457,193 | |
Other international sales | Syringes | |||
Revenue recognition | |||
Sales, net | 114,830 | 241,243 | |
Other international sales | Blood Collection Products | |||
Revenue recognition | |||
Sales, net | 1,740 | 210,700 | |
Other international sales | Other Products | |||
Revenue recognition | |||
Sales, net | $ 2,450 | $ 5,250 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings per share | ||
Stock options excluded from calculation of diluted EPS | 382,800 | 1,357,803 |
Net income (loss) | $ 322,773 | $ (129,221) |
Preferred stock dividend requirements | (174,143) | (176,249) |
Income (loss) applicable to common shareholders | $ 148,630 | $ (305,470) |
Weighted average common shares outstanding | 32,681,204 | 32,666,454 |
Weighted average common and common equivalent shares outstanding - assuming dilution | 32,745,972 | 32,666,454 |
Basic earnings (loss) per share | $ 0 | $ (0.01) |
Diluted earnings (loss) per share | $ 0 | $ (0.01) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
INVENTORIES | ||
Raw materials | $ 1,335,568 | $ 1,254,313 |
Finished goods | 5,334,772 | 6,493,487 |
Inventory, gross | 6,670,340 | 7,747,800 |
Inventory reserve | (297,208) | (297,208) |
Inventory, net | $ 6,373,132 | $ 7,450,592 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | $ 7,649,081 | $ 7,771,660 | |
Gross Unrealized | |||
Cost | 7,684,108 | 7,642,345 | |
Gains | 23,319 | 129,315 | |
Gross Unrealized Losses | (58,346) | ||
Unrealized gains (losses) on investments in debt and equity securities | (164,342) | $ 43,102 | |
Level 1 | |||
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | 6,575,762 | 6,708,746 | |
Level 2 | |||
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | 1,073,319 | 1,062,914 | |
Mutual funds and exchange traded funds | |||
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | 6,575,762 | 6,708,746 | |
Gross Unrealized | |||
Cost | 6,634,108 | 6,592,345 | |
Gains | 116,401 | ||
Gross Unrealized Losses | (58,346) | ||
Mutual funds and exchange traded funds | Level 1 | |||
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | 6,575,762 | 6,708,746 | |
Certificates of deposit | |||
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | 1,073,319 | 1,062,914 | |
Gross Unrealized | |||
Cost | 1,050,000 | 1,050,000 | |
Gains | 23,319 | 12,914 | |
Certificates of deposit | Level 2 | |||
Investments in equity securities | |||
Investments in debt and equity securities, at fair value | $ 1,073,319 | $ 1,062,914 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reconciliation of income taxes based on the federal statutory rate and the effective income tax rate | ||
Effective tax rate (as a percent) | 0.20% | 0.00% |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
OTHER ACCRUED LIABILITIES | ||
Prepayments from customers | $ 273,584 | $ 998,601 |
Accrued property taxes | 117,000 | |
Accrued professional fees | 303,000 | 263,757 |
Other accrued expenses | 129,298 | 124,791 |
Total | $ 822,882 | $ 1,387,149 |
BUSINESS SEGMENT (Details)
BUSINESS SEGMENT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Sales by geography | |||
Aggregate dollar amount of net sales to significant customers | $ 11,202,217 | $ 7,932,474 | |
Long-lived assets | |||
Long-lived assets | 10,607,718 | $ 10,632,057 | |
U.S. | |||
Sales by geography | |||
Aggregate dollar amount of net sales to significant customers | 8,336,797 | 6,139,911 | |
Long-lived assets | |||
Long-lived assets | 10,524,380 | 10,542,688 | |
North and South America sales (excluding U.S.) | |||
Sales by geography | |||
Aggregate dollar amount of net sales to significant customers | 2,746,400 | 1,335,370 | |
Other international sales | |||
Sales by geography | |||
Aggregate dollar amount of net sales to significant customers | 119,020 | $ 457,193 | |
International | |||
Long-lived assets | |||
Long-lived assets | $ 83,338 | $ 89,369 |
DIVIDENDS (Details)
DIVIDENDS (Details) - USD ($) | Apr. 20, 2020 | Jan. 22, 2020 | Oct. 21, 2019 | Jul. 19, 2019 | Apr. 22, 2019 | Jan. 18, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Dividends | ||||||||
Preferred dividends declared | $ 54,800 | $ 55,113 | ||||||
Series I, Class B | ||||||||
Dividends | ||||||||
Preferred dividends declared | $ 12,000 | $ 12,000 | $ 12,000 | $ 12,000 | $ 12,313 | $ 12,313 | ||
Series II, Class B | ||||||||
Dividends | ||||||||
Preferred dividends declared | $ 42,800 | $ 42,800 | $ 42,800 | $ 42,800 | $ 42,800 | $ 42,800 |
LEASES (Details)
LEASES (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
LEASES | |||
Operating lease cost | $ 20,283 | $ 19,854 | |
Cash outflows related to leases | 20,283 | $ 19,854 | |
Assets and liabilities associated with these leases in Balance Sheets | |||
Other assets | $ 62,077 | $ 82,359 | |
Other assets [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets | |
Other accrued liabilities | $ 62,077 | $ 82,359 | |
Other accrued liabilities [Extensible List] | us-gaap:OtherAccruedLiabilitiesCurrent | us-gaap:OtherAccruedLiabilitiesCurrent | |
Other long-term liabilities [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent | |
Total operating lease liabilities | $ 62,077 | $ 82,359 | |
Weighted average remaining lease term | 9 months | ||
Weighted average discount rate | 4.00% | ||
Maximum | |||
LEASES | |||
Remaining lease term | 1 year |
LEASES - Future minimum payment
LEASES - Future minimum payments (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Future minimum payments under non-cancelable operating leases and financing leases | ||
Remainder of 2020 | $ 63,116 | |
Less imputed interest | (1,039) | |
Total | $ 62,077 | $ 82,359 |
EXCHANGE OF COMMON STOCK FOR _2
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK (Details) | Jan. 13, 2020USD ($)stockholdershares |
Class of Stock | |
Number of shareholders agreed to purchase outstanding | stockholder | 2 |
Cash consideration | $ | $ 75,000 |
Common Stock were issued as consideration | 7,500 |
Unpaid dividends in arrears waived | $ | $ 149,795 |
Series III, Class B | |
Class of Stock | |
Total shares of preferred stockholders | 2,500 |
Series IV, Class B | |
Class of Stock | |
Total shares of preferred stockholders | 5,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Events - USD ($) | May 01, 2020 | Apr. 17, 2020 |
SUBSEQUENT EVENTS | ||
Total fixed price under the delivery order | $ 83,788,440 | |
PPP Loan | ||
SUBSEQUENT EVENTS | ||
Face amount of debt | $ 1,363,000 | |
Prepayment penalties | $ 0 |