Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 26, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 000-30379 | |
Entity Registrant Name | Chembio Diagnostics, Inc. | |
Entity Central Index Key | 0001092662 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 88-0425691 | |
Entity Address, Address Line One | 555 Wireless Blvd. | |
Entity Address, City or Town | Hauppauge | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11788 | |
City Area Code | 631 | |
Local Phone Number | 924-1135 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CEMI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,045,141 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 36,004,000 | $ 23,066,301 |
Accounts receivable, net of allowance for doubtful accounts of $193,535 and $296,793 at September 30, 2021 and December 31, 2020, respectively | 6,782,798 | 3,377,387 |
Inventories, net | 16,805,669 | 12,516,402 |
Prepaid expenses and other current assets | 1,191,678 | 778,683 |
TOTAL CURRENT ASSETS | 60,784,145 | 39,738,773 |
FIXED ASSETS: | ||
Property, plant and equipment, net | 8,744,713 | 8,688,403 |
Finance lease right-of-use asset, net | 208,908 | 233,134 |
OTHER ASSETS: | ||
Operating lease right-of-use asset, net | 6,085,655 | 6,112,632 |
Intangible assets, net | 2,178,186 | 3,645,986 |
Goodwill | 5,674,132 | 5,963,744 |
Deposits and other assets | 367,396 | 509,342 |
TOTAL ASSETS | 84,043,135 | 64,892,014 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued liabilities | 10,182,488 | 10,042,790 |
Deferred revenue | 20,195 | 1,606,997 |
Operating lease liabilities | 856,917 | 642,460 |
Finance lease liabilities | 66,790 | 58,877 |
Current portion of long-term debt | 300,000 | 0 |
TOTAL CURRENT LIABILITIES | 11,426,390 | 12,351,124 |
OTHER LIABILITIES: | ||
Long-term operating lease liabilities | 6,207,698 | 6,327,143 |
Long-term finance lease liabilities | 157,251 | 185,239 |
Long-term debt, net | 18,333,267 | 18,182,158 |
Deferred tax liability | 0 | 69,941 |
TOTAL LIABILITIES | 36,124,606 | 37,115,605 |
COMMITMENTS AND CONTINGENCIES (Note 6) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock - 10,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock - $0.01 par value; 100,000,000 shares authorized; 30,086,282 shares and 20,223,498 shares issued at September 30, 2021 and December 31, 2020, respectively | 300,863 | 202,235 |
Additional paid-in capital | 165,442,942 | 124,961,514 |
Accumulated deficit | (117,036,729) | (97,106,331) |
Treasury stock, 41,141 shares at cost, at September 30, 2021 and December 31, 2020 | (190,093) | (190,093) |
Accumulated other comprehensive loss | (598,454) | (90,916) |
TOTAL STOCKHOLDERS' EQUITY | 47,918,529 | 27,776,409 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 84,043,135 | $ 64,892,014 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Accounts receivable, allowance for doubtful accounts | $ 193,535 | $ 296,793 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 30,086,283 | 20,223,498 |
Treasury stock, shares (in shares) | 41,141 | 41,141 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUES: | ||||
TOTAL REVENUES | $ 12,058,444 | $ 10,272,478 | $ 27,244,913 | $ 22,243,234 |
COSTS AND EXPENSES: | ||||
Cost of product sales | 7,902,819 | 7,467,746 | 15,490,956 | 17,512,925 |
Research and development expenses | 3,442,044 | 2,351,880 | 9,102,363 | 6,233,040 |
Selling, general and administrative expenses | 5,947,327 | 5,348,958 | 18,033,748 | 13,903,192 |
Asset impairment, restructuring, severance and related costs | 396,740 | 11,651 | 2,440,983 | 1,122,310 |
Acquisition costs | 0 | 0 | 0 | 63,497 |
TOTAL COSTS AND EXPENSES | 17,688,930 | 15,180,235 | 45,068,050 | 38,834,964 |
LOSS FROM OPERATIONS | (5,630,486) | (4,907,757) | (17,823,137) | (16,591,730) |
OTHER EXPENSE: | ||||
Interest expense, net | (735,336) | (735,819) | (2,175,188) | (2,110,011) |
LOSS BEFORE INCOME TAXES | (6,365,822) | (5,643,576) | (19,998,325) | (18,701,741) |
Income tax (provision) benefit: | (28) | 104,778 | 67,928 | 319,597 |
NET LOSS | $ (6,365,850) | $ (5,538,798) | $ (19,930,397) | $ (18,382,144) |
Basic loss per share (in dollars per share) | $ (0.24) | $ (0.28) | $ (0.89) | $ (0.98) |
Diluted loss per share (in dollars per share) | $ (0.24) | $ (0.28) | $ (0.89) | $ (0.98) |
Weighted average number of shares outstanding, basic (in shares) | 26,701,546 | 20,104,547 | 22,361,899 | 18,728,372 |
Weighted average number of shares outstanding, diluted (in shares) | 26,701,546 | 20,104,547 | 22,361,899 | 18,728,372 |
Net Product Sales [Member] | ||||
REVENUES: | ||||
TOTAL REVENUES | $ 9,371,160 | $ 8,406,457 | $ 17,327,204 | $ 17,914,623 |
R&D Revenue [Member] | ||||
REVENUES: | ||||
TOTAL REVENUES | 441 | 1,444,724 | 1,107,808 | 3,546,385 |
Government Grant Income [Member] | ||||
REVENUES: | ||||
TOTAL REVENUES | 2,400,000 | 209,776 | 8,030,000 | 209,776 |
License and Royalty Revenue [Member] | ||||
REVENUES: | ||||
TOTAL REVENUES | $ 286,843 | $ 211,521 | $ 779,901 | $ 572,450 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||||
Net loss | $ (6,365,850) | $ (5,538,798) | $ (19,930,397) | $ (18,382,144) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (352,918) | 262,094 | (507,538) | (776,645) |
Comprehensive loss | $ (6,718,768) | $ (5,276,704) | $ (20,437,935) | $ (19,158,789) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in-Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | AOCI [Member] | Total |
Balance at Dec. 31, 2019 | $ 177,335 | $ 95,433,077 | $ 0 | $ (71,585,003) | $ 9,844 | $ 24,035,253 |
Balance (in shares) at Dec. 31, 2019 | 17,733,617 | 0 | ||||
Common Stock: | ||||||
Restricted stock issued | $ 343 | 117,956 | $ 0 | 0 | 0 | 118,299 |
Restricted stock issued (in shares) | 34,249 | 0 | ||||
Restricted stock compensation, net | $ (4,406) | (292,495) | $ 0 | 0 | 0 | (296,901) |
Restricted stock compensation, net (in shares) | (440,631) | 0 | ||||
Shares tendered for withholding taxes | $ 0 | 145,056 | $ (145,056) | 0 | 0 | 0 |
Shares tendered for withholding taxes (in shares) | 0 | (31,486) | ||||
Options: | ||||||
Stock option compensation | $ 0 | 139,449 | $ 0 | 0 | 0 | 139,449 |
Comprehensive loss | 0 | 0 | 0 | 0 | (863,294) | (863,294) |
Net loss | 0 | 0 | 0 | (4,999,549) | 0 | (4,999,549) |
Balance at Mar. 31, 2020 | $ 173,272 | 95,543,043 | $ (145,056) | (76,584,552) | (853,450) | 18,133,257 |
Balance (in shares) at Mar. 31, 2020 | 17,327,235 | (31,486) | ||||
Balance at Dec. 31, 2019 | $ 177,335 | 95,433,077 | $ 0 | (71,585,003) | 9,844 | 24,035,253 |
Balance (in shares) at Dec. 31, 2019 | 17,733,617 | 0 | ||||
Options: | ||||||
Comprehensive loss | (776,645) | |||||
Net loss | (18,382,144) | |||||
Balance at Sep. 30, 2020 | $ 202,139 | 124,622,252 | $ (150,919) | (89,967,147) | (766,803) | 33,939,522 |
Balance (in shares) at Sep. 30, 2020 | 20,213,956 | (33,290) | ||||
Balance at Mar. 31, 2020 | $ 173,272 | 95,543,043 | $ (145,056) | (76,584,552) | (853,450) | 18,133,257 |
Balance (in shares) at Mar. 31, 2020 | 17,327,235 | (31,486) | ||||
Common Stock: | ||||||
Issuance of stock, net | $ 26,196 | 28,410,545 | $ 0 | 0 | 0 | 28,436,741 |
Issuance of stock, net (in shares) | 2,619,593 | 0 | ||||
Restricted stock issued | $ 189 | (189) | $ 0 | 0 | 0 | 0 |
Restricted stock issued (in shares) | 18,858 | 0 | ||||
Restricted stock compensation, net | $ (296) | 262,405 | $ 0 | 0 | 0 | 262,109 |
Restricted stock compensation, net (in shares) | (29,543) | 0 | ||||
Shares tendered for withholding taxes | $ 0 | (192,161) | $ (5,863) | 0 | 0 | (198,024) |
Shares tendered for withholding taxes (in shares) | 0 | (1,804) | ||||
Options: | ||||||
Exercised | $ 55 | (55) | $ 0 | 0 | 0 | 0 |
Exercised (in shares) | 5,528 | 0 | ||||
Stock option compensation | $ 0 | 122,115 | $ 0 | 0 | 0 | 122,115 |
Warrants exercised | $ 2,532 | (2,532) | 0 | 0 | 0 | 0 |
Warrants exercised (in shares) | 253,161 | |||||
Comprehensive loss | $ 0 | 0 | 0 | 0 | (175,447) | (175,447) |
Net loss | 0 | 0 | 0 | (7,843,797) | 0 | (7,843,797) |
Balance at Jun. 30, 2020 | $ 201,948 | 124,143,171 | $ (150,919) | (84,428,349) | (1,028,897) | 38,736,954 |
Balance (in shares) at Jun. 30, 2020 | 20,194,832 | (33,290) | ||||
Common Stock: | ||||||
Restricted stock issued | $ 191 | 105,561 | $ 0 | 0 | 0 | 105,752 |
Restricted stock issued (in shares) | 19,124 | 0 | ||||
Restricted stock compensation, net | $ 0 | 275,985 | $ 0 | 0 | 0 | 275,985 |
Restricted stock compensation, net (in shares) | 0 | |||||
Options: | ||||||
Stock option compensation | $ 0 | 97,535 | 0 | 0 | 0 | 97,535 |
Comprehensive loss | 0 | 0 | 0 | 0 | 262,094 | 262,094 |
Net loss | 0 | 0 | 0 | (5,538,798) | 0 | (5,538,798) |
Balance at Sep. 30, 2020 | $ 202,139 | 124,622,252 | $ (150,919) | (89,967,147) | (766,803) | 33,939,522 |
Balance (in shares) at Sep. 30, 2020 | 20,213,956 | (33,290) | ||||
Balance at Dec. 31, 2020 | $ 202,235 | 124,961,514 | $ (190,093) | (97,106,331) | (90,916) | 27,776,409 |
Balance (in shares) at Dec. 31, 2020 | 20,223,498 | (41,141) | ||||
Common Stock: | ||||||
Restricted stock issued | $ 622 | 58,909 | $ 0 | 0 | 0 | 59,531 |
Restricted stock issued (in shares) | 62,197 | 0 | ||||
Restricted stock compensation, net | $ 0 | 309,010 | $ 0 | 0 | 0 | 309,010 |
Restricted stock compensation, net (in shares) | 0 | 0 | ||||
Shares tendered for withholding taxes | $ 0 | (115,059) | $ 0 | 0 | 0 | (115,059) |
Shares tendered for withholding taxes (in shares) | 0 | 0 | ||||
Options: | ||||||
Stock option compensation | $ 0 | 211,140 | $ 0 | 0 | 0 | 211,140 |
Comprehensive loss | 0 | 0 | 0 | 0 | (455,722) | (455,722) |
Net loss | 0 | 0 | 0 | (4,500,163) | 0 | (4,500,163) |
Balance at Mar. 31, 2021 | $ 202,857 | 125,425,514 | $ (190,093) | (101,606,494) | (546,638) | 23,285,146 |
Balance (in shares) at Mar. 31, 2021 | 20,285,695 | (41,141) | ||||
Balance at Dec. 31, 2020 | $ 202,235 | 124,961,514 | $ (190,093) | (97,106,331) | (90,916) | 27,776,409 |
Balance (in shares) at Dec. 31, 2020 | 20,223,498 | (41,141) | ||||
Options: | ||||||
Comprehensive loss | (507,538) | |||||
Net loss | (19,930,397) | |||||
Balance at Sep. 30, 2021 | $ 300,863 | 165,442,942 | $ (190,093) | (117,036,729) | (598,454) | 47,918,529 |
Balance (in shares) at Sep. 30, 2021 | 30,086,283 | (41,141) | ||||
Balance at Mar. 31, 2021 | $ 202,857 | 125,425,514 | $ (190,093) | (101,606,494) | (546,638) | 23,285,146 |
Balance (in shares) at Mar. 31, 2021 | 20,285,695 | (41,141) | ||||
Common Stock: | ||||||
Restricted stock issued | $ 517 | (517) | $ 0 | 0 | 0 | 0 |
Restricted stock issued (in shares) | 51,677 | 0 | ||||
Restricted stock compensation, net | $ 0 | 288,053 | $ 0 | 0 | 0 | 288,053 |
Restricted stock compensation, net (in shares) | 0 | 0 | ||||
Shares tendered for withholding taxes | $ 0 | (4,454) | $ 0 | 0 | 0 | (4,454) |
Shares tendered for withholding taxes (in shares) | 0 | 0 | ||||
Options: | ||||||
Stock option compensation | 297,791 | $ 0 | 0 | 0 | 297,791 | |
Comprehensive loss | $ 0 | 0 | 0 | 0 | 301,102 | 301,102 |
Net loss | 0 | 0 | 0 | (9,064,385) | 0 | (9,064,385) |
Balance at Jun. 30, 2021 | $ 203,374 | 126,006,387 | $ (190,093) | (110,670,879) | (245,536) | 15,103,253 |
Balance (in shares) at Jun. 30, 2021 | 20,337,372 | (41,141) | ||||
Common Stock: | ||||||
Issuance of stock, net | $ 97,093 | 38,714,867 | $ 0 | 0 | 0 | 38,811,960 |
Issuance of stock, net (in shares) | 9,709,328 | 0 | ||||
Restricted stock issued | $ 33 | 18,385 | $ 0 | 0 | 0 | 18,418 |
Restricted stock issued (in shares) | 3,331 | 0 | ||||
Restricted stock compensation, net | $ 0 | 399,548 | $ 0 | 0 | 0 | 399,548 |
Restricted stock compensation, net (in shares) | 0 | 0 | ||||
Options: | ||||||
Exercised | $ 363 | 85,192 | $ 0 | 0 | 0 | 85,555 |
Exercised (in shares) | 36,252 | 0 | ||||
Stock option compensation | $ 0 | 218,563 | $ 0 | 0 | 0 | 218,563 |
Comprehensive loss | 0 | 0 | 0 | 0 | (352,918) | (352,918) |
Net loss | 0 | 0 | 0 | (6,365,850) | 0 | (6,365,850) |
Balance at Sep. 30, 2021 | $ 300,863 | $ 165,442,942 | $ (190,093) | $ (117,036,729) | $ (598,454) | $ 47,918,529 |
Balance (in shares) at Sep. 30, 2021 | 30,086,283 | (41,141) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Cash received from customers and grants | $ 22,355,958 | $ 26,122,815 |
Cash paid to suppliers and employees | (43,732,182) | (37,776,303) |
Cash paid for operating leases | (1,049,198) | (797,482) |
Cash paid for finance leases | (15,358) | (14,762) |
Interest and taxes, net | (1,709,704) | (1,681,155) |
Net cash used in operating activities | (24,150,484) | (14,146,887) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Patent application costs | (32,648) | (181,417) |
Acquisition of and deposits on fixed assets | (1,387,601) | (3,000,763) |
Net cash used in investing activities | (1,420,249) | (3,182,180) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of stock, net | 38,811,960 | 28,436,741 |
Stimulus package loan | 0 | 2,978,315 |
Stimulus package loan payment | 0 | (2,978,315) |
Payments on note payable | 0 | (180,249) |
Payments of tax withholding on stock award | (119,513) | (348,944) |
Payments on finance lease | (45,680) | (37,166) |
Net cash (used in) provided by financing activities | 38,646,767 | 27,870,382 |
Effect of exchange rate changes on cash | (138,335) | (125,214) |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 12,937,699 | 10,416,101 |
Cash and cash equivalents - beginning of the period | 23,066,301 | 18,271,352 |
Cash and cash equivalents - end of the period | 36,004,000 | 28,687,453 |
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES: | ||
Net loss | (19,930,397) | (18,382,144) |
Adjustments: | ||
Depreciation and amortization | 2,186,684 | 2,057,275 |
Share based compensation | 1,802,056 | 824,345 |
Non-cash inventory adjustments | 926,499 | 2,530,444 |
Benefit from deferred tax liability | (69,941) | (301,000) |
Impairment of long-lived assets | 1,273,945 | 0 |
Provision (recovery of) doubtful accounts | (103,258) | 214,210 |
Changes in assets and liabilities: | ||
Accounts receivable | (3,302,153) | 138,827 |
Inventories | (5,215,766) | (5,295,899) |
Prepaid expenses and other current assets | (412,995) | (314,460) |
Deposits and other assets | 141,946 | 80,873 |
Accounts payable and accrued liabilities | 139,698 | 559,888 |
Deferred revenue | (1,586,802) | 3,740,754 |
Net cash used in operating activities | (24,150,484) | (14,146,887) |
Supplemental disclosures for non-cash investing and financing activities: | ||
Deposits on manufacturing equipment transferred to fixed assets | $ 0 | $ 472,651 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
DESCRIPTION OF BUSINESS [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 — DESCRIPTION OF BUSINESS: Chembio Diagnostics, Inc. (“Chembio”) and its subsidiaries (collectively with Chembio, the “Company”) develop and commercialize point-of-care tests used for the rapid detection and diagnosis of infectious diseases, including sexually transmitted disease, insect vector and tropical disease, COVID-19 and other viral and bacterial infections, enabling expedited treatment. Coupled with its extensive scientific expertise, the Company’s novel DPP technology offers broad market applications beyond infectious disease. The Company’s products are sold globally, directly and through distributors, to hospitals and clinics, physician offices, clinical laboratories, public health organizations, government agencies, and consumers under the Company’s DPP, STAT-PAK, STAT-VIEW and SURE CHECK registered trademarks or under the private labels of the Company’s marketing partners. The Company’s future working capital needs will depend on many factors, including the rate of its business and revenue growth, the availability and cost of human, material and other resources required to build and deliver products in accordance with its existing or future product orders, the timing of its continuing automation of manufacturing, and the timing of its investment in research and development as well as sales and marketing. If the Company is unable to increase its revenues and manage its expenses in accordance with its operating plan, it may need to reduce the level or slow the timing of the growth plans contemplated by its operating plan, which would likely curtail or delay the growth in its business contemplated by its operating plan and could impair or defer its ability to achieve profitability and generate cash flow, or to seek to raise additional funds through debt or equity financings, strategic relationships, or other arrangements (see Note 2(a) — Basis of Presentation). All DPP tests are developed and manufactured in the United States and are the subject of a range of domestic and global patents and patents pending. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES: (a) Basis of Presentation: T he accompanying unaudited condensed consolidated financial statements include the accounts of Chembio and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Chembio’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC. Going Concern Considerations Revenues during the three months ended September 30, 2021 did not meet the Company’s expectations. The Company ’ (see Note 5 - Stockholder's Equity). The Company performed an assessment to determine whether there were conditions or events that, considered in the aggregate, raised substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements are being issued. Initially, this assessment did not consider the potential mitigating effect of management’s plans that had not been fully implemented. Because, as described below, substantial doubt was determined to exist as the result of this initial assessment, management then assessed the mitigating effect of its plans to determine if it is probable that the plans (1) would be effectively implemented within one year after the date the accompanying unaudited condensed consolidated financial statements are issued and (2) when implemented, would mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. During the three months ended September 30, 2021, the Company undertook measures to increase its total revenues and improve its liquidity position. In particular, the Company received significant purchase orders from “ ” The Company had pursued the July Purchase Orders for an extended period of time. The July Purchase Orders consist of the following: • On July 20, 2021, the Company received a million purchase order from Bio-Manguinhos for the purchase of DPP SARS-CoV-2 Antigen tests for delivery during 2021 to support the urgent needs of Brazil’s Ministry of Health in addressing the COVID-19 pandemic. Bio-Manguinhos, a subsidiary of the Oswaldo Cruz Foundation, is responsible for the development and production of vaccines, diagnostics and biopharmaceuticals, primarily to meet the demand of Brazil’s national public health system. • On July 22, 2021, the Company received a million purchase order from the Partnership for Supply Chain Management, supported by The Global Fund, for the purchase of HIV 1/2 STAT-PAK Assays for shipment to Ethiopia into These measures and other plans and initiatives have been designed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date the accompanying unaudited condensed consolidated financial statements are being issued. The Company ’ • Limitations of the Company’s staffing, supply chain and liquidity have impaired, and are expected to continue to impair, the Company’s ability to fulfill at least $11.5 million of the July Purchase Order from Bio-Manguinhos by December 31, 2021, the end of the existing shipment schedule under the order. • Earlier delays in clinical trials, which reflected the impact of the COVID-19 vaccination rollout and the related decline in positivity rates at clinical trials on the Company’s clinical plan enrollment levels, and continuing requirements of achievement of regulatory approvals may limit the Company’s ability to achieve a portion of the revenue- and cash-generating milestones under a $12.7 million award granted pursuant to the Company’s contract dated December 2, 2020 with the Biomedical Advanced Research and Development Authority (part of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response) (“BARDA”), which contract will, unless extended by BARDA, expire on December 2, 2021. • The ongoing healthcare and economic impacts of the COVID-19 pandemic on the global customer base for the Company’s non‑COVID-19 products continue to negatively affect the timing and rate of recovery of the Company’s revenues from those products by, for example, decreasing the allocation of funding for HIV testing, thereby continuing to adversely affect the Company’s liquidity. • Although the Company has entered into agreements to distribute third-party COVID-19 products in the United States, its ability to sell those products could be constrained because of staffing and supply chain limitations affecting the suppliers of those products. The Company further considered how these factors and uncertainties could impact its ability over the next year to meet the obligations specified in the Credit Agreement with the Lender (each as defined in Note 7 – Long-Term Debt). Those obligations include a covenant requiring minimum total revenue amounts for the twelve months preceding each quarter end. For the next year, the minimum total revenue requirements range from $40.3 million for the twelve months ending December 31, 2021 to $45.6 million for the twelve months ending September 30, 2022. Upon an event of default under the Credit Agreement, the Lender could elect to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. In such an event, there can be no assurance that the Company would have sufficient liquidity to fund payment of the amounts that would be due under the Credit Agreement or that, if such liquidity were not available, the Company would be successful in raising additional capital on acceptable terms, or at all, or in completing any other endeavor to continue to be financially viable and continue as a going concern. The Company’s inability to raise additional capital on acceptable terms in the near future, whether for purposes of funding payments required under the Credit Agreement or providing additional liquidity needed for its operations, could have a material adverse effect on its business, prospects, results of operations, liquidity and financial condition. Accordingly, management determined the Company could not be certain that the Company’s plans and initiatives would be effectively implemented within one year after the date on which the accompanying unaudited condensed consolidated financial statements are being issued. Without giving effect to the prospect of raising additional capital pursuant to the ATM Agreement (as defined in Note 5(a) – Stockholders’ Equity: Common Stock), increasing product revenue in the near future or executing other mitigating plans, many of which are beyond the Company’s control, it is unlikely that the Company will be able to generate sufficient cash flows to meet its required financial obligations, including its debt service and other obligations due to third parties. The existence of these conditions raises substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date on which the accompanying unaudited condensed consolidated financial statements are being issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date the accompanying unaudited condensed consolidated financial statements are issued. As such, the accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. (b) Significant Accounting Policies: During the nine months ended September 30, 2021, there have been no significant changes to the Company's summary of significant accounting policies contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC. (c) Fair Value of Financial Instruments: The carrying values for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and other current liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. Included in cash and cash equivalents were $32.5 million and $14.8 million as of September 30, 2021 and December 31, 2020, respectively, of money market funds that are Level 1 fair value measurements under the hierarchy. The fair value of the Company’s total debt of $20.0 million (carrying value of $18.6 million) and $20.0 million (carrying value of $18.2 million) as of September 30, 2021 and December 31, 2020, respectively, is a Level 2 fair value measurement under the hierarchy. The face value of the Company's debt approximates the recorded value, as the rate is based upon the current rates available to the Company for similar financial instruments. Fair value measurements of all financial assets and liabilities that are measured and reported on a fair value basis are required to be classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and, Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). (d) Cash and Cash Equivalents: Cash and cash equivalents are defined as short-term, . The Company is contractually obligated to maintain the restricted cash balance on deposit with a bank as security for the bank ’ (e) Loss Per Share: Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period excluding unvested restricted stock. Diluted loss per share for the three and nine months ended September 30, 2021 and 2020 reflects the potential dilution from the exercise or conversion of other securities into common stock, if dilutive. There were 1,786,324 and 1,034,124 shares of common stock subject to options outstanding as of September 30, 2021 and 2020, respectively, that were not included in the calculation of diluted per common share equivalents for the three and nine months ended September 30, 2021 and 2020, respectively, because the effect would have been anti-dilutive. There were 811,038 and 619,385 shares of common stock that were restricted stock or were subject to restricted stock units or performance stock units as of September 30, 2021 and 2020, respectively, that were not included in the calculation of diluted per common share equivalents for the three and nine months ended September 30, 2021 and 2020, respectively, because the effect would have been anti-dilutive. (f) Income Taxes: At the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis, and may change in subsequent interim periods. Accordingly, the Company’s effective tax rate for the three and nine months ended September 30, 2021 was 0% and 0.34% respectively, compared to the effective tax rate of 1.9% and 1.7% for both the three and nine months ended September 30, 2020, respectively. The Company’s effective tax rates for both periods were affected primarily by a full valuation allowance on domestic net deferred tax assets and a benefit from foreign net operating losses. (g) Recently Issued Accounting Standards Affecting the Company: Recently Adopted ASU 2020-10, Codification Improvements In October 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-10, which clarifies various topics in the FASB’s Accounting Standards Codification (“ASC”), including the addition of existing disclosure requirements to the relevant disclosure sections. This update improves consistency by amending the ASC to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions in the ASC by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The Company adopted the standard effective December 31, 2020 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASC Topic 848. ASC Topic 848 provides relief for impacted areas as it relates to impending reference rate reform. ASC Topic 848 contains optional expedients and exceptions for applying GAAP to debt arrangements, contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. This guidance is effective upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. The Company adopted the standard effective January 1, 2021 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12. This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 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 and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted the standard effective January 1, 2021 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2021-01—Reference Rate Reform (Topic 848) In January 2021, the FASB issued ASU 2021-01, which refines the scope of ASC Topic 848 and clarifies some of its guidance as part of the monitoring of global reference rate reform activities. The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest (PAI3) in connection with reference rate reform activities under way in global financial markets (the “discounting transition”). ASU 2021-01 expands the scope of ASC Topic 848 to include all affected derivatives and give market participants the ability to apply certain aspects of the contract modification and hedge accounting expedients to derivative contracts affected by the discounting transition. In addition, ASU 2021-01 adds implementation guidance (codified in ASC 848-10-55-1) to clarify which optional expedients in ASC Topic 848 may be applied to derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. The Company adopted the standard effective January 1, 2021 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. Not Yet Adopted ASU 2021-04 - Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In May 2021, the FASB issued ASU 2021-04, which is the final guidance that requires issuers to account for modifications or exchanges of freestanding equity-classified written call options (e.g., warrants) that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the guidance, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The guidance is applied prospectively and is effective for all entities for fiscal years beginning after 15 December 2021, and interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt the standard effective January 1, 2022 and has determined that the adoption is not expected to have a material impact on the Company’s consolidated financial statements. ASU 2020-06 - Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. ASU 2020-06 simplifies the guidance in GAAP on the issuer’s accounting for convertible debt instruments, requires entities to provide expanded disclosures about “the terms and features of convertible instruments” and how the instruments have been reported in the entity’s financial statements. It also removes from ASC 815-40-25-10 certain conditions for equity classification and amends certain guidance in ASC 260 on the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. The ASU’s amendments are effective for smaller public business entities fiscal years beginning after December 15, 2023. The Company continues to assess the potential impacts of the standard. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2021 | |
REVENUE [Abstract] | |
REVENUE | NOTE 3 — REVENUE: Disaggregation of Revenue The following table disaggregates total revenues: For the three months ended September 30, 2021 September 30, 2020 Exchange Transactions Non-Exchange Transactions Total Exchange Transactions Non-Exchange Transactions Total Net product sales $ 9,371,160 $ - $ 9,371,160 $ 8,406,457 $ - $ 8,406,457 R&D revenue 441 - 441 1,444,724 - 1,444,724 Government grant income - 2,400,000 2,400,000 - 209,776 209,776 License and royalty revenue 286,843 - 286,843 211,521 - 211,521 $ 9,658,444 $ 2,400,000 $ 12,058,444 $ 10,062,702 $ 209,776 $ 10,272,478 For the nine months ended September 30, 2021 September 30, 2020 Exchange Transactions Non-Exchange Transactions Total Exchange Transactions Non-Exchange Transactions Total Net product sales $ 17,327,204 $ - $ 17,327,204 $ 17,914,623 $ - $ 17,914,623 R&D revenue 1,107,808 - 1,107,808 3,546,385 - 3,546,385 Government grant income - 8,030,000 8,030,000 - 209,776 209,776 License and royalty revenue 779,901 - 779,901 572,450 - 572,450 $ 19,214,913 $ 8,030,000 $ 27,244,913 $ 22,033,458 $ 209,776 $ 22,243,234 Exchange transactions are recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers, while non-exchange transactions are recognized in accordance with ASU 2018-08, Not-For-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. During the three and nine months ended September 30, 2021, the Company recognized government grant income totaling $2.4 million and $8.0 million, which was awarded under a contract the Company entered into with BARDA on December 2, 2020. The following table disaggregates total revenues by geographic location: For the three months ended For the nine months ended September 30, 2021 September 30, 2020 September 30 2021 September 30 2020 Africa $ 1,293,405 $ 1,874,518 $ 4,104,619 $ 3,310,603 Asia 208,750 168,052 479,297 650,659 Europe & Middle East 1,132,961 2,887,209 4,539,444 6,698,382 Latin America 5,698,920 4,618,560 6,444,456 7,515,523 United States 3,724,408 724,139 11,677,097 4,068,067 $ 12,058,444 $ 10,272,478 $ 27,244,913 $ 22,243,234 Contract Liabilities Deferred revenue relates to payments received in advance of performance under the contract. Deferred revenue is recognized as revenue as (or when) the Company performs under the contract. At June 30, 2021, the Company reported million in deferred revenue, substantially all of which was earned and recognized during the three months ended September 30, 2021, with the remaining amount expected to be recognized in the three months ending December 31, 202 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2021 | |
INVENTORY [Abstract] | |
INVENTORY | NOTE 4 — INVENTORY: Inventories are presented net of reserves and consisted of the following: September 30, 2021 December 31, 2020 Raw materials $ 7,549,851 $ 5,955,215 Work in process 7,244,946 2,549,516 Finished goods 2,010,872 4,011,671 $ 16,805,669 $ 12,516,402 During the three and nine months ended September 30, 2021, the Company recognized a charge of $0.1 million and $0.9 million, respectively, related to the write-down of inventory for products that were not salable, including as the result of the Company’s periodic review of the current status and future benefits of inventory. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 — STOCKHOLDERS’ EQUITY: (a) Common Stock During the three and nine months ended September 30, 2021 and 2020, options were exercised for the purchase of On July 19, 2021, Chembio entered into an At the Market Offering Agreement (the “ATM Agreement ”) with Craig‑Hallum Capital Group LLC ( “ Craig‑Hallum ”) . (b) Preferred Stock The Company has shares of preferred stock authorized and issued or (c) Treasury Stock The Company has 41,141 shares of common stock held as treasury stock, which were acquired upon the vesting of restricted stock awards related to the tax withholding requirements paid on behalf of employees. (d) Options, Restricted Stock, Restricted Stock Units and Performance Stock Units The stockholders. |
COMMITMENTS, CONTINGENCIES, AND
COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS [Abstract] | |
COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS | NOTE 6 — COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS: a) Concentrations: The following table discloses product sales the Company had to each customer that purchased in excess of 10% of the Company’s net product sales for the periods indicated: For the three months ended For the nine months ended Accounts Receivable as of September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 September 30, 2021 December. 31, 2020 Sales % of Sales Sales % of Sales Sales % of Sales Sales % of Sales Customer 1 $ 5,434,186 58.0 % $ 4,226,040 50.3 % $ 5,724,171 33.04 % $ 6,523,416 36.4 % $ 3,183,367 $ 1,622,866 Customer 2 1,196,217 12.8 % * * 2,347,832 13.55 % * * 1,264,639 * Customer 3 * * 1,071,513 12.7 % * * * * * * Customer 4 * * 963,671 11.5 % * * * * 17,510 * In the table above, an asterisk (*) indicates that sales did not exceed 10% for the period indicated. The following table discloses product purchases the Company had to each vendor in excess of 10% of the Company’s net purchases for the periods indicated: For the three months ended For the nine months ended Accounts Payable as of September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 September 30, 2021 December 31, 2020 Purchases % of Purchases Purchases % of Purchases Purchases % of Purchases Purchases % of Purchases Vendor 1 $ 1,678,250 34.4 % $ * * $ 2,339,182.00 18.8 % $ * * $ 1,651,866 $ * Vendor 2 * * 501,562 15.4 % * * 1,600,916 12.3 % * 178,395 In the table above, an asterisk (*) indicates that purchases did not exceed 10% for the period indicated. The b) Governmental Regulation: All “ ”) c) Employment Contracts: The Company has multi-year contracts with two key employees. The contracts call for salaries presently aggregating $843,292 per year. The contracts expire in December 2021 December 2022 2021 $ 210,823 2022 460,000 d) Benefit Plan: The Company has a 401(k) plan established for its employees whereby it matches of the first of salary (or up to of salary) that an employee contributes to the plan. Matching contribution expenses totaled $ and $ e) Leases: The Company The Company’s facility leases generally include optional renewal periods. Upon entering into a new facility lease, the Company evaluates the leasehold improvements and regulatory requirements related to its operations in that location. To the extent that the initial lease term of the related facility lease is less than the useful life of the leasehold improvements and potential regulatory costs associated with moving the facility, the Company concludes that it is reasonably certain that a renewal option will be exercised, and that renewal period is included in the lease term and the related payments are reflected in the right-of-use asset and lease liability. The Company’s leases generally include fixed rental payments with defined annual increases. While certain of the Company’s leases are gross leases, the majority of the Company’s leases are net leases in which the Company makes separate payments to the lessor based on the lessor’s property and casualty insurance costs, the property taxes assessed on the property, and a portion of the common area maintenance where applicable. The Company has elected the practical expedient not to separate lease and nonlease components for all of the Company’s facility leases. Effective May 2021, the Company permanently discontinued its operations in Malaysia. Impairment charges for the Malaysian facility right-of-use asset recorded during the three and nine months ended September 30, 2021 was $0 and $0.1 million, respectively The components of lease expense were as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Operating lease expense $ 398,089 $ 405,989 $ 1,208,885 $ 1,258,797 Finance lease cost Amortization of right-of-use assets $ 17,038 $ 15,571 $ 49,834 $ 42,657 Interest on lease liabilities 5,047 5,395 15,358 14,762 Total finance lease expense $ 22,085 $ 20,966 $ 65,192 $ 57,419 Supplemental cash flow information related to leases was as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 353,009 $ 340,205 $ 1,049,198 $ 797,482 Operating cash flows for finance leases 5,047 5,395 15,358 14,762 Financing cash flows for finance leases 15,859 13,587 45,680 37,166 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ - $ - $ 616,100 $ - Finance leases - 5,486 25,609 73,600 Supplemental balance sheet information related to leases was as follows: September 30, 2021 September 30, 2020 Finance Leases Finance lease right-of-use asset $ 340,762 $ 315,153 Accumulated depreciation (131,854 ) (66,261 ) Finance lease right-of-use asset, net $ 208,908 $ 248,892 Weighted-Average Remaining Lease Term Operating leases 7.7 Years 9.1 Finance leases 3.1 Years 4.0 Weighted-Average Discount Rate Operating leases 8.41 % 8.60 % Finance leases 8.74 % 8.18 % Maturities of lease liabilities were as follows: September 30, 2021 September 30, 2020 Operating Leases Finance Leases Operating Leases Finance Leases 2020 2021 $ 355,335 $ 20,906 $ 342,462 $ 19,226 2022 1,447,249 83,624 1,209,787 76,904 2023 1,221,017 83,624 1,057,757 76,904 2024 1,018,875 55,856 1,026,272 76,904 2025 1,049,442 12,471 1,018,875 49,136 Thereafter 4,724,446 1,679 5,773,888 5,750 Total lease payments $ 9,816,364 $ 258,160 $ 10,429,041 $ 304,824 Less: imputed interest 2,751,749 34,119 3,269,991 46,712 Total $ 7,064,615 $ 224,041 $ 7,159,050 $ 258,112 f) Litigation: SEC Investigation The SEC is conducting a non-public, fact-finding investigation relating to the public offering of common stock that Chembio completed in May 2020 (the “May 2020 Offering”) and to the FDA’s revocation in June 2020 of an emergency use authorization for the DPP COVID-19 IgM/IgG system that was issued by the FDA in April 2020. Chembio received subpoenas from the SEC in July 2020 and April 2021 seeking the production of documents in connection with this investigation. In addition, the SEC delivered subpoenas in April 2021 to five of Chembio’s employees (including its three executive officers, who consist of its Chief Executive Officer and President, its Executive Vice President and Chief Financial Officer, and its Executive Vice President and Chief Scientific and Technology Officer). An additional subpoena was issued in June 2021 to Chembio’s former Interim Chief Executive Officer and Executive Chair. Each subpoena requested the production of documents relating to the same matters as are the subject of the subpoenas Chembio received. Chembio and the six individuals are cooperating fully in the SEC’s investigation and expect to continue to do so. The SEC’s letters transmitting the subpoenas expressly provide that the inquiry does not mean that the SEC or its staff have concluded that anyone has violated the federal securities laws or have a negative opinion of any person, entity or security. The Company cannot predict the scope, duration or outcome of the investigation or the impact, if any, of the investigation on its results of operations. Legal Proceedings Stockholder Litigation Putative Stockholder Securities Class-Action Litigation In 2020 four purported securities class-action lawsuits were filed in the United States District Court for the Eastern District of New York by alleged stockholders of Chembio: • Sergey Chernysh v. Chembio Diagnostics, Inc., Richard L. Eberly and Gail S. Page, filed on June 18, 2020; • James Gowen v. Chembio Diagnostics, Inc., Richard L. Eberly and Gail S. Page, filed on June 22, 2020; • Anthony Bailey v. Chembio Diagnostics, Inc., Richard L. Eberly, Gail S. Page and Neil A. Goldman, filed on July 3, 2020; and • Special Situations Fund III QP, L.P., Special Situations Cayman Fund, L.P. and Special Situations Private Equity Fund, L.P. v. Chembio Diagnostics, Inc., Richard L. Eberly, Gail S. Page, Robert W. Baird & Co. Inc. and Dougherty & Company LLC, filed August 17, 2020. The plaintiffs in each of the above cases alleged claims under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), Rule 10b-5 thereunder and Section 20(a) of the Exchange Act. Special Situations Fund III QP, L.P., Special Situations Cayman Fund, L.P. and Special Situations Private Equity Fund, L.P. (collectively, the “Special Situations Funds”) also asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the “Securities Act”) relating to the May 2020 Offering. Chembio and the plaintiffs entered into Court-approved stipulations relieving Chembio and the other defendants of the obligation to respond to the complaints in these cases pending the designation of a lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995. Eight motions for appointment as lead plaintiff were filed by various prospective lead plaintiffs. However, all but two of these motions were withdrawn or otherwise abandoned, leaving before the Court two motions for appointment as lead plaintiff — one filed by the Special Situations Funds and one by Municipal Employees’ Retirement System of Michigan. By order entered December 29, 2020, Magistrate Judge Lindsay consolidated the cases and appointed the Special Situations Funds and Municipal Employees’ Retirement System of Michigan (together, the “Lead Plaintiffs”), as co-lead plaintiffs and their respective counsel as co-lead counsel. The consolidated cases are now pending under the caption “In re Chembio Diagnostics, Inc. Securities Litigation.” The Lead Plaintiffs filed their Consolidated Amended Complaint (the “CAC”) on February 12, 2021. In summary, the CAC purports to allege claims based on assertedly false and misleading statements and omissions concerning the performance of the DPP COVID-19 IgM/IgG System, as well as an asserted failure to timely disclose that the emergency use authorization that had been granted by the FDA with respect to the DPP COVID-19 IgM/IgG System “was — or was at an increased risk of — being revoked.” The CAC names as defendants Chembio, Richard L. Eberly, Gail S. Page, Neil A. Goldman, Javan Esfandiari, Katherine L. Davis, Mary Lake Polan, John Potthoff and the underwriters for the May 2020 Offering, Robert W. Baird & Co., Inc. and Dougherty & Company LLC. The CAC purports to assert five counts under the Securities Act and the Exchange Act. Counts I through III are brought under the Securities Act, allegedly on behalf of a purported class consisting of all persons who purchased Chembio common stock directly in or traceable to the May 2020 Offering pursuant to Chembio’s shelf registration statement on Form S 3 (File No. 333-227398) and the related prospectus, as supplemented by a prospectus supplement dated May 7, 2020 (the “Securities Act Class”). Count I purports to allege a claim for violation of Section 11 of the Securities Act against all defendants other than Messrs. Eberly and Esfandiari. Count II purports to allege a claim for violation of Section 12 of the Securities Act against all defendants other than Messrs. Eberly and Esfandiari. Count III purports to allege a claim under Section 15 of the Securities Act against Ms. Davis, Dr. Polan, Dr. Potthoff, Ms. Page and Mr. Goldman. Counts IV and V allege claims under the Exchange Act on behalf of a purported class consisting of all persons who purchased Chembio common stock on the open market from March 12, 2020 through June 16, 2020 (the “Exchange Act Class”). Count IV purports to allege a claim for violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder against Chembio, Mr. Eberly, Ms. Page, Mr. Goldman and Mr. Esfandiari. Count V purports to allege a claim under Section 20(a) of the Exchange Act against Mr. Eberly, Ms. Page, Mr. Goldman and Mr. Esfandiari. The Lead Plaintiffs seek, on behalf of the Securities Act Class and the Exchange Act Class, among other things, an award of damages in an amount to be proven at trial, as well as an award of reasonable costs, including attorneys’ fees and expenses, expert fees, pre-judgment and post-judgment interest, and such other relief as the Court deems just and proper. The Lead Plaintiffs also seek rescission “or a rescissory measure of damages” on behalf of the Securities Act Class as to Count II. Pursuant to an order entered by the Court on January 29, 2021, any defendant wishing to move against the amended complaint was required to file, by February 18, 2021, a letter requesting a pre-motion conference. On that date, the defendants submitted letters to the Court requesting a pre-motion conference regarding anticipated motions to dismiss the CAC, and the Lead Plaintiffs responded on February 24, 2021. In its January 29, 2021 order, the Court indicated that it would consider a briefing schedule on motions to dismiss after it had received and reviewed the parties’ correspondence. On March 5, 2021, the Court entered an order in which it advised the parties that it had determined a pre motion conference was not necessary and established a briefing schedule on the defendants’ anticipated motions to dismiss. However, the defendants subsequently agreed with the Lead Plaintiffs’ counsel to a modification of the schedule, which was then approved by the Court. Pursuant to that schedule, defendants’ motions and supporting papers were filed on March 26, 2021, the Lead Plaintiffs’ opposition papers were filed on April 16, 2021, and the defendants’ reply papers were filed on April 30, 2021. The defendants’ motions remain pending before the Court. At this stage of the litigation, the Company is not able to predict the probability of a favorable or unfavorable outcome. Putative Stockholder Derivative Litigation On September 11, 2020, a putative stockholder derivative action captioned Karen Wong, derivatively on behalf of Chembio Diagnostics, Inc., Plaintiff v. Richard L. Eberly, Gail S. Page, Neil A. Goldman, Javan Esfandiari, Katherine L. Davis, Mary Lake Polan and John G. Potthoff, Defendants, and Chembio Diagnostics, Inc., Nominal Defendant (the “Wong complaint”) was filed purportedly on Chembio’s behalf in the United States District Court for the Eastern District of New York. The Wong complaint purports to assert a claim for violation of Section 14(a) of the Exchange Act and Rule 14a-9 thereunder based on ostensibly false and misleading statements and omissions concerning the Company’s rapid COVID-19 antibody test in the proxy statement disseminated in advance of Chembio’s Annual Meeting of Stockholders held on July 28, 2020. The Wong complaint also asserts claims against the individual defendants for purported breaches of fiduciary duties owed to Chembio, as well as unjust enrichment. The Wong complaint requests a declaration that the individual defendants have breached or aided and abetted the breach of their fiduciary duties to Chembio, an award of damages to us, restitution, and an award of the plaintiff’s costs and disbursements in the action, including reasonable attorneys’ and experts’ fees, costs and expenses, and improvements to Chembio’s corporate governance and internal procedures regarding compliance with laws. Pursuant to a stipulation by which the individual defendants named in the Wong complaint agreed to waive service of process, the Court ordered that the time for defendants to answer or otherwise respond to the complaint be extended to November 19, 2020. The parties subsequently entered into a stipulation for a stay of proceedings in the action relating to the Wong complaint pending final disposition of motions to dismiss the pending putative class-action litigation, subject to certain conditions. The Court entered an order granting the requested stay on November 3, 2020. At this stage of the litigation, the Company is not able to predict the probability of a favorable or unfavorable outcome. Employee Litigation On March 19, 2021, John J. Sperzel III, Chembio’s former chief executive officer, filed a fifteen-count complaint in the United States District Court for the Eastern District of New York. The complaint was filed following the dismissal of an action previously filed by Mr. Sperzel in the United States District Court in Maine, which was dismissed for lack of personal jurisdiction over Chembio. In summary, the complaint filed in the Eastern District of New York alleges that Chembio wrongfully refused to allow Mr. Sperzel to exercise certain options to purchase, for an aggregate exercise price of $943,126, a total of 266,666 shares of common stock that were allegedly vested as of the date of his separation from Chembio, on January 3, 2020. The complaint alleges that under the terms of the applicable stock incentive plans, Mr. Sperzel had thirty days after the date on which he ceased to qualify as an “Eligible Person” under the plans within which to exercise the options, and asserts that by reason of his alleged continued service to us, he remained an “Eligible Person” and ostensibly retained the right to exercise the options. The Compensation Committee of the Board determined that the options expired on February 3, 2020, thirty days after Mr. Sperzel’s separation from Chembio, and that a purported attempt by Mr. Sperzel to exercise the options after that date was not valid. Count I of the complaint purports to allege that Chembio breached Mr. Sperzel’s separation agreement by refusing to allow him to exercise the stock options. Counts II through XI of the complaint purport to allege claims for breach of each of ten separate stock option agreements, collectively asserting damages of “at least” $3,190,198. Count XII of the complaint alleges a breach of Mr. Sperzel’s separation agreement based on Chembio’s purported failure to pay Mr. Sperzel consulting fees to which he claims to be entitled for consulting services allegedly performed following his separation. Count XIII of the complaint alleges a claim for breach of an implied covenant of good faith and fair dealing under Nevada common law based on the allegation that Chembio prevented Mr. Sperzel from obtaining the benefits of the stock option agreements and separation agreement. Mr. Sperzel alleges that he suffered damages in excess of $3 million as a result of the purported breach of the covenant of good faith and fair dealing. Count XIV of the complaint purports to assert a claim for quantum meruit, alleging that “it is reasonable for Sperzel to expect payment in exchange for ... services” he assertedly provided to us and, based on allegations that upon his separation Mr. Sperzel was not informed as to the pending expiration of the stock options he later sought to exercise, that Chembio has been unjustly enriched. Finally, Count XV of the complaint seeks a declaratory judgment that Mr. Sperzel is relieved from performance under his separation agreement due to asserted material breaches of the agreement based on the allegations summarized above. The complaint seeks compensatory damages in an unspecified amount, a declaration, as described above, and an award of Mr. Sperzel’s costs and expenses in the litigation, including reasonable attorneys’ fees, expert costs and disbursements. The complaint requests a trial by jury. In recently served initial disclosures, Mr. Sperzel claims entitlement to recover damages in a total amount not less than $10 million, together with prejudgment interest at the rate of 9% per annum. On May 20, 2021, Chembio filed its answer and affirmative defenses denying the material allegations of Mr. Sperzel’s complaint. Chembio and Mr. Sperzel are presently engaged in discovery. Under the present case schedule, all discovery is expected to be completed by April 28, 2022. At this stage of the litigation, the Company is not able to predict the probability of a favorable or unfavorable outcome Other From time to time the Company may become involved in legal proceedings or may be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2021 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | NOTE 7 — LONG-TERM DEBT: O n September 3, 2019, the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings II, LP (the “Lender”) the Company Capital Group LLC, the Company’s No principal repayments are due under the Credit Agreement prior to September 30, 2022, unless the Company The Company The the Company at all times and (ii) achieve specified minimum rolling four-quarter total revenue amounts as of September 30, 2019 and the last day of each calendar quarter thereafter. The minimum total revenue amounts, which range from As of September 30, 2021, the loan balance, net of unamortized discounts and debt issuance costs, was $18.6 million , and the Company was in compliance with its loan covenants |
EQUITY INCENTIVE PLAN
EQUITY INCENTIVE PLAN | 9 Months Ended |
Sep. 30, 2021 | |
EQUITY INCENTIVE PLAN [Abstract] | |
EQUITY INCENTIVE PLAN | NOTE 8 — EQUITY INCENTIVE PLAN: (a) Equity Plans: Effective June 3, 2008, Chembio’s stockholders voted to approve the 2008 Stock Incentive Plan (the “2008 Plan”), with shares of common stock available to be issued. At the Annual Stockholder Meeting on September 22, 2011 Chembio’s stockholders voted to approve an increase to the shares of common stock issuable under the 2008 Plan by to . Under the terms of the 2008 Plan, which expired during 2018, the Board Compensation Committee had the discretion to select the persons to whom awards were to be granted. Awards could be stock options, restricted stock and/or restricted stock units (collectively, “Equity Award Units”). The awards became vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through September 30, 2021, there were options expired, forfeited or exercised, and at September 30 , 2021, options were outstanding and Equity Award Units were available to be issued under the 2008 Plan. Effective June 19, 2014, Chembio’s stockholders voted to approve the 2014 Stock Incentive Plan (the “2014 Plan”), with 800,000 shares of common stock available to be issued. Under the terms of the 2014 Plan, the Board or its Compensation Committee has the discretion to select the persons to whom awards are to be granted. Awards can be in the form of Equity Award Units. The awards vest at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through September 30, 2021, there were 566,658 Equity Award Units expired, forfeited or exercised. At September 30, Units remain available to be issued under the 2014 Plan. Effective , 2019 , 2019 2019 (b) Stock Compensation Expense: Stock-based compensation expense (net of recovery) recognized in the condensed consolidated statements of operations was classified as follows: For the three months ended September 30 For the nine months ended September 30 2021 2020 2021 2020 Cost of product sales $ 52,819 $ - $ 124,955 $ 6,300 Research and development expenses 164,560 126,333 388,264 281,070 Selling, general and administrative expenses 419,152 350,871 1,288,837 960,959 Severance and related costs - - - (423,984 ) $ 636,531 $ 477,204 $ 1,802,056 $ 824,345 The weighted-average assumptions made in calculating the fair values of options are as follows: For the three months ended September 30, For the nine months ended September 30 2021 2021 Expected term (in years) 6.0 5.0 Expected volatility 85.33% 78.28% Expected dividend yield N/A N/A Risk-free interest rate 1.00% 0.81% The following table provides stock option activity for the nine months ended September 30, 2021: Stock Options Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contract Term Aggregate Intrinsic Value Outstanding at December 31, 2020 974,778 $ 4.12 2.87 years $ 1,520,910 Granted 932,135 4.72 - Exercised 36,252 2.36 - Forfeited 31,212 9.19 - Expired 53,125 8.68 Outstanding at September 30 2021 1,786,324 $ 4.25 7.00 years $ 84,016 Exercisable at September 30 2021 461,833 $ 4.57 4.05 years $ 34,772 The following table summarizes information about stock options outstanding at September 30, 2021: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Average Remaining Contract Term (Year) Weighted Average Exercise Price Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value _ 1 2.79999 603,287 5.48 $ 2.36 $ 84,016 248,372 $ 2.36 $ 34,772 2.8 4.59999 29,410 9.69 3.05 - - - - 4.6 6.39999 944,430 8.91 4.81 - 14,961 5.49 - 6.4 8.19999 209,197 2.35 7.30 - 198,500 7.27 - 8.2 12 - - - - - - - Total 1,786,324 7.00 $ 4.25 $ 84,016 461,833 $ 4.57 $ 34,772 As of September 30, 2021, there was $2,609,700 of net unrecognized compensation cost related to stock options that had not vested, which is expected to be recognized over a weighted-average period of approximately 2.66 years. The total fair value of options vested during the nine months ended September 30, 2021 and 2020 were $335,579 and $172,145, respectively. The : Number of Shares & Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2020 603,531 $ 3.08 Granted 346,970 4.59 Vested 130,906 2.57 Forfeited 8,557 4.97 Outstanding at September 30 2021 811,038 $ 3.65 As of September 30, 2021, there was $1,768,680 of net unrecognized compensation cost related to restricted stock, restricted stock units and performance stock units that had not vested, which is expected to be recognized over a weighted average period of approximately 1.83 years. |
GEOGRAPHIC INFORMATION AND ECON
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY | 9 Months Ended |
Sep. 30, 2021 | |
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY [Abstract] | |
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY | NOTE 9 — GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY: The For the three months ended September 30, For the nine months ended September 30, 2021 2020 2021 2020 Africa $ 1,293,405 $ 1,874,518 $ 4,104,619 $ 3,310,603 Asia 208,750 168,052 479,297 650,659 Europe & Middle East 1,132,520 1,451,486 3,431,736 3,360,648 Latin America 5,698,920 4,618,560 6,444,456 7,515,523 United States 1,037,565 293,841 2,867,096 3,077,190 $ 9,371,160 $ 8,406,457 $ 17,327,204 17,914,623 Property, plant and equipment by geographic area were as follows: September 30, 2021 December 31, 2020 Asia $ 122,719 $ 326,267 Europe & Middle East 117,227 147,692 Latin America 32,975 14,719 United States 8,471,792 8,199,725 $ 8,744,713 $ 8,688,403 Effective May 2021, the Company permanently discontinued its operations in Malaysia. Impairment charges recorded for the Malaysian property, plant and equipment during the three and nine months ended September 30, 2021 were $0 and $0.1 million, respectively. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 10 — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES: Accounts payable and accrued liabilities consisted of: September 30, 2021 December 31, 2020 Accounts payable – suppliers $ 5,978,865 $ 5,727,781 Accrued commissions and royalties 870,627 807,708 Accrued payroll 475,072 277,908 Accrued vacation 530,773 417,238 Accrued bonuses 1,138,337 1,193,985 Accrued severance - 511,681 Accrued expenses – other 1,188,814 1,106,489 TOTAL $ 10,182,488 $ 10,042,790 |
GOODWILL, LONG-LIVED ASSETS and
GOODWILL, LONG-LIVED ASSETS and INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL, LONG-LIVED ASSETS and INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 11 — GOODWILL, LONG-LIVED ASSETS and INTANGIBLE ASSETS: The following table reflects changes in goodwill: Beginning balance at December 31, 2020 $ 5,963,744 Change in foreign currency exchange rate (289,612 ) Balance at September 30 2021 $ 5,674,132 Intangible assets consisted of the following at: September 30, 2021 December 31, 2020 Weighted Average Remaining Useful Life Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Intellectual property 7 $ 779,848 $ 173,650 $ 606,198 $ 1,638,699 $ 472,190 $ 1,166,509 Developed technology 4 1,986,811 775,405 1,211,406 2,102,526 594,186 1,508,340 Customer contracts/relationships 6 516,464 155,882 360,582 1,323,424 423,093 900,331 Trade names 6 3,875 3,875 - 115,318 44,512 70,806 $ 3,286,998 $ 1,108,812 $ 2,178,186 $ 5,179,967 $ 1,533,981 $ 3,645,986 Intellectual Effective May 2021, the Company permanently discontinued its operations in Malaysia. Impairment charges relating to intangible assets recorded during the three and nine months ended September 30, 2021 were $0 and $1.0 million, respectively as follows: intellectual property ($0.5 million), customer contracts/relationship ($0.4 million), and trade names ($0.1 million). |
ASSET IMPAIRMENT, RESTRUCTURING
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS | 9 Months Ended |
Sep. 30, 2021 | |
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS [Abstract] | |
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS | NOTE 12 — ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS: The Company recorded an impairment loss of $1.3 million during the second quarter of 2021, as the result of its write-off of the intangible assets, net, leasehold improvements, net and right-of-use assets for leases, net associated with its Malaysian operations that underwent a retrenchment during the second quarter of 2020. During the second quarter of 2021, the Company was informed that the World Health Organization had prioritized its review of prequalification of the manufacture of the Company’s HIV 1/2 STAT-PAK Assay on its U.S. automated manufacturing processes, which would reduce the Company’s reliance on manual labor that otherwise could have been performed at the Malaysian facilities had the Company re-started operations there. During July 2021, the World Health Organization approved the change notification. The products produced on the Company’s automated and manual production lines at any time depend on, among other things, the timing of customer orders and the mix of products being produced. In light of the uncertainty of the timing and any receipt of those regulatory approvals, the timing of progress on and results of clinical trial programs, and the timing and any receipt of product orders from the commercialization of the COVID-19 Diagnostic Test Systems and other diagnostic test systems both within and outside the United States, during the second quarter of 2021, the Company engaged the services of an independent financial advisory firm (the “ ”) the Company incurred In order to address challenging economic conditions and implement its business strategy, in the first quarter of 2021 the Company continued to execute a program to reduce operating expenses and better align its costs with revenues, including by eliminating positions that were no longer aligned with its strategy, and recognized severance charges of The table below represents the total costs by category: For the three months ended September 30, 2021 For the nine months ended September 30, 2021 Severance $ - $ 83,087 Restructuring costs 396,740 1,083,951 Asset impairment - 1,273,945 $ 396,740 $ 2,440,983 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 — SUBSEQUENT EVENTS: In October 2021 the U.S. Department of Justice advised the Company that the U.S. Attorney’s Office for the Eastern District of New York is investigating the May 2020 Offering (see also “Litigation—SEC Investigation” under Note 6—Commitments, Contingencies, and Concentrations). The Company intends to cooperate fully in this investigation, should the Company be asked to provide documents or other materials. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | (a) Basis of Presentation: T he accompanying unaudited condensed consolidated financial statements include the accounts of Chembio and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Chembio’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC. Going Concern Considerations Revenues during the three months ended September 30, 2021 did not meet the Company’s expectations. The Company ’ (see Note 5 - Stockholder's Equity). The Company performed an assessment to determine whether there were conditions or events that, considered in the aggregate, raised substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements are being issued. Initially, this assessment did not consider the potential mitigating effect of management’s plans that had not been fully implemented. Because, as described below, substantial doubt was determined to exist as the result of this initial assessment, management then assessed the mitigating effect of its plans to determine if it is probable that the plans (1) would be effectively implemented within one year after the date the accompanying unaudited condensed consolidated financial statements are issued and (2) when implemented, would mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. During the three months ended September 30, 2021, the Company undertook measures to increase its total revenues and improve its liquidity position. In particular, the Company received significant purchase orders from “ ” The Company had pursued the July Purchase Orders for an extended period of time. The July Purchase Orders consist of the following: • On July 20, 2021, the Company received a million purchase order from Bio-Manguinhos for the purchase of DPP SARS-CoV-2 Antigen tests for delivery during 2021 to support the urgent needs of Brazil’s Ministry of Health in addressing the COVID-19 pandemic. Bio-Manguinhos, a subsidiary of the Oswaldo Cruz Foundation, is responsible for the development and production of vaccines, diagnostics and biopharmaceuticals, primarily to meet the demand of Brazil’s national public health system. • On July 22, 2021, the Company received a million purchase order from the Partnership for Supply Chain Management, supported by The Global Fund, for the purchase of HIV 1/2 STAT-PAK Assays for shipment to Ethiopia into These measures and other plans and initiatives have been designed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date the accompanying unaudited condensed consolidated financial statements are being issued. The Company ’ • Limitations of the Company’s staffing, supply chain and liquidity have impaired, and are expected to continue to impair, the Company’s ability to fulfill at least $11.5 million of the July Purchase Order from Bio-Manguinhos by December 31, 2021, the end of the existing shipment schedule under the order. • Earlier delays in clinical trials, which reflected the impact of the COVID-19 vaccination rollout and the related decline in positivity rates at clinical trials on the Company’s clinical plan enrollment levels, and continuing requirements of achievement of regulatory approvals may limit the Company’s ability to achieve a portion of the revenue- and cash-generating milestones under a $12.7 million award granted pursuant to the Company’s contract dated December 2, 2020 with the Biomedical Advanced Research and Development Authority (part of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response) (“BARDA”), which contract will, unless extended by BARDA, expire on December 2, 2021. • The ongoing healthcare and economic impacts of the COVID-19 pandemic on the global customer base for the Company’s non‑COVID-19 products continue to negatively affect the timing and rate of recovery of the Company’s revenues from those products by, for example, decreasing the allocation of funding for HIV testing, thereby continuing to adversely affect the Company’s liquidity. • Although the Company has entered into agreements to distribute third-party COVID-19 products in the United States, its ability to sell those products could be constrained because of staffing and supply chain limitations affecting the suppliers of those products. The Company further considered how these factors and uncertainties could impact its ability over the next year to meet the obligations specified in the Credit Agreement with the Lender (each as defined in Note 7 – Long-Term Debt). Those obligations include a covenant requiring minimum total revenue amounts for the twelve months preceding each quarter end. For the next year, the minimum total revenue requirements range from $40.3 million for the twelve months ending December 31, 2021 to $45.6 million for the twelve months ending September 30, 2022. Upon an event of default under the Credit Agreement, the Lender could elect to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. In such an event, there can be no assurance that the Company would have sufficient liquidity to fund payment of the amounts that would be due under the Credit Agreement or that, if such liquidity were not available, the Company would be successful in raising additional capital on acceptable terms, or at all, or in completing any other endeavor to continue to be financially viable and continue as a going concern. The Company’s inability to raise additional capital on acceptable terms in the near future, whether for purposes of funding payments required under the Credit Agreement or providing additional liquidity needed for its operations, could have a material adverse effect on its business, prospects, results of operations, liquidity and financial condition. Accordingly, management determined the Company could not be certain that the Company’s plans and initiatives would be effectively implemented within one year after the date on which the accompanying unaudited condensed consolidated financial statements are being issued. Without giving effect to the prospect of raising additional capital pursuant to the ATM Agreement (as defined in Note 5(a) – Stockholders’ Equity: Common Stock), increasing product revenue in the near future or executing other mitigating plans, many of which are beyond the Company’s control, it is unlikely that the Company will be able to generate sufficient cash flows to meet its required financial obligations, including its debt service and other obligations due to third parties. The existence of these conditions raises substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date on which the accompanying unaudited condensed consolidated financial statements are being issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date the accompanying unaudited condensed consolidated financial statements are issued. As such, the accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. |
Fair Value of Financial Instruments | (c) Fair Value of Financial Instruments: The carrying values for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and other current liabilities approximate fair value due to the immediate or short-term maturity of these financial instruments. Included in cash and cash equivalents were $32.5 million and $14.8 million as of September 30, 2021 and December 31, 2020, respectively, of money market funds that are Level 1 fair value measurements under the hierarchy. The fair value of the Company’s total debt of $20.0 million (carrying value of $18.6 million) and $20.0 million (carrying value of $18.2 million) as of September 30, 2021 and December 31, 2020, respectively, is a Level 2 fair value measurement under the hierarchy. The face value of the Company's debt approximates the recorded value, as the rate is based upon the current rates available to the Company for similar financial instruments. Fair value measurements of all financial assets and liabilities that are measured and reported on a fair value basis are required to be classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and, Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents: Cash and cash equivalents are defined as short-term, . The Company is contractually obligated to maintain the restricted cash balance on deposit with a bank as security for the bank ’ |
Loss Per Share | (e) Loss Per Share: Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period excluding unvested restricted stock. Diluted loss per share for the three and nine months ended September 30, 2021 and 2020 reflects the potential dilution from the exercise or conversion of other securities into common stock, if dilutive. There were 1,786,324 and 1,034,124 shares of common stock subject to options outstanding as of September 30, 2021 and 2020, respectively, that were not included in the calculation of diluted per common share equivalents for the three and nine months ended September 30, 2021 and 2020, respectively, because the effect would have been anti-dilutive. There were 811,038 and 619,385 shares of common stock that were restricted stock or were subject to restricted stock units or performance stock units as of September 30, 2021 and 2020, respectively, that were not included in the calculation of diluted per common share equivalents for the three and nine months ended September 30, 2021 and 2020, respectively, because the effect would have been anti-dilutive. |
Income Taxes | (f) Income Taxes: At the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis, and may change in subsequent interim periods. Accordingly, the Company’s effective tax rate for the three and nine months ended September 30, 2021 was 0% and 0.34% respectively, compared to the effective tax rate of 1.9% and 1.7% for both the three and nine months ended September 30, 2020, respectively. The Company’s effective tax rates for both periods were affected primarily by a full valuation allowance on domestic net deferred tax assets and a benefit from foreign net operating losses. |
Recently Issued Accounting Standards Affecting the Company | (g) Recently Issued Accounting Standards Affecting the Company: Recently Adopted ASU 2020-10, Codification Improvements In October 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-10, which clarifies various topics in the FASB’s Accounting Standards Codification (“ASC”), including the addition of existing disclosure requirements to the relevant disclosure sections. This update improves consistency by amending the ASC to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions in the ASC by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The Company adopted the standard effective December 31, 2020 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASC Topic 848. ASC Topic 848 provides relief for impacted areas as it relates to impending reference rate reform. ASC Topic 848 contains optional expedients and exceptions for applying GAAP to debt arrangements, contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. This guidance is effective upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance. The Company adopted the standard effective January 1, 2021 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12. This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 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 and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted the standard effective January 1, 2021 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2021-01—Reference Rate Reform (Topic 848) In January 2021, the FASB issued ASU 2021-01, which refines the scope of ASC Topic 848 and clarifies some of its guidance as part of the monitoring of global reference rate reform activities. The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest (PAI3) in connection with reference rate reform activities under way in global financial markets (the “discounting transition”). ASU 2021-01 expands the scope of ASC Topic 848 to include all affected derivatives and give market participants the ability to apply certain aspects of the contract modification and hedge accounting expedients to derivative contracts affected by the discounting transition. In addition, ASU 2021-01 adds implementation guidance (codified in ASC 848-10-55-1) to clarify which optional expedients in ASC Topic 848 may be applied to derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. The Company adopted the standard effective January 1, 2021 and determined that the adoption did not have a material impact on the Company’s consolidated financial statements. Not Yet Adopted ASU 2021-04 - Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In May 2021, the FASB issued ASU 2021-04, which is the final guidance that requires issuers to account for modifications or exchanges of freestanding equity-classified written call options (e.g., warrants) that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the guidance, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The guidance is applied prospectively and is effective for all entities for fiscal years beginning after 15 December 2021, and interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt the standard effective January 1, 2022 and has determined that the adoption is not expected to have a material impact on the Company’s consolidated financial statements. ASU 2020-06 - Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. ASU 2020-06 simplifies the guidance in GAAP on the issuer’s accounting for convertible debt instruments, requires entities to provide expanded disclosures about “the terms and features of convertible instruments” and how the instruments have been reported in the entity’s financial statements. It also removes from ASC 815-40-25-10 certain conditions for equity classification and amends certain guidance in ASC 260 on the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. The ASU’s amendments are effective for smaller public business entities fiscal years beginning after December 15, 2023. The Company continues to assess the potential impacts of the standard. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
REVENUE [Abstract] | |
Disaggregation of Revenue | The following table disaggregates total revenues: For the three months ended September 30, 2021 September 30, 2020 Exchange Transactions Non-Exchange Transactions Total Exchange Transactions Non-Exchange Transactions Total Net product sales $ 9,371,160 $ - $ 9,371,160 $ 8,406,457 $ - $ 8,406,457 R&D revenue 441 - 441 1,444,724 - 1,444,724 Government grant income - 2,400,000 2,400,000 - 209,776 209,776 License and royalty revenue 286,843 - 286,843 211,521 - 211,521 $ 9,658,444 $ 2,400,000 $ 12,058,444 $ 10,062,702 $ 209,776 $ 10,272,478 For the nine months ended September 30, 2021 September 30, 2020 Exchange Transactions Non-Exchange Transactions Total Exchange Transactions Non-Exchange Transactions Total Net product sales $ 17,327,204 $ - $ 17,327,204 $ 17,914,623 $ - $ 17,914,623 R&D revenue 1,107,808 - 1,107,808 3,546,385 - 3,546,385 Government grant income - 8,030,000 8,030,000 - 209,776 209,776 License and royalty revenue 779,901 - 779,901 572,450 - 572,450 $ 19,214,913 $ 8,030,000 $ 27,244,913 $ 22,033,458 $ 209,776 $ 22,243,234 The following table disaggregates total revenues by geographic location: For the three months ended For the nine months ended September 30, 2021 September 30, 2020 September 30 2021 September 30 2020 Africa $ 1,293,405 $ 1,874,518 $ 4,104,619 $ 3,310,603 Asia 208,750 168,052 479,297 650,659 Europe & Middle East 1,132,961 2,887,209 4,539,444 6,698,382 Latin America 5,698,920 4,618,560 6,444,456 7,515,523 United States 3,724,408 724,139 11,677,097 4,068,067 $ 12,058,444 $ 10,272,478 $ 27,244,913 $ 22,243,234 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
INVENTORY [Abstract] | |
Inventories | Inventories are presented net of reserves and consisted of the following: September 30, 2021 December 31, 2020 Raw materials $ 7,549,851 $ 5,955,215 Work in process 7,244,946 2,549,516 Finished goods 2,010,872 4,011,671 $ 16,805,669 $ 12,516,402 |
COMMITMENTS, CONTINGENCIES, A_2
COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS [Abstract] | |
Customer and Purchase Concentration Risks | The following table discloses product sales the Company had to each customer that purchased in excess of 10% of the Company’s net product sales for the periods indicated: For the three months ended For the nine months ended Accounts Receivable as of September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 September 30, 2021 December. 31, 2020 Sales % of Sales Sales % of Sales Sales % of Sales Sales % of Sales Customer 1 $ 5,434,186 58.0 % $ 4,226,040 50.3 % $ 5,724,171 33.04 % $ 6,523,416 36.4 % $ 3,183,367 $ 1,622,866 Customer 2 1,196,217 12.8 % * * 2,347,832 13.55 % * * 1,264,639 * Customer 3 * * 1,071,513 12.7 % * * * * * * Customer 4 * * 963,671 11.5 % * * * * 17,510 * The following table discloses product purchases the Company had to each vendor in excess of 10% of the Company’s net purchases for the periods indicated: For the three months ended For the nine months ended Accounts Payable as of September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 September 30, 2021 December 31, 2020 Purchases % of Purchases Purchases % of Purchases Purchases % of Purchases Purchases % of Purchases Vendor 1 $ 1,678,250 34.4 % $ * * $ 2,339,182.00 18.8 % $ * * $ 1,651,866 $ * Vendor 2 * * 501,562 15.4 % * * 1,600,916 12.3 % * 178,395 |
Future Minimum Salary Commitment | The Company has multi-year contracts with two key employees. The contracts call for salaries presently aggregating $843,292 per year. The contracts expire in December 2021 December 2022 2021 $ 210,823 2022 460,000 |
Components of Lease Expense | The components of lease expense were as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Operating lease expense $ 398,089 $ 405,989 $ 1,208,885 $ 1,258,797 Finance lease cost Amortization of right-of-use assets $ 17,038 $ 15,571 $ 49,834 $ 42,657 Interest on lease liabilities 5,047 5,395 15,358 14,762 Total finance lease expense $ 22,085 $ 20,966 $ 65,192 $ 57,419 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 353,009 $ 340,205 $ 1,049,198 $ 797,482 Operating cash flows for finance leases 5,047 5,395 15,358 14,762 Financing cash flows for finance leases 15,859 13,587 45,680 37,166 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ - $ - $ 616,100 $ - Finance leases - 5,486 25,609 73,600 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: September 30, 2021 September 30, 2020 Finance Leases Finance lease right-of-use asset $ 340,762 $ 315,153 Accumulated depreciation (131,854 ) (66,261 ) Finance lease right-of-use asset, net $ 208,908 $ 248,892 Weighted-Average Remaining Lease Term Operating leases 7.7 Years 9.1 Finance leases 3.1 Years 4.0 Weighted-Average Discount Rate Operating leases 8.41 % 8.60 % Finance leases 8.74 % 8.18 % |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows: September 30, 2021 September 30, 2020 Operating Leases Finance Leases Operating Leases Finance Leases 2020 2021 $ 355,335 $ 20,906 $ 342,462 $ 19,226 2022 1,447,249 83,624 1,209,787 76,904 2023 1,221,017 83,624 1,057,757 76,904 2024 1,018,875 55,856 1,026,272 76,904 2025 1,049,442 12,471 1,018,875 49,136 Thereafter 4,724,446 1,679 5,773,888 5,750 Total lease payments $ 9,816,364 $ 258,160 $ 10,429,041 $ 304,824 Less: imputed interest 2,751,749 34,119 3,269,991 46,712 Total $ 7,064,615 $ 224,041 $ 7,159,050 $ 258,112 |
EQUITY INCENTIVE PLAN (Tables)
EQUITY INCENTIVE PLAN (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
EQUITY INCENTIVE PLAN [Abstract] | |
Stock-Based Compensation Expense (Net of Recovery) Recognized | Stock-based compensation expense (net of recovery) recognized in the condensed consolidated statements of operations was classified as follows: For the three months ended September 30 For the nine months ended September 30 2021 2020 2021 2020 Cost of product sales $ 52,819 $ - $ 124,955 $ 6,300 Research and development expenses 164,560 126,333 388,264 281,070 Selling, general and administrative expenses 419,152 350,871 1,288,837 960,959 Severance and related costs - - - (423,984 ) $ 636,531 $ 477,204 $ 1,802,056 $ 824,345 |
Assumptions Made in Calculating Fair Values of Options | The weighted-average assumptions made in calculating the fair values of options are as follows: For the three months ended September 30, For the nine months ended September 30 2021 2021 Expected term (in years) 6.0 5.0 Expected volatility 85.33% 78.28% Expected dividend yield N/A N/A Risk-free interest rate 1.00% 0.81% |
Stock Option Activity | The following table provides stock option activity for the nine months ended September 30, 2021: Stock Options Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contract Term Aggregate Intrinsic Value Outstanding at December 31, 2020 974,778 $ 4.12 2.87 years $ 1,520,910 Granted 932,135 4.72 - Exercised 36,252 2.36 - Forfeited 31,212 9.19 - Expired 53,125 8.68 Outstanding at September 30 2021 1,786,324 $ 4.25 7.00 years $ 84,016 Exercisable at September 30 2021 461,833 $ 4.57 4.05 years $ 34,772 |
Stock Options Outstanding | The following table summarizes information about stock options outstanding at September 30, 2021: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Average Remaining Contract Term (Year) Weighted Average Exercise Price Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value _ 1 2.79999 603,287 5.48 $ 2.36 $ 84,016 248,372 $ 2.36 $ 34,772 2.8 4.59999 29,410 9.69 3.05 - - - - 4.6 6.39999 944,430 8.91 4.81 - 14,961 5.49 - 6.4 8.19999 209,197 2.35 7.30 - 198,500 7.27 - 8.2 12 - - - - - - - Total 1,786,324 7.00 $ 4.25 $ 84,016 461,833 $ 4.57 $ 34,772 |
Summary of Restricted Stock and Restricted Stock Units Outstanding | The : Number of Shares & Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2020 603,531 $ 3.08 Granted 346,970 4.59 Vested 130,906 2.57 Forfeited 8,557 4.97 Outstanding at September 30 2021 811,038 $ 3.65 |
GEOGRAPHIC INFORMATION AND EC_2
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY [Abstract] | |
Product Revenue by Geographic Area | The For the three months ended September 30, For the nine months ended September 30, 2021 2020 2021 2020 Africa $ 1,293,405 $ 1,874,518 $ 4,104,619 $ 3,310,603 Asia 208,750 168,052 479,297 650,659 Europe & Middle East 1,132,520 1,451,486 3,431,736 3,360,648 Latin America 5,698,920 4,618,560 6,444,456 7,515,523 United States 1,037,565 293,841 2,867,096 3,077,190 $ 9,371,160 $ 8,406,457 $ 17,327,204 17,914,623 |
Long-lived Assets by Geographic Area | Property, plant and equipment by geographic area were as follows: September 30, 2021 December 31, 2020 Asia $ 122,719 $ 326,267 Europe & Middle East 117,227 147,692 Latin America 32,975 14,719 United States 8,471,792 8,199,725 $ 8,744,713 $ 8,688,403 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of: September 30, 2021 December 31, 2020 Accounts payable – suppliers $ 5,978,865 $ 5,727,781 Accrued commissions and royalties 870,627 807,708 Accrued payroll 475,072 277,908 Accrued vacation 530,773 417,238 Accrued bonuses 1,138,337 1,193,985 Accrued severance - 511,681 Accrued expenses – other 1,188,814 1,106,489 TOTAL $ 10,182,488 $ 10,042,790 |
GOODWILL, LONG-LIVED ASSETS a_2
GOODWILL, LONG-LIVED ASSETS and INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL, LONG-LIVED ASSETS and INTANGIBLE ASSETS [Abstract] | |
Changes in Goodwill | The following table reflects changes in goodwill: Beginning balance at December 31, 2020 $ 5,963,744 Change in foreign currency exchange rate (289,612 ) Balance at September 30 2021 $ 5,674,132 |
Intangible Assets | Intangible assets consisted of the following at: September 30, 2021 December 31, 2020 Weighted Average Remaining Useful Life Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Intellectual property 7 $ 779,848 $ 173,650 $ 606,198 $ 1,638,699 $ 472,190 $ 1,166,509 Developed technology 4 1,986,811 775,405 1,211,406 2,102,526 594,186 1,508,340 Customer contracts/relationships 6 516,464 155,882 360,582 1,323,424 423,093 900,331 Trade names 6 3,875 3,875 - 115,318 44,512 70,806 $ 3,286,998 $ 1,108,812 $ 2,178,186 $ 5,179,967 $ 1,533,981 $ 3,645,986 |
ASSET IMPAIRMENT, RESTRUCTURI_2
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS [Abstract] | |
Total Costs | The table below represents the total costs by category: For the three months ended September 30, 2021 For the nine months ended September 30, 2021 Severance $ - $ 83,087 Restructuring costs 396,740 1,083,951 Asset impairment - 1,273,945 $ 396,740 $ 2,440,983 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) | Jul. 19, 2021USD ($) | Jul. 31, 2021PurchaseOrder | Sep. 30, 2021USD ($)shares | Sep. 30, 2020shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020shares | Sep. 30, 2022USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jul. 22, 2021USD ($) | Jul. 20, 2021USD ($) | Dec. 02, 2020USD ($) |
Purchase Order [Abstract] | |||||||||||||
Number of purchase orders received | PurchaseOrder | 2 | ||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||
Cash and cash equivalents | $ 36,004,000 | $ 36,004,000 | $ 36,004,000 | $ 23,066,301 | |||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||
Restricted cash | $ 0 | $ 0 | 0 | 1,000,000 | |||||||||
Income Taxes [Abstract] | |||||||||||||
Effective tax rate | 0.00% | 1.90% | 0.34% | 1.70% | |||||||||
Bio- Manguinhos [Member] | |||||||||||||
Purchase Order [Abstract] | |||||||||||||
Contract with customer | $ 28,300,000 | ||||||||||||
Impairment to fulfill purchase order | 11,500,000 | ||||||||||||
Partnership for Supply Chain Management [Member] | |||||||||||||
Purchase Order [Abstract] | |||||||||||||
Contract with customer | $ 4,000,000 | ||||||||||||
BARDA [Member] | |||||||||||||
Purchase Order [Abstract] | |||||||||||||
Contract with customer | $ 12,700,000 | ||||||||||||
Minimum [Member] | |||||||||||||
Credit Agreement [Abstract] | |||||||||||||
Covenant amount, revenue | 40,300,000 | $ 32,000,000 | |||||||||||
Maximum [Member] | |||||||||||||
Credit Agreement [Abstract] | |||||||||||||
Covenant amount, revenue | $ 50,100,000 | ||||||||||||
Common Stock [Member] | |||||||||||||
Issuance of Common Stock [Abstract] | |||||||||||||
Net proceeds from issuance of common stock after deduction of placement fee and other transactions costs | $ 38,800,000 | ||||||||||||
At-the-Market Offering [Member] | |||||||||||||
Issuance of Common Stock [Abstract] | |||||||||||||
Net proceeds from issuance of common stock after deduction of placement fee and other transactions costs | $ 38,800,000 | ||||||||||||
Level 2 [Member] | |||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||
Fair value of total debt | $ 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Carrying value | 18,600,000 | 18,600,000 | 18,600,000 | 18,200,000 | |||||||||
Subsequent Event [Member] | Maximum [Member] | |||||||||||||
Credit Agreement [Abstract] | |||||||||||||
Covenant amount, revenue | $ 45,600,000 | ||||||||||||
Money Market Funds [Member] | Level 1 [Member] | |||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||
Cash and cash equivalents | $ 32,500,000 | $ 32,500,000 | $ 32,500,000 | $ 14,800,000 | |||||||||
Options [Member] | |||||||||||||
Loss Per Share [Abstract] | |||||||||||||
Shares excluded from computation of earnings per share (in shares) | shares | 1,786,324 | 1,034,124 | 1,786,324 | 1,034,124 | |||||||||
Restricted Shares [Member] | |||||||||||||
Loss Per Share [Abstract] | |||||||||||||
Shares excluded from computation of earnings per share (in shares) | shares | 811,038 | 619,385 | 811,038 | 619,385 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Abstract] | ||||||
Revenues | $ 12,058,444 | $ 10,272,478 | $ 27,244,913 | $ 22,243,234 | ||
Deferred revenue | 20,195 | 20,195 | $ 400,000 | $ 1,606,997 | ||
Deferred revenue earned and recognized | 400,000 | |||||
Africa [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 1,293,405 | 1,874,518 | 4,104,619 | 3,310,603 | ||
Asia [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 208,750 | 168,052 | 479,297 | 650,659 | ||
Europe & Middle East [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 1,132,961 | 2,887,209 | 4,539,444 | 6,698,382 | ||
Latin America [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 5,698,920 | 4,618,560 | 6,444,456 | 7,515,523 | ||
United States [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 3,724,408 | 724,139 | 11,677,097 | 4,068,067 | ||
Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 9,658,444 | 10,062,702 | 19,214,913 | 22,033,458 | ||
Non-Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 2,400,000 | 209,776 | 8,030,000 | 209,776 | ||
Net Product Sales [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 9,371,160 | 8,406,457 | 17,327,204 | 17,914,623 | ||
Net Product Sales [Member] | Africa [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 1,293,405 | 1,874,518 | 4,104,619 | 3,310,603 | ||
Net Product Sales [Member] | Asia [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 208,750 | 168,052 | 479,297 | 650,659 | ||
Net Product Sales [Member] | Europe & Middle East [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 1,132,520 | 1,451,486 | 3,431,736 | 3,360,648 | ||
Net Product Sales [Member] | Latin America [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 5,698,920 | 4,618,560 | 6,444,456 | 7,515,523 | ||
Net Product Sales [Member] | United States [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 1,037,565 | 293,841 | 2,867,096 | 3,077,190 | ||
Net Product Sales [Member] | Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 9,371,160 | 8,406,457 | 17,327,204 | 17,914,623 | ||
Net Product Sales [Member] | Non-Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
R&D Revenue [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 441 | 1,444,724 | 1,107,808 | 3,546,385 | ||
R&D Revenue [Member] | Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 441 | 1,444,724 | 1,107,808 | 3,546,385 | ||
R&D Revenue [Member] | Non-Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Government Grant Income [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 2,400,000 | 209,776 | 8,030,000 | 209,776 | ||
Government Grant Income [Member] | Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Government Grant Income [Member] | Non-Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 2,400,000 | 209,776 | 8,030,000 | 209,776 | ||
License and Royalty Revenue [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 286,843 | 211,521 | 779,901 | 572,450 | ||
License and Royalty Revenue [Member] | Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | 286,843 | 211,521 | 779,901 | 572,450 | ||
License and Royalty Revenue [Member] | Non-Exchange Transactions [Member] | ||||||
Disaggregation of Revenue [Abstract] | ||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
INVENTORY [Abstract] | ||||
Raw materials | $ 7,549,851 | $ 7,549,851 | $ 5,955,215 | |
Work in process | 7,244,946 | 7,244,946 | 2,549,516 | |
Finished goods | 2,010,872 | 2,010,872 | 4,011,671 | |
Inventories | 16,805,669 | 16,805,669 | $ 12,516,402 | |
Charges [Abstract] | ||||
Charge related to write-down of inventory | $ 100,000 | $ 926,499 | $ 2,530,444 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | Jul. 19, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Nov. 04, 2021 | Dec. 31, 2020 |
Common Stock [Abstract] | |||||||
Number of stock options exercised under the plan (in shares) | 36,252 | 0 | 36,252 | 0 | |||
Gross proceeds from issuance of common stock | $ 38,811,960 | $ 28,436,741 | |||||
Preferred Stock [Abstract] | |||||||
Preferred stock - shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock - shares issued (in shares) | 0 | 0 | 0 | ||||
Preferred stock - shares outstanding (in shares) | 0 | 0 | 0 | ||||
Treasury Stock [Abstract] | |||||||
Treasury stock, shares (in shares) | 41,141 | 41,141 | 41,141 | ||||
Common Stock [Member] | |||||||
Common Stock [Abstract] | |||||||
Number of shares issued (in shares) | 9,709,328 | ||||||
Volume-weighted average price per share (in dollars per share) | $ 4.2011 | ||||||
Gross proceeds from issuance of common stock | $ 40,800,000 | ||||||
Net proceeds from issuance of common stock after deduction of placement fee and other transactions costs | 38,800,000 | ||||||
Common Stock [Member] | Maximum [Member] | |||||||
Common Stock [Abstract] | |||||||
Gross proceeds from additional shares of common stock that may be issued and sold | 19,200,000 | ||||||
ATM Offering [Member] | |||||||
Common Stock [Abstract] | |||||||
Net proceeds from issuance of common stock after deduction of placement fee and other transactions costs | $ 38,800,000 | ||||||
ATM Offering [Member] | Craig-Hallum [Member] | Maximum [Member] | |||||||
Common Stock [Abstract] | |||||||
Aggregate shares of common stock sold | $ 60,000,000 |
COMMITMENTS, CONTINGENCIES, A_3
COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS (Details) | Mar. 19, 2021Claim | Jan. 03, 2020USD ($)shares | Sep. 30, 2021USD ($)KeyEmployee | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)ApplicantsClaimKeyEmployee | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)Lawsuit |
Concentrations [Abstract] | |||||||
Revenues | $ 12,058,444 | $ 10,272,478 | $ 27,244,913 | $ 22,243,234 | |||
Accounts Receivable | $ 6,782,798 | $ 6,782,798 | $ 3,377,387 | ||||
Employment Contracts [Abstract] | |||||||
Number of key employees with whom Company has employment contracts | KeyEmployee | 2 | 2 | |||||
Aggregate annual salaries of employment contracts | $ 843,292 | ||||||
Contract one, expiration date | Dec. 31, 2021 | ||||||
Contract two expiration date | Dec. 31, 2022 | ||||||
Future minimum salary commitments [Abstract] | |||||||
2021 | $ 210,823 | $ 210,823 | |||||
2022 | 460,000 | $ 460,000 | |||||
Benefit Plan [Abstract] | |||||||
Percentage of employer's matching contribution | 40.00% | ||||||
Expenses related to matching contribution | 35,533 | 21,747 | $ 100,922 | 71,154 | |||
Components of Lease Expense [Abstract] | |||||||
Operating lease expense | 398,089 | 405,989 | 1,208,885 | 1,258,797 | |||
Finance lease cost [Abstract] | |||||||
Amortization of right-of-use assets | 17,038 | 15,571 | 49,834 | 42,657 | |||
Interest on lease liabilities | 5,047 | 5,395 | 15,358 | 14,762 | |||
Total finance lease expense | 22,085 | 20,966 | 65,192 | 57,419 | |||
Cash paid for amounts included in the measurement of lease liabilities [Abstract] | |||||||
Operating cash flows for operating leases | 353,009 | 340,205 | 1,049,198 | 797,482 | |||
Operating cash flows for finance leases | 5,047 | 5,395 | 15,358 | 14,762 | |||
Financing cash flows for finance leases | 15,859 | 13,587 | 45,680 | 37,166 | |||
Right-of-use assets obtained in exchange for lease obligations [Abstract] | |||||||
Operating leases | 0 | 0 | 616,100 | 0 | |||
Finance leases | 0 | 5,486 | 25,609 | 73,600 | |||
Finance Leases [Abstract] | |||||||
Finance lease right-of-use asset | 340,762 | 315,153 | 340,762 | 315,153 | |||
Accumulated depreciation | (131,854) | (66,261) | (131,854) | (66,261) | |||
Finance lease right-of-use asset, net | $ 208,908 | $ 248,892 | $ 208,908 | $ 248,892 | $ 233,134 | ||
Weighted-Average Remaining Lease Term [Abstract] | |||||||
Operating leases | 7 years 8 months 12 days | 9 years 1 month 6 days | 7 years 8 months 12 days | 9 years 1 month 6 days | |||
Finance leases | 3 years 1 month 6 days | 4 years | 3 years 1 month 6 days | 4 years | |||
Weighted-Average Discount Rate [Abstract] | |||||||
Operating leases | 8.41% | 8.60% | 8.41% | 8.60% | |||
Finance leases | 8.74% | 8.18% | 8.74% | 8.18% | |||
Maturities of Operating Lease Liabilities [Abstract] | |||||||
2020 and 2021 | $ 355,335 | $ 342,462 | $ 355,335 | $ 342,462 | |||
2022 | 1,447,249 | 1,209,787 | 1,447,249 | 1,209,787 | |||
2023 | 1,221,017 | 1,057,757 | 1,221,017 | 1,057,757 | |||
2024 | 1,018,875 | 1,026,272 | 1,018,875 | 1,026,272 | |||
2025 | 1,049,442 | 1,018,875 | 1,049,442 | 1,018,875 | |||
Thereafter | 4,724,446 | 5,773,888 | 4,724,446 | 5,773,888 | |||
Total lease payments | 9,816,364 | 10,429,041 | 9,816,364 | 10,429,041 | |||
Less: imputed interest | 2,751,749 | 3,269,991 | 2,751,749 | 3,269,991 | |||
Total | 7,064,615 | 7,159,050 | 7,064,615 | 7,159,050 | |||
Maturities of Finance Lease Liabilities [Abstract] | |||||||
2020 and 2021 | 20,906 | 19,226 | 20,906 | 19,226 | |||
2022 | 83,624 | 76,904 | 83,624 | 76,904 | |||
2023 | 83,624 | 76,904 | 83,624 | 76,904 | |||
2024 | 55,856 | 76,904 | 55,856 | 76,904 | |||
2025 | 12,471 | 49,136 | 12,471 | 49,136 | |||
Thereafter | 1,679 | 5,750 | 1,679 | 5,750 | |||
Total lease payments | 258,160 | 304,824 | 258,160 | 304,824 | |||
Less: imputed interest | 34,119 | 46,712 | 34,119 | 46,712 | |||
Total | $ 224,041 | 258,112 | $ 224,041 | 258,112 | |||
Stockholder Litigation [Abstract] | |||||||
Number of class action lawsuits | Lawsuit | 4 | ||||||
Number of motions for appointment as lead plaintiff | Applicants | 8 | ||||||
Number of motions abandoned | Applicants | 2 | ||||||
Number of remaining motions for appointment as lead plaintiff | Applicants | 2 | ||||||
Number of motions filed by special situations funds | Applicants | 1 | ||||||
Number of motions filed by municipal employees retirement system | Applicants | 1 | ||||||
Employee Litigation [Abstract] | |||||||
Number of filed complaint | Claim | 15 | ||||||
Exercise price of stock options | $ 943,126 | ||||||
Vested shares exercisable (in shares) | shares | 266,666 | ||||||
Term to exercise stock options | 30 days | ||||||
Number of complaint purport to allege claims for breach of each of separate stock option agreements | Claim | 10 | ||||||
Loss contingency, asserting damages amount | $ 3,190,198 | ||||||
Loss contingency, asserting damages excess amount | $ 3,000,000 | ||||||
Prejudgment interest rate | 9.00% | 9.00% | |||||
Customer Concentration Risk [Member] | Customer 1 [Member] | |||||||
Concentrations [Abstract] | |||||||
Accounts Receivable | $ 3,183,367 | $ 3,183,367 | $ 1,622,866 | ||||
Customer Concentration Risk [Member] | Customer 2 [Member] | |||||||
Concentrations [Abstract] | |||||||
Accounts Receivable | 1,264,639 | 1,264,639 | |||||
Customer Concentration Risk [Member] | Customer 3 [Member] | |||||||
Concentrations [Abstract] | |||||||
Accounts Receivable | |||||||
Customer Concentration Risk [Member] | Customer 4 [Member] | |||||||
Concentrations [Abstract] | |||||||
Accounts Receivable | 17,510 | 17,510 | |||||
Supplier Concentration Risk [Member] | Vendor 1 [Member] | |||||||
Concentrations [Abstract] | |||||||
Accounts Payable | 1,651,866 | 1,651,866 | |||||
Supplier Concentration Risk [Member] | Vendor 2 [Member] | |||||||
Concentrations [Abstract] | |||||||
Accounts Payable | $ 178,395 | ||||||
Maximum [Member] | |||||||
Benefit Plan [Abstract] | |||||||
Employee contribution subject to employer matching contribution | 5.00% | ||||||
Employer matching contribution | 2.00% | ||||||
Employee Litigation [Abstract] | |||||||
Loss contingency, claims entitlement to recover damages amount | $ 10,000,000 | ||||||
Malaysia [Member] | |||||||
Leases [Abstract] | |||||||
Impairment charges | 0 | 100,000 | |||||
Sales [Member] | Customer Concentration Risk [Member] | Customer 1 [Member] | |||||||
Concentrations [Abstract] | |||||||
Revenues | $ 5,434,186 | $ 4,226,040 | $ 5,724,171 | $ 6,523,416 | |||
Concentration risk, percentage | 58.00% | 50.30% | 33.04% | 36.40% | |||
Sales [Member] | Customer Concentration Risk [Member] | Customer 2 [Member] | |||||||
Concentrations [Abstract] | |||||||
Revenues | $ 1,196,217 | $ 2,347,832 | |||||
Concentration risk, percentage | 12.80% | 13.55% | |||||
Sales [Member] | Customer Concentration Risk [Member] | Customer 3 [Member] | |||||||
Concentrations [Abstract] | |||||||
Revenues | $ 1,071,513 | ||||||
Concentration risk, percentage | 12.70% | ||||||
Sales [Member] | Customer Concentration Risk [Member] | Customer 4 [Member] | |||||||
Concentrations [Abstract] | |||||||
Revenues | $ 963,671 | ||||||
Concentration risk, percentage | 11.50% | ||||||
Purchases [Member] | Supplier Concentration Risk [Member] | Vendor 1 [Member] | |||||||
Concentrations [Abstract] | |||||||
Concentration risk, percentage | 34.40% | 18.80% | |||||
Purchases | $ 1,678,250 | $ 2,339,182 | |||||
Purchases [Member] | Supplier Concentration Risk [Member] | Vendor 2 [Member] | |||||||
Concentrations [Abstract] | |||||||
Concentration risk, percentage | 15.40% | 12.30% | |||||
Purchases | $ 501,562 | $ 1,600,916 |
LONG-TERM DEBT, Credit Agreemen
LONG-TERM DEBT, Credit Agreement (Details) - USD ($) | Sep. 03, 2019 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Minimum [Member] | ||||
Credit Agreement [Abstract] | ||||
Covenant amount, unrestricted cash | $ 3,000,000 | $ 3,000,000 | ||
Covenant amount, revenue | 40,300,000 | $ 32,000,000 | ||
Maximum [Member] | ||||
Credit Agreement [Abstract] | ||||
Covenant amount, revenue | $ 50,100,000 | |||
Senior Secured Term Loan Credit Facility [Member] | ||||
Credit Agreement [Abstract] | ||||
Debt instrument, face amount | $ 20,000,000 | |||
Lender's closing cost | 550,000 | |||
Financing fee | $ 600,000 | |||
Percentage of gross proceeds considered as financing fee | 3.00% | |||
Principal installment payable | $ 300,000 | |||
Debt instrument maturity date | Sep. 3, 2023 | |||
Outstanding loan balance, net | $ 18,600,000 | $ 18,600,000 | ||
Senior Secured Term Loan Credit Facility [Member] | September 4, 2021 to September 3 ,2022 [Member] | ||||
Credit Agreement [Abstract] | ||||
Percentage of prepaid principal as premium | 4.00% |
EQUITY INCENTIVE PLAN, Part 1 (
EQUITY INCENTIVE PLAN, Part 1 (Details) - USD ($) | Jun. 25, 2021 | Jan. 03, 2020 | Sep. 22, 2011 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Jun. 18, 2019 | Jun. 19, 2014 | Jun. 03, 2008 |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||
Allocated share-based compensation expense | $ 636,531 | $ 477,204 | $ 1,802,056 | $ 824,345 | |||||||
Stock options, additional disclosure [Abstract] | |||||||||||
Outstanding, aggregate intrinsic value, end of period | 84,016 | 84,016 | |||||||||
Exercisable, aggregate intrinsic value, end of period | $ 34,772 | $ 34,772 | |||||||||
Total fair value of stock options vested during period | $ 943,126 | ||||||||||
Stock Options [Member] | |||||||||||
Assumptions made in calculating fair values of options [Abstract] | |||||||||||
Expected term | 6 years | 5 years | |||||||||
Expected volatility | 85.33% | 78.28% | |||||||||
Expected dividend yield | |||||||||||
Risk-free interest rate | 1.00% | 0.81% | |||||||||
Stock options, number of shares [Roll forward] | |||||||||||
Outstanding, beginning of period (in shares) | 974,778 | ||||||||||
Granted (in shares) | 932,135 | ||||||||||
Exercised (in shares) | 36,252 | ||||||||||
Forfeited (in shares) | 31,212 | ||||||||||
Expired (in shares) | 53,125 | ||||||||||
Outstanding, end of period (in shares) | 1,786,324 | 1,786,324 | 974,778 | ||||||||
Exercisable, end of period (in shares) | 461,833 | 461,833 | |||||||||
Stock options, weighted average exercise price per share [Roll Forward] | |||||||||||
Outstanding, beginning of period (in dollars per share) | $ 4.12 | ||||||||||
Granted (in dollars per share) | 4.72 | ||||||||||
Exercised (in dollars per share) | 2.36 | ||||||||||
Forfeited (in dollars per share) | 9.19 | ||||||||||
Expired (in dollars per share) | 8.68 | ||||||||||
Outstanding, end of period (in dollars per share) | $ 4.25 | 4.25 | $ 4.12 | ||||||||
Exercisable, end of period (in dollars per share) | $ 4.57 | $ 4.57 | |||||||||
Stock options, additional disclosure [Abstract] | |||||||||||
Outstanding, weighted average remaining contract term | 7 years | 2 years 10 months 13 days | |||||||||
Exercisable, weighted average remaining contract term | 4 years 18 days | ||||||||||
Outstanding, aggregate intrinsic value, beginning of period | $ 1,520,910 | ||||||||||
Granted, aggregate intrinsic value | 0 | ||||||||||
Exercised, aggregate intrinsic value | 0 | ||||||||||
Forfeited, aggregate intrinsic value | 0 | ||||||||||
Outstanding, aggregate intrinsic value, end of period | $ 84,016 | 84,016 | $ 1,520,910 | ||||||||
Exercisable, aggregate intrinsic value, end of period | 34,772 | 34,772 | |||||||||
Net unrecognized compensation cost | $ 2,609,700 | $ 2,609,700 | |||||||||
Weighted average period for recognition of net unrecognized compensation cost | 2 years 7 months 28 days | ||||||||||
Total fair value of stock options vested during period | $ 335,579 | 172,145 | |||||||||
2008 Stock Incentive Plan [Member] | Stock Options [Member] | |||||||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | |||||||||||
Number of shares authorized under the plan (in shares) | 750,000 | 625,000 | |||||||||
Increase in number of shares authorized (in shares) | 125,000 | ||||||||||
Number of stock options expired, forfeited or exercised under the plan (in shares) | 714,000 | ||||||||||
Options still available to be issued (in shares) | 0 | 0 | |||||||||
Stock options, number of shares [Roll forward] | |||||||||||
Outstanding, end of period (in shares) | 36,000 | 36,000 | |||||||||
2014 Stock Incentive Plan [Member] | Stock Options [Member] | |||||||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | |||||||||||
Number of shares authorized under the plan (in shares) | 800,000 | ||||||||||
Number of stock options expired, forfeited or exercised under the plan (in shares) | 566,658 | ||||||||||
Options still available to be issued (in shares) | 0 | 0 | |||||||||
Stock options, number of shares [Roll forward] | |||||||||||
Outstanding, end of period (in shares) | 212,281 | 212,281 | |||||||||
2019 Omnibus Incentive Plan [Member] | Stock Options [Member] | |||||||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | |||||||||||
Number of shares authorized under the plan (in shares) | 4,800,000 | 2,400,000 | |||||||||
Increase in number of shares authorized (in shares) | 2,400,000 | ||||||||||
Number of stock options expired, forfeited or exercised under the plan (in shares) | 448,584 | ||||||||||
Options still available to be issued (in shares) | 3,051,405 | 3,051,405 | |||||||||
Stock options, number of shares [Roll forward] | |||||||||||
Outstanding, end of period (in shares) | 2,193,355 | 2,193,355 | |||||||||
2014 & 2019 Stock Incentive Plan [Member] | Stock Options [Member] | |||||||||||
Share-based Arrangements with Employees and Nonemployees [Abstract] | |||||||||||
Shares not issued (in shares) | 21,061 | 21,061 | |||||||||
Cost of Product Sales [Member] | |||||||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||
Allocated share-based compensation expense | $ 52,819 | 0 | $ 124,955 | 6,300 | |||||||
Research and Development Expenses [Member] | |||||||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||
Allocated share-based compensation expense | 164,560 | 126,333 | 388,264 | 281,070 | |||||||
Selling, General and Administrative Expenses [Member] | |||||||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||
Allocated share-based compensation expense | 419,152 | 350,871 | 1,288,837 | 960,959 | |||||||
Severance and Related Costs [Member] | |||||||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||
Allocated share-based compensation expense | $ 0 | $ 0 | $ 0 | $ (423,984) |
EQUITY INCENTIVE PLANS, Part 2
EQUITY INCENTIVE PLANS, Part 2 (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Stock Options Outstanding [Abstract] | |
Shares outstanding (in shares) | shares | 1,786,324 |
Average remaining contract term | 7 years |
Weighted average exercise price (in dollars per share) | $ 4.25 |
Aggregate intrinsic value | $ | $ 84,016 |
Stock Options Exercisable [Abstract] | |
Shares exercisable (in shares) | shares | 461,833 |
Weighted average exercise price (in dollars per share) | $ 4.57 |
Aggregate intrinsic value | $ | $ 34,772 |
1 to 2.79999 [Member] | |
Range of Exercise Prices [Abstract] | |
Range of exercise prices, minimum (in dollars per share) | $ 1 |
Range of exercise prices, maximum (in dollars per share) | $ 2.79999 |
Stock Options Outstanding [Abstract] | |
Shares outstanding (in shares) | shares | 603,287 |
Average remaining contract term | 5 years 5 months 23 days |
Weighted average exercise price (in dollars per share) | $ 2.36 |
Aggregate intrinsic value | $ | $ 84,016 |
Stock Options Exercisable [Abstract] | |
Shares exercisable (in shares) | shares | 248,372 |
Weighted average exercise price (in dollars per share) | $ 2.36 |
Aggregate intrinsic value | $ | $ 34,772 |
2.8 to 4.59999 [Member] | |
Range of Exercise Prices [Abstract] | |
Range of exercise prices, minimum (in dollars per share) | $ 2.8 |
Range of exercise prices, maximum (in dollars per share) | $ 4.59999 |
Stock Options Outstanding [Abstract] | |
Shares outstanding (in shares) | shares | 29,410 |
Average remaining contract term | 9 years 8 months 8 days |
Weighted average exercise price (in dollars per share) | $ 3.05 |
Aggregate intrinsic value | $ | $ 0 |
Stock Options Exercisable [Abstract] | |
Shares exercisable (in shares) | shares | 0 |
Weighted average exercise price (in dollars per share) | $ 0 |
Aggregate intrinsic value | $ | $ 0 |
4.6 to 6.39999 [Member] | |
Range of Exercise Prices [Abstract] | |
Range of exercise prices, minimum (in dollars per share) | $ 4.6 |
Range of exercise prices, maximum (in dollars per share) | $ 6.39999 |
Stock Options Outstanding [Abstract] | |
Shares outstanding (in shares) | shares | 944,430 |
Average remaining contract term | 8 years 10 months 28 days |
Weighted average exercise price (in dollars per share) | $ 4.81 |
Aggregate intrinsic value | $ | $ 0 |
Stock Options Exercisable [Abstract] | |
Shares exercisable (in shares) | shares | 14,961 |
Weighted average exercise price (in dollars per share) | $ 5.49 |
Aggregate intrinsic value | $ | $ 0 |
6.4 to 8.19999 [Member] | |
Range of Exercise Prices [Abstract] | |
Range of exercise prices, minimum (in dollars per share) | $ 6.4 |
Range of exercise prices, maximum (in dollars per share) | $ 8.19999 |
Stock Options Outstanding [Abstract] | |
Shares outstanding (in shares) | shares | 209,197 |
Average remaining contract term | 2 years 4 months 6 days |
Weighted average exercise price (in dollars per share) | $ 7.30 |
Aggregate intrinsic value | $ | $ 0 |
Stock Options Exercisable [Abstract] | |
Shares exercisable (in shares) | shares | 198,500 |
Weighted average exercise price (in dollars per share) | $ 7.27 |
Aggregate intrinsic value | $ | $ 0 |
8.2 to 12 [Member] | |
Range of Exercise Prices [Abstract] | |
Range of exercise prices, minimum (in dollars per share) | $ 8.2 |
Range of exercise prices, maximum (in dollars per share) | $ 12 |
Stock Options Outstanding [Abstract] | |
Shares outstanding (in shares) | shares | 0 |
Average remaining contract term | 0 years |
Weighted average exercise price (in dollars per share) | $ 0 |
Aggregate intrinsic value | $ | $ 0 |
Stock Options Exercisable [Abstract] | |
Shares exercisable (in shares) | shares | 0 |
Weighted average exercise price (in dollars per share) | $ 0 |
Aggregate intrinsic value | $ | $ 0 |
EQUITY INCENTIVE PLAN, Part 3 (
EQUITY INCENTIVE PLAN, Part 3 (Details) - Restricted Stock, Restricted Stock Units, and Performance Stock Units [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Number of Shares & Units [Abstract] | |
Outstanding, beginning of period (in shares) | shares | 603,531 |
Granted (in shares) | shares | 346,970 |
Vested (in shares) | shares | 130,906 |
Forfeited (in shares) | shares | 8,557 |
Outstanding, end of period (in shares) | shares | 811,038 |
Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 3.08 |
Granted (in dollars per share) | $ / shares | 4.59 |
Vested (in dollars per share) | $ / shares | 2.57 |
Forfeited (in dollars per share) | $ / shares | 4.97 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 3.65 |
Net unrecognized compensation cost | $ | $ 1,768,680 |
Weighted average period for recognition of net unrecognized compensation cost | 1 year 9 months 29 days |
GEOGRAPHIC INFORMATION AND EC_3
GEOGRAPHIC INFORMATION AND ECONOMIC DEPENDENCY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | $ 12,058,444 | $ 10,272,478 | $ 27,244,913 | $ 22,243,234 | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||||||
Property, plant and equipment, net | 8,744,713 | 8,744,713 | $ 8,688,403 | |||
Impairment charges | 0 | $ 1,300,000 | 1,273,945 | |||
Net Product Sales [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 9,371,160 | 8,406,457 | 17,327,204 | 17,914,623 | ||
Africa [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 1,293,405 | 1,874,518 | 4,104,619 | 3,310,603 | ||
Africa [Member] | Net Product Sales [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 1,293,405 | 1,874,518 | 4,104,619 | 3,310,603 | ||
Asia [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 208,750 | 168,052 | 479,297 | 650,659 | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||||||
Property, plant and equipment, net | 122,719 | 122,719 | 326,267 | |||
Asia [Member] | Net Product Sales [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 208,750 | 168,052 | 479,297 | 650,659 | ||
Europe & Middle East [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 1,132,961 | 2,887,209 | 4,539,444 | 6,698,382 | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||||||
Property, plant and equipment, net | 117,227 | 117,227 | 147,692 | |||
Europe & Middle East [Member] | Net Product Sales [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 1,132,520 | 1,451,486 | 3,431,736 | 3,360,648 | ||
Latin America [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 5,698,920 | 4,618,560 | 6,444,456 | 7,515,523 | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||||||
Property, plant and equipment, net | 32,975 | 32,975 | 14,719 | |||
Latin America [Member] | Net Product Sales [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 5,698,920 | 4,618,560 | 6,444,456 | 7,515,523 | ||
United States [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 3,724,408 | 724,139 | 11,677,097 | 4,068,067 | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||||||
Property, plant and equipment, net | 8,471,792 | 8,471,792 | $ 8,199,725 | |||
United States [Member] | Net Product Sales [Member] | ||||||
Geographic Areas, Revenues from External Customers [Abstract] | ||||||
Net sales | 1,037,565 | $ 293,841 | 2,867,096 | $ 3,077,190 | ||
Malaysia [Member] | ||||||
Geographic Areas, Long-Lived Assets [Abstract] | ||||||
Impairment charges | $ 0 | $ 100,000 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | ||
Accounts payable - suppliers | $ 5,978,865 | $ 5,727,781 |
Accrued commissions and royalties | 870,627 | 807,708 |
Accrued payroll | 475,072 | 277,908 |
Accrued vacation | 530,773 | 417,238 |
Accrued bonuses | 1,138,337 | 1,193,985 |
Accrued severance | 0 | 511,681 |
Accrued expenses - other | 1,188,814 | 1,106,489 |
TOTAL | $ 10,182,488 | $ 10,042,790 |
GOODWILL, LONG-LIVED ASSETS a_3
GOODWILL, LONG-LIVED ASSETS and INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||||
Goodwill, Beginning balance | $ 5,963,744 | |||
Changes in foreign currency exchange rate | (289,612) | |||
Goodwill, Ending balance | $ 5,674,132 | 5,674,132 | ||
Intangible assets [Abstract] | ||||
Cost | 3,286,998 | 3,286,998 | $ 5,179,967 | |
Accumulated Amortization | 1,108,812 | 1,108,812 | 1,533,981 | |
Net Book Value | 2,178,186 | 2,178,186 | 3,645,986 | |
Amortization Expense [Abstract] | ||||
Amortization expense | 373,784 | $ 287,253 | ||
Amortization expense 2021 | 358,771 | 358,771 | ||
Amortization expense 2022 | 358,771 | 358,771 | ||
Amortization expense 2023 | 358,771 | 358,771 | ||
Amortization expense 2024 | 358,771 | 358,771 | ||
Amortization expense 2025 | 358,771 | 358,771 | ||
Amortization expense, thereafter | 384,745 | 384,745 | ||
Impairment charges | 0 | $ 1,000,000 | ||
Intellectual Property [Member] | ||||
Intangible assets [Abstract] | ||||
Weighted average remaining useful life of intangible assets | 7 years | |||
Cost | 779,848 | $ 779,848 | 1,638,699 | |
Accumulated Amortization | 173,650 | 173,650 | 472,190 | |
Net Book Value | 606,198 | $ 606,198 | 1,166,509 | |
Amortization Expense [Abstract] | ||||
Amortization period | 10 years | |||
Intellectual Property [Member] | Malaysia [Member] | ||||
Amortization Expense [Abstract] | ||||
Impairment charges | $ 500,000 | |||
Developed Technology [Member] | ||||
Intangible assets [Abstract] | ||||
Weighted average remaining useful life of intangible assets | 4 years | |||
Cost | 1,986,811 | $ 1,986,811 | 2,102,526 | |
Accumulated Amortization | 775,405 | 775,405 | 594,186 | |
Net Book Value | 1,211,406 | $ 1,211,406 | 1,508,340 | |
Amortization Expense [Abstract] | ||||
Amortization period | 7 years | |||
Customer Contracts / Relationships [Member] | ||||
Intangible assets [Abstract] | ||||
Weighted average remaining useful life of intangible assets | 6 years | |||
Cost | 516,464 | $ 516,464 | 1,323,424 | |
Accumulated Amortization | 155,882 | 155,882 | 423,093 | |
Net Book Value | 360,582 | $ 360,582 | 900,331 | |
Amortization Expense [Abstract] | ||||
Amortization period | 10 years | |||
Customer Contracts / Relationships [Member] | Malaysia [Member] | ||||
Amortization Expense [Abstract] | ||||
Impairment charges | $ 400,000 | |||
Trade Names [Member] | ||||
Intangible assets [Abstract] | ||||
Weighted average remaining useful life of intangible assets | 6 years | |||
Cost | 3,875 | $ 3,875 | 115,318 | |
Accumulated Amortization | 3,875 | 3,875 | 44,512 | |
Net Book Value | $ 0 | $ 0 | $ 70,806 | |
Amortization Expense [Abstract] | ||||
Amortization period | 11 years | |||
Trade Names [Member] | Malaysia [Member] | ||||
Amortization Expense [Abstract] | ||||
Impairment charges | $ 100,000 |
ASSET IMPAIRMENT, RESTRUCTURI_3
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS [Abstract] | |||||
Severance | $ 0 | $ 83,087 | |||
Restructuring costs | 396,740 | 1,083,951 | |||
Asset impairment | 0 | $ 1,300,000 | 1,273,945 | ||
Total | $ 396,740 | $ 11,651 | $ 2,440,983 | $ 1,122,310 |