Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 02, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | IMMUCELL CORP /DE/ | |
Entity Central Index Key | 0000811641 | |
Amendment Flag | false | |
Trading Symbol | ICCC | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 7,209,595 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 10,584,067 | $ 2,521,050 |
Trade accounts receivable, net | 1,283,096 | 932,298 |
Inventory | 2,035,793 | 2,331,671 |
Prepaid expenses and other current assets | 755,237 | 635,817 |
Total current assets | 14,658,193 | 6,420,836 |
PROPERTY, PLANT AND EQUIPMENT, net | 25,585,452 | 26,027,549 |
INTANGIBLE ASSETS, net | 128,952 | 133,728 |
GOODWILL | 95,557 | 95,557 |
INTEREST RATE SWAPS | 4,117 | 40,209 |
OTHER ASSETS | 4,359 | 12,953 |
TOTAL ASSETS | 40,476,630 | 32,730,832 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 1,172,756 | 1,220,660 |
Current portion of bank debt | 846,292 | 844,351 |
Line of credit | 500,000 | |
Total current liabilities | 2,019,048 | 2,565,011 |
LONG-TERM LIABILITIES: | ||
Bank debt, net of current portion | 8,209,489 | 8,421,487 |
Total long-term liabilities | 8,209,489 | 8,421,487 |
TOTAL LIABILITIES | 10,228,537 | 10,986,498 |
CONTINGENT LIABILITIES AND COMMITMENTS (See Note 17) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.10 par value per share, 11,000,000 and 11,000,000 shares authorized, 7,299,009 and 5,662,645 shares issued and 7,209,595 and 5,568,962 shares outstanding, as of March 31, 2019 and December 31, 2018, respectively | 729,901 | 566,265 |
Additional paid-in capital | 30,908,855 | 22,695,557 |
Accumulated deficit | (1,198,143) | (1,342,698) |
Treasury stock, at cost, 89,414 and 93,683 shares as of March 31, 2019 and December 31, 2018, respectively | (195,608) | (204,947) |
Accumulated other comprehensive income | 3,088 | 30,157 |
Total stockholders' equity | 30,248,093 | 21,744,334 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 40,476,630 | $ 32,730,832 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 11,000,000 | 11,000,000 |
Common stock, shares issued | 7,299,009 | 5,662,645 |
Common stock, shares outstanding | 7,209,595 | 5,568,962 |
Treasury stock, shares | 89,414 | 93,683 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Product sales | $ 4,410,561 | $ 2,881,185 |
Costs of goods sold | 2,209,090 | 1,521,444 |
Gross margin | 2,201,471 | 1,359,741 |
Product development expenses | 910,370 | 582,934 |
Sales and marketing expenses | 607,104 | 531,905 |
Administrative expenses | 418,693 | 423,057 |
Operating activities, net | 1,936,167 | 1,537,896 |
NET OPERATING INCOME (LOSS) | 265,304 | (178,155) |
Other expenses, net | 111,726 | 92,116 |
INCOME (LOSS) BEFORE INCOME TAXES | 153,578 | (270,271) |
Income tax expense (benefit) | 9,023 | (49,148) |
NET INCOME (LOSS) | $ 144,555 | $ (221,123) |
Basic weighted average common shares outstanding | 5,624,504 | 5,477,921 |
Basic net income (loss) per share | $ 0.03 | $ (0.04) |
Diluted weighted average common shares outstanding | 5,666,549 | 5,477,921 |
Diluted net income (loss) per share | $ 0.03 | $ (0.04) |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 144,555 | $ (221,123) |
Other comprehensive (loss) income: | ||
Interest rate swaps, before taxes | (36,092) | 58,625 |
Income tax applicable to interest rate swaps | 9,023 | (14,766) |
Other comprehensive (loss) income, net of taxes | (27,069) | 43,859 |
Total comprehensive income (loss) | $ 117,486 | $ (177,264) |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional paid-in capital | Retained Earnings (Accumulated Deficit) | Treasury Stock | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at Dec. 31, 2017 | $ 566,265 | $ 22,458,219 | $ 978,973 | $ (407,879) | $ (638) | $ 23,594,940 |
Balance, Shares at Dec. 31, 2017 | 5,662,645 | 186,448 | ||||
Net income | (221,122) | (221,123) | ||||
Other comprehensive loss, net of taxes | 43,859 | 43,859 | ||||
Exercise of stock options | (4,507) | $ 8,662 | 4,155 | |||
Exercise of stock options, Shares | (3,960) | |||||
Stock-based compensation | 71,048 | 71,048 | ||||
Balance at Mar. 31, 2018 | $ 566,265 | 22,524,760 | 757,851 | $ (399,217) | 43,221 | 23,492,880 |
Balance, Shares at Mar. 31, 2018 | 5,662,645 | 182,488 | ||||
Balance at Dec. 31, 2018 | $ 566,265 | 22,695,557 | (1,342,698) | $ (204,947) | 30,157 | 21,744,334 |
Balance, Shares at Dec. 31, 2018 | 5,662,645 | 93,683 | ||||
Net income | 144,555 | 144,555 | ||||
Other comprehensive loss, net of taxes | (27,069) | (27,069) | ||||
Public offering of common stock, net of $696,566 of offering costs | $ 163,636 | 8,139,800 | 8,303,436 | |||
Public offering of common stock, net of $696,566 of offering costs, Shares | 1,636,364 | |||||
Exercise of stock options | (9,337) | $ 9,339 | 2 | |||
Exercise of stock options, Shares | (4,269) | |||||
Stock-based compensation | 82,835 | 82,835 | ||||
Balance at Mar. 31, 2019 | $ 729,901 | $ 30,908,855 | $ (1,198,143) | $ (195,608) | $ 3,088 | $ 30,248,093 |
Balance, Shares at Mar. 31, 2019 | 7,299,009 | 89,414 |
Statements of Stockholders' E_2
Statements of Stockholders' Equity (Unaudited) (Parenthetical) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Common stock, public offering costs | $ 696,566 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 144,555 | $ (221,123) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 563,805 | 279,896 |
Amortization | 4,776 | 4,776 |
Amortization of debt issue costs | 4,244 | 4,204 |
Deferred income taxes | 9,023 | (46,276) |
Stock-based compensation | 82,835 | 71,048 |
Changes in: | ||
Accounts receivable | (350,798) | 344,123 |
Inventory | 295,878 | 119,806 |
Prepaid expenses and other current assets | (119,420) | (87,072) |
Other assets | 8,594 | (4,911) |
Accounts payable and accrued expenses | 33,705 | (214,809) |
Net cash provided by operating activities | 677,197 | 249,662 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property, plant and equipment | (194,403) | (1,213,252) |
Payment of contingent royalties related to 2016 acquisition | (8,914) | (5,723) |
Net cash used in investing activities | (203,317) | (1,218,975) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from public offering, net | 8,303,436 | |
Proceeds from debt issue | 267,141 | |
Line of credit repayment | (500,000) | |
Debt principal repayments | (214,301) | (39,803) |
Payments of debt issue costs | (522) | |
Proceeds from exercise of stock options | 2 | 4,156 |
Net cash provided by financing activities | 7,589,137 | 230,972 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 8,063,017 | (738,341) |
BEGINNING CASH AND CASH EQUIVALENTS | 2,521,050 | 3,798,811 |
ENDING CASH AND CASH EQUIVALENTS | 10,584,067 | 3,060,470 |
CASH PAID FOR: | ||
Income taxes | ||
Interest expense | 112,227 | 89,313 |
NON-CASH ACTIVITIES: | ||
Change in capital expenditures included in accounts payable and accrued expenses | (72,695) | (574,288) |
Net change in fair value of interest rate swaps, net of taxes | 27,069 | (43,859) |
Fixed asset disposals, gross | $ 1,830 | $ 3,430 |
Business Operations
Business Operations | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS OPERATIONS | 1. BUSINESS OPERATIONS ImmuCell Corporation (the “Company”, “we”, “us”, “our”) was originally incorporated in Maine in 1982 and reincorporated in Delaware in 1987, in conjunction with its initial public offering of common stock. We are an animal health company whose purpose is to create scientifically-proven and practical products that improve the health and productivity of dairy and beef cattle. We market products that provide Immediate Immunity™ First Defense ® Re-Tain™ |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation We have prepared the accompanying unaudited financial statements reflecting all adjustments that are, in our opinion, necessary in order to ensure that the financial statements are not misleading. We follow accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations, earnings per share and cash flows. References to GAAP in these footnotes are to the FASB Accounting Standards Codification (b) Cash and Cash Equivalents We consider all highly liquid investment instruments that mature within three months of their purchase dates to be cash equivalents. Cash equivalents are principally invested in securities backed by the U.S. government. Certain cash balances in excess of Federal Deposit Insurance Corporation (FDIC) limits of $250,000 per financial institution per depositor are maintained in money market accounts at financial institutions that are secured, in part, by the Securities Investor Protection Corporation. Amounts in excess of these FDIC limits per bank that are not invested in securities backed by the U.S. government aggregated $10,331,744 and $2,268,737 as of March 31, 2019 and December 31, 2018, respectively. We account for investments in marketable securities in accordance with Codification Topic 320, Investments — Debt and Equity Securities (c) Accounts Receivable Accounts receivable are carried at the original invoice amount less an estimate made for doubtful collection. Management determines the allowance for doubtful accounts on a monthly basis by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are considered to be past due if a portion of the receivable balance is outstanding for more than 30 days. Past due accounts receivable are subject to an interest charge. Accounts receivable are written off when deemed uncollectible. The amount of accounts receivable written off during all periods reported was immaterial. Recoveries of accounts receivable previously written off are recorded as income when received. As of March 31, 2019 and December 31, 2018, we determined that no allowance for bad debt was necessary. See Note 4. (d) Inventory Inventory includes raw materials, work-in-process and finished goods and is recorded at the lower of cost, on the first-in, first-out method, or net realizable value (determined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation). Work-in-process and finished goods inventories include materials, labor and manufacturing overhead. At each monthly balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. Inventories that we consider excess or obsolete are reserved. Once inventory is written down and a new cost basis is established, it is not written back up if demand increases. We believe that supplies and raw materials for the production of our products are available from more than one vendor. Our policy is to maintain more than one source of supply for the components used in our products when practicable. See Note 5. (e) Property, Plant and Equipment We depreciate property, plant and equipment on the straight-line method by charges to operations and costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. The facility we have constructed to produce the active pharmaceutical ingredient (Nisin) for Re-Tain™ (f) Intangible Assets and Goodwill We amortize intangible assets on the straight-line method by charges to costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. We have recorded intangible assets related to customer relationships, non-compete agreements, and developed technology, each with defined useful lives. We have classified as goodwill the amounts paid in excess of fair value of the net assets (including tax attributes) acquired in purchase transactions. We assess the impairment of intangible assets and goodwill that have indefinite lives at the reporting unit level on an annual basis (as of December 31 st (g) Fair Value Measurements In determining fair value measurements, we follow the provisions of Codification Topic 820, Fair Value Measurements and Disclosures Level 1— Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the measurement date. Level 2— Pricing inputs are quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 3— Pricing inputs are unobservable for the assets or liabilities, that is, inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset's or liability's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. From time to time, we also hold money market mutual funds in a brokerage account, which are classified as cash equivalents and measured at fair value. The fair value of these investments is based on their closing published net asset value. We assess the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with our accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. During the three-month periods ended March 31, 2019 and 2018, there were no transfers between levels. As of March 31, 2019 and December 31, 2018, our Level 1 assets measured at fair value by quoted prices in active markets consisted of bank savings accounts and money market funds. As of March 31, 2019 and December 31, 2018, our interest rate swaps were classified as Level 2 and were measured by observable market data in combination with expected cash flows for each instrument. There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2019 or December 31, 2018. As of March 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 10,584,067 $ — $ — $ 10,584,067 Interest rate swaps — 4,117 — 4,117 Total $ 10,584,067 $ 4,117 $ — $ 10,588,184 As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 2,521,050 $ — $ — $ 2,521,050 Interest rate swaps — 40,209 — 40,209 Total $ 2,521,050 $ 40,209 $ — $ 2,561,259 (h) Valuation of Long-Lived Assets We periodically evaluate our long-lived assets, consisting principally of fixed assets and amortizable intangible assets, for potential impairment. In accordance with the applicable accounting guidance for the treatment of long-lived assets, we review the carrying value of our long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable. Under the held for use approach, the asset or asset group to be tested for impairment should represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. We evaluate our long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable. No impairment was recognized during the three-month periods ended March 31, 2019 and 2018. (i) Concentration of Risk Concentration of credit risk with respect to accounts receivable is principally limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, as a consequence, believe that our accounts receivable credit risk exposure is limited. We maintain an allowance for potential credit losses when deemed necessary, but historically we have not experienced significant credit losses related to an individual customer or groups of customers in any particular industry or geographic area. Sales to significant customers that amounted to 10% or more of total product sales are detailed in the following table: During the Three-Month 2019 2018 Company A 43 % 34 % Company B 27 % 24 % Company C * 11 % * Amount is less than 10% Trade accounts receivable due from significant customers amounted to the percentages of total trade accounts receivable as detailed in the following table: As of As of Company A 42 % 35 % Company B 29 % 36 % Company C 13 % 15 % (j) Interest Rate Swap Agreements All derivatives are recognized on the balance sheet at their fair value. We entered into interest rate swap agreements in 2010 and 2015. On the dates the agreements were entered into, we designated the derivatives as hedges of the variability of cash flows to be paid related to our long-term debt. The agreements have been determined to be highly effective in hedging the variability of identified cash flows, so changes in the fair market value of the interest rate swap agreements are recorded as comprehensive income (loss), until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). We formally documented the relationship between the interest rate swap agreements and the related hedged items. We also formally assess, both at the interest rate swap agreements' inception and on an ongoing basis, whether the agreements are highly effective in offsetting changes in cash flow of hedged items. See Note 11. (k) Revenue Recognition For periods ended on and before December 31, 2017, we recognized revenue in accordance with Accounting Standards Codification (ASC) 605 when four criteria were met. These included i) persuasive evidence that an arrangement existed, ii) delivery had occurred, iii) our price was fixed and determinable and iv) collectability was reasonably assured. For periods beginning on or after January 1, 2018, we recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (l) Expense Recognition In 2018, we adopted ASC 340-40, Accounting for Other Assets and Deferred Costs (m) Income Taxes We account for income taxes in accordance with Codification Topic 740, Income Taxes Codification Topic 740-10 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position must meet before being recognized in the financial statements. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, we are subject to periodic audits and examinations by the Internal Revenue Service and other taxing authorities. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years before 2015. We have evaluated the positions taken on our filed tax returns. We have concluded that no uncertain tax positions exist as of March 31, 2019 or December 31, 2018. Although we believe that our estimates are reasonable, actual results could differ from these estimates. See Note 16. (n) Stock-Based Compensation We account for stock-based compensation in accordance with Codification Topic 718, Compensation-Stock Compensation (o) Net Income (Loss) Per Common Share Net income (loss) per common share has been computed in accordance with Codification Topic 260-10, Earnings Per Share. (p) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Although we regularly assess these estimates, actual amounts could differ from those estimates. Changes in estimates are recorded during the period in which they become known. Significant estimates include our inventory valuation, valuation of goodwill and long-lived assets, valuation of deferred tax assets, accrued expenses, costs of goods sold, and useful lives of intangible assets. (q) New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Codification improvements to Topic 842, Leases. Topic 842 Topic 842, Leases - Targeted improvements. Topic 842 In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting Topic 718 In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities Topic 815 Topic 815 Topic 815 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | 3. CASH AND CASH EQUIVALENTS Cash and cash equivalents amounted to $10,584,067 and $2,521,050 as of March 31, 2019 and December 31, 2018, respectively. We are required by a bank debt covenant to maintain at least $2,000,000 of otherwise unrestricted cash and cash equivalents. |
Trade Accounts Receivable, Net
Trade Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE, net | 4. TRADE ACCOUNTS RECEIVABLE, net Trade accounts receivable amounted to $1,283,096 and $932,298 as of March 31, 2019 and December 31, 2018, respectively. No allowance for bad debt and product returns was recorded as of March 31, 2019 or December 31, 2018. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 5. INVENTORY Inventory consisted of the following: As of As of Raw materials $ 470,497 $ 338,991 Work-in-process 1,153,152 1,337,035 Finished goods 412,144 655,645 Total $ 2,035,793 $ 2,331,671 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: As of March 31, As of December 31, Prepaid expenses $ 292,360 $ 142,528 Other receivables (1) 462,877 493,289 Total $ 755,237 $ 635,817 (1) This amount includes $450,000 due from a third party for the sale of assets. See Note 14. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, net | 7. PROPERTY, PLANT AND EQUIPMENT, net Property, plant and equipment consisted of the following: Estimated Useful Lives As of As of Buildings and improvements 10-39 $ 17,060,316 $ 17,018,316 Laboratory and manufacturing equipment 3-10 15,156,622 15,092,252 Office furniture and equipment 3-10 733,159 731,510 Construction in progress n/a 102,926 91,067 Land n/a 516,867 516,867 Property, plant and equipment, gross 33,569,890 33,450,012 Accumulated depreciation (7,984,438 ) (7,422,463 ) Property, plant and equipment, net $ 25,585,452 $ 26,027,549 As of March 31, 2019 and December 31, 2018, construction in progress consisted principally of down payments towards two pieces of manufacturing equipment. During the three-month periods ended March 31, 2019 and 2018, $1,830 and $3,430 of property, plant and equipment was disposed of, respectively. Depreciation expense was $563,805 and $279,896 during the three-month periods ended March 31, 2019 and 2018, respectively. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | 8. BUSINESS ACQUISITION On January 4, 2016, we acquired certain business assets and processes from DAY 1™ Technology, LLC of Minnesota. The acquired rights and know-how are primarily related to formulating our bovine antibodies into a gel solution (or paste) for an oral delivery option to newborn calves via a syringe (or tube). This product format offers customers an alternative delivery option to the bolus (the standard delivery format of the bivalent First Defense ® Dual-Force™ First Defense ® We were also interested in a gel formulation in anticipation of the launch of Tri-Shield First Defense ® (which was approved by the USDA during the fourth quarter of 2017) because the additional rotavirus antibodies in this new product would not fit in a bolus full of E. coli |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 9. INTANGIBLE ASSETS The intangible assets described in Note 8 are being amortized to costs of goods sold over their useful lives, which are estimated to be 10 years. Intangible amortization expense was $4,776 during both of the three-month periods ended March 31, 2019 and 2018. The net value of these intangibles was $128,952 and $133,728 as of March 31, 2019 and December 31, 2018, respectively. A summary of intangible amortization expense estimated for the periods subsequent to March 31, 2019 is as follows: Period Amount Nine-month period ending December 31, 2019 $ 14,328 Year ending December 31, 2020 19,104 Year ending December 31, 2021 19,104 Year ending December 31, 2022 19,104 Year ending December 31, 2023 19,104 After December 31, 2023 38,208 Total $ 128,952 Intangible assets as of March 31, 2019 consisted of the following: Gross Carrying Value Accumulated Amortization Net Book Developed technology $ 184,100 $ (59,833 ) $ 124,267 Customer relationships 1,300 (422 ) 878 Non-compete agreements 5,640 (1,833 ) 3,807 Total $ 191,040 $ (62,088 ) $ 128,952 Intangible assets as of December 31, 2018 consisted of the following: Gross Carrying Value Accumulated Amortization Net Book Developed technology $ 184,100 $ (55,230 ) $ 128,870 Customer relationships 1,300 (390 ) 910 Non-compete agreements 5,640 (1,692 ) 3,948 Total $ 191,040 $ (57,312 ) $ 133,728 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of As of Accounts payable – trade $ 618,646 $ 531,048 Accounts payable – capital - 72,695 Accrued payroll 307,604 358,451 Accrued professional fees 56,275 93,050 Accrued other 190,231 165,416 Total $ 1,172,756 $ 1,220,660 |
Bank Debt
Bank Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
BANK DEBT | 11. BANK DEBT We have in place five credit facilities and a line of credit with TD Bank N.A. These five credit facilities are secured by substantially all of our assets and are subject to certain restrictions and financial covenants. Proceeds from a $1,000,000 first mortgage on our corporate headquarters and production and research facility at 56 Evergreen Drive in Portland (Loan #1) were received during the third quarter of 2010 with monthly principal and interest payments due for ten years, calculated based on a fifteen-year amortization schedule. A balloon principal payment of $451,885 will be due during the third quarter of 2020. As of March 31, 2019, $545,723 was outstanding under Loan #1. Proceeds from a $2,500,000 second mortgage on this corporate headquarters (Loan #2) were received during the third quarter of 2015 with monthly principal and interest payments due for ten years, calculated based on a twenty-year amortization schedule. A balloon principal payment of approximately $1,550,000 will be due during the third quarter of 2025. As of March 31, 2019, $2,211,508 was outstanding under Loan #2. During the first quarter of 2016, we entered into two additional credit facilities (Loans #3 and #4) aggregating up to approximately $4,500,000. As a result of loan amendments entered into the during the first quarter of 2017, these two credit facilities were increased to up to $6,500,000, subject to certain restrictions set forth in the agreements. Loan #3 is comprised of a construction loan of up to $3,940,000 and not to exceed 80% of the cost of the equipment installed in our commercial-scale Nisin production facility at 33 Caddie Lane in Portland. As amended, interest only was payable at a variable rate equal to the one-month LIBOR (adjusted at each monthly payment date) plus a margin of 2.25% through September 2018, at which time the loan converted to a seven-year term loan facility at the same variable interest rate (which was equal to 4.74% as of March 31, 2019) with monthly principal and interest payments due based on a seven-year amortization schedule. As of March 31, 2019, $3,658,571 was outstanding under Loan #3. Loan #4 is comprised of a construction loan of up to $2,560,000 and not to exceed 80% of the appraised value of our commercial-scale Nisin production facility. As amended, interest only was payable at a variable rate equal to the one-month LIBOR (adjusted at each monthly payment date) plus a margin of 2.25% through March 2018, at which time the loan converted to a term loan facility at the same variable interest rate (which was equal to 4.74% as of March 31, 2019) with monthly principal and interest payments due for ten years, calculated based on a twenty-year amortization schedule. A balloon principal payment of approximately $1,408,000 will be due during the first quarter of 2027. As of March 31, 2019, $2,432,000 was outstanding under Loan #4. Proceeds from a $340,000 first mortgage on our 4,114 square foot warehouse and storage facility near to our Re-Tain™ We hedged our interest rate exposures on Loan #1 and Loan #2 with interest rate swap agreements that effectively converted floating interest rates based on the one-month LIBOR plus a margin of 3.25% and 2.25% to the fixed rates of 6.04% and 4.38%, respectively. As of March 31, 2019, the variable rates on these two mortgage notes were 5.75% and 4.74%, respectively. All derivatives are recognized on the balance sheet at their fair value. At the time of the closings and thereafter, the agreements were determined to be highly effective in hedging the variability of the identified cash flows and have been designated as cash flow hedges of the variability in the hedged interest payments. Changes in the fair value of the interest rate swap agreements are recorded in other comprehensive income, net of taxes. The original notional amounts of the interest rate swap agreements of $1,000,000 and $2,500,000 amortize in accordance with the amortization of the mortgage notes. The notional amount of the interest rate swaps was $2,757,231 as of March 31, 2019. The fair values of the interest rate swaps have been determined using observable market-based inputs or unobservable inputs that are corroborated by market data. Accordingly, the interest rate swaps are classified as level 2 within the fair value hierarchy provided in Codification Topic 820, Fair Value Measurements and Disclosures During the Three-Month 2019 2018 Payments required by interest rate swaps $ (1,564 ) $ 5,285 Other comprehensive (loss) income, net of taxes $ (27,069 ) $ 43,859 In connection with Loan #1 and Loan #2, we incurred debt issue costs of $26,489 and $34,125, respectively. In connection with Loan #3, Loan #4 and Loan #5, we incurred debt issue costs of $46,734 and $68,072, respectively. The 2017 amendments to Loan #3 and Loan #4 were accounted for as modifications. The amortization of debt issue costs is being recorded as a component of other expenses and is being amortized over the underlying terms of the respective credit facilities. Debt proceeds received and principal repayments made during the three-month periods ended March 31, 2019 and 2018 are reflected in the following table by year and by loan: During the Three-Month During the Three-Month Proceeds from Debt Issue Debt Principal Repayments Proceeds from Debt Principal Repayments Loan #1 $ — $ (16,881 ) $ — $ (15,888 ) Loan #2 — (22,260 ) — (21,279 ) Loan #3 — (140,715 ) — — Loan #4 — (32,000 ) 267,141 — Loan #5 — (2,445 ) — (2,636 ) Total $ — $ (214,301 ) $ 267,141 $ (39,803 ) Principal payments (net of debt issue costs) due under bank loans outstanding as of March 31, 2019 (excluding our $500,000 line of credit) are reflected in the following table by the year that payments are due: Nine-Months ending 12/31/2019 Year Year Year Year After 12/31/2023 Total Loan #1 $ 52,027 $ 493,696 $ — $ — $ — $ — $ 545,723 Loan #2 67,737 94,005 98,538 103,077 107,769 1,740,382 2,211,508 Loan #3 (1) 422,143 562,857 562,857 562,857 562,857 985,000 3,658,571 Loan #4 (1) 96,000 128,000 128,000 128,000 128,000 1,824,000 2,432,000 Loan #5 (2) 8,582 11,926 12,503 13,107 13,741 258,463 318,322 Subtotal $ 646,489 $ 1,290,484 $ 801,898 $ 807,041 $ 812,367 $ 4,807,845 9,166,124 Debt Issue Costs (110,343 ) Total $ 9,055,781 (1) These notes bear interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 4.74%. The actual interest rate and principal payments will be different. (2) This note bears interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 4.73%. The actual interest rate and principal payments will be different. During the third quarter of 2010, we entered into a $500,000 line of credit with TD Bank N.A., which is secured by substantially all of our assets and is subject to certain restrictions and financial covenants. This line of credit has been renewed approximately annually since then, is available as needed and has been extended through May 31, 2020. There was no outstanding balance under this line of credit as of March 31, 2019. As of December 31, 2018, $500,000 was outstanding under this line of credit. Interest on borrowings against the line of credit is variable at the higher of 4.25% per annum or the one-month LIBOR plus 3.5% per annum. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 12. STOCKHOLDERS' EQUITY On October 28, 2015, we filed a registration statement on Form S-3 (File No. 333-207635) with the Securities and Exchange Commission (SEC) for the potential issuance of up to $10,000,000 in equity securities (subject to certain limitations). This registration statement became effective on November 10, 2015. Under this form of registration statement, we were limited within a twelve-month period to raising gross proceeds of no more than one-third of the market capitalization of our common stock (as determined by the high price of our common stock within the preceding 60 days leading up to a sale of securities) held by non-affiliates (non-insiders) of the Company. Having raised $10,000,000 in gross proceeds under the February 2016, July 2017 and December 2017 equity transactions described below, no additional equity securities can be issued under this registration statement. On February 3, 2016, we sold 1,123,810 shares of common stock at a price to the public of $5.25 per share in an underwritten public offering pursuant to our effective shelf registration statement on Form S-3, raising gross proceeds of approximately $5,900,000 and resulting in net proceeds to the Company of approximately $5,313,000 (after deducting underwriting discounts and offering expenses incurred in connection with the equity financing). On October 21, 2016, we closed on a private placement of 659,880 shares of common stock to nineteen institutional and accredited investors at $5.25 per share, raising gross proceeds of approximately $3,464,000 and resulting in net proceeds to the Company of approximately $3,161,000 (after deducting placement agent fees and other expenses incurred in connection with the equity financing). On July 27, 2017, we issued 200,000 shares of our common stock at a price of $5.25 per share to two related investors pursuant to our effective shelf registration statement on Form S-3, raising gross proceeds of $1,050,000 and resulting in net proceeds of approximately $1,034,000 (after deducting expenses incurred in connection with the equity financing). On December 21, 2017, we sold 417,807 shares of common stock at a price to the public of $7.30 per share in an underwritten public offering pursuant to our effective shelf registration statement on Form S-3, raising gross proceeds of approximately $3,050,000 and resulting in net proceeds to the Company of approximately $2,734,000 (after deducting underwriting discounts and offering expenses incurred in connection with the equity financing). On November 20, 2018, we filed a registration statement on Form S-3 (File No. 333-228479) with the SEC for the potential issuance of up to $20,000,000 in equity securities (subject to certain limitations). This registration statement became effective on November 29, 2018. Under this form of registration statement, we are limited within a twelve-month period to raising gross proceeds of no more than one-third of the market capitalization of our common stock (as determined by the high price of our common stock within the preceding 60 days leading up to a sale of securities) held by non-affiliates (non-insiders) of the Company. On March 29, 2019, we sold 1,636,364 shares of common stock at a price to the public of $5.50 per share in an underwritten public offering pursuant to our effective shelf registration statement on Form S-3, raising gross proceeds of approximately $9,000,000 and resulting in net proceeds to the Company of approximately $8,303,000 (after deducting underwriting discounts and offering expenses incurred in connection with the equity financing). At the June 15, 2016 Annual Meeting of Stockholders, we reported that our stockholders voted to approve an amendment to the Company's Certificate of Incorporation to increase the number of shares of common stock authorized for issuance from 8,000,000 to 10,000,000. After careful consideration, we determined that the method of voting instructions described in our Proxy Statement was not consistent with the way the votes were actually recorded in accordance with stock exchange rules. Therefore, during the second quarter of 2017, we elected to treat the amendment as ineffective, and there was no increase in our authorized common stock. At the June 14, 2018 Annual Meeting of Stockholders, our stockholders voted to approve an amendment to the Company's Certificate of Incorporation to increase the number of shares of common stock authorized for issuance from 8,000,000 to 11,000,000. In June 2000, our stockholders approved the 2000 Stock Option and Incentive Plan (the "2000 Plan") pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company's common stock at i) no less than fair market value on the date of grant in the case of incentive stock options and ii) no less than 85% of fair market value on the date of grant in the case of non-qualified stock options. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. Originally, 250,000 shares of common stock were reserved for issuance under the 2000 Plan. The stockholders of the Company approved an increase in this number to 500,000 shares in June 2001. All options granted under the 2000 Plan expire no later than ten years from the date of grant. The 2000 Plan expired in February 2010, after which date no further options could be granted under the 2000 Plan. However, outstanding options under the 2000 Plan may be exercised in accordance with their terms. In June 2010, our stockholders approved the 2010 Stock Option and Incentive Plan (the "2010 Plan") pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company's common stock at no less than fair market value on the date of grant. At that time, 300,000 shares of common stock were reserved for issuance under the 2010 Plan and subsequently no additional shares have been reserved for the 2010 Plan. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. All options granted under the 2010 Plan expire no later than ten years from the date of grant. The 2010 Plan expires in June 2020, after which date no further options could be granted under the 2010 Plan. However, options outstanding under the 2010 Plan at that time could be exercised in accordance with their terms. In June 2017, our stockholders approved the 2017 Stock Option and Incentive Plan (the "2017 Plan") pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company's common stock at no less than fair market value on the date of grant. At that time, 300,000 shares of common stock were reserved for issuance under the 2017 Plan and subsequently no additional shares have been reserved for the 2017 Plan. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. All options granted under the 2017 Plan expire no later than ten years from the date of grant. The 2017 Plan expires in March 2027, after which date no further options could be granted under the 2017 Plan. However, options outstanding under the 2017 Plan at that time could be exercised in accordance with their terms. Activity under the stock option plans described above was as follows: 2000 Plan 2010 Plan 2017 Plan Weighted Average Exercise Price Aggregate Intrinsic Value (1) Outstanding at December 31, 2017 117,500 242,500 — $ 4.58 $ 1,513,980 Grants — 48,500 122,500 $ 7.38 Terminations — (19,000 ) (11,000 ) $ 6.63 Exercises (105,000 ) (2,000 ) — $ 1.89 Outstanding at December 31, 2018 12,500 270,000 111,500 $ 6.37 $ 266,020 Grants — — 10,000 $ 7.50 Terminations — (12,000 ) — $ 5.07 Exercises — (15,000 ) — $ 4.80 Outstanding at March 31, 2019 12,500 243,000 121,500 $ 6.51 $ (59,850 ) Vested at March 31, 2019 12,500 32,500 — $ 4.93 $ 63,860 Vested and expected to vest at March 31, 2019 12,500 243,000 121,500 $ 6.51 $ (59,850 ) Reserved for future grants — 13,000 178,500 (1) Intrinsic value is the difference between the fair market value as of the date indicated and as of the date of the option grant. The following table displays additional information about the stock option plans described above: Number of Shares Weighted Average Weighted Average Exercise Price Non-vested stock options as of January 1, 2019 334,000 $ 3.63 $ 6.64 Non-vested stock options as of March 31, 2019 332,000 $ 3.65 $ 6.72 Stock options granted during the three-month period ended March 31, 2019 10,000 $ 3.16 $ 7.50 Stock options that vested during the three-month period ended March 31, 2019 — $ — $ — Stock options that were forfeited during the three-month period ended March 31, 2019 12,000 $ 2.65 $ 5.07 During the three-month period ended March 31, 2019, one director exercised stock options covering 15,000 shares by the surrender of 10,731 shares of common stock with a fair market value of $71,998 at the time of exercise and $2 in cash. During the three-month period ended March 31, 2018, two employees exercised stock options covering 6,000 shares. One thousand of these options were exercised for cash, resulting in total proceeds of $4,150 and 5,000 of these options were exercised by the surrender of 2,040 shares of common stock with a fair market value of $14,994 at the time of exercise and $6 in cash. The weighted average remaining life of the options outstanding under the 2000 Plan, the 2010 Plan and the 2017 plan as of March 31, 2019 was approximately 6 years and 6 months. The weighted average remaining life of the options exercisable under these plans as of March 31, 2019 was approximately 3 years and 1 month. The exercise prices of the options outstanding as of March 31, 2019 ranged from $3.15 to $8.90 per share. The 10,000 stock options granted during the three-month period ended March 31, 2019 had exercise prices of $7.50 per share. The 137,000 stock options granted during the three-month period ended March 31, 2018 had exercise prices between $7.08 and $7.80 per share. The aggregate intrinsic value of options exercised during the three-month periods ended March 31, 2019 and 2018 approximated $28,641 and $24,800, respectively. The weighted-average grant date fair values of options granted during the three-month periods ended March 31, 2019 and 2018 were $3.16 and $4.22 per share, respectively. As of March 31, 2019, total unrecognized stock-based compensation related to non-vested stock options aggregated $562,225, which will be recognized over a weighted average period of 1 year and 7 months. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model, for the purpose discussed in Note 2(n), with the following weighted-average assumptions for the three-month periods ended March 31, 2019 and 2018: During the Three-Month 2019 2018 Risk-free interest rate 2.59 % 2.5 % Dividend yield 0 % 0 % Expected volatility 51 % 57 % Expected life 4 years 5.1 years The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected option term, while the other assumptions are derived from averages of our historical data. Common Stock Rights Plan In September 1995, our Board of Directors adopted a Common Stock Rights Plan (the "Rights Plan") and declared a dividend of one common share purchase right (a "Right") for each of the then outstanding shares of the common stock of the Company. Each Right entitles the registered holder to purchase from the Company one share of common stock at an initial purchase price of $70.00 per share, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement between the Company and American Stock Transfer & Trust Co., as Rights Agent. The Rights (as amended) become exercisable and transferable apart from the common stock upon the earlier of i) 10 days following a public announcement that a person or group (Acquiring Person) has, without the prior consent of the Continuing Directors (as such term is defined in the Rights Agreement), acquired beneficial ownership of 20% or more of the outstanding common stock or ii) 10 days following commencement of a tender offer or exchange offer the consummation of which would result in ownership by a person or group of 20% or more of the outstanding common stock (the earlier of such dates being called the Distribution Date). Upon the Distribution Date, the holder of each Right not owned by the Acquiring Person would be entitled to purchase common stock at a discount to the initial purchase price of $70.00 per share, effectively equal to one half of the market price of a share of common stock on the date the Acquiring Person becomes an Acquiring Person. If, after the Distribution Date, the Company should consolidate or merge with any other entity and the Company were not the surviving company, or, if the Company were the surviving company, all or part of the Company's common stock were changed or exchanged into the securities of any other entity, or if more than 50% of the Company's assets or earning power were sold, each Right would entitle its holder to purchase, at the Rights' then-current purchase price, a number of shares of the acquiring company's common stock having a market value at that time equal to twice the Right's exercise price. At any time after a person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding common stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of common stock per Right (subject to adjustment). At any time prior to 14 days following the date that any person or group becomes an Acquiring Person (subject to extension by the Board of Directors), the Board of Directors of the Company may redeem the then outstanding Rights in whole, but not in part, at a price of $0.005 per Right, subject to adjustment. At various times over the years, our Board of Directors has voted to authorize amendments of the Rights Agreement to extend the Final Expiration Date, which is currently September 19, 2022. Our Board of Directors also has voted to authorize amendments to increase the ownership threshold for determining "Acquiring Person" status to 20%. During the second quarter of 2015, our Board of Directors also voted to authorize an amendment to remove a provision that prevented a new group of directors elected following the emergence of an Acquiring Person (an owner of more than 20% of our stock) from controlling the Rights Plan by maintaining exclusive authority over the Rights Plan with pre-existing directors. We did this because such provisions have come to be viewed with disfavor by Delaware courts. Each time that we made such amendments we entered into amendments to the Rights Agreement with the Rights Agent reflecting such extensions, threshold increases or provision changes. No other changes have been made to the terms of the Rights or the Rights Agreement. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 13. REVENUE Generally, our products are promoted to veterinarians and dairy and beef producers by our sales team and then sold through distributors. Our primary market is North America. We do sell into select international regions and may expand this international reach in the future. There were no material changes between the allocation and timing of revenue recognition during the year ended December 31, 2018 or the three-month periods ended March 31, 2019 or 2018 (under ASC 606). We do not have any contract assets such as contracts for which we have satisfied the performance obligations but do not yet have the right to bill for or contract liabilities such as customer advances. All trade receivables on our balance sheet are from contracts with customers. We incur no material costs to obtain contracts. As of March 31, 2018, we had a backlog of orders (representing purchase orders received from customers which were not fulfilled or paid) worth approximately $1,245,000 for the First Defense ® First Defense ® Dual-Force™ First Defense ® Tri-Shield First Defense ® The following table presents our product sales disaggregated by geographic area: During the Three-Month 2019 2018 United States $ 3,777,746 $ 2,595,616 Other 632,815 285,569 Total product sales $ 4,410,561 $ 2,881,185 The following table presents our product sales disaggregated by major product category: During the Three-Month 2019 2018 First Defense ® $ 4,140,917 $ 2,780,869 Other animal health 136,043 100,316 Other 133,601 — Total product sales $ 4,410,561 $ 2,881,185 |
Gain on Sale of Assets
Gain on Sale of Assets | 3 Months Ended |
Mar. 31, 2019 | |
Gain on Sale of Assets [Abstract] | |
GAIN ON SALE OF ASSETS | 14. GAIN ON SALE OF ASSETS During the third quarter of 2018, we sold the assets underlying our water diagnostic product for $700,000. This sale of assets was recognized as an operating activity at that time in accordance with ASC 610: Other Income Consolidation |
Other Expenses, Net
Other Expenses, Net | 3 Months Ended |
Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSES, NET | 15. OTHER EXPENSES, NET Other expenses, net, consisted of the following: During the Three-Month 2019 2018 Interest expense $ 114,041 $ 96,015 Interest income (2,315 ) (3,824 ) Other gains — (75 ) Other expenses, net $ 111,726 $ 92,116 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 16. INCOME TAXES Our income tax expense (benefit) aggregated $9,023 and ($49,148) (amounting to 6% and (18%) of our income (loss) before income taxes, respectively) for the three-month periods ended March 31, 2019 and 2018, respectively. As of December 31, 2018, we had federal net operating loss carryforwards of $11,839,349 of which $10,127,442 do not expire and $1,711,907 expires in 2034 through 2037 (if not utilized before then) and state net operating loss carryforwards of $3,485,949 that expire in 2037 through 2038 (if not utilized before then). Additionally, we had federal general business tax credit carryforwards of $407,023 that expire in 2027 through 2038 (if not utilized before then) and state tax credit carryforwards of $763,350 that expire in 2023 through 2038 (if not utilized before then). The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. During the second quarter of 2018, we assessed our historical and near-term future profitability and recorded approximately $563,000 in non-cash income tax expense to create a full valuation allowance against our net deferred tax assets (which consist largely of net operating loss carryforwards and federal and state tax credits) based on applicable accounting standards and practices. At that time, we had incurred a net loss for five consecutive quarters, had not been profitable on a year-to-date basis since the nine-month period ended September 30, 2017 and projected additional net losses for some period going forward before returning to profitability. Should future profitability be realized at an adequate level, we would be able to release this valuation allowance (resulting in a non-cash income tax benefit) and realize these deferred tax assets before they expire. We will continue to assess the need for the valuation allowance at each quarter and, in the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to adjust our valuation allowance. No such adjustment was recorded during the nine months ended March 31, 2019. Net operating loss carryforwards, credits, and other tax attributes are subject to review and possible adjustment by the Internal Revenue Service. Section 382 of the Internal Revenue Code contains provisions that could place annual limitations on the future utilization of net operating loss carryforwards and credits in the event of a change in ownership of the Company, as defined. The Company files income tax returns in the U.S. federal jurisdiction and several state jurisdictions. We currently have no tax examinations in progress. We also have not paid additional taxes, interest or penalties as a result of tax examinations nor do we have any unrecognized tax benefits for any of the periods in the accompanying financial statements. The Tax Cuts and Jobs Act was enacted on December 22, 2017. This legislation made significant changes in the U.S. tax laws including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the prior rate of 34% to 21%. As a result of the enacted law, we were required to revalue deferred tax assets and liabilities at the rate enacted in 2017. This revaluation resulted in a benefit of $71,000 to income tax expense in continuing operations and a corresponding increase in the deferred tax assets during 2017. On December 22, 2017, the SEC issued Staff Accounting Bulletin #118 that provides additional guidance and allows companies to apply a measurement period of up to twelve months to account for the impacts of this legislation in their financial statements. The accounting for the transitional impacts of this legislation is now complete. |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES AND COMMITMENTS | 17. CONTINGENT LIABILITIES AND COMMITMENTS Our bylaws, as amended, in effect provide that the Company will indemnify its officers and directors to the maximum extent permitted by Delaware law. In addition, we make similar indemnity undertakings to each director through a separate indemnification agreement with that director. The maximum payment that we may be required to make under such provisions is theoretically unlimited and is impossible to determine. We maintain directors' and officers' liability insurance, which may provide reimbursement to the Company for payments made to, or on behalf of, officers and directors pursuant to the indemnification provisions. Our indemnification obligations were grandfathered under the provisions of Codification Topic 460 , Guarantees The development, manufacturing and marketing of animal health care products entails an inherent risk that liability claims will be asserted against us during the normal course of business. We are aware of no such claims against us as of the date of this filing. We feel that we have reasonable levels of liability insurance to support our operations. We enter into agreements with third parties in the ordinary course of business under which we are obligated to indemnify such third parties from and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations, and based on our analysis of the nature of the risks involved, we believe that the fair value of the liabilities potentially arising under these agreements is minimal. Accordingly, we have recorded no liabilities for such obligations as of March 31, 2019. We are committed to purchasing certain key parts (syringes) and services (final formulation, aseptic filling and final packaging of Drug Product) pertaining to Re-Tain™ Re-Tain™ During the second quarter of 2009, we entered into an exclusive and perpetual (unless terminated for cause) license with the Baylor College of Medicine covering the underlying rotavirus vaccine technology used to generate the specific antibodies for our product line extension, Tri-Shield First Defense ® First Defense ® |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 18. SEGMENT INFORMATION We principally operate in the business segment described in Note 1. Pursuant to Codification Topic 280, Segment Reporting Sales of the First Defense ® |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS Dr. David S. Tomsche (Chair of our Board of Directors) is a controlling owner of Leedstone Inc., a domestic distributor of ImmuCell products (the First Defense ® CMT |
Employee Benefits
Employee Benefits | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFITS | 20. EMPLOYEE BENEFITS We have a 401(k) savings plan (the Plan) in which all employees completing one month of service with the Company are eligible to participate. Participants may contribute up to the maximum amount allowed by the Internal Revenue Service. We currently match 100% of the first 3% of each employee's salary that is contributed to the Plan and 50% of the next 2% of each employee's salary that is contributed to the Plan. Under this matching plan, we paid $31,197 and $24,646 into the plan for the three-month periods ended March 31, 2019 and 2018, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 21. SUBSEQUENT EVENTS We have evaluated subsequent events through the time of filing on May 13, 2019, the date we have issued this Quarterly Report on Form 10-Q. As of such date, there were no material, reportable subsequent events. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation We have prepared the accompanying unaudited financial statements reflecting all adjustments that are, in our opinion, necessary in order to ensure that the financial statements are not misleading. We follow accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations, earnings per share and cash flows. References to GAAP in these footnotes are to the FASB Accounting Standards Codification |
Cash and Cash Equivalents | (b) Cash and Cash Equivalents We consider all highly liquid investment instruments that mature within three months of their purchase dates to be cash equivalents. Cash equivalents are principally invested in securities backed by the U.S. government. Certain cash balances in excess of Federal Deposit Insurance Corporation (FDIC) limits of $250,000 per financial institution per depositor are maintained in money market accounts at financial institutions that are secured, in part, by the Securities Investor Protection Corporation. Amounts in excess of these FDIC limits per bank that are not invested in securities backed by the U.S. government aggregated $10,331,744 and $2,268,737 as of March 31, 2019 and December 31, 2018, respectively. We account for investments in marketable securities in accordance with Codification Topic 320, Investments — Debt and Equity Securities |
Accounts Receivable | (c) Accounts Receivable Accounts receivable are carried at the original invoice amount less an estimate made for doubtful collection. Management determines the allowance for doubtful accounts on a monthly basis by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are considered to be past due if a portion of the receivable balance is outstanding for more than 30 days. Past due accounts receivable are subject to an interest charge. Accounts receivable are written off when deemed uncollectible. The amount of accounts receivable written off during all periods reported was immaterial. Recoveries of accounts receivable previously written off are recorded as income when received. As of March 31, 2019 and December 31, 2018, we determined that no allowance for bad debt was necessary. See Note 4. |
Inventory | (d) Inventory Inventory includes raw materials, work-in-process and finished goods and is recorded at the lower of cost, on the first-in, first-out method, or net realizable value (determined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation). Work-in-process and finished goods inventories include materials, labor and manufacturing overhead. At each monthly balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. Inventories that we consider excess or obsolete are reserved. Once inventory is written down and a new cost basis is established, it is not written back up if demand increases. We believe that supplies and raw materials for the production of our products are available from more than one vendor. Our policy is to maintain more than one source of supply for the components used in our products when practicable. See Note 5. |
Property, Plant and Equipment | (e) Property, Plant and Equipment We depreciate property, plant and equipment on the straight-line method by charges to operations and costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. The facility we have constructed to produce the active pharmaceutical ingredient (Nisin) for Re-Tain™ |
Intangible Assets and Goodwill | (f) Intangible Assets and Goodwill We amortize intangible assets on the straight-line method by charges to costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. We have recorded intangible assets related to customer relationships, non-compete agreements, and developed technology, each with defined useful lives. We have classified as goodwill the amounts paid in excess of fair value of the net assets (including tax attributes) acquired in purchase transactions. We assess the impairment of intangible assets and goodwill that have indefinite lives at the reporting unit level on an annual basis (as of December 31 st |
Fair Value Measurements | (g) Fair Value Measurements In determining fair value measurements, we follow the provisions of Codification Topic 820, Fair Value Measurements and Disclosures Level 1— Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the measurement date. Level 2— Pricing inputs are quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 3— Pricing inputs are unobservable for the assets or liabilities, that is, inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset's or liability's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. From time to time, we also hold money market mutual funds in a brokerage account, which are classified as cash equivalents and measured at fair value. The fair value of these investments is based on their closing published net asset value. We assess the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with our accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. During the three-month periods ended March 31, 2019 and 2018, there were no transfers between levels. As of March 31, 2019 and December 31, 2018, our Level 1 assets measured at fair value by quoted prices in active markets consisted of bank savings accounts and money market funds. As of March 31, 2019 and December 31, 2018, our interest rate swaps were classified as Level 2 and were measured by observable market data in combination with expected cash flows for each instrument. There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2019 or December 31, 2018. As of March 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 10,584,067 $ — $ — $ 10,584,067 Interest rate swaps — 4,117 — 4,117 Total $ 10,584,067 $ 4,117 $ — $ 10,588,184 As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 2,521,050 $ — $ — $ 2,521,050 Interest rate swaps — 40,209 — 40,209 Total $ 2,521,050 $ 40,209 $ — $ 2,561,259 |
Valuation of Long-Lived Assets | (h) Valuation of Long-Lived Assets We periodically evaluate our long-lived assets, consisting principally of fixed assets and amortizable intangible assets, for potential impairment. In accordance with the applicable accounting guidance for the treatment of long-lived assets, we review the carrying value of our long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable. Under the held for use approach, the asset or asset group to be tested for impairment should represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. We evaluate our long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable. No impairment was recognized during the three-month periods ended March 31, 2019 and 2018. |
Concentration of Risk | (i) Concentration of Risk Concentration of credit risk with respect to accounts receivable is principally limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, as a consequence, believe that our accounts receivable credit risk exposure is limited. We maintain an allowance for potential credit losses when deemed necessary, but historically we have not experienced significant credit losses related to an individual customer or groups of customers in any particular industry or geographic area. Sales to significant customers that amounted to 10% or more of total product sales are detailed in the following table: During the Three-Month 2019 2018 Company A 43 % 34 % Company B 27 % 24 % Company C * 11 % * Amount is less than 10% Trade accounts receivable due from significant customers amounted to the percentages of total trade accounts receivable as detailed in the following table: As of As of Company A 42 % 35 % Company B 29 % 36 % Company C 13 % 15 % |
Interest Rate Swap Agreements | (j) Interest Rate Swap Agreements All derivatives are recognized on the balance sheet at their fair value. We entered into interest rate swap agreements in 2010 and 2015. On the dates the agreements were entered into, we designated the derivatives as hedges of the variability of cash flows to be paid related to our long-term debt. The agreements have been determined to be highly effective in hedging the variability of identified cash flows, so changes in the fair market value of the interest rate swap agreements are recorded as comprehensive income (loss), until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). We formally documented the relationship between the interest rate swap agreements and the related hedged items. We also formally assess, both at the interest rate swap agreements' inception and on an ongoing basis, whether the agreements are highly effective in offsetting changes in cash flow of hedged items. See Note 11. |
Revenue Recognition | (k) Revenue Recognition For periods ended on and before December 31, 2017, we recognized revenue in accordance with Accounting Standards Codification (ASC) 605 when four criteria were met. These included i) persuasive evidence that an arrangement existed, ii) delivery had occurred, iii) our price was fixed and determinable and iv) collectability was reasonably assured. For periods beginning on or after January 1, 2018, we recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers |
Expense Recognition | (l) Expense Recognition In 2018, we adopted ASC 340-40, Accounting for Other Assets and Deferred Costs |
Income Taxes | (m) Income Taxes We account for income taxes in accordance with Codification Topic 740, Income Taxes Codification Topic 740-10 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position must meet before being recognized in the financial statements. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, we are subject to periodic audits and examinations by the Internal Revenue Service and other taxing authorities. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years before 2015. We have evaluated the positions taken on our filed tax returns. We have concluded that no uncertain tax positions exist as of March 31, 2019 or December 31, 2018. Although we believe that our estimates are reasonable, actual results could differ from these estimates. See Note 16. |
Stock-Based Compensation | (n) Stock-Based Compensation We account for stock-based compensation in accordance with Codification Topic 718, Compensation-Stock Compensation |
Net Loss Per Common Share | (o) Net Income (Loss) Per Common Share Net income (loss) per common share has been computed in accordance with Codification Topic 260-10, Earnings Per Share. |
Use of Estimates | (p) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Although we regularly assess these estimates, actual amounts could differ from those estimates. Changes in estimates are recorded during the period in which they become known. Significant estimates include our inventory valuation, valuation of goodwill and long-lived assets, valuation of deferred tax assets, accrued expenses, costs of goods sold, and useful lives of intangible assets. |
New Accounting Pronouncements | (q) New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Codification improvements to Topic 842, Leases. Topic 842 Topic 842, Leases - Targeted improvements. Topic 842 In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting Topic 718 In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities Topic 815 Topic 815 Topic 815 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of financial assets measured at fair value on nonrecurring basis | As of March 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 10,584,067 $ — $ — $ 10,584,067 Interest rate swaps — 4,117 — 4,117 Total $ 10,584,067 $ 4,117 $ — $ 10,588,184 As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 2,521,050 $ — $ — $ 2,521,050 Interest rate swaps — 40,209 — 40,209 Total $ 2,521,050 $ 40,209 $ — $ 2,561,259 |
Schedule of sales to significant customers | During the Three-Month 2019 2018 Company A 43 % 34 % Company B 27 % 24 % Company C * 11 % * Amount is less than 10% |
Schedule of accounts receivable due from significant customers | As of As of Company A 42 % 35 % Company B 29 % 36 % Company C 13 % 15 % |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | As of As of Raw materials $ 470,497 $ 338,991 Work-in-process 1,153,152 1,337,035 Finished goods 412,144 655,645 Total $ 2,035,793 $ 2,331,671 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other current assets | As of March 31, As of December 31, Prepaid expenses $ 292,360 $ 142,528 Other receivables (1) 462,877 493,289 Total $ 755,237 $ 635,817 (1) This amount includes $450,000 due from a third party for the sale of assets. See Note 14. |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Estimated Useful Lives As of As of Buildings and improvements 10-39 $ 17,060,316 $ 17,018,316 Laboratory and manufacturing equipment 3-10 15,156,622 15,092,252 Office furniture and equipment 3-10 733,159 731,510 Construction in progress n/a 102,926 91,067 Land n/a 516,867 516,867 Property, plant and equipment, gross 33,569,890 33,450,012 Accumulated depreciation (7,984,438 ) (7,422,463 ) Property, plant and equipment, net $ 25,585,452 $ 26,027,549 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible amortization expense | Period Amount Nine-month period ending December 31, 2019 $ 14,328 Year ending December 31, 2020 19,104 Year ending December 31, 2021 19,104 Year ending December 31, 2022 19,104 Year ending December 31, 2023 19,104 After December 31, 2023 38,208 Total $ 128,952 |
Schedule of intangible assets | Intangible assets as of March 31, 2019 consisted of the following: Gross Carrying Value Accumulated Amortization Net Book Developed technology $ 184,100 $ (59,833 ) $ 124,267 Customer relationships 1,300 (422 ) 878 Non-compete agreements 5,640 (1,833 ) 3,807 Total $ 191,040 $ (62,088 ) $ 128,952 Intangible assets as of December 31, 2018 consisted of the following: Gross Carrying Value Accumulated Amortization Net Book Developed technology $ 184,100 $ (55,230 ) $ 128,870 Customer relationships 1,300 (390 ) 910 Non-compete agreements 5,640 (1,692 ) 3,948 Total $ 191,040 $ (57,312 ) $ 133,728 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | As of As of Accounts payable – trade $ 618,646 $ 531,048 Accounts payable – capital - 72,695 Accrued payroll 307,604 358,451 Accrued professional fees 56,275 93,050 Accrued other 190,231 165,416 Total $ 1,172,756 $ 1,220,660 |
Bank Debt (Tables)
Bank Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of interest rate swaps classified as level 2 fair value | During the Three-Month 2019 2018 Payments required by interest rate swaps $ (1,564 ) $ 5,285 Other comprehensive (loss) income, net of taxes $ (27,069 ) $ 43,859 |
Schedule of debt proceeds received and principal repayments made during the year | During the Three-Month During the Three-Month Proceeds from Debt Issue Debt Principal Repayments Proceeds from Debt Principal Repayments Loan #1 $ — $ (16,881 ) $ — $ (15,888 ) Loan #2 — (22,260 ) — (21,279 ) Loan #3 — (140,715 ) — — Loan #4 — (32,000 ) 267,141 — Loan #5 — (2,445 ) — (2,636 ) Total $ — $ (214,301 ) $ 267,141 $ (39,803 ) |
Schedule of principal payments due under debt outstanding | Nine-Months ending 12/31/2019 Year Year Year Year After 12/31/2023 Total Loan #1 $ 52,027 $ 493,696 $ — $ — $ — $ — $ 545,723 Loan #2 67,737 94,005 98,538 103,077 107,769 1,740,382 2,211,508 Loan #3 (1) 422,143 562,857 562,857 562,857 562,857 985,000 3,658,571 Loan #4 (1) 96,000 128,000 128,000 128,000 128,000 1,824,000 2,432,000 Loan #5 (2) 8,582 11,926 12,503 13,107 13,741 258,463 318,322 Subtotal $ 646,489 $ 1,290,484 $ 801,898 $ 807,041 $ 812,367 $ 4,807,845 9,166,124 Debt Issue Costs (110,343 ) Total $ 9,055,781 (1) These notes bear interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 4.74%. The actual interest rate and principal payments will be different. (2) This note bears interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 4.73%. The actual interest rate and principal payments will be different. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of activity under the stock option plans | 2000 Plan 2010 Plan 2017 Plan Weighted Average Exercise Price Aggregate Intrinsic Value (1) Outstanding at December 31, 2017 117,500 242,500 — $ 4.58 $ 1,513,980 Grants — 48,500 122,500 $ 7.38 Terminations — (19,000 ) (11,000 ) $ 6.63 Exercises (105,000 ) (2,000 ) — $ 1.89 Outstanding at December 31, 2018 12,500 270,000 111,500 $ 6.37 $ 266,020 Grants — — 10,000 $ 7.50 Terminations — (12,000 ) — $ 5.07 Exercises — (15,000 ) — $ 4.80 Outstanding at March 31, 2019 12,500 243,000 121,500 $ 6.51 $ (59,850 ) Vested at March 31, 2019 12,500 32,500 — $ 4.93 $ 63,860 Vested and expected to vest at March 31, 2019 12,500 243,000 121,500 $ 6.51 $ (59,850 ) Reserved for future grants — 13,000 178,500 (1) Intrinsic value is the difference between the fair market value as of the date indicated and as of the date of the option grant. |
Schedule of additional information about the stock option plans | Number of Shares Weighted Average Weighted Average Exercise Price Non-vested stock options as of January 1, 2019 334,000 $ 3.63 $ 6.64 Non-vested stock options as of March 31, 2019 332,000 $ 3.65 $ 6.72 Stock options granted during the three-month period ended March 31, 2019 10,000 $ 3.16 $ 7.50 Stock options that vested during the three-month period ended March 31, 2019 — $ — $ — Stock options that were forfeited during the three-month period ended March 31, 2019 12,000 $ 2.65 $ 5.07 |
Schedule of fair value stock option grant using black-scholes option valuation model with the weighted-average assumptions | During the Three-Month 2019 2018 Risk-free interest rate 2.59 % 2.5 % Dividend yield 0 % 0 % Expected volatility 51 % 57 % Expected life 4 years 5.1 years |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Geographic Area [Member] | |
Disaggregation of Revenue [Line Items] | |
Schedule of revenue disaggregated by geographic area and major product category | During the Three-Month 2019 2018 United States $ 3,777,746 $ 2,595,616 Other 632,815 285,569 Total product sales $ 4,410,561 $ 2,881,185 |
Major Product Category [Member] | |
Disaggregation of Revenue [Line Items] | |
Schedule of revenue disaggregated by geographic area and major product category | During the Three-Month 2019 2018 First Defense ® $ 4,140,917 $ 2,780,869 Other animal health 136,043 100,316 Other 133,601 — Total product sales $ 4,410,561 $ 2,881,185 |
Other Expenses, Net (Tables)
Other Expenses, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of other expenses, net | During the Three-Month 2019 2018 Interest expense $ 114,041 $ 96,015 Interest income (2,315 ) (3,824 ) Other gains — (75 ) Other expenses, net $ 111,726 $ 92,116 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and money market accounts | $ 10,584,067 | $ 2,521,050 |
Interest rate swaps | 4,117 | 40,209 |
Total | 10,588,184 | 2,561,259 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Cash and money market accounts | 10,584,067 | 2,521,050 |
Interest rate swaps | ||
Total | 10,584,067 | 2,521,050 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Cash and money market accounts | ||
Interest rate swaps | 4,117 | 40,209 |
Total | 4,117 | 40,209 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Cash and money market accounts | ||
Interest rate swaps | ||
Total |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Company A [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 43.00% | 34.00% | |
Company B [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 27.00% | 24.00% | |
Company C [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | [1] | 11.00% | |
[1] | Amount is less than 10%. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) | Mar. 31, 2019 | Dec. 31, 2018 |
Company A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Accounts receivable due from significant customers | 42.00% | 35.00% |
Company B [Member] | ||
Revenue, Major Customer [Line Items] | ||
Accounts receivable due from significant customers | 29.00% | 36.00% |
Company C [Member] | ||
Revenue, Major Customer [Line Items] | ||
Accounts receivable due from significant customers | 13.00% | 15.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | ||||
Federal deposit insurance corporation limits | $ 250,000 | |||
Property, plant and equipment, description | The facility we have constructed to produce the active pharmaceutical ingredient (Nisin) for Re-Tain™ is being depreciated over 39 years from when a certificate of occupancy was issued during the fourth quarter of 2017. We began depreciating the equipment for our Nisin production facility when it was placed in service during the third quarter of 2018. Approximately 89% of these assets are being depreciated over ten years. | |||
Concentration risk percentage, description | Sales to significant customers that amounted to 10% or more of total product sales. | |||
U.S. government aggregated amount | $ 10,331,744 | $ 2,268,737 | ||
Advertising expenses | 30,807 | $ 21,766 | ||
Stock-based compensation | $ 82,835 | $ 71,048 | ||
Non-cash income tax expense to create a full valuation allowance against our net deferred tax assets | $ 563,252 | |||
Outstanding stock options not included in the calculation because the effect would be anti-dilutive | 87,000 | 477,000 | ||
Weighted average number of shares outstanding | 5,624,504 | 5,477,921 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Cash and Cash Equivalents (Textual) | ||||
Debt covenant, description | Bank debt covenant to maintain at least $2,000,000 of otherwise unrestricted cash and cash equivalents. | |||
Cash and cash equivalents | $ 10,584,067 | $ 2,521,050 | $ 3,060,470 | $ 3,798,811 |
Trade Accounts Receivable, Net
Trade Accounts Receivable, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of accounts receivable | ||
Trade accounts receivable, net | $ 1,283,096 | $ 932,298 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of inventory | ||
Raw materials | $ 470,497 | $ 338,991 |
Work-in-process | 1,153,152 | 1,337,035 |
Finished goods | 412,144 | 655,645 |
Total | $ 2,035,793 | $ 2,331,671 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid expenses | $ 292,360 | $ 142,528 | |
Other receivables | [1] | 462,877 | 493,289 |
Total | $ 755,237 | $ 635,817 | |
[1] | This amount includes $450,000 due from a third party for the sale of assets. See Note 14. |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets (Details Textual) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Due from a third party | $ 450,000 | $ 450,000 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 33,569,890 | $ 33,450,012 |
Accumulated depreciation | (7,984,438) | (7,422,463) |
Property, plant and equipment, net | 25,585,452 | 26,027,549 |
Buildings and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 17,060,316 | 17,018,316 |
Laboratory and manufacturing equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15,156,622 | 15,092,252 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 733,159 | 731,510 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 102,926 | 91,067 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 516,867 | $ 516,867 |
Minimum [Member] | Buildings and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 10 years | |
Minimum [Member] | Laboratory and manufacturing equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 3 years | |
Minimum [Member] | Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 3 years | |
Maximum [Member] | Buildings and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 39 years | |
Maximum [Member] | Laboratory and manufacturing equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 10 years | |
Maximum [Member] | Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 10 years |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment (Textual) | ||
Property, plant and equipment, disposals | $ 1,830 | $ 3,430 |
Depreciation expense | $ 563,805 | $ 279,896 |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Jan. 04, 2016 | Dec. 31, 2018 |
Business Acquisition (Textual) | ||
Total purchase price | $ 532,000 | |
Amount paid on acquisition | 368,000 | |
Technology transfer payment | 97,000 | |
Aggregate royalties payment | 67,000 | |
Royalty expense | $ 36,000 | |
Estimated fair values of inventory | 113,000 | |
Estimated fair values of machinery and equipment | 132,000 | |
Estimated fair values of intangible assets | 191,000 | |
Estimated fair values of goodwill | $ 96,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of intangible amortization expense | ||
Nine-month period ending December 31, 2019 | $ 14,328 | |
Year ending December 31, 2020 | 19,104 | |
Year ending December 31, 2021 | 19,104 | |
Year ending December 31, 2022 | 19,104 | |
Year ending December 31, 2023 | 19,104 | |
After December 31, 2023 | 38,208 | |
Total | $ 128,952 | $ 133,728 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 191,040 | $ 191,040 |
Accumulated Amortization | (62,088) | (57,312) |
Net Book Value | 128,952 | 133,728 |
Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 184,100 | 184,100 |
Accumulated Amortization | (59,833) | (55,230) |
Net Book Value | 124,267 | 128,870 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,300 | 1,300 |
Accumulated Amortization | (422) | (390) |
Net Book Value | 878 | 910 |
Non-compete agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 5,640 | 5,640 |
Accumulated Amortization | (1,833) | (1,692) |
Net Book Value | $ 3,807 | $ 3,948 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Intangible Assets (Textual) | |||
Intangible amortization expense | $ 4,776 | $ 4,776 | |
Intangible asset amortized, useful lives | 10 years | ||
Net value | $ 128,952 | $ 133,728 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable - trade | $ 618,646 | $ 531,048 |
Accounts payable - capital | 72,695 | |
Accrued payroll | 307,604 | 358,451 |
Accrued professional fees | 56,275 | 93,050 |
Accrued other | 190,231 | 165,416 |
Total | $ 1,172,756 | $ 1,220,660 |
Bank Debt (Details)
Bank Debt (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Payments required by interest rate swaps | $ (1,564) | $ 5,285 |
Other comprehensive (loss) income, net of taxes | $ (27,069) | $ 43,859 |
Bank Debt (Details 1)
Bank Debt (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | ||
Proceeds from Debt Issue | $ 267,141 | |
Debt Principal Repayments | (214,301) | (39,803) |
Loan #1 [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from Debt Issue | ||
Debt Principal Repayments | (16,881) | (15,888) |
Loan #2 [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from Debt Issue | ||
Debt Principal Repayments | (22,260) | (21,279) |
Loan #3 [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from Debt Issue | ||
Debt Principal Repayments | (140,715) | |
Loan #4 [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from Debt Issue | 267,141 | |
Debt Principal Repayments | (32,000) | |
Loan #5 [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from Debt Issue | ||
Debt Principal Repayments | $ (2,445) | $ (2,636) |
Bank Debt (Details 2)
Bank Debt (Details 2) | Mar. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||
Nine-Months ending 12/31/2019 | $ 646,489 | |
Year ending 12/31/2020 | 1,290,484 | |
Year ending 12/31/2021 | 801,898 | |
Year ending 12/31/2022 | 807,041 | |
Year ending 12/31/2023 | 812,367 | |
After 12/31/2023 | 4,807,845 | |
Subtotal | 9,166,124 | |
Debt Issuance Costs | (110,343) | |
Total | 9,055,781 | |
loan 1 [Member] | ||
Debt Instrument [Line Items] | ||
Nine-Months ending 12/31/2019 | 52,027 | |
Year ending 12/31/2020 | 493,696 | |
Year ending 12/31/2021 | ||
Year ending 12/31/2022 | ||
Year ending 12/31/2023 | ||
After 12/31/2023 | ||
Subtotal | 545,723 | |
loan 2 [Member] | ||
Debt Instrument [Line Items] | ||
Nine-Months ending 12/31/2019 | 67,737 | |
Year ending 12/31/2020 | 94,005 | |
Year ending 12/31/2021 | 98,538 | |
Year ending 12/31/2022 | 103,077 | |
Year ending 12/31/2023 | 107,769 | |
After 12/31/2023 | 1,740,382 | |
Subtotal | 2,211,508 | |
loan 3 [Member] | ||
Debt Instrument [Line Items] | ||
Nine-Months ending 12/31/2019 | 422,143 | [1] |
Year ending 12/31/2020 | 562,857 | [1] |
Year ending 12/31/2021 | 562,857 | [1] |
Year ending 12/31/2022 | 562,857 | [1] |
Year ending 12/31/2023 | 562,857 | [1] |
After 12/31/2023 | 985,000 | [1] |
Subtotal | 3,658,571 | [1] |
loan 4 [Member] | ||
Debt Instrument [Line Items] | ||
Nine-Months ending 12/31/2019 | 96,000 | [1] |
Year ending 12/31/2020 | 128,000 | [1] |
Year ending 12/31/2021 | 128,000 | [1] |
Year ending 12/31/2022 | 128,000 | [1] |
Year ending 12/31/2023 | 128,000 | [1] |
After 12/31/2023 | 1,824,000 | [1] |
Subtotal | 2,432,000 | [1] |
loan 5 [Member] | ||
Debt Instrument [Line Items] | ||
Nine-Months ending 12/31/2019 | 8,582 | [2] |
Year ending 12/31/2020 | 11,926 | [2] |
Year ending 12/31/2021 | 12,503 | [2] |
Year ending 12/31/2022 | 13,107 | [2] |
Year ending 12/31/2023 | 13,741 | [2] |
After 12/31/2023 | 258,463 | [2] |
Subtotal | $ 318,322 | [2] |
[1] | These notes bear interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 4.74%. The actual interest rate and principal payments will be different. | |
[2] | This note bears interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 4.73%. The actual interest rate and principal payments will be different. |
Bank Debt (Details Textual)
Bank Debt (Details Textual) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019USD ($)ft² | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2010USD ($) | |
Bank Debt (Textual) | ||||||
Debt issue costs | $ 522 | |||||
Interest Rate Swap [Member] | ||||||
Bank Debt (Textual) | ||||||
Variable interest rate with LIBOR, description | Interest rate exposures on Loan #1 and Loan #2 with interest rate swap agreements that effectively converted floating interest rates based on the one-month LIBOR plus a margin of 3.25% and 2.25% to the fixed rates of 6.04% and 4.38%, respectively. As of March 31, 2019, the variable rates on these two mortgage notes were 5.75% and 4.74%, respectively | |||||
Original notional amount | $ 2,757,231 | |||||
Line of Credit [Member] | ||||||
Bank Debt (Textual) | ||||||
Credit facility aggregate value | $ 6,500,000 | $ 4,500,000 | ||||
Variable interest rate with LIBOR, description | Interest on borrowings against the line of credit is variable at the higher of 4.25% per annum or the one-month LIBOR plus 3.5% per annum. | |||||
Outstanding under line of credit | $ 500,000 | |||||
Line of Credit [Member] | Loan 1 and Loan 2 [Member] | ||||||
Bank Debt (Textual) | ||||||
Debt issue costs | 26,489 | |||||
Line of Credit [Member] | Loan 1 and Loan 2 [Member] | ||||||
Bank Debt (Textual) | ||||||
Debt issue costs | 34,125 | |||||
Line of Credit [Member] | Loan 3 and Loan 4 and Laon 5 [Member] | ||||||
Bank Debt (Textual) | ||||||
Debt issue costs | 46,734 | |||||
Line of Credit [Member] | Loan 3 and Loan 4 and Laon 5 [Member] | ||||||
Bank Debt (Textual) | ||||||
Debt issue costs | 68,072 | |||||
Loan One [Member] | Interest Rate Swap [Member] | ||||||
Bank Debt (Textual) | ||||||
Original notional amount | 1,000,000 | |||||
Loan Two [Member] | Interest Rate Swap [Member] | ||||||
Bank Debt (Textual) | ||||||
Original notional amount | $ 2,500,000 | |||||
Loan Four [Member] | Line of Credit [Member] | ||||||
Bank Debt (Textual) | ||||||
Variable interest rate with LIBOR, description | These notes bear interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. | |||||
Variable interest rate | 4.74% | |||||
Loan Five [Member] | Line of Credit [Member] | ||||||
Bank Debt (Textual) | ||||||
Variable interest rate with LIBOR, description | This note bears interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. | |||||
Variable interest rate | 4.73% | |||||
Td Bank [Member] | Line of Credit [Member] | ||||||
Bank Debt (Textual) | ||||||
Credit facility aggregate value | $ 500,000 | |||||
Td Bank [Member] | Loan One [Member] | ||||||
Bank Debt (Textual) | ||||||
Proceeds from issuance of loan | $ 1,000,000 | |||||
Interest payments, term | 10 years | |||||
Loan amortization, term | 15 years | |||||
Balloon principal payment | $ 451,885 | |||||
Balloon principal payment due, description | Due during the third quarter of 2020. | |||||
Outstanding amount of loan | $ 545,723 | |||||
Td Bank [Member] | Loan Two [Member] | ||||||
Bank Debt (Textual) | ||||||
Proceeds from issuance of loan | $ 2,500,000 | |||||
Interest payments, term | 10 years | |||||
Loan amortization, term | 20 years | |||||
Balloon principal payment | $ 1,550,000 | |||||
Balloon principal payment due, description | Due during the third quarter of 2025. | |||||
Outstanding amount of loan | $ 2,211,508 | |||||
Td Bank [Member] | Loan Three [Member] | ||||||
Bank Debt (Textual) | ||||||
Maximum limit on issuance of loan, description | Not to exceed 80%. | |||||
Proceeds from issuance of loan | $ 3,940,000 | |||||
Loan amortization, term | 7 years | |||||
Outstanding amount of loan | $ 3,658,571 | |||||
Variable interest rate with LIBOR, description | Variable rate equal to the one-month LIBOR (adjusted at each monthly payment date) plus a margin of 2.25% through March 2018, at which time the loan converted to a term loan facility at the same variable interest rate (which was equal to 4.74% as of March 31, 2019) | |||||
Loan conversion, term | 7 years | |||||
Td Bank [Member] | Loan Four [Member] | ||||||
Bank Debt (Textual) | ||||||
Maximum limit on issuance of loan, description | Not to exceed 80%. | |||||
Proceeds from issuance of loan | $ 2,560,000 | |||||
Interest payments, term | 10 years | |||||
Loan amortization, term | 20 years | |||||
Balloon principal payment | $ 1,408,000 | |||||
Balloon principal payment due, description | Due during the first quarter of 2027. | |||||
Outstanding amount of loan | $ 2,432,000 | |||||
Variable interest rate with LIBOR, description | Variable rate equal to the one-month LIBOR (adjusted at each monthly payment date) plus a margin of 2.25% through March 2018, at which time the loan converted to a term loan facility at the same variable interest rate (which was equal to 4.74% as of March 31, 2019) | |||||
Td Bank [Member] | Loan Five [Member] | ||||||
Bank Debt (Textual) | ||||||
Proceeds from issuance of loan | $ 340,000 | |||||
Interest payments, term | 10 years | |||||
Loan amortization, term | 20 years | |||||
Balloon principal payment | $ 209,000 | |||||
Balloon principal payment due, description | Due during the first quarter of 2027. | |||||
Outstanding amount of loan | $ 318,322 | |||||
Variable interest rate with LIBOR, description | Variable rate equal to the one-month LIBOR (adjusted at each monthly payment date) plus a margin of 2.25% (which was equal to 4.73% as of March 31, 2019) | |||||
Warehouse and storage facility | ft² | 4,114 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Stock Option [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted Average Exercise Price, Outstanding, Beginning | $ 6.37 | ||
Weighted Average Exercise Price, Grants | 7.50 | $ 7.38 | |
Weighted Average Exercise Price, Terminations | 5.07 | 6.63 | |
Weighted Average Exercise Price, Exercises | 4.80 | 1.89 | |
Weighted Average Exercise Price, Outstanding, Ending | 6.51 | $ 6.37 | |
Weighted Average Exercise Price, Vested | 4.93 | ||
Weighted average exercise price, Vested and expected to vest | $ 6.51 | ||
Aggregate Intrinsic Value, Outstanding, Beginning | [1] | $ 266,020 | $ 1,513,980 |
Aggregate Intrinsic Value, Outstanding, Ending | [1] | (59,850) | $ 266,020 |
Aggregate Intrinsic Value, Vested | [1] | 63,860 | |
Aggregate Intrinsic Value, Vested and expected to vest | [1] | $ (59,850) | |
2000 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding, Beginning balance | 12,500 | 117,500 | |
Grants | |||
Terminations | |||
Exercises | (105,000) | ||
Outstanding, Ending balance | 12,500 | 12,500 | |
Vested | 12,500 | ||
Vested and expected to vest | 12,500 | ||
Reserved for future grants | |||
2010 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding, Beginning balance | 270,000 | 242,500 | |
Grants | 48,500 | ||
Terminations | (12,000) | (19,000) | |
Exercises | (15,000) | (2,000) | |
Outstanding, Ending balance | 243,000 | 270,000 | |
Vested | 32,500 | ||
Vested and expected to vest | 243,000 | ||
Reserved for future grants | 13,000 | ||
2017 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding, Beginning balance | 111,500 | ||
Grants | 10,000 | 122,500 | |
Terminations | (11,000) | ||
Exercises | |||
Outstanding, Ending balance | 121,500 | 111,500 | |
Vested | |||
Vested and expected to vest | 121,500 | ||
Reserved for future grants | 178,500 | ||
[1] | Intrinsic value is the difference between the fair market value as of the date indicated and as of the date of the option grant. |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Stock option plans [Member] | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Non-vested stock options as of January 1, 2019 | shares | 334,000 |
Number of Shares, Non-vested stock options as of March 31, 2019 | shares | 332,000 |
Number of Shares, Stock options granted during the three-month period ended March 31, 2019 | shares | 10,000 |
Number of Shares, Stock options that vested during the three-month period ended March 31, 2019 | shares | |
Number of Shares, Stock options that were forfeited during the three-month period ended March 31, 2019 | shares | 12,000 |
Weighted Average Fair Value at Grant Date, Non-vested stock options as of January 1, 2019 | $ 3.63 |
Weighted Average Fair Value at Grant Date, Non-vested stock options as of March 31, 2019 | 3.65 |
Weighted Average Fair Value at Grant Date, Stock options granted during the three-month period ended March 31, 2019 | 3.16 |
Weighted Average Fair Value at Grant Date, Stock options that vested during the three-month period ended March 31, 2019 | |
Weighted Average Fair Value at Grant Date, Stock options that were forfeited during the three-month period ended March 31, 2019 | 2.65 |
Weighted Average Exercise Price, Non-vested stock options as of January 1, 2019 | 6.64 |
Weighted Average Exercise Price, Non-vested stock options as of March 31, 2019 | 6.72 |
Weighted Average Exercise Price, Stock options granted during the three-month period ended March 31, 2019 | 7.50 |
Weighted Average Exercise Price, Stock options that vested during the three-month period ended March 31, 2019 | |
Weighted Average Exercise Price, Stock options that were forfeited during the three-month period ended March 31, 2019 | $ 5.07 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity [Abstract] | ||
Risk-free interest rate | 2.59% | 2.50% |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 51.00% | 57.00% |
Expected life | 4 years | 5 years 1 month 6 days |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) | Feb. 03, 2016USD ($)$ / sharesshares | Sep. 30, 1995$ / shares | Nov. 20, 2018USD ($) | Dec. 21, 2017USD ($)$ / sharesshares | Jul. 27, 2017USD ($)Investors$ / sharesshares | Oct. 21, 2016USD ($)$ / sharesshares | Oct. 28, 2015USD ($) | Jun. 30, 2010shares | Jun. 30, 2000shares | Mar. 31, 2019USD ($)Director$ / sharesshares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2018$ / sharesshares | Jun. 14, 2018shares | Jun. 30, 2017shares | Jun. 15, 2016shares | Jun. 30, 2001shares |
Stockholders' Equity (Textual) | ||||||||||||||||
Potential issuance or sale of equity | $ | $ 10,000,000 | |||||||||||||||
Gross proceeds | $ | $ 5,900,000 | $ 3,050,000 | $ 9,000,000 | |||||||||||||
Net proceeds | $ | $ 5,313,000 | $ 2,734,000 | $ 8,303,000 | |||||||||||||
Common stock shares sold | 1,123,810 | 417,807 | 1,636,364 | |||||||||||||
Sale of stock, per share | $ / shares | $ 5.25 | $ 7.30 | $ 5.50 | |||||||||||||
Common stock, shares authorized | 11,000,000 | 11,000,000 | ||||||||||||||
Stock option and incentive plan, description | We currently match 100% of the first 3% of each employee's salary that is contributed to the Plan and 50% of the next 2% of each employee's salary that is contributed to the Plan. | |||||||||||||||
Proceeds from exercise of stock options | $ | $ 2 | $ 4,156 | ||||||||||||||
Potential issuance cost in equity securities | $ | $ 20,000,000 | |||||||||||||||
Registration statement, description | Having raised $10,000,000 in gross proceeds under the February 2016, July 2017 and December 2017 equity transactions. | |||||||||||||||
Private Placement [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Gross proceeds | $ | $ 3,464,000 | |||||||||||||||
Net proceeds | $ | $ 3,161,000 | |||||||||||||||
Common stock shares sold | 659,880 | |||||||||||||||
Closing share price | $ / shares | $ 5.25 | |||||||||||||||
Stock Options Granted [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Weighted average remaining life of options exercisable | 3 years 1 month | |||||||||||||||
Investor [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Gross proceeds | $ | $ 1,050,000 | |||||||||||||||
Net proceeds | $ | $ 1,034,000 | |||||||||||||||
Number of related investors | Investors | 2 | |||||||||||||||
Common stock shares issued | 200,000 | |||||||||||||||
Closing share price | $ / shares | $ 5.25 | |||||||||||||||
Common Stock Rights Plan [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Share-based payment, description | At any time after a person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding common stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of common stock per Right (subject to adjustment). | |||||||||||||||
Common stock purchase price | $ / shares | $ 70 | |||||||||||||||
Employee stock, plan description | The Rights (as amended) become exercisable and transferable apart from the common stock upon the earlier of i) 10 days following a public announcement that a person or group (Acquiring Person) has, without the prior consent of the Continuing Directors (as such term is defined in the Rights Agreement), acquired beneficial ownership of 20% or more of the outstanding common stock or ii) 10 days following commencement of a tender offer or exchange offer the consummation of which would result in ownership by a person or group of 20% or more of the outstanding common stock (the earlier of such dates being called the Distribution Date). | Our Board of Directors also has voted to authorize amendments to increase the ownership threshold for determining "Acquiring Person" status to 20%. During the second quarter of 2015, our Board of Directors also voted to authorize an amendment to remove a provision that prevented a new group of directors elected following the emergence of an Acquiring Person (an owner of more than 20% of our stock) from controlling the Rights Plan by maintaining exclusive authority over the Rights Plan with pre-existing directors. | ||||||||||||||
Sale of common stock, description | The Company should consolidate or merge with any other entity and the Company were not the surviving company, or, if the Company were the surviving company, all or part of the Company's common stock were changed or exchanged into the securities of any other entity, or if more than 50% of the Company's assets or earning power were sold. | |||||||||||||||
Outstanding rights price per share | $ / shares | $ 0.005 | |||||||||||||||
Option expiry date | Sep. 19, 2022 | |||||||||||||||
Employee Stock Option [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Number of directors exercised stock options | Director | 1 | |||||||||||||||
Aggregate intrinsic value of options exercised | $ | $ 28,641 | $ 24,800 | ||||||||||||||
Weighted-average grant date fair values of options granted | $ / shares | $ 3.16 | $ 4.22 | ||||||||||||||
Total unrecognized stock-based compensation related to non-vested stock options | $ | $ 562,225 | |||||||||||||||
Exercise prices of options outstanding | $ / shares | $ 6.51 | $ 6.37 | ||||||||||||||
Weighted average remaining life of unrecognized stock-based compensation related to non-vested | 1 year 7 months | |||||||||||||||
Employee Stock Option [Member] | Two Thousand Ten Plan [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock reserved for issuance under the plan | 13,000 | |||||||||||||||
Weighted average remaining life of options outstanding | 6 years 6 months | |||||||||||||||
Number of stock options exercised | ||||||||||||||||
Stock option granted during the period | 48,500 | |||||||||||||||
Employee Stock Option [Member] | Two Thousand Ten Plan [Member] | Employee [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock reserved for issuance under the plan | 300,000 | |||||||||||||||
Stock option expiration period | 10 years | |||||||||||||||
Weighted average remaining life of options exercisable | 3 years 1 month | |||||||||||||||
Share-based payment, description | The 2010 Plan expires in June 2020, after which date no further options could be granted under the 2010 Plan. | |||||||||||||||
Option expiry date | Jun. 30, 2020 | |||||||||||||||
Employee Stock Option [Member] | Two Thousand Plan [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock reserved for issuance under the plan | ||||||||||||||||
Weighted average remaining life of options outstanding | 6 years 6 months | |||||||||||||||
Number of stock options exercised | ||||||||||||||||
Stock option granted during the period | ||||||||||||||||
Employee Stock Option [Member] | Two Thousand Plan [Member] | Employee [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Stock option and incentive plan, description | No less than 85% of fair market value on the date of grant in the case of non-qualified stock options. | |||||||||||||||
Common stock reserved for issuance under the plan | 250,000 | 500,000 | ||||||||||||||
Stock option expiration period | 10 years | |||||||||||||||
Weighted average remaining life of options exercisable | 3 years 1 month | |||||||||||||||
Option expiry date | Feb. 28, 2010 | |||||||||||||||
Employee Stock Option [Member] | Two Thousand Seventeen Plan [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock reserved for issuance under the plan | 178,500 | |||||||||||||||
Weighted average remaining life of options outstanding | 6 years 6 months | |||||||||||||||
Number of stock options exercised | ||||||||||||||||
Stock option granted during the period | 10,000 | 122,500 | ||||||||||||||
Weighted-average grant date fair values of options granted | $ / shares | $ 7.50 | |||||||||||||||
Employee Stock Option [Member] | Two Thousand Seventeen Plan [Member] | Employee [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock reserved for issuance under the plan | 300,000 | |||||||||||||||
Weighted average remaining life of options exercisable | 3 years 1 month | |||||||||||||||
Equity Option [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Stock option granted during the period | 10,000 | |||||||||||||||
Weighted-average grant date fair values of options granted | $ / shares | $ 3.16 | |||||||||||||||
Share-based payment, description | Stock options covering 15,000 shares by the surrender of 10,731 shares of common stock with a fair market value of $71,998 at the time of exercise and $2 in cash. | Two employees exercised stock options covering 6,000 shares. One thousand of these options were exercised for cash, resulting in total proceeds of $4,150 and 5,000 of these options were exercised by the surrender of 2,040 shares of common stock with a fair market value of $14,994 at the time of exercise and $6 in cash. | ||||||||||||||
Maximum [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock, shares authorized | 11,000,000 | 10,000,000 | ||||||||||||||
Maximum [Member] | Stock Options Granted [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Weighted-average grant date fair values of options granted | $ / shares | $ 7.80 | |||||||||||||||
Minimum [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Common stock, shares authorized | 8,000,000 | 8,000,000 | ||||||||||||||
Minimum [Member] | Stock Options Granted [Member] | ||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||
Weighted-average grant date fair values of options granted | $ / shares | $ 7.08 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total product sales | $ 4,410,561 | $ 2,881,185 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total product sales | 3,777,746 | 2,595,616 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total product sales | $ 632,815 | $ 285,569 |
Revenue (Details 1)
Revenue (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total product sales | $ 4,410,561 | $ 2,881,185 |
First Defense product line [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total product sales | 4,140,917 | 2,780,869 |
Other animal health [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total product sales | 136,043 | 100,316 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total product sales | $ 133,601 |
Revenue (Details Textual)
Revenue (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue (Textual) | ||||
Revenue, description | We cleared all of this backlog (approximately $901,000) | We had received orders representing backlogs worth approximately $393,000 and $276,000, respectively. | We had a backlog of orders (representing purchase orders received from customers which were not fulfilled or paid) worth approximately $1,245,000. | |
Received orders from backlogs | $ 276,000 | $ 393,000 |
Gain on Sale of Assets (Details
Gain on Sale of Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | |
Gain on Sale of Assets (Textual) | ||
Sale of technology | $ 700,000 | |
Upfront payment received | $ 250,000 | |
Third Quarter [Member] | ||
Gain on Sale of Assets (Textual) | ||
Second payment due | 200,000 | |
Fourth Quarter [Member] | ||
Gain on Sale of Assets (Textual) | ||
Third payment due | $ 200,000 |
Other Expenses, Net (Details)
Other Expenses, Net (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | ||
Interest expense | $ 114,041 | $ 96,015 |
Interest income | (2,315) | (3,824) |
Other gains | (75) | |
Other expenses, net | $ 111,726 | $ 92,116 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 22, 2017 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Income Taxes (Textual) | ||||
Income tax expense (benefit) | $ 9,023 | $ (49,148) | ||
(Loss) income before income taxes, rate | 6.00% | 18.00% | ||
Tax credit carryforward, description | Federal net operating loss carryforwards of $11,839,349 of which $10,127,442 do not expire and $1,711,907 expires in 2034 through 2037 (if not utilized before then) and state net operating loss carryforwards of $3,485,949 that expire in 2037 through 2038 (if not utilized before then). Additionally, we had federal general business tax credit carryforwards of $407,023 that expire in 2027 through 2038 (if not utilized before then) and state tax credit carryforwards of $763,350 that expire in 2023 through 2038 (if not utilized before then). | |||
Non-cash income tax expense to create a full valuation allowance against our net deferred tax assets | $ 563,252 | |||
Income tax expense in continuing operations increase in the deferred tax assets | $ 71,000 | |||
Minimum [Member] | ||||
Income Taxes (Textual) | ||||
U.S. federal corporate tax rate | 21.00% | |||
Maximum [Member] | ||||
Income Taxes (Textual) | ||||
U.S. federal corporate tax rate | 34.00% |
Contingent Liabilities and Co_2
Contingent Liabilities and Commitments (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2019 | Dec. 31, 2018 | |
Contingent Liabilities and Commitments (Textual) | |||||
Termination fee | $ 100,000 | ||||
Purchase of inventory | 474,000 | ||||
Other obligations | 144,000 | ||||
Milestone payment | $ 150,000 | ||||
Royalty, percentage | 4.00% | ||||
Growth assumption, percentage | 6.00% | ||||
Royalties due for 2017 | $ 5,000 | ||||
Royalties due for 2018 | 10,000 | ||||
Royalties due for 2019 | 15,000 | ||||
Royalties due for 2020 | 20,000 | ||||
Royalties due for 2021 (and thereafter) | 25,000 | ||||
Royalties | $ 3,750 | $ 10,396 |
Segment Information (Details)
Segment Information (Details) - Segment | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Information (Textual) | ||
Number of business segment | 1 | |
Sales Revenue, Net [Member] | ||
Segment Information (Textual) | ||
Concentration risk percentage | 94.00% | 97.00% |
U.S. dairy and beef industries [Member] | Sales Revenue, Net [Member] | ||
Segment Information (Textual) | ||
Concentration risk percentage | 86.00% | 90.00% |
International dairy and beef [Member] | Sales Revenue, Net [Member] | ||
Segment Information (Textual) | ||
Concentration risk percentage | 11.00% | 10.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Related Party Transactions (Textual) | |||
Revenues from transactions with related party | $ 176,866 | $ 209,633 | |
Marketing-related payments | 0 | $ 10,383 | |
Accounts receivable, related parties | $ 35,543 | $ 16,283 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee Benefits (Textual) | ||
Employee savings plan, description | All employees completing one month of service with the Company are eligible to participate. | |
Defined benefit plans general information, description | We currently match 100% of the first 3% of each employee's salary that is contributed to the Plan and 50% of the next 2% of each employee's salary that is contributed to the Plan. | |
Defined benefit plan benefits paid | $ 31,197 | $ 24,646 |