Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 25, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Registrant Name | ZYNEX INC | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Security Exchange Name | NASDAQ | ||
Title of 12(g) Security | Common Stock, $0.001 par value per share | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Public Float | $ 422.4 | ||
Entity Common Stock, Shares Outstanding | 34,849,482 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000846475 | ||
Amendment Flag | false | ||
Trading Symbol | ZYXI | ||
Entity File Number | 001-38804 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 90-0275169 | ||
Entity Address, Address Line One | 9555 Maroon Circle | ||
Entity Address, City or Town | Englewood | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80112 | ||
City Area Code | 303 | ||
Local Phone Number | 703-4906 | ||
ICFR Auditor Attestation Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 39,173 | $ 14,040 |
Accounts receivable, net | 13,837 | 5,833 |
Inventory, net | 8,635 | 2,378 |
Prepaid expenses and other | 1,378 | 315 |
Total current assets | 63,023 | 22,566 |
Property and equipment, net | 1,925 | 858 |
Operating lease asset | 5,993 | 3,831 |
Finance lease asset | 321 | 180 |
Deposits | 347 | 329 |
Deferred income taxes | 566 | 513 |
Total assets | 72,175 | 28,277 |
Current liabilities: | ||
Accounts payable and accrued expenses | 4,717 | 2,141 |
Operating lease liability | 2,051 | 1,211 |
Finance lease liability | 77 | 45 |
Income taxes payable | 280 | 52 |
Accrued payroll and related taxes | 2,992 | 1,748 |
Total current liabilities | 10,117 | 5,197 |
Long-term liabilities: | ||
Operating lease liability | 4,920 | 3,282 |
Finance lease liability | 283 | 145 |
Total liabilities | 15,320 | 8,624 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,126,698 issued and 34,791,931 outstanding as of December 31, 2020 and 33,862,885 issued and 32,791,665 outstanding as of December 31, 2019 | 36 | 34 |
Additional paid-in capital | 37,235 | 9,198 |
Treasury stock 1,071,220 shares, at December 31, 2020 and 2019, at cost | (3,846) | (3,846) |
Retained earnings | 23,430 | 14,356 |
Total Zynex, Inc. stockholders' equity | 56,855 | 19,742 |
Non-controlling interest | (89) | |
Total stockholders' equity | 56,855 | 19,653 |
Total liabilities and stockholders' equity | $ 72,175 | $ 28,277 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 36,126,698 | 33,862,885 |
Common Stock, Shares, Outstanding | 34,791,931 | 32,791,665 |
Treasury Stock, Shares | 1,071,220 | 1,071,220 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
NET REVENUE | ||
Total net revenue | $ 80,122 | $ 45,472 |
COSTS OF REVENUE AND OPERATING EXPENSES | ||
Costs of revenue - devices and supplies | 17,417 | 8,814 |
Sales and marketing | 34,133 | 14,855 |
General and administrative | 18,323 | 10,737 |
Total costs of revenue and operating expenses | 69,873 | 34,406 |
Income from operations | 10,249 | 11,066 |
Other income/ (expense) | ||
Deferred insurance reimbursement | 880 | |
Loss on disposal of non-controlling interest | (77) | |
Interest expense | (19) | (5) |
Other income/ (expense), net | (96) | 875 |
Income from operations before income taxes | 10,153 | 11,941 |
Income tax expense | 1,079 | 2,449 |
Net Income | $ 9,074 | $ 9,492 |
Net income per share: | ||
Basic | $ 0.27 | $ 0.29 |
Diluted | $ 0.26 | $ 0.28 |
Weighted average basic shares outstanding | 33,869 | 32,439 |
Weighted average diluted shares outstanding | 34,943 | 33,963 |
Devices [Member] | ||
NET REVENUE | ||
Total net revenue | $ 21,269 | $ 10,713 |
Supplies [Member] | ||
NET REVENUE | ||
Total net revenue | $ 58,853 | $ 34,759 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 9,074 | $ 9,492 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,572 | 778 |
Non-cash reserve charges | (238) | 185 |
Stock-based compensation | 2,681 | 820 |
Non-cash lease expense | 2 | |
Provision for deferred income taxes | (54) | 212 |
Change in operating assets and liabilities: | ||
Accounts receivable | (8,004) | (3,042) |
Prepaid and other assets | (724) | 255 |
Accounts payable and other accrued expenses | 3,773 | 785 |
Inventory | (7,323) | (2,360) |
Deposits | (18) | (15) |
Other | 77 | (807) |
Net cash provided by operating activities | 818 | 6,303 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (985) | (160) |
Net cash used in investing activities | (985) | (160) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on finance lease obligations | (57) | (19) |
Common stock cash dividends | (2,262) | |
Purchase of treasury stock | (171) | |
Proceeds from issuance of common stock under equity offering, net | 25,203 | |
Proceeds from the issuance of common stock on stock-based awards | 566 | 221 |
Taxes withheld and paid on employees' equity awards | (412) | |
Net cash (used in) provided by financing activities | 25,300 | (2,231) |
Net increase in cash and cash equivalents | 25,133 | 3,912 |
Cash and cash equivalents at beginning of period | 14,040 | 10,128 |
Cash and cash equivalents at end of period | 39,173 | 14,040 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | (19) | (5) |
Cash paid for rent | (1,633) | (956) |
Cash paid for income taxes | (894) | (2,873) |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 3,834 | 1,605 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 225 | 186 |
Inventory transferred to sales rep demos | 519 | |
Inventory transferred to property and equipment under lease | $ 811 | $ 652 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Non-Controlling Interest [Member] | Total |
Balance at Dec. 31, 2018 | $ 34 | $ 8,157 | $ (3,675) | $ 4,864 | $ (89) | $ 9,291 |
Balance (in shares) at Dec. 31, 2018 | 32,271,367 | |||||
Exercised and vested stock-based awards | 221 | 221 | ||||
Exercised and vested stock-based awards (in shares) | 531,940 | |||||
Warrant exercises (in shares) | 40,366 | |||||
Stock-based compensation expense | 820 | 820 | ||||
Treasury stock | (171) | (171) | ||||
Treasury stock (in shares) | (52,000) | |||||
Other (in shares) | (8) | |||||
Net income | 9,492 | 9,492 | ||||
Balance at Dec. 31, 2019 | $ 34 | 9,198 | (3,846) | 14,356 | (89) | 19,653 |
Balance (in shares) at Dec. 31, 2019 | 32,791,665 | |||||
Exercised and vested stock-based awards | $ 1 | 566 | 567 | |||
Exercised and vested stock-based awards (in shares) | 776,733 | |||||
Stock issued for public offering, net of issuance costs | $ 1 | 25,202 | 25,203 | |||
Stock issued for public offering, net of issuance costs (in shares) | 1,250,000 | |||||
Stock-based compensation expense | 2,681 | 2,681 | ||||
Shares of common stock withheld to pay taxes on employees' equity awards | (412) | (412) | ||||
Shares of common stock withheld to pay taxes on employees' equity awards (in shares) | (26,467) | |||||
Deconsolidation of non-controlling interest | $ (89) | (89) | ||||
Net income | 9,074 | 9,074 | ||||
Balance at Dec. 31, 2020 | $ 36 | $ 37,235 | $ (3,846) | $ 23,430 | $ 56,855 | |
Balance (in shares) at Dec. 31, 2020 | 34,791,931 |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS AND MANAGEMENT'S PLANS | 12 Months Ended |
Dec. 31, 2020 | |
ORGANIZATION, NATURE OF BUSINESS AND MANAGEMENT'S PLANS | |
ORGANIZATION, NATURE OF BUSINESS AND MANAGEMENT'S PLANS | (1) ORGANIZATION, NATURE OF BUSINESS AND MANAGEMENT’S PLANS Organization Zynex, Inc. (a Nevada corporation) has its headquarters in Englewood, Colorado. We operate in one primary business segment, medical devices which include electrotherapy and pain management products. As of December 31, 2020, the Company’s only active subsidiary is Zynex Medical, Inc. (“ZMI,” a wholly-owned Colorado corporation) through which the Company conducts most of its operations. Zynex Monitoring Solutions, Inc. (“ZMS,” a wholly-owned Colorado corporation) has developed a blood volume monitoring device which received approval by the U.S. Food and Drug Administration (“FDA”) during 2020 and is still awaiting CE Marking in Europe; therefore, ZMS has achieved no revenues to date. Its inactive subsidiaries include Zynex Europe, Zynex NeuroDiagnostics, Inc. (“ZND,” a wholly-owned Colorado corporation) and Pharmazy, Inc. (“Pharmazy”), which was incorporated in June 2015 as a wholly-owned Colorado corporation. The Company’s compound pharmacy operated as a division of ZMI dba as Pharmazy through January 2016. The term “the Company” refers to Zynex, Inc. and its active and inactive subsidiaries. Nature of Business The Company designs, manufactures and markets medical devices that treat chronic and acute pain, as well as activate and exercise muscles for rehabilitative purposes with electrical stimulation. The Company’s devices are intended for pain management to reduce reliance on drugs and medications and provide rehabilitation and increased mobility through the utilization of non-invasive muscle stimulation, electromyography technology, interferential current (“IFC”), neuromuscular electrical stimulation (“NMES”) and transcutaneous electrical nerve stimulation (“TENS”). All our medical devices are designed to be patient friendly and designed for home use. Our devices are small, portable, battery operated and include an electrical pulse generator which is connected to the body via electrodes. All of our medical devices are marketed in the U.S. and are subject to FDA regulation and approval. Our products require a physician’s prescription before they can be dispensed in the U.S. Our primary product is the NexWave device. The NexWave is marketed to physicians and therapists by our field sales representatives. The NexWave requires consumable supplies, such as electrodes and batteries, which are shipped to patients on a recurring monthly basis, as needed. During the years ended December 31, 2020 and 2019, the Company generated all of its revenue in North America from sales and supplies of its devices to patients and health care providers. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | (2) SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Zynex, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Non-controlling Interest Non-controlling interest in the equity of a subsidiary is accounted for and reported as a decrease in shareholders’ equity. Prior years’ non-controlling interest represents the 20 % ownership in the Company’s majority-owned inactive subsidiary, Zynex Billing, Corp (ZBC). During 2020, the Company dissolved ZBC due to inactivity and no plans to restart operations. As a result, the Company recorded a loss of $77,000 on the dissolution related to the 20% non-controlling interest, less liabilities that were written off. Reclassifications During 2020, the Company re-allocated certain costs related to selling and marketing activities from general and administrative costs. As a result, reclassifications between selling and marketing costs and general and administrative costs have been made to the results of operations for the year ended December 31, 2019 to conform to the consolidated 2020 financial statement presentation. These reclassifications resulted in an increase of $0.8 million to sales and marketing expenses and a decrease in general and administrative expenses for the same amount for the year ended December 31, 2019 . As a result, the reclassifications had no effect on net earnings, retained earnings or cash flows as previously reported. Use of Estimates Preparation of financial statements in conformity with U.S. 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. The most significant management estimates used in the preparation of the accompanying consolidated financial statements are associated with the expected net collectable value of its accounts receivable and related revenue, inventory reserves, the life of its leased and sales demo unit devices, stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. Fair Value of Financial Instruments The Company’s financial instruments include cash, accounts receivable, accounts payable, and accrued liabilities, for which current carrying amounts approximate fair value due to their short-term nature. Cash The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Short-term investments include investments with maturities greater than three months, but not exceeding 12 months, or highly liquid investments with maturities greater than 12 months that the Company intends to liquidate during the next 12 months for working capital needs. Accounts Receivable, Net The Company’s accounts receivables represent unconditional rights to consideration and are generated when a patient receives one of the Company’s devices, related supplies or complimentary products. In conjunction with fulfilling the Company’s obligation to deliver a product, the Company bills the patient’s third-party payor or the patient. Billing adjustments represent the difference between the list prices and the reimbursement rates set by third-party payors, including Medicare, commercial payors and amounts billed directly to the patient. Specific amounts, if uncollected over a period of time, may be written off after several appeals, which in some cases may take longer than twelve months. Primarily all of the Company’s receivables are due from patients with commercial or government health plans and workers compensation claims with a small portion related to private pay individuals, attorney and auto claims. Inventory, Net Inventories are stated at the lower of cost and net realizable value. Cost is computed using standard costs, which approximates actual costs on an average cost basis. Following are the components of inventory as of December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Raw Materials $ 3,213 $ 953 Work-in-process 1,455 200 Finished Goods 4,119 1,640 $ 8,787 $ 2,793 Less: reserve (152) (415) $ 8,635 $ 2,378 The Company monitors inventory for turnover and obsolescence and records losses for excess and obsolete inventory, as appropriate. The Company provides reserves for estimated excess and obsolete inventories equal to the difference between the costs of inventories on hand and the estimated market value based upon assumptions about future demand. If future demand is less favorable than currently projected by management, additional inventory write-downs may be required. Property and Equipment Property and equipment is recorded at cost. Repairs and maintenance expenditures are charged to expense as incurred. We compute depreciation expense on a straight-line basis over the estimated useful lives of the assets as follows: Classification Estimated Useful Life Office furniture and equipment 5 to 7 years Assembly equipment 7 years Vehicles 5 years Leasehold improvements Term of lease Leased devices 9 months Leases The Company determines if an arrangement is a lease at inception or modification of a contract. The Company recognizes finance and operating lease right-of-use assets and liabilities at the lease commencement date based on the estimated present value of the remaining lease payments over the lease term. For our finance leases, the Company uses the implicit rate to determine the present value of future lease payments. For our operating leases that do not provide an implicit rate, the Company uses incremental borrowing rates to determine the present value of future lease payments. The Company includes options to extend or terminate a lease in the lease term when it is reasonably certain to exercise such options. The Company recognizes leases with an initial term of 12 months or less as lease expense over the lease term and those leases are not recorded on our Consolidated Balance Sheets. For additional information on our leases where the Company is the lessee, see Note 9- Leases. A significant portion of our device revenue is derived from patients who obtain our devices under month-to-month lease arrangements where the Company is the lessor. Revenue related to devices on lease is recognized in accordance with ASC 842, Leases. Using the guidance in ASC 842, we concluded our transactions should be accounted for as operating leases based on the following criteria below: ● The lease does not transfer ownership of the underlying asset to the lessee by the end of the lease term. ● The lease does not grant the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. ● The lease term is month to month, which does not meet the major part of the remaining economic life of the underlying asset. However, if the commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be used for purposes of classifying the lease. ● There is no residual value guaranteed and the present value of the sum of the lease payments does not equal or exceed substantially all of the fair value of the underlying asset ● The underlying asset is expected to have alternative uses to the lessor at the end of the lease term. Lease commencement occurs upon delivery of the device to the patient. The Company retains title to the leased device and those devices are classified as property and equipment on the balance sheet. Since our leases are month-to-month and can be returned by the patient at any time, revenue is recognized monthly for the duration of the period in which the patient retains the device. Revenue Recognition Revenue is derived from sales and leases of our electrotherapy devices and sales of related supplies and complimentary products. The Company recognizes revenue when control of the product has been transferred to the patient, in the amount that reflects the consideration to which the Company expects to receive. In general, revenue from sales of our devices and supplies is recognized once the product is delivered to the patient, which is when control is deemed to have transferred to our patient. Sales of our devices and supplies are primarily made with, and shipped directly to the patient with a small amount of revenue generated from sales to distributors. In the healthcare industry there is often a third party involved that will pay on the patients’ behalf for purchased or leased devices and supplies. The terms of the separate arrangement impact certain aspects of the contracts, with patients covered by third-party payors, such as contract type, performance obligations and transaction price, but for purposes of revenue recognition the contract with the customer refers to the arrangement between the Company and the patient. The Company does not have any material deferred revenue in the normal course of business as each performance obligation is met upon delivery of goods to the patient. There are no substantial costs incurred through support or warranty obligations. The following table provides a breakdown of net revenue related to devices accounted for as purchases subject to ASC 606 and leases subject to ASC 842 (in thousands): For the Years Ended December 31, 2020 2019 Device revenue Purchased $ 6,390 $ 4,035 Leased 14,879 6,678 Total Device revenue $ 21,269 $ 10,713 Revenues are estimated using the portfolio approach by third-party payor type based upon historical rates of collection, aging of receivables, trends in historical reimbursement rates by third-party payor types, and current relationships and experience with the third-party payors, which includes estimated constraints for third-party payor refund requests, deductions and adjustments. Inherent in these estimates is the risk that they will have to be revised as additional information becomes available and constraints are released. Specifically, the complexity of third-party payor billing arrangements and the uncertainty of reimbursement amounts for certain products from third-party payors or unanticipated requirements to refund payments previously received may result in adjustments to amounts originally recorded. Due to continuing changes in the health care industry and third-party payor reimbursement, it is possible our forecasting model to estimate collections could change, which could have an impact on our results of operations and cash flows. Any differences between estimated and actual collectability are reflected in the period in which received. Historically these differences have been immaterial and the Company has not had a significant reversal of revenue from prior periods. A change in the way estimates are determined can result from a number of factors, including changes in the reimbursement policies or practices of third-party payors, or changes in industry rates of reimbursement. The Company monitors the variability and uncertain timing over third-party payor types in our portfolios. If there is a change in our third-party payor mix over time, it could affect our net revenue and related receivables. We believe we have a sufficient history of collection experience to estimate the net collectible amounts by third-party payor type. However, changes to constraints for billing adjustments have historically fluctuated and may continue to fluctuate significantly from quarter to quarter and year to year. Stock-based Compensation The Company accounts for stock-based compensation through recognition of the cost of employee services received in exchange for an award of equity instruments, which is measured based on the grant date fair value of the award that is ultimately expected to vest during the period. The stock-based compensation expenses are recognized over the period during which an employee is required to provide service in exchange for the award (the requisite service period, which in the Company’s case is the same as the vesting period). For awards subject to the achievement of performance metrics, stock-based compensation expense is recognized when it becomes probable that the performance conditions will be achieved. Earnings Per Share We calculate basic earnings per share on the basis of the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated using the weighted-average number of shares of common stock outstanding for the period plus the effect of potential dilutive common shares during the period using the treasury stock method. Potential shares of common stock outstanding include unvested restricted stock awards, vested and unvested unexercised stock options and common stock purchase warrants. Research and Development Research and development costs are expensed when incurred. Research and development expense for the years ended December 31, 2020 and 2019 was approximately $0.8 million and $0.6 million, respectively. Research and development, which includes salaries related to research and development and raw materials, are included in general and administrative expenses on the consolidated statement of comprehensive income. Income Taxes We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as any operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized. We recognize tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Recently Issued Accounting Pronouncements In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2022, and interim periods therein for smaller reporting companies. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. The Corporation is currently evaluating the impact that the adoption of ASU 2016-13 will have on our financial condition, results of operations and cash flows. Management has evaluated other recently issued accounting pronouncements and does not believe that this pronouncement will have a material impact on the Company’s consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | (3) PROPERTY AND EQUIPMENT The components of property and equipment are as follows (in thousands): December 31, 2020 December 31, 2019 Property and equipment Office furniture and equipment $ 2,362 $ 1,178 Assembly equipment 143 128 Vehicles 198 181 Leasehold improvements 559 500 Sales Rep demo units 361 — Leased devices 809 934 $ 4,432 $ 2,921 Less accumulated depreciation (2,507) (2,063) $ 1,925 $ 858 The Company monitors devices out on lease for potential loss and places an estimated reserve on the net book value based on an analysis of the number of units of which are still with patients for which the Company cannot determine the current status. Total depreciation expense related to our purchased property and equipment was $0.7 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively. Total depreciation expense related to devices out on lease was $0.8 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively. Depreciation on leased units is reflected on the income statement as cost of revenue. During the year ended December 31, 2020, the Company began capitalizing product demo units sent to its territory managers to use in the field. The Company monitors these devices for potential losses and places an estimated reserve on the net book value based on an analysis of terminated territory managers that have not yet returned their units. Total depreciation expense related to demo unit devices out with sales rep was $0.2 million for the year ended December 31, 2020. Deprecation on demo units is reflected on the income statement as sales and marketing expense. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | (4) EARNINGS PER SHARE The calculation of basic and diluted earnings per share for the years ended December 31, 2020 and 2019 are as follows: For the Years Ended December 31, 2020 2019 Basic earnings per share Net income available to common stockholders $ 9,074 $ 9,492 Basic weighted-average shares outstanding 33,869 32,439 Basic earnings per share $ 0.27 $ 0.29 Diluted earnings per share Net income available to common stockholders $ 9,074 $ 9,492 Weighted-average shares outstanding 33,869 32,439 Effect of dilutive securities - options and restricted stock 1,074 1,524 Diluted weighted-average shares outstanding 34,943 33,963 Diluted earnings per share $ 0.26 $ 0.28 For the years ended December 31, 2020 and 2019, 0.2 million and 0.3 million shares of common stock were excluded from the dilutive stock calculation because their effect would have been anti-dilutive. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2020 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | (5) STOCK-BASED COMPENSATION PLANS Zynex, Inc. 2017 Stock Incentive Plan The Company currently has one active long-term incentive plan. The Company’s 2017 Stock Incentive Plan (the “2017 Stock Plan”) is the Company’s equity compensation plan and provides for grants of stock-based awards to employees, directors and other individuals providing services to the Company. Awards issued under the 2017 Stock Plan are at the discretion of the Board of Directors. The 2017 Stock Plan mandates a maximum award term of 10 years and stipulates that stock options be granted with prices not less than fair market value on the date of grant. Stock option awards generally vest over four years . Restricted stock awards typically vest quarterly over three years for grants issued to members of our Board of Directors and quarterly or annually over two to four years for grants issued to employees. For stock option awards, all awards granted under the 2017 Stock Plan are stock-settled with common stock issued upon exercise. For restricted stock awards, shares are issued to the recipient upon grant with a restrictive legend and are not included in the calculation of outstanding shares until vesting occurs. At December 31, 2020, there were 3.6 million shares available for future grants under the 2017 Stock Plan. The 2005 Stock Plan expired as of December 31, 2014. Vesting provisions of the expired plan were to be determined by the Board of Directors. All stock options under the 2005 Stock Plan expire no later than ten years from the date of grant. Options granted in 2015, 2016 and through May 2017 prior to the approval of the 2017 Stock Incentive Plan were approved and certified by the board of directors on September 6, 2017 under the existing 2005 stock option plan. As of December 31, 2020, the Company had 1.0 million stock options outstanding and 0.6 million stock options exercisable under the following plans: Outstanding Number of Options Exercisable Number of Options (in thousands) (in thousands) Plan Category 2005 Stock Option Plan 299 299 Equity Compensation Plans not approved by Shareholders 37 25 2017 Stock Option Plan 670 251 Total 1,006 $ 575 The Company estimates the grant-date fair value of stock option awards using the Black-Scholes option pricing model and restricted stock awards at intrinsic value on the date of grant. The following assumptions were used in estimating the grant date fair value of stock options granted during the years ended December 31, 2020 and 2019: 2020 2019 Weighted average expected term 6.79 years 6.25 years Weighted average volatility 117 % 122 % Weighted average risk-free interest rate 1.59 % 2.30 % Dividend yield 0 % 0 % The weighted average expected term of stock options represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends. The weighted average expected volatility is based on the historical price volatility of the Company’s common stock. The weighted average risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected term of the stock options. Forfeitures are accounted for as they occur. The following table summarizes stock-based compensation expenses recorded in the condensed consolidated statements of operations (in thousands): For the Years Ended December 31, 2020 2019 Cost of Revenue $ 37 $ 21 Sales and marketing expense 424 205 General, and administrative 2,220 594 Total stock based compensation expense 2,681 820 The excess tax benefit associated with our stock-based compensation plans for the years ended December 31, 2020 and 2019, was approximately $1.7 million and $0.8 million, respectively. A combined summary of stock option activity for all plans for the years ended December 31, 2020 and 2019 is presented below: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Shares Strike Contractual Value (in thousands) Price Life (Years) (in thousands) Outstanding at December 31, 2018 1,885 $ 0.80 Granted 653 $ 5.81 Exercised (503) $ 0.44 Expired (6) $ 1.00 Forfeited (174) $ 2.64 Outstanding at December 31, 2019 1,855 $ 2.48 6.42 $ 10,032 Outstanding at December 31, 2019 1,855 $ 2.48 Granted 14 $ 10.15 Exercised (622) $ 0.90 Forfeited (241) $ 4.68 Outstanding at December 31, 2020 1,006 $ 3.04 6.47 $ 10,483 Exercisable at December 31, 2020 575 $ 1.62 5.35 $ 6,807 Outstanding Weighted average Number of Remaining Weighted Average Options Contractual Weighted Average Exercisable Number of Remaining Exercisable Exercisable Range (in thousands) Life (years) Strike Price Options (in thousands) Contractual Life (years) Strike Price $0 to $2.00 473 4.60 $ 0.35 401 4.28 $ 0.33 $2.01 to $4.00 270 7.66 $ 3.05 116 7.43 $ 2.87 $4.01 to $6.00 19 8.25 $ 4.45 — — $ — $6.01 to $8.00 200 8.56 $ 7.87 50 8.56 $ 7.87 $8.01 to $10.00 41 8.92 $ 9.22 8 8.86 $ 8.98 $10.01 to $12.00 3 9.04 $ 10.60 — — $ — 1,006 6.47 $ 3.04 575 5.35 $ 1.62 A summary of our unvested stock options as of December 31, 2020 and 2019 and related activity is presented below: Non-vested Shares Weighted Under Average Option Grant Date (in thousands) Fair Value Non-vested at December 31, 2018 569 $ 1.44 Granted 653 $ 5.12 Vested (169) $ 1.24 Forfeited (163) $ 2.44 Non-vested at December 31, 2019 890 $ 4.03 Non-vested at December 31, 2019 890 $ 4.03 Granted 14 $ 8.88 Vested (251) $ 3.34 Forfeited (222) $ 4.36 Non-vested at December 31, 2020 431 $ 4.35 A summary of restricted stock award activity under the 2017 Stock Plan for the years ended December 2020 and 2019 are presented below: Number of Shares Weighted Average (in thousands) Grant Date Fair Value Outstanding at December 31, 2018 76 $ 3.19 Granted 55 $ 8.10 Vested (29) $ 3.24 Outstanding at December 31, 2019 102 $ 5.81 Outstanding at December 31, 2019 102 $ 5.81 Granted 320 $ 12.92 Vested (154) $ 8.54 Outstanding at December 31, 2020 268 $ 12.64 As of December 31, 2020, there was approximately $4.3 million of total unrecognized compensation costs related to unvested stock options and restricted stock. These costs are expected to be recognized over a weighted average period of 2.3 years. The total intrinsic value of stock option exercises for the years ended December 31, 2020 and 2019 was $9.6 million and $4.4 million, respectively. The total fair value of restricted stock awards vested during the years ended December 31, 2020 and 2019 was $1.3 million and $0.1 million, respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | (6) STOCKHOLDERS’ EQUITY Equity Offering On July 17, 2020, the Company completed an underwritten public offering of an aggregate 2.5 million shares of common stock at a public offering price of $22.00 per common share. In the offering, 1.25 million shares of common stock were sold by the Company and 1.25 million shares of common stock were sold by Sandgaard Holdings, LLC, which is 100 % controlled by Thomas Sandgaard, CEO and Chairman of the Board of Directors. Net proceeds to the Company, after deducting for direct costs associated with the offering, were $25.2 million. Common Stock Dividend The Company’s Board of Directors declared a cash dividend of $0.07 per share on November 6, 2018. The dividend of $2.3 million was paid on January 18, 2019 to stockholders of record as of January 2, 2019. Any determination to declare a future quarterly dividend, as well as the amount of any cash dividend which may be declared, will be based on our financial position, earnings, earnings outlook and other relevant factors at that time. Treasury Stock From December 6, 2017 through March 6, 2018, we had the ability through our stock purchase program to re-purchase our common stock at prevailing market prices either in the open market or through privately negotiated transactions up to $2.0 million. On March 6, 2018, we reached the limit of $2.0 million and share re-purchases were ceased. From the inception of the plan through March 6, 2018, we purchased 495,091 shares of our common stock for $2.0 million or an average price of $4.04 per share. From May 14, 2018 through May 13, 2019, we had the ability through our stock repurchase program to re-purchase our common stock at prevailing market rates either in the open market or through privately negotiated transactions up to $2.0 million. From the inception of the plan through May 13, 2019, the Company purchased 576,129 shares of our common stock for $1.8 million or an average price of $3.20 per share. As of December 31, 2020 the Company had no outstanding stock repurchase programs. Warrants A summary of stock warrant activity for the years ended December 31, 2020 and 2019 are presented below: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Warrants Exercise Contractual Value (in thousands) Price Life (Years) (in thousands) Outstanding at December 31, 2018 150 $ 2.42 5.77 $ 79 Granted — $ — Exercised (40) $ 2.00 Forfeited (1) (10) $ 2.00 Outstanding and Exercisable at December 31, 2019 100 $ 2.63 4.77 $ 525 Outstanding at December 31, 2019 100 $ 2.63 4.77 $ 525 Granted — $ — Exercised — $ — Forfeited — $ — Outstanding and Exercisable at December 31, 2020 100 $ 2.63 3.76 $ 1,084 (1) Warrants were exercised under a net exercise provision in the warrant agreement. As a result, approximately 10,000 warrants were forfeited in lieu of cash payment for shares. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | (7) INCOME TAXES The pre-tax income from continuing operations on which the provision for income taxes was computed is as follows (in thousands): 2020 2019 United States $ 10,185 $ 11,964 Foreign (32) (23) Total 10,153 11,941 Income tax expense consists of the following for the years ended December 31, 2020 and 2019 (in thousands): 2020 2019 Current tax expense: Federal $ 841 $ 1,865 State 292 372 Total tax expense: 1,133 2,237 Deferred tax expense/(benefit): Federal (122) 120 State 68 92 Total deferred tax expense/(benefit): $ (54) $ 212 Total $ 1,079 $ 2,449 A reconciliation of income tax computed at the U.S. statutory rate of 21% to the effective income tax rate is as follows: 2020 2019 Statutory rate 21 % 21 % State taxes 3 3 Permanent differences and other 1 — Change in valuation allowance — (1) Stock based compensation (15) (4) Other (true – up) — 1 Effective rate 10 % 20 % The tax effects of temporary differences that give rise to deferred tax assets (liabilities) at December 31, 2020 and 2019 are as follows (in thousands): 2020 2019 Deferred tax assets: Accrued expenses $ 10 $ 34 Lease liability 1,721 1,109 Accounts receivable 18 19 Inventory 495 232 Stock based compensation 306 145 Tax Credits and NOL Carryforward 20 110 Other 1 1 Amortization 43 50 2,614 1,700 Less: Valuation allowance — — Deferred tax assets $ 2,614 $ 1,700 Deferred tax Liabilities: Property and equipment $ (470) $ (192) Finance lease (78) (45) Right-of-use asset (1,480) (946) Prepaid Expenses (20) (4) Deferred tax liabilities $ (2,048) $ (1,187) Net Deferred tax assets $ 566 $ 513 As of December 31, 2020, the Company has net operating loss carryforwards in various states of approximately $0.5 million, which expire at various dates ranging from five In addition, the Company had no recorded valuation allowances at December 31, 2020 and 2019. The accounting standard related to income taxes applies to all tax positions and defines the confidence level that a tax position must meet in order to be recognized in the financial statements. The accounting standard requires that the tax effects of a position be recognized only if it is "more-likely-than-not" to be sustained by the taxing authority as of the reporting date. If a tax position is not considered "more-likely-than-not" to be sustained, then no benefits of the position are to be recognized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. This standard also provides guidance on the presentation of tax matters and the recognition of potential IRS interest and penalties. As of December 31, 2020 and 2019, the Company does not have an unrecognized tax liability. The Company does not classify penalty and interest expense related to income tax liabilities as an income tax expense. Penalties and interest are included within general and administrative expenses on the consolidated statements of operations. The Company files income tax returns in the U.S. and various state jurisdictions, and there are open statutes of limitations for taxing authorities to audit our tax returns from 2015 through the current period. |
DEFERRED INSURANCE REIMBURSEMEN
DEFERRED INSURANCE REIMBURSEMENT | 12 Months Ended |
Dec. 31, 2020 | |
DEFERRED INSURANCE REIMBURSEMENT | |
DEFERRED INSURANCE REIMBURSEMENT | (8) DEFERRED INSURANCE REIMBURSEMENT During the first quarter of 2016, the Company collected $880,000 from a single insurance company for accounts receivable. The accounts receivable had been previously reduced to zero by the allowance for billing adjustments. Subsequent to March 31, 2016, the insurance company verbally communicated to the Company that this payment was made in error and requested it be refunded to the insurance company. The Company recorded this $880,000 insurance reimbursement as a deferred insurance liability. During the first quarter of 2019, the Company recognized $880,000 as other income and reversed the liability as management’s assessment was that any repayment obligation was deemed remote. The Company has included this amount in other income in order to ensure comparability of the Company’s operating income results for the years ended December 31, 2019 and 2018. Management’s legal determination that any refund obligation is remote was based on the facts and circumstances related to the dispute, which included reviewing the legal statutes within the jurisdictions the Company operates. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
LEASES | (9) LEASES The Company has four operating leases pertaining to its corporate headquarters located in Colorado. Details of each lease are as follows: ● The Company entered into a sublease agreement on October 20, 2017 with CSG Systems Inc. for approximately 41,715 square feet. The term of the sublease runs through June 30, 2023, with an option to extend for an additional two years through June 30, 2025. During the first year of the sublease, the rent per square foot was $7.50 , which increased to $19.75 during the second year of the sublease. Each year thereafter increasing by an additional $1 per square foot. The Company has not yet determined whether it is reasonably certain to exercise its renewal option and has therefore only considered the initial term in the calculation of the lease liability and lease asset. The Company is also obligated to pay its proportionate share of building operating expenses. The sub-landlord agreed to contribute approximately $0.2 million toward tenant improvements which was accounted for as a reduction of the operating lease asset and subsequently treated as a reduction of rent expense over the term of the lease. Upon lease commencement, the Company recorded an operating lease liability of $3.9 million and a corresponding right-of-use asset for $3.6 million. The remaining lease term was 2.8 years at December 31, 2020. ● The Company entered into an amendment to its sublease agreement, above, on March 11, 2019 for an additional 21,420 square feet of office space. The term of the sublease for the additional space began on June 1, 2019 and runs through June 30, 2023, with an option to extend the term for an additional two years through June 30, 2025. During the first seven months of the Amendment to the Sublease, the rent per square foot was $10.00 , which increased to $20.75 from January 1, 2020 through October 31, 2020. For annual periods beginning November 1, 2020, the price per square foot increases by an additional $1 per square foot. Upon lease commencement, the Company recorded an operating lease liability and a corresponding right-of-use asset for $1.6 million each. The remaining lease term was 2.8 years at December 31, 2020. ● The Company entered into an amendment to its sublease agreement, above, on January 3, 2020, for an additional 22,546 square feet of office space. The term of the sublease began on March 9, 2020 and will run through June 30, 2025. From the commencement date through October 31, 2020, the rent per square foot is $13.00 , increasing to $21.75 per square foot from November 1, 2020 through October 31, 2021. The price per square foot increases by an additional $1 annually beginning November 1, 2021. Upon lease commencement, the Company recorded an operating lease liability and a corresponding right-of-use asset for $1.4 million each. The remaining lease term was 2.8 years at December 31, 2020. ● The Company entered into a lease agreement on September 17, 2020 with GIG CW Compark, LLC for approximately 50,488 square feet. The term of the lease is 65 months , which begins on January 5, 2021. The lease includes an option to extend the lease for one additional five year period. Base rent begins at $9.40 per square feet increasing each year thereafter by an additional $0.30 per square foot. The Company has not yet determined whether or not it is reasonably certain to exercise its renewal option. The Company is also obligated to pay its proportional share of building operating expenses. The landlord agreed to contribute approximately $0.4 million toward tenant improvements. The Company determined that lease commencement occurred earlier than lease inception on January 5, 2021 as the Company began making significant tenant improvements and storing inventory at this location during December 2020. As a result, the Company recorded an operating lease liability of $2.4 million and a corresponding right-of-use asset of $2.1 million as of December 31, 2020. The remaining lease term was 5.4 years at December 31, 2020. The Company has three finance leases for office equipment as follows: ● The Company entered into an equipment lease on September 20, 2019 with Konica Minolta Premier Finance for a copier/printer and related software located at its corporate offices. The term of the equipment lease agreement is 5 years with the option to purchase the equipment at the end of the lease. The Company does not expect to exercise the option to purchase the equipment and, accordingly, has not considered the effect of the purchase in the evaluation of the lease asset and liability. Rent is to be paid monthly at a fixed rate for the term of the equipment lease agreement. Upon lease commencement, the Company recorded a finance lease liability and a corresponding right-of-use asset for $0.2 million each. The remaining lease term was 3.8 years at December 31, 2020. ● The Company entered into an equipment lease on March 3, 2020 with Konica Minolta Premier Finance for copiers/printers and related software located at its corporate offices. The term of the equipment lease agreement is 4 years with the option to purchase the equipment at the end of the lease. The Company does not expect to exercise the option to purchase the equipment and, accordingly, has not considered the effect of the purchase in the evaluation of the lease asset and liability. Rent is to be paid monthly at a fixed rate for the term of the equipment lease agreement. Upon lease commencement, the Company recorded a finance lease liability and a corresponding right-of-use asset for $0.1 million each. The remaining lease term was 3.2 years at December 31, 2020. ● The Company entered into an equipment lease on November 25, 2020 with Konica Minolta Premier Finance for copiers/printers and related software located at its Grasslands warehouse facility in Colorado. The term of the equipment lease is 5 years with the option to purchase the equipment at the end of the lease. The Company does not expect to exercise the option to purchase the equipment and, accordingly, has not considered the effect of the purchase in the evaluation of the lease asset and liability. Rent is to be paid monthly at a fixed rate for the term of the equipment lease agreement. Upon lease commencement, the Company recorded a finance lease liability and a corresponding right-of-use asset for $0.1 million each. The remaining lease term was 4.9 years at December 31, 2020. The Company’s operating leases do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring lease liability. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company’s incremental borrowing rate was determined to be 4.0% for its operating lease liabilities. The Company’s equipment lease agreements have implicit rates from 8.3% to 9.7% , which was used to measure its finance lease liability. The table below reconciles the undiscounted future minimum lease payments under the Company’s operating and finance leases to the total operating and capital lease liabilities recognized on the consolidated balance sheets as of December 31, 2019 (in thousands): Operating lease liability Finance lease liability 2021 2,352 105 2022 2,447 105 2023 1,514 105 2024 512 77 2025 528 35 2026 223 — Total undiscounted future minimum lease payments $ 7,576 $ 427 Less: Difference between undiscounted lease payments and discounted lease liabilities: (605) (67) Total lease liabilities $ 6,971 $ 360 Operating and finance lease costs were $6.6 million and $1.2 million for years ended December 31, 2020 and 2019, which were included in the consolidated statement of operations under the following headings (in thousands): For the years ended December 31, Operating Lease expense 2020 2019 Costs of revenue - devices and supplies $ 740 $ 121 Sales and marketing expense 1,783 170 General and administrative 3,993 859 Total operating lease expense $ 6,516 $ 1,150 Finance Lease expense Amortization of right-of-use asset: Costs of revenue - devices and supplies $ 7 $ 2 Sales and marketing expense 18 4 General and administrative 36 13 Total amortization of right-of-use asset 61 19 Interest expense and other 20 5 Total finance lease expense $ 81 $ 24 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (10) COMMITMENTS AND CONTINGENCIES See Note 9 for details regarding commitments under the Company’s long-term leases. From time to time, the Company may become party to litigation and other claims in the ordinary course of business. To the extent that such claims and litigation arise, management provides for them if losses are determined to be both probable and estimable. The Company is currently not a party to any material pending legal proceedings. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2020 | |
CONCENTRATIONS | |
CONCENTRATIONS | (11) CONCENTRATIONS The Company is exposed to concentration of credit risk related primarily to its cash balances. The Company maintains its cash balances in major financial institutions that exceed amounts insured by the FDIC (up to $250,000, per financial institution as of December 31, 2020). The Company has not experienced any realized losses in such accounts and believes it is not exposed to any significant credit risk related to its cash. The Company had one major vendor from which is sourced approximately 22% and 49%, respectively, of supplies for its electrotherapy products for the years ended December 31, 2020 and 2019. Management believes that its relationships with its suppliers are good. If the relationships were to be replaced, there may be a short-term disruption for a period of time in which products may not be available and additional expenses may be incurred as the Company locates additional or replacement suppliers. The Company had receivables from one third-party payor at December 31, 2020 which made up approximately 26% of the accounts receivable balance. The Company had receivables from two third-party payors at December 31, 2019, which made up approximately 39% of the accounts receivable balance. |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2020 | |
RETIREMENT PLAN | |
RETIREMENT PLAN | (12) RETIREMENT PLAN In 2012, the Company established a defined contribution retirement plan for its employees under section 401(k) of the Internal Revenue Code (the “401(k) Plan”) that is available to all employees 18 years of age or older with three months of service. All employee contributions are fully vested immediately and employer contributions vest over a period of four years. The Company has a discretionary employee match program and currently matches 35% of first 6% of an employee’s contributions. During the years ended December 31, 2020 and 2019, The Company recorded an expense of $0.3 million and $0.1 million, respectively, under the aforementioned plan, related to the Company match. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | (13) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Quarterly financial information is as follows (in thousands, except per share data): 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 9,196 $ 10,297 $ 11,817 $ 14,162 Less: cost of revenue and operating expenses 6,940 7,713 9,322 10,431 Income from operations 2,256 2,584 2,495 3,731 Income before income taxes 3,136 2,584 2,496 3,725 Net income $ 2,350 $ 2,162 $ 2,033 $ 2,947 Net income per common share: Basic income per share - net income $ 0.07 $ 0.07 $ 0.06 $ 0.09 Diluted income per share - net income $ 0.07 $ 0.06 $ 0.06 $ 0.09 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 15,228 $ 19,263 $ 20,026 $ 25,605 Less: cost of revenue and operating expenses 12,770 15,178 18,617 23,308 Income from operations 2,458 4,085 1,409 2,297 Income before income taxes 2,454 4,080 1,404 2,215 Net income $ 2,937 $ 3,017 $ 1,333 $ 1,787 Net income per common share: Basic income per share - net income $ 0.09 $ 0.09 $ 0.04 $ 0.05 Diluted income per share - net income $ 0.09 $ 0.09 $ 0.04 $ 0.04 |
COVID-19
COVID-19 | 12 Months Ended |
Dec. 31, 2020 | |
COVID-19 | |
COVID-19 | (14) COVID-19 In December 2019, a novel Coronavirus disease (“COVID-19”) was reported and on March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. During the second and third quarters, the Company’s operations were impacted by closures of clinics and reductions in elective surgeries which decreased availability of physicians to prescribe our products. Additionally, the Company had to navigate the impacts it had on employee and supply chain issues. While the Company did not see a significant impact on its operating results or financial position during the year ended December 31, 2020 from COVID-19, it is unable at this time to predict the impact that COVID-19 will have on its business, financial position and operating results in future periods due to numerous uncertainties. The Company has been and continues to closely monitor the impact of the pandemic on all aspects of its business. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Zynex, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Non-controlling Interest | Non-controlling Interest Non-controlling interest in the equity of a subsidiary is accounted for and reported as a decrease in shareholders’ equity. Prior years’ non-controlling interest represents the 20 % ownership in the Company’s majority-owned inactive subsidiary, Zynex Billing, Corp (ZBC). During 2020, the Company dissolved ZBC due to inactivity and no plans to restart operations. As a result, the Company recorded a loss of $77,000 on the dissolution related to the 20% non-controlling interest, less liabilities that were written off. |
Reclassifications | Reclassifications During 2020, the Company re-allocated certain costs related to selling and marketing activities from general and administrative costs. As a result, reclassifications between selling and marketing costs and general and administrative costs have been made to the results of operations for the year ended December 31, 2019 to conform to the consolidated 2020 financial statement presentation. These reclassifications resulted in an increase of $0.8 million to sales and marketing expenses and a decrease in general and administrative expenses for the same amount for the year ended December 31, 2019 . As a result, the reclassifications had no effect on net earnings, retained earnings or cash flows as previously reported. |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with U.S. 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. The most significant management estimates used in the preparation of the accompanying consolidated financial statements are associated with the expected net collectable value of its accounts receivable and related revenue, inventory reserves, the life of its leased and sales demo unit devices, stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments include cash, accounts receivable, accounts payable, and accrued liabilities, for which current carrying amounts approximate fair value due to their short-term nature. |
Cash | Cash The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Short-term investments include investments with maturities greater than three months, but not exceeding 12 months, or highly liquid investments with maturities greater than 12 months that the Company intends to liquidate during the next 12 months for working capital needs. |
Accounts Receivable, Net | Accounts Receivable, Net The Company’s accounts receivables represent unconditional rights to consideration and are generated when a patient receives one of the Company’s devices, related supplies or complimentary products. In conjunction with fulfilling the Company’s obligation to deliver a product, the Company bills the patient’s third-party payor or the patient. Billing adjustments represent the difference between the list prices and the reimbursement rates set by third-party payors, including Medicare, commercial payors and amounts billed directly to the patient. Specific amounts, if uncollected over a period of time, may be written off after several appeals, which in some cases may take longer than twelve months. Primarily all of the Company’s receivables are due from patients with commercial or government health plans and workers compensation claims with a small portion related to private pay individuals, attorney and auto claims. |
Inventory, Net | Inventory, Net Inventories are stated at the lower of cost and net realizable value. Cost is computed using standard costs, which approximates actual costs on an average cost basis. Following are the components of inventory as of December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Raw Materials $ 3,213 $ 953 Work-in-process 1,455 200 Finished Goods 4,119 1,640 $ 8,787 $ 2,793 Less: reserve (152) (415) $ 8,635 $ 2,378 The Company monitors inventory for turnover and obsolescence and records losses for excess and obsolete inventory, as appropriate. The Company provides reserves for estimated excess and obsolete inventories equal to the difference between the costs of inventories on hand and the estimated market value based upon assumptions about future demand. If future demand is less favorable than currently projected by management, additional inventory write-downs may be required. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost. Repairs and maintenance expenditures are charged to expense as incurred. We compute depreciation expense on a straight-line basis over the estimated useful lives of the assets as follows: Classification Estimated Useful Life Office furniture and equipment 5 to 7 years Assembly equipment 7 years Vehicles 5 years Leasehold improvements Term of lease Leased devices 9 months |
Leases | Leases The Company determines if an arrangement is a lease at inception or modification of a contract. The Company recognizes finance and operating lease right-of-use assets and liabilities at the lease commencement date based on the estimated present value of the remaining lease payments over the lease term. For our finance leases, the Company uses the implicit rate to determine the present value of future lease payments. For our operating leases that do not provide an implicit rate, the Company uses incremental borrowing rates to determine the present value of future lease payments. The Company includes options to extend or terminate a lease in the lease term when it is reasonably certain to exercise such options. The Company recognizes leases with an initial term of 12 months or less as lease expense over the lease term and those leases are not recorded on our Consolidated Balance Sheets. For additional information on our leases where the Company is the lessee, see Note 9- Leases. A significant portion of our device revenue is derived from patients who obtain our devices under month-to-month lease arrangements where the Company is the lessor. Revenue related to devices on lease is recognized in accordance with ASC 842, Leases. Using the guidance in ASC 842, we concluded our transactions should be accounted for as operating leases based on the following criteria below: ● The lease does not transfer ownership of the underlying asset to the lessee by the end of the lease term. ● The lease does not grant the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. ● The lease term is month to month, which does not meet the major part of the remaining economic life of the underlying asset. However, if the commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be used for purposes of classifying the lease. ● There is no residual value guaranteed and the present value of the sum of the lease payments does not equal or exceed substantially all of the fair value of the underlying asset ● The underlying asset is expected to have alternative uses to the lessor at the end of the lease term. Lease commencement occurs upon delivery of the device to the patient. The Company retains title to the leased device and those devices are classified as property and equipment on the balance sheet. Since our leases are month-to-month and can be returned by the patient at any time, revenue is recognized monthly for the duration of the period in which the patient retains the device. |
Revenue Recognition | Revenue Recognition Revenue is derived from sales and leases of our electrotherapy devices and sales of related supplies and complimentary products. The Company recognizes revenue when control of the product has been transferred to the patient, in the amount that reflects the consideration to which the Company expects to receive. In general, revenue from sales of our devices and supplies is recognized once the product is delivered to the patient, which is when control is deemed to have transferred to our patient. Sales of our devices and supplies are primarily made with, and shipped directly to the patient with a small amount of revenue generated from sales to distributors. In the healthcare industry there is often a third party involved that will pay on the patients’ behalf for purchased or leased devices and supplies. The terms of the separate arrangement impact certain aspects of the contracts, with patients covered by third-party payors, such as contract type, performance obligations and transaction price, but for purposes of revenue recognition the contract with the customer refers to the arrangement between the Company and the patient. The Company does not have any material deferred revenue in the normal course of business as each performance obligation is met upon delivery of goods to the patient. There are no substantial costs incurred through support or warranty obligations. The following table provides a breakdown of net revenue related to devices accounted for as purchases subject to ASC 606 and leases subject to ASC 842 (in thousands): For the Years Ended December 31, 2020 2019 Device revenue Purchased $ 6,390 $ 4,035 Leased 14,879 6,678 Total Device revenue $ 21,269 $ 10,713 Revenues are estimated using the portfolio approach by third-party payor type based upon historical rates of collection, aging of receivables, trends in historical reimbursement rates by third-party payor types, and current relationships and experience with the third-party payors, which includes estimated constraints for third-party payor refund requests, deductions and adjustments. Inherent in these estimates is the risk that they will have to be revised as additional information becomes available and constraints are released. Specifically, the complexity of third-party payor billing arrangements and the uncertainty of reimbursement amounts for certain products from third-party payors or unanticipated requirements to refund payments previously received may result in adjustments to amounts originally recorded. Due to continuing changes in the health care industry and third-party payor reimbursement, it is possible our forecasting model to estimate collections could change, which could have an impact on our results of operations and cash flows. Any differences between estimated and actual collectability are reflected in the period in which received. Historically these differences have been immaterial and the Company has not had a significant reversal of revenue from prior periods. A change in the way estimates are determined can result from a number of factors, including changes in the reimbursement policies or practices of third-party payors, or changes in industry rates of reimbursement. The Company monitors the variability and uncertain timing over third-party payor types in our portfolios. If there is a change in our third-party payor mix over time, it could affect our net revenue and related receivables. We believe we have a sufficient history of collection experience to estimate the net collectible amounts by third-party payor type. However, changes to constraints for billing adjustments have historically fluctuated and may continue to fluctuate significantly from quarter to quarter and year to year. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation through recognition of the cost of employee services received in exchange for an award of equity instruments, which is measured based on the grant date fair value of the award that is ultimately expected to vest during the period. The stock-based compensation expenses are recognized over the period during which an employee is required to provide service in exchange for the award (the requisite service period, which in the Company’s case is the same as the vesting period). For awards subject to the achievement of performance metrics, stock-based compensation expense is recognized when it becomes probable that the performance conditions will be achieved. |
Earnings Per Share | Earnings Per Share We calculate basic earnings per share on the basis of the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated using the weighted-average number of shares of common stock outstanding for the period plus the effect of potential dilutive common shares during the period using the treasury stock method. Potential shares of common stock outstanding include unvested restricted stock awards, vested and unvested unexercised stock options and common stock purchase warrants. |
Research and Development | Research and Development Research and development costs are expensed when incurred. Research and development expense for the years ended December 31, 2020 and 2019 was approximately $0.8 million and $0.6 million, respectively. Research and development, which includes salaries related to research and development and raw materials, are included in general and administrative expenses on the consolidated statement of comprehensive income. |
Income Taxes | Income Taxes We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as any operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized. We recognize tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2022, and interim periods therein for smaller reporting companies. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. The Corporation is currently evaluating the impact that the adoption of ASU 2016-13 will have on our financial condition, results of operations and cash flows. Management has evaluated other recently issued accounting pronouncements and does not believe that this pronouncement will have a material impact on the Company’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of components of inventory | December 31, 2020 December 31, 2019 Raw Materials $ 3,213 $ 953 Work-in-process 1,455 200 Finished Goods 4,119 1,640 $ 8,787 $ 2,793 Less: reserve (152) (415) $ 8,635 $ 2,378 |
Schedule of estimated useful lives of the assets | Classification Estimated Useful Life Office furniture and equipment 5 to 7 years Assembly equipment 7 years Vehicles 5 years Leasehold improvements Term of lease Leased devices 9 months |
Disaggregation of Revenue | The following table provides a breakdown of net revenue related to devices accounted for as purchases subject to ASC 606 and leases subject to ASC 842 (in thousands): For the Years Ended December 31, 2020 2019 Device revenue Purchased $ 6,390 $ 4,035 Leased 14,879 6,678 Total Device revenue $ 21,269 $ 10,713 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
Schedule of components of property and equipment | The components of property and equipment are as follows (in thousands): December 31, 2020 December 31, 2019 Property and equipment Office furniture and equipment $ 2,362 $ 1,178 Assembly equipment 143 128 Vehicles 198 181 Leasehold improvements 559 500 Sales Rep demo units 361 — Leased devices 809 934 $ 4,432 $ 2,921 Less accumulated depreciation (2,507) (2,063) $ 1,925 $ 858 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
EARNINGS PER SHARE | |
Schedule of Calculation of Basic and Diluted earnings per share | The calculation of basic and diluted earnings per share for the years ended December 31, 2020 and 2019 are as follows: For the Years Ended December 31, 2020 2019 Basic earnings per share Net income available to common stockholders $ 9,074 $ 9,492 Basic weighted-average shares outstanding 33,869 32,439 Basic earnings per share $ 0.27 $ 0.29 Diluted earnings per share Net income available to common stockholders $ 9,074 $ 9,492 Weighted-average shares outstanding 33,869 32,439 Effect of dilutive securities - options and restricted stock 1,074 1,524 Diluted weighted-average shares outstanding 34,943 33,963 Diluted earnings per share $ 0.26 $ 0.28 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of outstanding and exercisable number of options | Outstanding Number of Options Exercisable Number of Options (in thousands) (in thousands) Plan Category 2005 Stock Option Plan 299 299 Equity Compensation Plans not approved by Shareholders 37 25 2017 Stock Option Plan 670 251 Total 1,006 $ 575 |
Summary of fair value of stock options grants | 2020 2019 Weighted average expected term 6.79 years 6.25 years Weighted average volatility 117 % 122 % Weighted average risk-free interest rate 1.59 % 2.30 % Dividend yield 0 % 0 % |
Schedule of share based compensation expenses recorded in the consolidated statement of income | The following table summarizes stock-based compensation expenses recorded in the condensed consolidated statements of operations (in thousands): For the Years Ended December 31, 2020 2019 Cost of Revenue $ 37 $ 21 Sales and marketing expense 424 205 General, and administrative 2,220 594 Total stock based compensation expense 2,681 820 |
Summary of stock option activity under the option plan | A combined summary of stock option activity for all plans for the years ended December 31, 2020 and 2019 is presented below: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Shares Strike Contractual Value (in thousands) Price Life (Years) (in thousands) Outstanding at December 31, 2018 1,885 $ 0.80 Granted 653 $ 5.81 Exercised (503) $ 0.44 Expired (6) $ 1.00 Forfeited (174) $ 2.64 Outstanding at December 31, 2019 1,855 $ 2.48 6.42 $ 10,032 Outstanding at December 31, 2019 1,855 $ 2.48 Granted 14 $ 10.15 Exercised (622) $ 0.90 Forfeited (241) $ 4.68 Outstanding at December 31, 2020 1,006 $ 3.04 6.47 $ 10,483 Exercisable at December 31, 2020 575 $ 1.62 5.35 $ 6,807 |
Summary of stock options outstanding under the plans | Outstanding Weighted average Number of Remaining Weighted Average Options Contractual Weighted Average Exercisable Number of Remaining Exercisable Exercisable Range (in thousands) Life (years) Strike Price Options (in thousands) Contractual Life (years) Strike Price $0 to $2.00 473 4.60 $ 0.35 401 4.28 $ 0.33 $2.01 to $4.00 270 7.66 $ 3.05 116 7.43 $ 2.87 $4.01 to $6.00 19 8.25 $ 4.45 — — $ — $6.01 to $8.00 200 8.56 $ 7.87 50 8.56 $ 7.87 $8.01 to $10.00 41 8.92 $ 9.22 8 8.86 $ 8.98 $10.01 to $12.00 3 9.04 $ 10.60 — — $ — 1,006 6.47 $ 3.04 575 5.35 $ 1.62 |
Schedule of restricted stock award activity under all equity compensation plans | A summary of our unvested stock options as of December 31, 2020 and 2019 and related activity is presented below: Non-vested Shares Weighted Under Average Option Grant Date (in thousands) Fair Value Non-vested at December 31, 2018 569 $ 1.44 Granted 653 $ 5.12 Vested (169) $ 1.24 Forfeited (163) $ 2.44 Non-vested at December 31, 2019 890 $ 4.03 Non-vested at December 31, 2019 890 $ 4.03 Granted 14 $ 8.88 Vested (251) $ 3.34 Forfeited (222) $ 4.36 Non-vested at December 31, 2020 431 $ 4.35 A summary of restricted stock award activity under the 2017 Stock Plan for the years ended December 2020 and 2019 are presented below: Number of Shares Weighted Average (in thousands) Grant Date Fair Value Outstanding at December 31, 2018 76 $ 3.19 Granted 55 $ 8.10 Vested (29) $ 3.24 Outstanding at December 31, 2019 102 $ 5.81 Outstanding at December 31, 2019 102 $ 5.81 Granted 320 $ 12.92 Vested (154) $ 8.54 Outstanding at December 31, 2020 268 $ 12.64 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
Schedule of stock warrant activity | A summary of stock warrant activity for the years ended December 31, 2020 and 2019 are presented below: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Warrants Exercise Contractual Value (in thousands) Price Life (Years) (in thousands) Outstanding at December 31, 2018 150 $ 2.42 5.77 $ 79 Granted — $ — Exercised (40) $ 2.00 Forfeited (1) (10) $ 2.00 Outstanding and Exercisable at December 31, 2019 100 $ 2.63 4.77 $ 525 Outstanding at December 31, 2019 100 $ 2.63 4.77 $ 525 Granted — $ — Exercised — $ — Forfeited — $ — Outstanding and Exercisable at December 31, 2020 100 $ 2.63 3.76 $ 1,084 (1) Warrants were exercised under a net exercise provision in the warrant agreement. As a result, approximately 10,000 warrants were forfeited in lieu of cash payment for shares. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Schedule of pre-tax income from continuing operations on which the provision for income taxes | The pre-tax income from continuing operations on which the provision for income taxes was computed is as follows (in thousands): 2020 2019 United States $ 10,185 $ 11,964 Foreign (32) (23) Total 10,153 11,941 |
Schedule of income tax expense | Income tax expense consists of the following for the years ended December 31, 2020 and 2019 (in thousands): 2020 2019 Current tax expense: Federal $ 841 $ 1,865 State 292 372 Total tax expense: 1,133 2,237 Deferred tax expense/(benefit): Federal (122) 120 State 68 92 Total deferred tax expense/(benefit): $ (54) $ 212 Total $ 1,079 $ 2,449 |
Schedule of reconciliation of income tax | A reconciliation of income tax computed at the U.S. statutory rate of 21% to the effective income tax rate is as follows: 2020 2019 Statutory rate 21 % 21 % State taxes 3 3 Permanent differences and other 1 — Change in valuation allowance — (1) Stock based compensation (15) (4) Other (true – up) — 1 Effective rate 10 % 20 % |
Schedule of tax effects of temporary differences that give rise to deferred tax assets (liabilities) | The tax effects of temporary differences that give rise to deferred tax assets (liabilities) at December 31, 2020 and 2019 are as follows (in thousands): 2020 2019 Deferred tax assets: Accrued expenses $ 10 $ 34 Lease liability 1,721 1,109 Accounts receivable 18 19 Inventory 495 232 Stock based compensation 306 145 Tax Credits and NOL Carryforward 20 110 Other 1 1 Amortization 43 50 2,614 1,700 Less: Valuation allowance — — Deferred tax assets $ 2,614 $ 1,700 Deferred tax Liabilities: Property and equipment $ (470) $ (192) Finance lease (78) (45) Right-of-use asset (1,480) (946) Prepaid Expenses (20) (4) Deferred tax liabilities $ (2,048) $ (1,187) Net Deferred tax assets $ 566 $ 513 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
Schedule of future minimum lease payments under the Company's financing leases | The table below reconciles the undiscounted future minimum lease payments under the Company’s operating and finance leases to the total operating and capital lease liabilities recognized on the consolidated balance sheets as of December 31, 2019 (in thousands): Operating lease liability Finance lease liability 2021 2,352 105 2022 2,447 105 2023 1,514 105 2024 512 77 2025 528 35 2026 223 — Total undiscounted future minimum lease payments $ 7,576 $ 427 Less: Difference between undiscounted lease payments and discounted lease liabilities: (605) (67) Total lease liabilities $ 6,971 $ 360 |
Lease, Cost [Table Text Block] | For the years ended December 31, Operating Lease expense 2020 2019 Costs of revenue - devices and supplies $ 740 $ 121 Sales and marketing expense 1,783 170 General and administrative 3,993 859 Total operating lease expense $ 6,516 $ 1,150 Finance Lease expense Amortization of right-of-use asset: Costs of revenue - devices and supplies $ 7 $ 2 Sales and marketing expense 18 4 General and administrative 36 13 Total amortization of right-of-use asset 61 19 Interest expense and other 20 5 Total finance lease expense $ 81 $ 24 |
QUARTERLY FINANCIAL INFORMATI_2
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
Schedule of quarterly financial information | Quarterly financial information is as follows (in thousands, except per share data): 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 9,196 $ 10,297 $ 11,817 $ 14,162 Less: cost of revenue and operating expenses 6,940 7,713 9,322 10,431 Income from operations 2,256 2,584 2,495 3,731 Income before income taxes 3,136 2,584 2,496 3,725 Net income $ 2,350 $ 2,162 $ 2,033 $ 2,947 Net income per common share: Basic income per share - net income $ 0.07 $ 0.07 $ 0.06 $ 0.09 Diluted income per share - net income $ 0.07 $ 0.06 $ 0.06 $ 0.09 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 15,228 $ 19,263 $ 20,026 $ 25,605 Less: cost of revenue and operating expenses 12,770 15,178 18,617 23,308 Income from operations 2,458 4,085 1,409 2,297 Income before income taxes 2,454 4,080 1,404 2,215 Net income $ 2,937 $ 3,017 $ 1,333 $ 1,787 Net income per common share: Basic income per share - net income $ 0.09 $ 0.09 $ 0.04 $ 0.05 Diluted income per share - net income $ 0.09 $ 0.09 $ 0.04 $ 0.04 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Non-controlling Interest (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Loss on dissolution | $ (77,000) |
Zynex Billing And Consultancy, LLC [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Non-controlling interest (as a percentage) | 20.00% |
Loss on dissolution | $ 77,000 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of inventory | ||
Raw Materials | $ 3,213 | $ 953 |
Work-in-process | 1,455 | 200 |
Finished Goods | 4,119 | 1,640 |
Total | 8,787 | 2,793 |
Less: reserve | (152) | (415) |
Inventory, net | $ 8,635 | $ 2,378 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Office furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (in years) | 5 years |
Office furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (in years) | 7 years |
Assembly equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (in years) | 7 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (in years) | 5 years |
Leased devices | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (in years) | 9 months |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Leases (Details) | Sep. 17, 2020 | Dec. 31, 2020 |
SIGNIFICANT ACCOUNTING POLICIES | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | true |
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Breakdown of net revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Device revenue | ||||||||||
Total Device revenue | $ 25,605 | $ 20,026 | $ 19,263 | $ 15,228 | $ 14,162 | $ 11,817 | $ 10,297 | $ 9,196 | $ 80,122 | $ 45,472 |
Devices [Member] | ||||||||||
Device revenue | ||||||||||
Purchased | 6,390 | 4,035 | ||||||||
Leased | 14,879 | 6,678 | ||||||||
Total Device revenue | $ 21,269 | $ 10,713 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Research and Development Expense | $ 800 | $ 600 |
Selling and Marketing Expense | 34,133 | 14,855 |
General and Administrative Expense | $ 18,323 | 10,737 |
Revision of Prior Period, Reclassification, Adjustment [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Selling and Marketing Expense | 800 | |
General and Administrative Expense | $ (800) |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment, Gross | $ 4,432 | $ 2,921 |
Less accumulated depreciation | (2,507) | (2,063) |
Property and Equipment, Net | 1,925 | 858 |
Office furniture and equipment | ||
Property, Plant and Equipment, Gross | 2,362 | 1,178 |
Assembly equipment | ||
Property, Plant and Equipment, Gross | 143 | 128 |
Vehicles | ||
Property, Plant and Equipment, Gross | 198 | 181 |
Leasehold improvements | ||
Property, Plant and Equipment, Gross | 559 | 500 |
Sales Rep demo units | ||
Property, Plant and Equipment, Gross | 361 | |
Leased devices | ||
Property, Plant and Equipment, Gross | $ 809 | $ 934 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment | ||
Depreciation | $ 1,572 | $ 778 |
Property and Equipment [Member] | ||
Property, Plant and Equipment | ||
Depreciation | 700 | 300 |
Leased Devices [Member] | ||
Property, Plant and Equipment | ||
Depreciation | 800 | $ 500 |
Sales Rep demo units | ||
Property, Plant and Equipment | ||
Depreciation | $ 200 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Basic earnings per share | ||||||||||
Net income available to common stockholders | $ 1,787 | $ 1,333 | $ 3,017 | $ 2,937 | $ 2,947 | $ 2,033 | $ 2,162 | $ 2,350 | $ 9,074 | $ 9,492 |
Weighted average basic shares outstanding | 33,869 | 32,439 | ||||||||
Basic earnings per share | $ 0.27 | $ 0.29 | ||||||||
Diluted earnings per share | ||||||||||
Net income available to common stockholders | $ 1,787 | $ 1,333 | $ 3,017 | $ 2,937 | $ 2,947 | $ 2,033 | $ 2,162 | $ 2,350 | $ 9,074 | $ 9,492 |
Weighted-average shares outstanding | 33,869 | 32,439 | ||||||||
Effect of dilutive securities - options and restricted stock | 1,074 | 1,524 | ||||||||
Diluted weighted-average shares outstanding | 34,943 | 33,963 | ||||||||
Diluted earnings per share | $ 0.26 | $ 0.28 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional information (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.2 | 0.3 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS - Outstanding and exercisable number of stock options (Details) shares in Thousands | Dec. 31, 2020shares |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 1,006 |
Number of Shares, Exercisable | 575 |
2005 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 299 |
Number of Shares, Exercisable | 299 |
Equity Compensation Plans not approved by Shareholders | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 37 |
Number of Shares, Exercisable | 25 |
2017 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 670 |
Number of Shares, Exercisable | 251 |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - Stock options granted (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value of stock option grants | ||
Weighted average expected term | 6 years 9 months 14 days | 6 years 3 months |
Weighted average volatility | 117.00% | 122.00% |
Weighted average risk-free interest rate | 1.59% | 2.30% |
Dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION PLAN_4
STOCK-BASED COMPENSATION PLANS - stock-based compensation expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total stock based compensation expense | $ 2,681 | $ 820 |
Cost of Revenue | ||
Total stock based compensation expense | 37 | 21 |
Sales and marketing expense | ||
Total stock based compensation expense | 424 | 205 |
General and administrative | ||
Total stock based compensation expense | $ 2,220 | $ 594 |
STOCK-BASED COMPENSATION PLAN_5
STOCK-BASED COMPENSATION PLANS - Summary of stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of stock option activity under the option Plan | ||
Outstanding and Exercisable at ending balance | 1,006 | |
Number of Shares, Exercisable | 575 | |
Weighted Average Remaining Contractual Life, Exercisable (Years) | 5 years 4 months 6 days | |
Employee Stock Option [Member] | ||
Summary of stock option activity under the option Plan | ||
Outstanding at beginning balance | 1,855 | 1,885 |
Number of Shares, Granted | 14 | 653 |
Number of Warrants, Exercised | (622) | (503) |
Number of Shares, Expired | (6) | |
Number of Shares, Forfeited | (241) | (174) |
Outstanding and Exercisable at ending balance | 1,006 | 1,855 |
Number of Shares, Exercisable | 575 | |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 2.48 | $ 0.80 |
Weighted Average Exercise Price, Granted | 10.15 | 5.81 |
Weighted Average Exercise Price, Exercised | 0.90 | 0.44 |
Weighted Average Exercise Price, Expired | 1 | |
Weighted Average Exercise Price, Forfeited | 4.68 | 2.64 |
Weighted Average Exercise Price, Outstanding at ending balance | 3.04 | 2.48 |
Weighted Average Exercise Price, Exercisable at ending balance | $ 1.62 | $ 2.48 |
Weighted Average Remaining Contractual Life, Outstanding | 6 years 5 months 19 days | |
Weighted Average Remaining Contractual Life, Exercisable (Years) | 5 years 4 months 6 days | 6 years 5 months 1 day |
Aggregate Intrinsic Value, Outstanding | $ 10,483 | $ 10,032 |
Aggregate Intrinsic Value, Exercisable | $ 6,807 |
STOCK-BASED COMPENSATION PLAN_6
STOCK-BASED COMPENSATION PLANS - Stock Plan (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Outstanding Number of Options (in shares) | shares | 1,006 |
Weighted average Remaining Contractual Life (years) | 6 years 5 months 19 days |
Weighted average Outstanding Strike Price | $ 3.04 |
Exercisable Number of Options (in shares) | shares | 575 |
Remaining Exercisable Contractual Life (years) | 5 years 4 months 6 days |
Weighted Average Exercisable Strike Price | $ 1.62 |
Exercise Price Range One [Member] | |
Exercise Price Minimum | 0 |
Exercise Price Maximum | $ 2 |
Outstanding Number of Options (in shares) | shares | 473 |
Weighted average Remaining Contractual Life (years) | 4 years 7 months 6 days |
Weighted average Outstanding Strike Price | $ 0.35 |
Exercisable Number of Options (in shares) | shares | 401 |
Remaining Exercisable Contractual Life (years) | 4 years 3 months 10 days |
Weighted Average Exercisable Strike Price | $ 0.33 |
Exercise Price Range Two [Member] | |
Exercise Price Minimum | 2.01 |
Exercise Price Maximum | $ 4 |
Outstanding Number of Options (in shares) | shares | 270 |
Weighted average Remaining Contractual Life (years) | 7 years 7 months 28 days |
Weighted average Outstanding Strike Price | $ 3.05 |
Exercisable Number of Options (in shares) | shares | 116 |
Remaining Exercisable Contractual Life (years) | 7 years 5 months 4 days |
Weighted Average Exercisable Strike Price | $ 2.87 |
Exercise Price Range Three [Member] | |
Exercise Price Minimum | 4.01 |
Exercise Price Maximum | $ 6 |
Outstanding Number of Options (in shares) | shares | 19 |
Weighted average Remaining Contractual Life (years) | 8 years 3 months |
Weighted average Outstanding Strike Price | $ 4.45 |
Remaining Exercisable Contractual Life (years) | 0 years |
Exercise Price Range Four [Member] | |
Exercise Price Minimum | $ 6.01 |
Exercise Price Maximum | $ 8 |
Outstanding Number of Options (in shares) | shares | 200 |
Weighted average Remaining Contractual Life (years) | 8 years 6 months 21 days |
Weighted average Outstanding Strike Price | $ 7.87 |
Exercisable Number of Options (in shares) | shares | 50 |
Remaining Exercisable Contractual Life (years) | 0 years |
Weighted Average Exercisable Strike Price | $ 7.87 |
Exercise Price Range Five [Member] | |
Exercise Price Minimum | 8.01 |
Exercise Price Maximum | $ 10 |
Outstanding Number of Options (in shares) | shares | 41 |
Weighted average Remaining Contractual Life (years) | 8 years 11 months 1 day |
Weighted average Outstanding Strike Price | $ 9.22 |
Exercisable Number of Options (in shares) | shares | 8 |
Remaining Exercisable Contractual Life (years) | 0 years |
Weighted Average Exercisable Strike Price | $ 8.98 |
Exercise Price Range Six [Member] | |
Exercise Price Minimum | 10.01 |
Exercise Price Maximum | $ 12 |
Outstanding Number of Options (in shares) | shares | 3 |
Weighted average Remaining Contractual Life (years) | 9 years 14 days |
Weighted average Outstanding Strike Price | $ 10.60 |
Remaining Exercisable Contractual Life (years) | 0 years |
STOCK-BASED COMPENSATION PLAN_7
STOCK-BASED COMPENSATION PLANS - Summary of our unvested stock options (Details) - Non vested Share Awards [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Non-vested Shares Under Option, Beginning Balance | 890 | 569 |
Non-vested Shares Under Option, Granted | 14 | 653 |
Non-vested Shares Under Option, Vested | (251) | (169) |
Non-vested Shares Under Option, Forfeited | (222) | (163) |
Non-vested Shares Under Option, Ending Balance | 431 | 890 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ 4.03 | $ 1.44 |
Weighted Average Grant Date Fair Value, Granted | 8.88 | 5.12 |
Weighted Average Grant Date Fair Value, Vested | 3.34 | 1.24 |
Weighted Average Grant Date Fair Value, Forfeited | 4.36 | 2.44 |
Weighted Average Grant Date Fair Value, Ending Balance | $ 4.35 | $ 4.03 |
STOCK-BASED COMPENSATION PLAN_8
STOCK-BASED COMPENSATION PLANS - Summary of restricted stock award activity (Details) - Restricted Stock [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Granted but not vested at beginning balance | 102 | 76 |
Granted | 320 | 55 |
Vested | (154) | (29) |
Granted but not vested at ending balance | 268 | 102 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ 5.81 | $ 3.19 |
Weighted Average Grant Date Fair Value, Granted | 12.92 | 8.10 |
Weighted Average Grant Date Fair Value, Vested | 8.54 | 3.24 |
Weighted Average Grant Date Fair Value, Ending Balance | $ 12.64 | $ 5.81 |
STOCK-BASED COMPENSATION PLAN_9
STOCK-BASED COMPENSATION PLANS - Additional information (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,006 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 575 | |
Proceeds from Stock Options Exercised | $ 1.7 | $ 0.8 |
Unrecognized compensation expense related to stock options | $ 4.3 | |
Weighted-average period of unrecognized compensation expense related to stock options | 2 years 3 months 18 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 9.6 | 4.4 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 1.3 | $ 0.1 |
2017 Stock Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Stock options remain reserved for issuance | 3,600 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 670 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 251 | |
2017 Stock Option Plan | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |
Shares Vesting period | 4 years | |
2017 Stock Option Plan | Management [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Shares Vesting period | 3 years | |
2017 Stock Option Plan | Minimum | Restricted Stock [Member] | Share-based Payment Arrangement, Employee [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Shares Vesting period | 2 years | |
2017 Stock Option Plan | Maximum | Restricted Stock [Member] | Share-based Payment Arrangement, Employee [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Shares Vesting period | 4 years | |
2005 Stock Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 299 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 299 |
STOCKHOLDERS' EQUITY - Warrants
STOCKHOLDERS' EQUITY - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Outstanding and Exercisable at ending balance | 1,006,000 | ||
Weighted Average Remaining Contractual Life, Exercisable (Years) | 5 years 4 months 6 days | ||
Warrant | |||
Outstanding at beginning balance | 100,000 | 150,000 | |
Number of Warrants, Exercised | (40,000) | ||
Number of Warrants, Forfeited | (10,000) | ||
Outstanding and Exercisable at ending balance | 100,000 | 100,000 | 150,000 |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 2.63 | $ 2.42 | |
Weighted Average Exercise Price, Exercised | 2 | ||
Weighted Average Exercise Price, Forfeited | 2 | ||
Weighted Average Exercise Price, Outstanding at ending balance | $ 2.63 | $ 2.63 | $ 2.42 |
Weighted Average Remaining Contractual Life (Years) | 3 years 9 months 3 days | 4 years 9 months 7 days | 5 years 9 months 7 days |
Weighted Average Remaining Contractual Life, Exercisable (Years) | 4 years 9 months 7 days | 5 years 9 months 7 days | |
Aggregate Intrinsic Value | $ 1,084 | $ 525 | $ 79 |
Aggregate Intrinsic Value, Exercisable | $ 525 | $ 79 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 17, 2020 | Mar. 06, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | May 13, 2019 | Jan. 18, 2019 | Nov. 06, 2018 | May 14, 2018 | Dec. 06, 2017 |
Subsidiary, Sale of Stock | |||||||||
Proceeds from the issuance of stock | $ 25,203 | ||||||||
Stock Repurchase Program Additional Authorized Amount | $ 2,000 | ||||||||
Dividends Payable, Amount Per Share | $ 0.07 | ||||||||
Dividends Payable, Current | $ 2,300 | ||||||||
Stock Repurchase Program, Authorized Amount | $ 2,000 | $ 2,000 | |||||||
Stock Repurchased During Period, Shares | 576,129 | ||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 4.04 | $ 3.20 | |||||||
Stock Repurchased During Period, Value | $ 2,000 | $ 171 | $ 1,800 | ||||||
Underwritten public offering | |||||||||
Subsidiary, Sale of Stock | |||||||||
Aggregate number of stock issued (in shares) | 2,500,000 | ||||||||
Public offering price (in dollars per share) | $ 22 | ||||||||
Number of shares sold by the company (in shares) | 1,250,000 | ||||||||
Proceeds from the issuance of stock | $ 25,200 | ||||||||
Underwritten public offering | Selling stockholder | |||||||||
Subsidiary, Sale of Stock | |||||||||
Number of shares sold by certain shareholders (in shares) | 1,250,000 | ||||||||
Thomas Sandgaard | Selling stockholder | |||||||||
Subsidiary, Sale of Stock | |||||||||
Equity Method Investment, Ownership Percentage | 100.00% | ||||||||
Common Stock [Member] | |||||||||
Subsidiary, Sale of Stock | |||||||||
Stock Repurchased During Period, Shares | 495,091 | 52,000 | |||||||
Warrant | |||||||||
Subsidiary, Sale of Stock | |||||||||
Number of Warrants, Forfeited | 10,000 |
INCOME TAXES - Pre-tax income f
INCOME TAXES - Pre-tax income from continuing operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
United States | $ 10,185 | $ 11,964 |
Foreign | (32) | (23) |
Total | $ 10,153 | $ 11,941 |
INCOME TAXES - Income tax expen
INCOME TAXES - Income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax expense: | ||
Federal | $ 841 | $ 1,865 |
State | 292 | 372 |
Total tax expense: | 1,133 | 2,237 |
Deferred tax expense/(benefit): | ||
Federal | (122) | 120 |
State | 68 | 92 |
Total deferred tax expense/(benefit): | (54) | 212 |
Total | $ 1,079 | $ 2,449 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of income tax (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Statutory rate | 21.00% | 21.00% |
State taxes | 3.00% | 3.00% |
Permanent differences and other | 1.00% | |
Change in valuation allowance | (1.00%) | |
Stock based compensation | (15.00%) | (4.00%) |
Other (true - up) | 1.00% | |
Effective rate | 10.00% | 20.00% |
INCOME TAXES - Tax effects of t
INCOME TAXES - Tax effects of temporary differences (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Accrued expenses | $ 10 | $ 34 |
Lease liability | 1,721 | 1,109 |
Accounts receivable | 18 | 19 |
Inventory | 495 | 232 |
Stock based compensation | 306 | 145 |
Tax Credits and NOL Carryforward | 20 | 110 |
Other | 1 | 1 |
Amortization | 43 | 50 |
Total deferred tax assets | 2,614 | 1,700 |
Deferred tax assets | 2,614 | 1,700 |
Deferred tax Liabilities: | ||
Property and equipment | (470) | (192) |
Finance lease | (78) | (45) |
Right-of-use asset | (1,480) | (946) |
Prepaid Expenses | (20) | (4) |
Deferred tax liabilities | (2,048) | (1,187) |
Net Deferred tax assets | $ 566 | $ 513 |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Taxes | |
Operating Loss Carryforwards | $ 0.5 |
Maximum | |
Income Taxes | |
Net Operating Loss Carry Forwards Expiration Period | 7 years |
Minimum | |
Income Taxes | |
Net Operating Loss Carry Forwards Expiration Period | 5 years |
DEFERRED INSURANCE REIMBURSEM_2
DEFERRED INSURANCE REIMBURSEMENT (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2019 | |
DEFERRED INSURANCE REIMBURSEMENT | ||||
Liability for Claims and Claims Adjustment Expense, Total | $ 880,000 | $ 0 | ||
Deferred Insurance Liability | $ 880,000 | |||
Deferred insurance reimbursement | $ 880,000 | $ 880,000 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Nov. 25, 2020 | Mar. 03, 2020 | Jan. 03, 2020 | Dec. 31, 2019 | Sep. 20, 2019 | Oct. 20, 2017 |
Operating lease liabilities | |||||||
2021 | $ 2,352 | ||||||
2022 | 2,447 | ||||||
2023 | 1,514 | ||||||
2024 | 512 | ||||||
2025 | 528 | ||||||
2026 | 223 | ||||||
Total undiscounted future minimum lease payments | 7,576 | ||||||
Less: Difference between undiscounted lease payments and discounted operating lease liabilities: | (605) | ||||||
Total lease liabilities | $ 2,400 | $ 1,400 | 6,971 | $ 3,900 | |||
Finance lease liabilities | |||||||
2021 | 105 | ||||||
2022 | 105 | ||||||
2023 | 105 | ||||||
2024 | 77 | ||||||
2025 | 35 | ||||||
Total undiscounted future minimum lease payments | 427 | ||||||
Less: Difference between undiscounted lease payments and discounted lease liabilities: | (67) | ||||||
Total lease liabilities | $ 100 | $ 100 | $ 360 | $ 200 |
LEASES - Additional information
LEASES - Additional information (Details) $ in Thousands | Nov. 01, 2021$ / ft² | Nov. 01, 2020$ / ft² | Sep. 17, 2020USD ($)a | Dec. 31, 2020USD ($)$ / ft² | Sep. 30, 2019$ / ft² | Oct. 31, 2020$ / ft² | Oct. 31, 2020$ / ft² | Dec. 31, 2020USD ($)lease | Dec. 31, 2019USD ($) | Oct. 20, 2019$ / ft² | Oct. 19, 2019$ / ft² | Oct. 19, 2018$ / ft² | Oct. 31, 2021$ / ft² | Nov. 25, 2020USD ($) | Mar. 03, 2020USD ($) | Jan. 03, 2020USD ($)a | Sep. 20, 2019USD ($) | Jun. 01, 2019USD ($) | Mar. 11, 2019a | Oct. 20, 2017USD ($)a |
Lessee, Lease, Description | ||||||||||||||||||||
Number of operating leases | lease | 4 | |||||||||||||||||||
Land Subject to Ground Leases | a | 50,488 | 22,546 | 21,420 | 41,715 | ||||||||||||||||
Term of lease | 65 months | 5 years | ||||||||||||||||||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | true | ||||||||||||||||||
Option to extend lease term | 5 years | 2 years | 2 years | |||||||||||||||||
Rent per square foot | $ / ft² | 9.40 | 10 | 20.75 | 13 | 19.75 | 7.50 | 21.75 | |||||||||||||
Additional rent per square foot | $ / ft² | 1 | 1 | 0.30 | 1 | ||||||||||||||||
Tenant Improvements | $ 400 | $ 200 | ||||||||||||||||||
Operating lease liabilities | $ 2,400 | $ 2,400 | $ 6,971 | $ 1,400 | 3,900 | |||||||||||||||
Operating lease asset | 5,993 | 5,993 | 3,831 | $ 1,400 | $ 1,600 | $ 3,600 | ||||||||||||||
Operating lease asset | 2,100 | 2,100 | ||||||||||||||||||
Financing lease asset | $ 321 | $ 321 | 180 | $ 100 | $ 100 | $ 200 | ||||||||||||||
Finance Lease, Liability | 360 | $ 100 | $ 100 | $ 200 | ||||||||||||||||
Lessor, Direct Financing Lease, Term of Contract | 2 years 9 months 18 days | 2 years 9 months 18 days | 5 years | 4 years | ||||||||||||||||
Finance Lease, Cost | $ 81 | 24 | ||||||||||||||||||
Operating Lease, Cost | 6,516 | 1,150 | ||||||||||||||||||
Operating and finance lease cost | $ 6,600 | 1,200 | ||||||||||||||||||
Lessee, Operating Lease, Discount Rate | 4.00% | 4.00% | ||||||||||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 9 months 18 days | 2 years 9 months 18 days | ||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 3 years 9 months 18 days | 3 years 9 months 18 days | ||||||||||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 5 years 4 months 24 days | 5 years 4 months 24 days | ||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 3 years 2 months 12 days | 3 years 2 months 12 days | ||||||||||||||||||
Minimum | ||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||
Lessee, Finance Lease, Discount Rate | 8.30% | 8.30% | ||||||||||||||||||
Maximum | ||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||
Lessee, Finance Lease, Discount Rate | 9.70% | 9.70% | ||||||||||||||||||
General and administrative | ||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||
Operating Lease, Cost | $ 3,993 | $ 859 |
LEASES - Lease cost (Details)
LEASES - Lease cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Total operating lease expense | $ 6,516 | $ 1,150 |
Total amortization of right-of-use asset | 61 | 19 |
Interest expense and other | 20 | 5 |
Total finance lease expense | 81 | 24 |
Cost of Revenue | ||
Leases | ||
Total operating lease expense | 740 | 121 |
Total amortization of right-of-use asset | 7 | 2 |
Sales and marketing expense | ||
Leases | ||
Total operating lease expense | 1,783 | 170 |
Total amortization of right-of-use asset | 18 | 4 |
General and administrative | ||
Leases | ||
Total operating lease expense | 3,993 | 859 |
Total amortization of right-of-use asset | $ 36 | $ 13 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - item | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ||
Concentration Risk | ||
Concentration Risk, Percentage | 22.00% | 49.00% |
Accounts Receivable [Member] | ||
Concentration Risk | ||
Concentration Risk, Percentage | 26.00% | 39.00% |
Number of third-party payers | 1 | 2 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) $ in Millions | Sep. 17, 2020USD ($)a | Jan. 03, 2020a | Mar. 11, 2019a | Oct. 20, 2017USD ($)a |
COMMITMENTS AND CONTINGENCIES | ||||
Land Subject to Ground Leases | a | 50,488 | 22,546 | 21,420 | 41,715 |
Tenant Improvements | $ | $ 0.4 | $ 0.2 |
RETIREMENT PLAN - Additional in
RETIREMENT PLAN - Additional information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2012 | |
RETIREMENT PLAN | |||
Defined Contribution Plan Eligibility Age | 18 years | ||
Defined Contribution Plan Period Of Employment For Eligibility | 3 months | ||
Defined Contribution Plan, Cost | $ 0.3 | $ 0.1 | |
Defined Contribution Plan Description of Employer Matching Contribution | The Company has a discretionary employee match program and currently matches 35% of first 6% of an employee’s contributions. | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 35.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 6.00% |
QUARTERLY FINANCIAL INFORMATI_3
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | ||||||||||
Total Revenue | $ 25,605 | $ 20,026 | $ 19,263 | $ 15,228 | $ 14,162 | $ 11,817 | $ 10,297 | $ 9,196 | $ 80,122 | $ 45,472 |
Less: cost of revenue and operating expenses | 23,308 | 18,617 | 15,178 | 12,770 | 10,431 | 9,322 | 7,713 | 6,940 | 69,873 | 34,406 |
Income from operations | 2,297 | 1,409 | 4,085 | 2,458 | 3,731 | 2,495 | 2,584 | 2,256 | 10,249 | 11,066 |
Income before income taxes | 2,215 | 1,404 | 4,080 | 2,454 | 3,725 | 2,496 | 2,584 | 3,136 | ||
Net income | $ 1,787 | $ 1,333 | $ 3,017 | $ 2,937 | $ 2,947 | $ 2,033 | $ 2,162 | $ 2,350 | $ 9,074 | $ 9,492 |
Net income per common share: | ||||||||||
Basic income per share - net income | $ 0.05 | $ 0.04 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.06 | $ 0.07 | $ 0.07 | ||
Diluted income per share - net income | $ 0.04 | $ 0.04 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.06 | $ 0.06 | $ 0.07 |