Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 28, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | ZYNEX INC | |
Entity Current Reporting Status | Yes | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 34,846,656 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000846475 | |
Amendment Flag | false | |
Trading Symbol | ZYXI | |
Entity File Number | 001-38804 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 90-0275169 | |
Entity Address, Address Line One | 9555 Maroon Cir. | |
Entity Address, City or Town | Englewood | |
Entity Address, Country | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 303 | |
Local Phone Number | 703-4906 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 33,439 | $ 39,173 |
Accounts receivable, net | 14,874 | 13,837 |
Inventory, net | 10,957 | 8,635 |
Prepaid expenses and other | 1,559 | 1,378 |
Total current assets | 60,829 | 63,023 |
Property and equipment, net | 2,299 | 1,925 |
Operating lease asset | 5,380 | 5,993 |
Finance lease asset | 457 | 321 |
Deposits | 340 | 347 |
Deferred income taxes | 931 | 566 |
Total assets | 70,236 | 72,175 |
Current liabilities: | ||
Accounts payable and accrued expenses | 3,338 | 4,717 |
Operating lease liability | 2,043 | 2,051 |
Finance lease liability | 104 | 77 |
Income taxes payable | 266 | 280 |
Accrued payroll and related taxes | 3,564 | 2,992 |
Total current liabilities | 9,315 | 10,117 |
Long-term liabilities: | ||
Operating lease liability | 4,371 | 4,920 |
Finance lease liability | 397 | 283 |
Total liabilities | 14,083 | 15,320 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,143,761 issued and 34,849,790 outstanding as of March 31, 2021 and 36,126,698 issued and 34,791,931 outstanding as of December 31, 2020 | 37 | 36 |
Additional paid-in capital | 37,313 | 37,235 |
Treasury stock 1,076,220 shares, at March 31, 2021 and 1,071,220 shares at December 31, 2020, respectively, at cost | (3,921) | (3,846) |
Retained earnings | 22,724 | 23,430 |
Total stockholders' equity | 56,153 | 56,855 |
Total liabilities and stockholders' equity | $ 70,236 | $ 72,175 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
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 | 36,143,761 | 36,126,698 |
Common Stock, Shares, Outstanding | 34,849,790 | 34,791,931 |
Treasury Stock, Shares | 1,076,220 | 1,071,220 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
NET REVENUE | ||
Total net revenue | $ 24,127 | $ 15,228 |
COSTS OF REVENUE AND OPERATING EXPENSES | ||
Costs of revenue - devices and supplies | 5,886 | 3,401 |
Sales and marketing | 13,827 | 5,584 |
General and administrative | 5,495 | 3,785 |
Total costs of revenue and operating expenses | 25,208 | 12,770 |
Income/(loss) from operations | (1,081) | 2,458 |
Other expense | ||
Interest expense | (9) | (4) |
Other expense, net | (9) | (4) |
Income/(loss) from operations before income taxes | (1,090) | 2,454 |
Income tax benefit | (384) | (483) |
Net Income/(Loss) | $ (706) | $ 2,937 |
Net income/(loss) per share: | ||
Basic | $ (0.02) | $ 0.09 |
Diluted | $ (0.02) | $ 0.09 |
Weighted average basic shares outstanding | 34,837 | 32,913 |
Weighted average diluted shares outstanding | 34,837 | 34,204 |
Devices [Member] | ||
NET REVENUE | ||
Total net revenue | $ 6,365 | $ 3,444 |
Supplies [Member] | ||
NET REVENUE | ||
Total net revenue | $ 17,762 | $ 11,784 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ (706) | $ 2,937 |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||
Depreciation | 487 | 252 |
Non-cash reserve charges | 2 | 249 |
Stock-based compensation | 108 | 497 |
Non-cash lease expense | 55 | (10) |
Provision for deferred income taxes | (378) | (473) |
Change in operating assets and liabilities: | ||
Accounts receivable | (1,037) | (716) |
Prepaid and other assets | (182) | (819) |
Accounts payable and other accrued expenses | (798) | 162 |
Inventory | (2,863) | (1,501) |
Deposits | 7 | 54 |
Net cash provided by/(used in) operating activities | (5,305) | 632 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (299) | (297) |
Net cash used in investing activities | (299) | (297) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on finance lease obligations | (23) | (11) |
Purchase of treasury stock | (75) | 0 |
Proceeds from the issuance of common stock on stock-based compensation awards | 27 | 221 |
Taxes withheld and paid on employees' equity awards | (59) | |
Net cash (used in) provided by financing activities | (130) | 210 |
Net increase/(decrease) in cash | (5,734) | 545 |
Cash at beginning of period | 39,173 | 14,040 |
Cash at end of period | 33,439 | 14,585 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | (9) | (4) |
Cash paid for rent | (521) | (328) |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 162 | 1,433 |
Inventory transferred to property and equipment under lease | 473 | 187 |
Inventory transferred to property and equipment as demo devices | $ 67 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 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, 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 | 221 | 221 | ||||
Exercised and vested stock-based awards (in shares) | 385,917 | |||||
Stock-based compensation expense | 497 | 497 | ||||
Net income | 2,937 | 2,937 | ||||
Balance at Mar. 31, 2020 | $ 34 | 9,916 | (3,846) | 17,293 | $ (89) | 23,308 |
Balance (in shares) at Mar. 31, 2020 | 33,177,582 | |||||
Balance at Dec. 31, 2020 | $ 36 | 37,235 | (3,846) | 23,430 | 56,855 | |
Balance (in shares) at Dec. 31, 2020 | 34,791,931 | |||||
Exercised and vested stock-based awards | $ 1 | 29 | 30 | |||
Exercised and vested stock-based awards (in shares) | 57,769 | |||||
Stock-based compensation expense | 108 | 108 | ||||
Shares of common stock withheld to pay taxes on employees' equity awards | (59) | (59) | ||||
Shares of common stock withheld to pay taxes on employees' equity awards (in shares) | (3,758) | |||||
Warrants exercised (in shares) | 8,848 | |||||
Treasury stock | $ (100) | (75) | (75) | |||
Treasury stock (in shares) | (5,000) | |||||
Net income | (706) | (706) | ||||
Balance at Mar. 31, 2021 | $ 37 | $ 37,313 | $ (3,921) | $ 22,724 | $ 56,153 | |
Balance (in shares) at Mar. 31, 2021 | 34,849,790 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | (1) BASIS OF PRESENTATION 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 March 31, 2021, 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 three months ended March 31, 2021 and 2020, the Company generated all of its revenue in North America from sales and supplies of its devices to patients and health care providers. Unaudited Consolidated Financial Statements The unaudited consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company’s accounting policies and other financial information is included in the audited consolidated financial statements as filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Amounts as of December 31, 2020, are derived from those audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the annual audited financial statements, accounting policies and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2021 and the results of its operations and its cash flows for the periods presented. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year. 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. Reclassifications During 2020, the Company revised its cost center allocations to better align with its business operations. As a result, reclassifications between general and administrative and selling and marketing expenses have been made to the three months ended March 31, 2020 financial statements to conform to the consolidated 2021 financial statement presentation. These 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 allowance for billing adjustments and uncollectible accounts receivable, the reserve for obsolete and damaged inventory, stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. 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 7- 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. 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 invoices the patient’s third-party payor or the patient. Billing adjustments represent the difference between the list price 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. Substantially 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. 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 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 Three Months Ended March 31, 2021 2020 Device revenue Purchased $ 2,332 $ 1,280 Leased 4,033 2,164 Total Device revenue 6,365 3,444 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 the difference is identified. 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 over the respective performance period. 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. Financial instruments also included our operating and finance lease obligations, the carrying value of which approximates fair value because the interest rates on the outstanding borrowings are at rates that approximate market rates for borrowings with similar terms and average maturities. 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 (in thousands): March 31, 2021 December 31, 2020 Raw Materials $ 4,102 $ 3,213 Work-in-process 390 1,455 Finished Goods 6,617 4,119 $ 11,109 $ 8,787 Less: reserve (152) (152) $ 10,957 $ 8,635 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 based upon assumptions about future demand. If future demand is less favorable than currently projected by management, additional inventory write-downs may be required. Segment Information We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We have identified our Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer as our chief operating decision-makers (“CODM”). We currently operate our business as one operating segment which includes two revenue types: Devices and Supplies. 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 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. Recent 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 Company 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 any of these pronouncements will have a material impact on the Company’s consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | (2) PROPERTY AND EQUIPMENT The components of property and equipment are as follows (in thousands): March 31, 2021 December 31, 2020 Property and equipment Office furniture and equipment $ 2,196 $ 2,362 Assembly equipment 151 143 Vehicles 198 198 Leasehold improvements 1,013 559 Sales Rep demo units 313 361 Leased devices 1,086 809 $ 4,957 $ 4,432 Less accumulated depreciation (2,658) (2,507) $ 2,299 $ 1,925 Total depreciation expense related to our property and equipment was $0.1 million for each of the three months ended March 31, 2021 and 2020. Total depreciation expense related to devices out on lease was $0.2 million for each of the three months ended March 31, 2021 and 2020. Depreciation on leased units is reflected on the income statement as cost of revenue. Total depreciation expense related to demo unit devices out with sales representatives was $0.1 million and nil for the three months ended March 31, 2021 and 2020, respectively. Deprecation on demo units is reflected on the income statement as sales and marketing expense. 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. The Company monitors demo 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 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | (3) EARNINGS PER SHARE Basic earnings/(loss) per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding and the number of dilutive potential common share equivalents during the period, calculated using the treasury-stock method for outstanding stock options. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential common shares outstanding would be anti-dilutive. The calculation of basic and diluted earnings per share for the three months ended March 31, 2021and 2020 are as follows (in thousands, except per share data): For the Three Months Ended March 31, 2021 2020 Basic earnings per share Net income available to common stockholders $ (706) $ 2,937 Basic weighted-average shares outstanding 34,837 32,913 Basic earnings per share $ (0.02) $ 0.09 Diluted earnings per share Net income available to common stockholders $ (706) $ 2,937 Weighted-average shares outstanding 34,837 32,913 Effect of dilutive securities - options and restricted stock — 1,291 Diluted weighted-average shares outstanding 34,837 34,204 Diluted earnings per share $ (0.02) $ 0.09 For the three months ended March 31, 2021 and 2020, 1.1 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 | 3 Months Ended |
Mar. 31, 2021 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | (4) STOCK-BASED COMPENSATION PLANS In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,000,000 shares reserved for issuance. Awards permitted under the 2017 Stock Plan include: Stock Options and Restricted Stock. Awards issued under the 2017 Stock Plan are at the discretion of the Board of Directors. As applicable, awards are granted with an exercise price equal to the closing price of our common stock on the date of grant and generally vest over four years. Restricted Stock Awards are issued to the recipient upon vesting and are not included in outstanding shares until such vesting and issuance occurs. During the three months ended March 31, 2021, no stock option awards were granted under the 2017 Stock Plan. During the three months ended March 31, 2020, 14,000 stock option awards were granted under the 2017 Stock Plan. At March 31, 2021, the company had 0.8 million stock options outstanding and 0.6 million exercisable under the following plans: Outstanding Exercisable Number of Options Number of Options (in thousands) (in thousands) Plan Category 2005 Stock Option Plan 296 296 Equity Compensation Plans not approved by Shareholders 38 25 2017 Stock Option Plan 490 274 Total 824 $ 595 During the three months ended March 31, 2021, 65,000 shares of restricted stock were granted to the Board of Directors and management under the 2017 Stock Plan. During the three months ended March 31, 2020, 165,000 shares of restricted stock were granted. The fair market value of restricted shares for share-based compensation expensing is equal to the closing price of our common stock on the date of grant. The vesting on the Restricted Stock is typically released quarterly over three years for the Board of Directors and annually or quarterly over four years for management. The following summarizes stock-based compensation expenses recorded in the consolidated statements of operations: For the Three Months Ended March 31, 2021 2020 Cost of Revenue $ 15 $ 6 Sales and marketing expense 15 29 General, and administrative 78 462 Total stock based compensation expense $ 108 $ 497 The Company received proceeds of $27,000 and $0.2 million related to option exercises during the three months ended March 31, 2021 and 2020, respectively. The Company used the Black-Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions for the three months ended March 31, 2021 and March 31, 2020. For the Three Months Ended March 31, 2021 2020 Expected term (years) — 6.79 Risk-free interest rate — % 1.59 % Expected volatility — % 116.76 % Expected dividend yield — % — % A summary of stock option activity under all equity compensation plans for the three months ended March 31, 2021, is presented below: Weighted- Weighted- Average Aggregate Number of Average Remaining Intrinsic Shares Exercise Contractual Value (in thousands) Price Term (Years) (in thousands) Outstanding at December 31, 2020 1,006 $ 3.04 6.47 $ 10,483 Granted — $ — Forfeited (174) $ 7.65 Exercised (8) $ 3.12 Outstanding at March 31, 2021 824 $ 2.07 5.79 $ 10,873 Exercisable at March 31, 2021 595 $ 1.73 5.23 $ 8,061 A summary of restricted stock award activity under all equity compensation plans for the three months ended March 31, 2021, is presented below: Number of Shares (in thousands) Granted but not vested at December 31, 2020 268 Granted 65 Forfeited (66) Vested (49) Granted but not vested at March 31, 2021 218 As of March 31, 2021, the Company had approximately $3.5 million of unrecognized compensation expense related to stock options and restricted stock awards that will be recognized over a weighted average period of approximately 2.3 years. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | (5) STOCKHOLDERS’ EQUITY Treasury Stock On March 8, 2021, our Board of Directors approved a program to repurchase up to $10.0 million of our common stock at prevailing market prices either in the open market or through privately negotiated transactions through September 8, 2021. From the inception of the plan through March 31, 2021, the Company purchased 5,000 shares of our common stock for $0.1 million or an average price of $14.79 per share. Warrants A summary of stock warrant activity for the three months ended March 31, 2021 is 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, 2020 100 $ 2.63 3.76 $ 1,084 Granted — $ — Exercised (10) $ 2.50 3.52 192 Forfeited — $ — Outstanding and Exercisable at March 31, 2021 90 $ 2.64 3.52 $ 1,137 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | (6) INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, primarily related to excess tax benefits on stock option exercises. For the three months ended March 31, 2021 discrete items adjusted were $0.4 million. At March 31, 2021 the Company is currently estimating an annual effective tax rate of approximately 25.2%. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to various factors. The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. The Company’s effective income tax rate was 35% for the three months ended March 31, 2021. Discrete items recognized during the three months ended March 31, 2021 and 2020, resulted in a tax benefit of approximately $0.1 million and $1.1 million, respectively. The Company recorded an income tax benefit of $0.4 million and $0.5 million for the three months ended March 31, 2021 and 2020, respectively. No taxes were paid during the three months ended March 31, 2021 and 2020. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
LEASES | |
LEASES | (7) LEASES The Company has five operating leases; four pertaining to its corporate headquarters and one for its warehouse facility located in Englewood, CO. 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 is $7.50 , which increased to $19.75 during the second year of the sublease and 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 when determining 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 2.3 years at March 31, 2021. ● 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 2.3 years at March 31, 2021. ● 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 2.3 years at March 31, 2021. ● 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 began on January 5, 2021 and will run through June 5, 2026. The lease includes an option to extend the lease for one additional five year period. Base rent began 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. Upon lease commencement, the Company recorded an operating lease liability of $2.4 million and a corresponding right-of-use asset of $2.1 million. The remaining lease term was 5.2 years at March 31, 2021. ● Subsequent to March 31, 2021, the Company entered into a sublease agreement on April 9, 2021 with Cognizant Trizetto Software Group, Inc. for approximately 166,912 square feet of office space as its new corporate headquarters. The term of the sublease will begin upon move in at some point during second quarter and will run through April 29, 2028. The Company is entitled to rent credits equal to twenty-one months of base rent at the initial rate. During the first thirty-three months of the sublease, the rent per square foot is $26.50 . The price per square foot increases by an additional $ 0.50 during each subsequent twelve-month period of the sublease. The Company estimates that it will record a right-of-use asset and liability of $13.4 million each upon lease commencement. The Company has five 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 3.6 years at March 31, 2021. ● 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 3.0 years at March 31, 2021. ● 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 4.7 years at March 31, 2021. · The Company entered into an equipment lease on December 14, 2020 with Konica Minolta Premier Finance for mail solution and related software located at its Grasslands warehouse facility in Colorado. The term of the equipment lease is 5.3 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 ● The Company entered into an equipment lease on November 3, 2020 with Altitude Leasing for a baler located at its Grasslands warehouse facility in Colorado. The term of the equipment lease is 3 years with no option to purchase the equipment at the end of the lease. 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 $8,000 each. The remaining lease term was 2.8 years at March 31, 2021. 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 the 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 20.7%, which were used to measure its finance lease liability. Operating lease liability Financing lease liability April 1, 2021 through December 31, 2021 1,768 110 2022 2,447 147 2023 1,514 147 2024 512 116 2025 528 73 2026 223 19 Total undiscounted future minimum lease payments 6,992 612 Less: Difference between undiscounted lease payments and discounted lease liabilities: (578) (111) Total lease liabilities $ 6,414 $ 501 Operating lease costs were $0.6 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively. For the three months ended March 31, 2021, $0.2 million of operating lease costs incurred primarily at our manufacturing and warehouse facility were included in cost of sales and $0.4 million were included in general and administrative expenses on the consolidated statement of operations. All operating lease costs for the three months ended March 31, 2020 were included in general and administrative expenses on the consolidated statement of operations. |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2021 | |
CONCENTRATIONS | |
CONCENTRATIONS | (8) CONCENTRATIONS For the three months ended March 31, 2021, the Company sourced approximately 32% of the components for its electrotherapy products from two significant vendors (defined as supplying at least 10%). For the three months ended March 31, 2020 the company sourced approximately 40% of components from two significant vendors. Management believes that its relationships with suppliers are good; however, if the relationships were to be replaced, there may be a short-term disruption to operations, a period of time in which products may not be available and additional expenses may be incurred. At March 31, 2021, the Company had receivables from two third-party payers that made up approximately 37% of the net accounts receivable balance. At December 31, 2020, the Company had receivables from one third-party payer that made up approximately 26% of the net accounts receivable balance. |
LITIGATION
LITIGATION | 3 Months Ended |
Mar. 31, 2021 | |
LITIGATION | |
LITIGATION | (9) LITIGATION 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 would accrue the estimated exposure for such events when losses are determined to be both probable and estimable. The Company is currently not a party to any material pending legal proceedings. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
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. |
Reclassifications | Reclassifications During 2020, the Company revised its cost center allocations to better align with its business operations. As a result, reclassifications between general and administrative and selling and marketing expenses have been made to the three months ended March 31, 2020 financial statements to conform to the consolidated 2021 financial statement presentation. These 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 allowance for billing adjustments and uncollectible accounts receivable, the reserve for obsolete and damaged inventory, stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. |
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 7- 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. |
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 invoices the patient’s third-party payor or the patient. Billing adjustments represent the difference between the list price 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. Substantially 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. |
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 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 Three Months Ended March 31, 2021 2020 Device revenue Purchased $ 2,332 $ 1,280 Leased 4,033 2,164 Total Device revenue 6,365 3,444 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 the difference is identified. 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 over the respective performance period. |
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. Financial instruments also included our operating and finance lease obligations, the carrying value of which approximates fair value because the interest rates on the outstanding borrowings are at rates that approximate market rates for borrowings with similar terms and average maturities. |
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 (in thousands): March 31, 2021 December 31, 2020 Raw Materials $ 4,102 $ 3,213 Work-in-process 390 1,455 Finished Goods 6,617 4,119 $ 11,109 $ 8,787 Less: reserve (152) (152) $ 10,957 $ 8,635 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 based upon assumptions about future demand. If future demand is less favorable than currently projected by management, additional inventory write-downs may be required. |
Segment Information | Segment Information We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We have identified our Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer as our chief operating decision-makers (“CODM”). We currently operate our business as one operating segment which includes two revenue types: Devices and Supplies. |
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 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. |
Recent Accounting Pronouncements | Recent 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 Company 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 any of these pronouncements will have a material impact on the Company’s consolidated financial statements. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
Disaggregation of Revenue | For the Three Months Ended March 31, 2021 2020 Device revenue Purchased $ 2,332 $ 1,280 Leased 4,033 2,164 Total Device revenue 6,365 3,444 |
Schedule of components of inventory | March 31, 2021 December 31, 2020 Raw Materials $ 4,102 $ 3,213 Work-in-process 390 1,455 Finished Goods 6,617 4,119 $ 11,109 $ 8,787 Less: reserve (152) (152) $ 10,957 $ 8,635 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
Schedule of components of property and equipment | The components of property and equipment are as follows (in thousands): March 31, 2021 December 31, 2020 Property and equipment Office furniture and equipment $ 2,196 $ 2,362 Assembly equipment 151 143 Vehicles 198 198 Leasehold improvements 1,013 559 Sales Rep demo units 313 361 Leased devices 1,086 809 $ 4,957 $ 4,432 Less accumulated depreciation (2,658) (2,507) $ 2,299 $ 1,925 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
Schedule of Calculation of Basic and Diluted earnings per share | The calculation of basic and diluted earnings per share for the three months ended March 31, 2021and 2020 are as follows (in thousands, except per share data): For the Three Months Ended March 31, 2021 2020 Basic earnings per share Net income available to common stockholders $ (706) $ 2,937 Basic weighted-average shares outstanding 34,837 32,913 Basic earnings per share $ (0.02) $ 0.09 Diluted earnings per share Net income available to common stockholders $ (706) $ 2,937 Weighted-average shares outstanding 34,837 32,913 Effect of dilutive securities - options and restricted stock — 1,291 Diluted weighted-average shares outstanding 34,837 34,204 Diluted earnings per share $ (0.02) $ 0.09 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of outstanding and exercisable number of options | Outstanding Exercisable Number of Options Number of Options (in thousands) (in thousands) Plan Category 2005 Stock Option Plan 296 296 Equity Compensation Plans not approved by Shareholders 38 25 2017 Stock Option Plan 490 274 Total 824 $ 595 |
Summary of fair value of stock options grants | The Company used the Black-Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions for the three months ended March 31, 2021 and March 31, 2020. For the Three Months Ended March 31, 2021 2020 Expected term (years) — 6.79 Risk-free interest rate — % 1.59 % Expected volatility — % 116.76 % Expected dividend yield — % — % |
Schedule of share based compensation expenses recorded in the consolidated statement of income | The following summarizes stock-based compensation expenses recorded in the consolidated statements of operations: For the Three Months Ended March 31, 2021 2020 Cost of Revenue $ 15 $ 6 Sales and marketing expense 15 29 General, and administrative 78 462 Total stock based compensation expense $ 108 $ 497 |
Summary of stock option activity under the option plan | A summary of stock option activity under all equity compensation plans for the three months ended March 31, 2021, is presented below: Weighted- Weighted- Average Aggregate Number of Average Remaining Intrinsic Shares Exercise Contractual Value (in thousands) Price Term (Years) (in thousands) Outstanding at December 31, 2020 1,006 $ 3.04 6.47 $ 10,483 Granted — $ — Forfeited (174) $ 7.65 Exercised (8) $ 3.12 Outstanding at March 31, 2021 824 $ 2.07 5.79 $ 10,873 Exercisable at March 31, 2021 595 $ 1.73 5.23 $ 8,061 |
Schedule of restricted stock award activity under all equity compensation plans | A summary of restricted stock award activity under all equity compensation plans for the three months ended March 31, 2021, is presented below: Number of Shares (in thousands) Granted but not vested at December 31, 2020 268 Granted 65 Forfeited (66) Vested (49) Granted but not vested at March 31, 2021 218 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
STOCKHOLDERS' EQUITY | |
Schedule of stock warrant activity | A summary of stock warrant activity for the three months ended March 31, 2021 is 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, 2020 100 $ 2.63 3.76 $ 1,084 Granted — $ — Exercised (10) $ 2.50 3.52 192 Forfeited — $ — Outstanding and Exercisable at March 31, 2021 90 $ 2.64 3.52 $ 1,137 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
LEASES | |
Schedule of future minimum lease payments under the Company's financing leases and operating lease | Operating lease liability Financing lease liability April 1, 2021 through December 31, 2021 1,768 110 2022 2,447 147 2023 1,514 147 2024 512 116 2025 528 73 2026 223 19 Total undiscounted future minimum lease payments 6,992 612 Less: Difference between undiscounted lease payments and discounted lease liabilities: (578) (111) Total lease liabilities $ 6,414 $ 501 |
BASIS OF PRESENTATION - Breakdo
BASIS OF PRESENTATION - Breakdown of net revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Device revenue | ||
Total Device revenue | $ 24,127 | $ 15,228 |
Devices [Member] | ||
Device revenue | ||
Purchased | 2,332 | 1,280 |
Leased | 4,033 | 2,164 |
Total Device revenue | $ 6,365 | $ 3,444 |
BASIS OF PRESENTATION - Invento
BASIS OF PRESENTATION - Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Components of inventory | ||
Raw Materials | $ 4,102 | $ 3,213 |
Work-in-process | 390 | 1,455 |
Finished Goods | 6,617 | 4,119 |
Total | 11,109 | 8,787 |
Less: reserve | (152) | (152) |
Inventory, net | $ 10,957 | $ 8,635 |
BASIS OF PRESENTATION - Additio
BASIS OF PRESENTATION - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
BASIS OF PRESENTATION | |
Number of operating segments | 1 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment, Gross | $ 4,957 | $ 4,432 |
Less accumulated depreciation | (2,658) | (2,507) |
Property and Equipment, Net | 2,299 | 1,925 |
Office furniture and equipment | ||
Property, Plant and Equipment, Gross | 2,196 | 2,362 |
Assembly equipment | ||
Property, Plant and Equipment, Gross | 151 | 143 |
Vehicles | ||
Property, Plant and Equipment, Gross | 198 | 198 |
Leasehold improvements | ||
Property, Plant and Equipment, Gross | 1,013 | 559 |
Sales Rep demo units | ||
Property, Plant and Equipment, Gross | 313 | 361 |
Leased devices | ||
Property, Plant and Equipment, Gross | $ 1,086 | $ 809 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment | ||
Depreciation | $ 487 | $ 252 |
Property and Equipment [Member] | ||
Property, Plant and Equipment | ||
Depreciation | 100 | 100 |
Sales Rep demo units | ||
Property, Plant and Equipment | ||
Depreciation | 100 | 0 |
Leased Devices [Member] | ||
Property, Plant and Equipment | ||
Depreciation | $ 200 | $ 200 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Basic earnings per share | ||
Net income available to common stockholders | $ (706) | $ 2,937 |
Basic weighted-average shares outstanding | 34,837 | 32,913 |
Basic earnings per share | $ (0.02) | $ 0.09 |
Diluted earnings per share | ||
Net income available to common stockholders | $ (706) | $ 2,937 |
Weighted-average shares outstanding | 34,837 | 32,913 |
Effect of dilutive securities - options and restricted stock | 0 | 1,291 |
Diluted weighted-average shares outstanding | 34,837 | 34,204 |
Diluted earnings per share | $ (0.02) | $ 0.09 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.1 | 0.3 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS - Outstanding and exercisable number of stock options (Details) shares in Thousands | Mar. 31, 2021shares |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 824 |
Number of Shares, Exercisable | 595 |
2005 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 296 |
Number of Shares, Exercisable | 296 |
Equity Compensation Plans not approved by Shareholders | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 38 |
Number of Shares, Exercisable | 25 |
2017 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding Number of Options (in shares) | 490 |
Number of Shares, Exercisable | 274 |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - stock-based compensation expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total stock based compensation expense | $ 108 | $ 497 |
Cost of Revenue | ||
Total stock based compensation expense | 15 | 6 |
Sales and marketing expense | ||
Total stock based compensation expense | 15 | 29 |
General and administrative | ||
Total stock based compensation expense | $ 78 | $ 462 |
STOCK-BASED COMPENSATION PLAN_4
STOCK-BASED COMPENSATION PLANS - Stock options granted (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair value of stock option grants | ||
Expected term (years) | 0 years | 6 years 9 months 14 days |
Risk-free interest rate | 0.00% | 1.59% |
Expected volatility | 0.00% | 116.76% |
Expected dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION PLAN_5
STOCK-BASED COMPENSATION PLANS - Summary of stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of stock option activity under the option Plan | ||
Outstanding and Exercisable at ending balance | 824 | |
Number of Shares, Exercisable | 595 | |
Employee Stock Option [Member] | ||
Summary of stock option activity under the option Plan | ||
Outstanding at beginning balance | 1,006 | |
Number of Shares, Granted | 0 | |
Number of Warrants, Exercised | (174) | |
Number of Shares, Forfeited | (8) | |
Outstanding and Exercisable at ending balance | 824 | 1,006 |
Number of Shares, Exercisable | 595 | |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 3.04 | |
Weighted Average Exercise Price, Granted | 0 | |
Weighted Average Exercise Price, Exercised | 7.65 | |
Weighted Average Exercise Price, Forfeited | 3.12 | |
Weighted Average Exercise Price, Outstanding at ending balance | 2.07 | $ 3.04 |
Weighted Average Exercise Price, Exercisable at ending balance | $ 1.73 | |
Weighted Average Remaining Contractual Life, Outstanding | 5 years 9 months 14 days | 6 years 5 months 19 days |
Weighted Average Remaining Contractual Life, Exercisable (Years) | 5 years 2 months 23 days | |
Aggregate Intrinsic Value, Outstanding | $ 10,873 | $ 10,483 |
Aggregate Intrinsic Value, Exercisable | $ 8,061 |
STOCK-BASED COMPENSATION PLAN_6
STOCK-BASED COMPENSATION PLANS - Summary of restricted stock award activity (Details) - Restricted Stock [Member] shares in Thousands | 3 Months Ended |
Mar. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Granted but not vested at beginning balance | 268 |
Granted | 65 |
Forfeited | 66 |
Vested | (49) |
Granted but not vested at ending balance | 218 |
STOCK-BASED COMPENSATION PLAN_7
STOCK-BASED COMPENSATION PLANS - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Stock options outstanding | 824,000 | ||
Number of Shares, Exercisable | 595,000 | ||
Proceeds from Stock Options Exercised | $ 27,000 | $ 200 | |
Unrecognized compensation expense related to stock options | $ 3,500 | ||
Weighted-average period of unrecognized compensation expense related to stock options | 2 years 3 months 18 days | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Restricted stock were granted | 65,000 | ||
2017 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000,000 | ||
Number of Shares, Granted | 0 | 14,000 | |
Stock options outstanding | 490,000 | ||
Number of Shares, Exercisable | 274,000 | ||
2017 Stock Option Plan | Management [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Restricted stock were granted | 65,000 | 165,000 | |
2005 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Stock options outstanding | 296,000 | ||
Number of Shares, Exercisable | 296,000 |
STOCKHOLDERS' EQUITY - Warrants
STOCKHOLDERS' EQUITY - Warrants (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Outstanding and Exercisable at ending balance | 824 | |
Warrant | ||
Outstanding at beginning balance | 100 | |
Number of Warrants, Granted | 0 | |
Number of Warrants, Exercised | (10) | |
Number of Warrants, Forfeited | 0 | |
Outstanding and Exercisable at ending balance | 90 | 100 |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 2.63 | |
Weighted Average Exercise Price, Granted | 0 | |
Weighted Average Exercise Price, Exercised | 2.50 | |
Weighted Average Exercise Price, Forfeited | 0 | |
Weighted Average Exercise Price, Outstanding at ending balance | $ 2.64 | $ 2.63 |
Weighted Average Remaining Contractual Life (Years) | 3 years 6 months 7 days | 3 years 9 months 3 days |
Weighted Average Remaining Contractual Life, Exercised (Years) | 3 years 6 months 7 days | |
Aggregate Intrinsic Value | $ 1,137 | $ 1,084 |
Aggregate Intrinsic Value, Exercised | $ 192 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 08, 2021 | |
Subsidiary, Sale of Stock | ||
Stock Repurchased During Period, Value | $ 75 | |
Common Stock [Member] | ||
Subsidiary, Sale of Stock | ||
Stock Repurchase Program, Authorized Amount | $ 10,000 | |
Stock Repurchased During Period, Shares | 5,000 | |
Treasury Stock Acquired, Average Cost Per Share | $ 14.79 | |
Stock Repurchased During Period, Value | $ 100 |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Taxes | ||
Income Tax Credits and Adjustments | $ 400 | |
Effective Income Tax Rate Reconciliation, Percent | 35.00% | |
Discrete Items Income Tax Benefit | $ 100 | $ 1,100 |
Income tax benefit | 384 | 483 |
Income taxes paid | $ 0 | $ 0 |
Estimated Rate One [Member] | ||
Income Taxes | ||
Effective Income Tax Rate Reconciliation, Percent | 25.20% |
LEASES (Details)
LEASES (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Operating lease liabilities | |
April 1, 2021 through December 31, 2021 | $ 1,768 |
2022 | 2,447 |
2023 | 1,514 |
2024 | 512 |
2025 | 528 |
2026 | 223 |
Total undiscounted future minimum lease payments | 6,992 |
Less: Difference between undiscounted lease payments and discounted lease liabilities: | (578) |
Total lease liabilities | 6,414 |
Finance lease liabilities | |
April 1, 2021 through December 31, 2021 | 110 |
2022 | 147 |
2023 | 147 |
2024 | 116 |
2025 | 73 |
2026 | 19 |
Total undiscounted future minimum lease payments | 612 |
Less: Difference between undiscounted lease payments and discounted lease liabilities: | (111) |
Total lease liabilities | $ 501 |
LEASES - Additional information
LEASES - Additional information (Details) | Nov. 01, 2021$ / ft² | Apr. 09, 2021USD ($)ft²$ / ft² | Nov. 01, 2020$ / ft² | Oct. 20, 2019$ / ft² | Mar. 31, 2021USD ($)lease | Dec. 31, 2020USD ($)$ / ft² | Mar. 31, 2020USD ($) | Sep. 30, 2019$ / ft² | Oct. 31, 2020$ / ft² | Oct. 31, 2020$ / ft² | Oct. 31, 2021$ / ft² | Oct. 19, 2019$ / ft² | Oct. 19, 2018$ / ft² | Jan. 31, 2024$ / ft² | Dec. 14, 2020USD ($) | Nov. 25, 2020USD ($) | Nov. 03, 2020USD ($) | Sep. 17, 2020USD ($)ft² | Mar. 03, 2020USD ($) | Jan. 03, 2020USD ($)ft² | Sep. 20, 2019USD ($) | Jun. 01, 2019USD ($) | Mar. 11, 2019ft² | Oct. 20, 2017USD ($)ft² |
Lessee, Lease, Description | ||||||||||||||||||||||||
Number of operating leases | lease | 5 | |||||||||||||||||||||||
Number of Operating Leases Pertaining to Corporate Headquarters | lease | 4 | |||||||||||||||||||||||
Number of operating leases pertaining to warehouse facility. | lease | 1 | |||||||||||||||||||||||
Number of finance leases | lease | 5 | |||||||||||||||||||||||
Additional rent per square foot | $ / ft² | 0.50 | |||||||||||||||||||||||
Operating lease liabilities | $ 6,414,000 | |||||||||||||||||||||||
Operating lease asset | 5,380,000 | $ 5,993,000 | ||||||||||||||||||||||
Financing lease asset | 457,000 | $ 321,000 | ||||||||||||||||||||||
Finance Lease, Liability | 501,000 | |||||||||||||||||||||||
Operating Lease, Cost | $ 600,000 | $ 400,000 | ||||||||||||||||||||||
Lessee, Operating Lease, Discount Rate | 4.00% | |||||||||||||||||||||||
Operating Leases, One | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Land Subject to Ground Leases | ft² | 41,715 | |||||||||||||||||||||||
Option to extend lease term | 2 years | |||||||||||||||||||||||
Rent per square foot | $ / ft² | 19.75 | 7.50 | ||||||||||||||||||||||
Additional rent per square foot | $ / ft² | 1 | |||||||||||||||||||||||
Tenant Improvements | $ 200,000 | |||||||||||||||||||||||
Operating lease liabilities | 3,900,000 | |||||||||||||||||||||||
Operating lease asset | $ 3,600,000 | |||||||||||||||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 3 months 18 days | |||||||||||||||||||||||
Operating Leases, Two | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Land Subject to Ground Leases | ft² | 21,420 | |||||||||||||||||||||||
Option to extend lease term | 2 years | |||||||||||||||||||||||
Rent per square foot | $ / ft² | 10 | 20.75 | ||||||||||||||||||||||
Additional rent per square foot | $ / ft² | 1 | |||||||||||||||||||||||
Operating lease liabilities | $ 1,600,000 | |||||||||||||||||||||||
Operating lease asset | $ 1,600,000 | |||||||||||||||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 3 months 18 days | |||||||||||||||||||||||
Operating Leases, Three | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Land Subject to Ground Leases | ft² | 22,546 | |||||||||||||||||||||||
Rent per square foot | $ / ft² | 13 | 21.75 | ||||||||||||||||||||||
Additional rent per square foot | $ / ft² | 1 | |||||||||||||||||||||||
Operating lease liabilities | $ 1,400,000 | |||||||||||||||||||||||
Operating lease asset | $ 1,400,000 | |||||||||||||||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 3 months 18 days | |||||||||||||||||||||||
Operating Leases, Four | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Land Subject to Ground Leases | ft² | 50,488 | |||||||||||||||||||||||
Option to extend lease term | 5 years | |||||||||||||||||||||||
Rent per square foot | $ / ft² | 9.40 | |||||||||||||||||||||||
Additional rent per square foot | $ / ft² | 0.30 | |||||||||||||||||||||||
Tenant Improvements | $ 400,000 | |||||||||||||||||||||||
Operating lease liabilities | $ 2,400,000 | |||||||||||||||||||||||
Operating lease asset | $ 2,100,000 | |||||||||||||||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 5 years 2 months 12 days | |||||||||||||||||||||||
Operating Leases, Five | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Land Subject to Ground Leases | ft² | 166,912 | |||||||||||||||||||||||
Rent per square foot | $ / ft² | 26.50 | |||||||||||||||||||||||
Additional rent per square foot | $ / ft² | 0.50 | |||||||||||||||||||||||
Operating lease liabilities | $ 13,400,000 | |||||||||||||||||||||||
Operating lease asset | $ 13,400,000 | |||||||||||||||||||||||
Finance Leases, Office Equipment One | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Financing lease asset | $ 200,000 | |||||||||||||||||||||||
Finance Lease, Liability | $ 200,000 | |||||||||||||||||||||||
Lessee, Finance Lease, Term of Contract | 5 years | |||||||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 3 years 7 months 6 days | |||||||||||||||||||||||
Finance Leases, Office Equipment Two | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Financing lease asset | $ 100,000 | |||||||||||||||||||||||
Finance Lease, Liability | $ 100,000 | |||||||||||||||||||||||
Lessee, Finance Lease, Term of Contract | 4 years | |||||||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 3 years | |||||||||||||||||||||||
Finance Leases, Office Equipment Three | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Financing lease asset | $ 100,000 | |||||||||||||||||||||||
Finance Lease, Liability | $ 100,000 | |||||||||||||||||||||||
Lessee, Finance Lease, Term of Contract | 5 years | |||||||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 4 years 8 months 12 days | |||||||||||||||||||||||
Finance Leases, Office Equipment Four | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Financing lease asset | $ 200,000 | |||||||||||||||||||||||
Finance Lease, Liability | $ 200,000 | |||||||||||||||||||||||
Lessee, Finance Lease, Term of Contract | 5 years 3 months 18 days | |||||||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 5 years 3 months 18 days | |||||||||||||||||||||||
Finance Leases, Office Equipment Five | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Financing lease asset | $ 8,000 | |||||||||||||||||||||||
Finance Lease, Liability | $ 8,000 | |||||||||||||||||||||||
Lessee, Finance Lease, Term of Contract | 3 years | |||||||||||||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 2 years 9 months 18 days | |||||||||||||||||||||||
Minimum | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Lessee, Finance Lease, Discount Rate | 8.30% | |||||||||||||||||||||||
Maximum | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Lessee, Finance Lease, Discount Rate | 20.70% | |||||||||||||||||||||||
Cost of Revenue | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Operating Lease, Cost | $ 200,000 | |||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||
Lessee, Lease, Description | ||||||||||||||||||||||||
Operating Lease, Cost | $ 400,000 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - item | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | |||
Concentration Risk | |||
Concentration Risk, Percentage | 32.00% | 40.00% | |
Accounts Receivable [Member] | |||
Concentration Risk | |||
Concentration Risk, Percentage | 37.00% | 26.00% | |
Number of third-party payers | 2 | 1 |