Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 22, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ZYNEX INC | ||
Entity Central Index Key | 846,475 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 8.7 | ||
Trading Symbol | ZYXI | ||
Entity Common Stock, Shares Outstanding | 32,457,636 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 5,565 | $ 247 |
Accounts receivable, net | 2,185 | 3,028 |
Inventory, net | 423 | 107 |
Prepaid expenses | 198 | 40 |
Total current assets | 8,371 | 3,422 |
Property and equipment, net | 188 | 580 |
Deposits | 370 | 55 |
Amortizable intangible assets, net | 0 | 34 |
Total assets | 8,929 | 4,091 |
Current liabilities: | ||
Line of credit | 0 | 2,771 |
Current portion of unsecured subordinated promissory notes | 231 | 0 |
Current portion of capital leases | 123 | 118 |
Accounts payable and accrued expenses | 2,243 | 3,244 |
Accrued payroll and related taxes | 538 | 732 |
Deferred insurance reimbursement | 880 | 880 |
Total current liabilities | 4,015 | 7,745 |
Long-term liabilities: | ||
Capital leases, less current portion | 0 | 136 |
Warranty liability | 12 | 12 |
Total liabilities | 4,027 | 7,893 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized; 32,864,877 issued and 32,778,040 outstanding as of December 31, 2017 31,271,234 issued and outstanding as of December 31, 2016 | 33 | 31 |
Additional paid-in capital | 7,612 | 6,032 |
Treasury stock 86,837 and 0 shares, at December 31, 2017 and 2016, respectively, at cost | (243) | 0 |
Accumulated deficit | (2,411) | (9,776) |
Total Zynex, Inc. stockholders' equity (deficit) | 4,991 | (3,713) |
Non-controlling interest | (89) | (89) |
Total stockholders' equity (deficit) | 4,902 | (3,802) |
Total liabilities and stockholders' equity | $ 8,929 | $ 4,091 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 32,864,877 | 31,271,234 |
Common Stock, Shares, Outstanding | 32,778,040 | 31,271,234 |
Treasury Stock, Shares | 86,837 | 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
NET REVENUE | |||
Product devices | $ 8,755 | $ 9,032 | |
Product supplies | 14,677 | 4,281 | |
Total revenue | 23,432 | 13,313 | |
COSTS OF REVENUE AND OPERATING EXPENSES | |||
Costs of revenue - product & supply | 4,819 | 3,517 | |
Selling, general and administrative expense | 9,669 | 9,156 | |
Total costs of revenue and operating expenses | 14,488 | 12,673 | |
Income from operations | 8,944 | 640 | |
Other expense | |||
Other expense | 0 | (204) | |
Interest expense | (1,450) | (352) | |
Other expense | (1,450) | (556) | |
Income from operations before income taxes | 7,494 | 84 | |
Income tax expense | 129 | 15 | |
Net Income | 7,365 | 69 | |
Plus: Net income (loss) - noncontrolling interest | 0 | 0 | |
Net income - attributable to Zynex, Inc. | [1] | $ 7,365 | $ 69 |
Net income per share attributable to Zynex, Inc.: | |||
Basic | $ 0.23 | $ 0 | |
Diluted | $ 0.22 | $ 0 | |
Weighted average basic shares outstanding | 32,156 | 31,271 | |
Weighted average diluted shares outstanding | 33,196 | 31,271 | |
[1] | There is no difference between net income and comprehensive income. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 7,365 | $ 69 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 252 | 395 |
Amortization of intangible assets | 34 | 40 |
Amortization of debt issuance costs | 511 | 0 |
Stock based compensation | 66 | 200 |
Non-cash compensation to consultant | 228 | 0 |
Loss on disposal of product inventory | 227 | 30 |
Loss on disposal of property | 0 | 22 |
Interest expense related to common stock issued in connection with our private placement | 739 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 843 | 585 |
Deferred Revenue | 0 | 845 |
Prepaid and other assets | (473) | (14) |
Accounts payable and accrued liabilities | (1,216) | 569 |
Inventory | (316) | 198 |
Net cash provided by operating activities | 8,260 | 1,769 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of Property and Equipment | (87) | (226) |
Net cash used in investing activities | (87) | (226) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net (repayments) borrowings on line of credit | (2,771) | (1,232) |
Principal payments on subordinated notes payable | (650) | 0 |
Proceeds from unsecured subordinated promissory notes | 1,035 | 0 |
Payment of commission and placement agent fees and related expenses | (155) | 0 |
Payments on capital lease obligations | (131) | (72) |
Purchase of treasury stock | (222) | 0 |
Proceeds from the issuance of stock | 39 | 0 |
Net cash used in financing activities | (2,855) | (1,304) |
Net increase in cash and cash equivalents | 5,318 | 239 |
Cash and cash equivalents at beginning of period | 247 | 8 |
Cash and cash equivalents at end of period | 5,565 | 247 |
Supplemental disclosure of cash and non-cash transactions: | ||
Interest paid | 200 | 351 |
Treasury stock purchased and included in accrued liabilities but not settled | $ 21 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | AccumulatedDeficit | Non-Controlling Interest |
Balance at Dec. 31, 2015 | $ (4,071) | $ 31 | $ 5,832 | $ 0 | $ (9,845) | $ (89) |
Balance, shares at Dec. 31, 2015 | 31,271,234 | |||||
Stock-based compensation expense | 185 | $ 0 | 185 | 0 | 0 | 0 |
Service provider warrant expense | 15 | 0 | 15 | 0 | 0 | 0 |
Net income | 69 | 0 | 0 | 0 | 69 | |
Balance at Dec. 31, 2016 | (3,802) | $ 31 | 6,032 | 0 | (9,776) | (89) |
Balance, shares at Dec. 31, 2016 | 31,271,234 | |||||
Stock option exercises | 39 | $ 0 | 39 | 0 | 0 | 0 |
Stock option exercises, shares | 41,143 | |||||
Common stock issued pursuant to the Private Placement | 1,249 | $ 2 | 1,247 | 0 | 0 | 0 |
Common stock issued pursuant to the Private Placement, shares | 1,552,500 | |||||
Stock-based compensation expense | 66 | $ 0 | 66 | 0 | 0 | 0 |
Service provider warrant expense | 228 | 0 | 228 | 0 | 0 | 0 |
Treasury stock | $ (243) | $ 0 | 0 | (243) | 0 | 0 |
Treasury stock, shares | (86,837) | (86,837) | ||||
Net income | $ 7,365 | $ 0 | 0 | 0 | 7,365 | |
Balance at Dec. 31, 2017 | $ 4,902 | $ 33 | $ 7,612 | $ (243) | $ (2,411) | $ (89) |
Balance, shares at Dec. 31, 2017 | 32,778,040 |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS AND MANAGEMENT’S PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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, Electrotherapy and Pain Management Products. As of December 31, 2017, 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. One other subsidiary, Zynex Europe, ApS (“ZEU,” a wholly-owned Denmark corporation), did not generate material revenues during the years ended December 31, 2017 and 2016 from international sales and marketing. Zynex Monitoring Solutions, Inc. (“ZMS,” a wholly-owned Colorado corporation) is developing a blood volume monitoring device, but it is not yet developed or ready for market and, as a result, ZMS has achieved no revenues to date. Its inactive subsidiaries include Zynex NeuroDiagnostics, Inc. (“ZND,” a wholly-owned Colorado corporation), Zynex Billing and Consulting, LLC (“ZBC,” an 80 The term “the Company” refers to Zynex, Inc. and its active and inactive subsidiaries. Nature of Business ZMI designs, manufactures and markets U.S. Food and Drug Administration (FDA) cleared medical devices that treat chronic and acute pain, as well as activate and exercise muscles for rehabilitative purposes with electrical stimulation. ZEU was formed in 2012 to conduct international sales and marketing for Company products. ZEU produced minimal revenues during 2017 and 2016. ZMS was formed to develop and market medical devices for non-invasive cardiac monitoring, the products of which are under development. The Company is currently developing a blood volume monitoring device. ZMS produced no revenues during 2017 or 2016. In 2017 and 2016, the Company generated substantially all of its revenue in North America from sales of its products and supplies to patients, dealers and health care providers. Liquidity During 2013-2015, the Company suffered operating losses which caused a lack of liquidity and a substantial working capital deficit. This raised substantial doubt about the Company’s ability to continue as a going concern. During 2016, the Company generated net income during Q3 and Q4 and combined with the profitability in 2017, the Company has recorded six consecutive profitable quarters, paid off its line of credit with Triumph Healthcare Finance, a division of TBK Bank, SSB, formerly known as Triumph Community Bank, (“Triumph”) (Note 9) and generated cash reserves and positive working capital. In accordance with Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements Going Concern, as of December 31, 2017, management evaluated whether there are conditions and events that raise doubt about the entity’s ability to continue as a going concern and concluded there is not significant doubt. The Company is currently able to meet its obligations as they become due within one year from the date the Company releases its financial statements. Management’s evaluation is based only on relevant conditions and events that are known and reasonably knowable as of the date of these financial statements. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | (2) SIGNIFICANT ACCOUNTING POLICIES 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 in the equity of a subsidiary is accounted for and reported as stockholders’ equity (deficit). Non-controlling interest represents the 20 Certain reclassifications have been made to the 2016 financial statements to conform to the consolidated 2017 financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. 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, excess and damaged inventory, the life of its rented equipment, valuation of stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. The Company recognizes revenue when each of the following four conditions are met: 1) a contract or sales arrangement exists, 2) products have been delivered and title has transferred 3) the price of the products or services is fixed or determinable, and 4) collectability is reasonably assured. The Company recognizes revenue for medical units and supplies when we receive notice that the product has been prescribed and delivered to the patient. The Company, prior to recognizing revenue verifies the patient’s insurance coverage or obtains the insurance company preauthorization, when required. Revenue from supplies is recognized upon delivery. Revenue from sales to distributors is recognized when the Company receives notice of receipt by the distributor. Revenue is reported net, after adjustments for estimated insurance company or governmental agency (collectively “Third-party Payors”) reimbursement deductions and, for wholesale customers and patient billings, an allowance for uncollectible accounts. The Third-party Payor reimbursement deductions are known throughout the health care industry as “billing adjustments” whereby the Third-party Payors unilaterally reduce the amount they reimburse for the Company’s products. A significant portion of the Company’s revenues are derived, and the related receivables are due, from Third-party Payors. The nature of these receivables within the medical industry has typically resulted in long collection cycles. The process of determining what products will be reimbursed by Third-party Payors and the amounts that they will reimburse is complex and depends on conditions and procedures that vary among providers and may change from time to time. The Company maintains an allowance for billing adjustments and if necessary, an allowance for doubtful accounts. Billing adjustments result from reimbursements from Third-party Payors that are less than amounts claimed and from where the amount claimed by the Company exceeds the Third-party Payors usual, customary and reasonable reimbursement rate. The Company determines the amount of the allowance and adjusts it at the end of each reporting period, based on a number of factors, including historical rates of collection, the aging of the receivables, trends in the historical rates of collection and current relationships and experience with the Third-party Payors. If the rates of collection of past-due receivables recorded for previous fiscal periods changes, or if there is a trend in the rates of collection on those receivables, the Company may be required to change the rate at which it provides for additions to the allowance. A change in the rates of the Company’s collections can result from a number of factors, including experience and training of billing personnel, changes in the reimbursement policies or practices of Third-party Payors, or changes in industry rates of reimbursement. We believe we have a sufficient history of collection experience to estimate the net collectible amounts by payor. However, changes to the allowance for billing adjustments and uncollectible accounts, which are recorded as a reduction of revenue, have historically fluctuated and may continue to fluctuate significantly from quarter to quarter and year to year. Due to the nature of the medical industry and the reimbursement environment in which the Company operates, estimates are required to record net revenues and accounts receivable at their net realizable values (also known as net collectible value). Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of third-party billing arrangements and the uncertainty of reimbursement amounts for certain products or services from 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 reimbursement, as well as changes in our billing practices to increase cash collections, it is possible that management’s estimates could change in the near term, which could have an impact on our results of operations and cash flows. Any differences between estimated settlements and final determinations are reflected as an increase or a reduction to revenue in the period when such final determinations are known. The Company frequently receives refund requests from insurance providers relating to specific patients and dates of service. Billing and reimbursement disputes are very common in the Company’s industry. These requests are sometimes related to a limited number of patients or products; at other times, they include a significant number of refund claims in a single request. The Company reviews and evaluates these requests and determines if any refund request is appropriate. The Company also reviews these refund claims when it is rebilling or pursuing reimbursement from insurance providers. The Company frequently has offsets against such refund requests, and sometimes amounts are due to the Company in excess of the amounts of refunds requested by the insurance providers. Therefore, at the time of receipt of such refund requests, the Company is generally unable to determine if a refund request is valid. The Company maintains an allowance for estimated future refunds which management believes is sufficient to cover future requests for refunds. However, no assurances can be given with respect to such estimates of reimbursements and offsets or the ultimate outcome of any refund requests. In addition to the allowance for billing adjustments, the Company records an allowance for uncollectible accounts receivable for wholesale (sales to distributors) sales and certain patient billings when necessary. Uncollectible accounts receivable are primarily a result of non-payment from patients who have been direct billed for co-payments or deductibles, lack of appropriate insurance coverage and disallowances of charges by Third-party Payors. If there is a change to a material insurance provider contract or policy, application by a provider, a decline in the economic condition of providers or a significant turnover of Company billing personnel resulting in diminished collection effectiveness, the estimate of the allowance for billing adjustments and uncollectible accounts receivable may not be adequate and may result in an increase in the future. As of December 31, 2017, the Company believes its accounts receivable is reasonably stated at its net realizable / collectible value and has an adequate allowance for billing adjustments including all known and estimated insurance disputes and refund requests. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company’s financial instruments at December 31, 2017, include cash, accounts receivable, accounts payable and income taxes, for which current carrying amounts approximate fair value due to their short-term nature. Financial instruments at December 31, 2017, also include the notes payable related to our private placement and capitalized leases, 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. During the first quarter of 2016, the Company collected $ 880,000 880,000 Inventory, which primarily represents finished goods, are valued at the lower of cost (average) or market. 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. Finished goods at December 31, 2017 and 2016 includes products (finished goods, parts and supplies) held at the Company’s headquarters. During 2016, the Company ramped up the EZ Rx Prescribe program, whereby the NexWave electrotherapy device is sold by prescription and is shipped from the Company manufacturing facilities. On December 31, 2017, the Company did not have open material inventory purchase commitments with vendors. The Company estimates uncollectible amounts, when applicable, based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. 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 and Chief Financial Officer as our chief operating decision-makers (“CODM”). We currently operate our business as one operating segment which includes two revenue types: Product devices and Product supplies. Property and equipment are stated at cost. The Company removes the cost and the related accumulated depreciation from the accounts of assets sold or retired, and the resulting net gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the useful life of the asset ranging from three to seven years. Repairs and maintenance costs are charged to expense as incurred. 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. The Company expenses advertising costs as they are incurred. Advertising expense for each of the years ended December 31, 2017 and 2016 was approximately $ 0.1 Research and development costs are expensed when incurred. Research and development expense for the years ended December 31, 2017 and 2016 was approximately $ 0.1 0.3 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 use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35 21 The Company is subject to the provisions of the Financial Accounting Standards Board (“FASB”) ASC 740-10, Income Taxes, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 118 requires that the Company include in its financial statements the reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Pursuant to the SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The final impact on the Company from the Tax Act’s transition tax legislation may differ from the aforementioned estimates due to the complexity of calculating and supporting with primary evidence such U.S. tax attributes such as accumulated foreign earnings and profits, foreign tax paid, and other tax components involved in foreign tax credit calculations for prior years back to 1998. Such differences could be material, due to, among other things, changes in interpretations of the Tax Act, future legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition tax's reasonable estimate. The Company will continue to evaluate the impact of the U.S. Tax Act and will record any resulting tax adjustments during 2018. Foreign currency transaction gains and losses are included in other income (expense) in the accompanying consolidated statements of comprehensive income. Foreign currency transaction gains for the years ended December 31, 2017 and 2016 were insignificant. In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2017-12 on our consolidated financial statements. 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, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact that the adoption of ASU 2016-13 will have on our financial condition, results of operations and cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We will adopt the new standard effective January 1, 2019. While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases, as disclosed in Note 11 Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities. In May 2014, the FASB issued ASU No. 2014-09“Revenue from Contracts with Customers” (Topic 606) which amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This accounting guidance is effective for the Company beginning in the first quarter of fiscal year 2018, using one of two prescribed retrospective methods. We will adopt the new standard effective January 1, 2018, using the modified retrospective transition method. We finalized our analysis and the adoption of this guidance will not have a material impact on our consolidated financial statements and our internal controls over financial reporting. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We will adopt the new standard effective January 1, 2018, using the modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the effective date. A cumulative-effect adjustment will capture the write-off of income tax consequences deferred from past intra-entity transfers involving assets other than inventory, new deferred tax assets, and other liabilities for amounts not currently recognized under U.S. GAAP. Based on transactions up to December 31, 2017, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We will adopt the new standard effective January 1, 2018, using the retrospective transition approach for all periods presented. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We will adopt the new standard effective January 1, 2018, on a prospective basis and do not expect the standard to have a material impact on our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements. 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. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | (3) BALANCE SHEET COMPONENTS December 31, 2017 2016 Property and equipment: Office furniture and equipment $ 998 $ 911 Rental inventory - 1,411 Assembly equipment 128 125 Vehicles 76 76 1,202 2,523 Less accumulated depreciation (1,014) (1,943) $ 188 $ 580 December 31, 2017 2016 Assets acquired under capital lease: Original book value $ 461 $ 461 Accumulated depreciation (379) (287) Net book value $ 82 $ 174 Depreciation expense recorded was $ 0.3 0.4 Included in computer and office &; manufacturing equipment at December 31, 2017 and 2016 are assets under capital lease. Depreciation expense related to assets under capital leases was $ 0.1 During the year ending December 31, 2017 Rental inventory was written off and going forward, units will be fully expensed when they leave the facility on the initial purchase. Depreciation expense related to rental inventory was $ 0.1 0.3 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | (4) INTANGIBLE ASSETS Amortization Life Years 2017 2016 Software and development costs 3 $ 325 $ 325 Less: accumulated amortization (325) (291) Total intangible assets, net $ 0 $ 34 The software and development costs are amortized over 3 34,000 40,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | (5) EARNINGS PER SHARE Basic earnings 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. For the Years Ended December 31, 2017 2016 Basic income per share: Net income available to common stockholders $ 7,365 $ 69 Basic weighted average shares outstanding 32,156 31,271 Basic income per share: $ 0.23 $ 0.00 Diluted income per share: Net income available to common stockholders $ 7,365 $ 69 Weighted average shares outstanding 32,156 31,271 Effect of dilutive securities - options and restricted stock 1,040 - Diluted weighted average shares outstanding 33,196 31,271 Diluted income per share: $ 0.22 $ 0.00 For the year ended December 31, 2017, 0.3 For the year ended December 31, 2016, 2.2 Prior to their issuance on August 28, 2017, the dilutive securities calculation included 776,250 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | (6) 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 0.4 0.4 During the years ended December 2017 and 2016, the Company awarded 15,000 0 The Company previously reserved 3,000,000 For the years ended December 31, 2017 and 2016, the Company recorded compensation expense related to stock options, restricted stock and warrants of $ 0.3 0.2 2017 2016 Weighted average expected term 6.25 years 6.25 years Weighted average volatility 124 % 122 % Weighted average risk-free interest rate 1.83 % 1.48 % 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. Number of Shares Weighted Weighted Aggregate Outstanding at December 31, 2015 1,685 $ 0.46 $ 235 Granted 877 $ 0.26 Exercised (1) 0.15 Forfeited (330) $ 0.36 Outstanding at December 31, 2016 2,231 $ 0.40 6.7 $ 135 Outstanding at December 31, 2016 2,231 $ 0.40 Granted 662 $ 0.86 Exercised (38) $ 1.02 Forfeited/Canceled (803) $ 0.33 Outstanding at December 31, 2017 2,052 $ 0.56 6.5 $ 5,334 Exercisable at December 31, 2017 1,460 $ 0.40 5.3 Range Outstanding WA WA Outstanding Exercisable Number of Remaining Exercisable WA $0 to $.50 1,540 6.96 $ 0.27 1,155 6.25 $ 0.24 $.51 to $1.00 283 3.59 $ 0.89 233 2.29 $ 0.93 $1.01 to $1.50 69 3.09 $ 1.24 54 1.19 $ 1.19 $1.51 to $2.00 30 4.19 $ 1.73 18 0.49 $ 1.68 $2.00 to $3.00 130 9.95 $ 2.65 - 0.00 $ - 2,052 6.52 $ 0.56 1,460 5.36 $ 0.40 Non-vested Weighted Non-vested at December 31, 2016 572 $ 0.24 Granted 897 $ 0.70 Vested (267) $ 0.25 Exercised - $ - Forfeited (610) $ 0.29 Non-vested at December 31, 2017 592 $ 0.88 The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2017 and 2016 were $ 0.70 0.32 As of December 31, 2017, there were approximately $ 0.5 3.3 The total intrinsic value of stock option exercises for the years ended December 31, 2017 and 2016 was $ 0.1 0 0.1 0.2 Cash received from stock option exercises was $ 39,000 0 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | (7) STOCKHOLDERS’ EQUITY Treasury Stock Beginning on December 6, 2017, and continuing through December 5, 2018, we have 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 From the inception of the plan through December 31, 2017, we purchased 86,837 0.2 2.86 Warrants In October 2017, 150,000 In connection with the agreement entered into on March 28, 2016, with Triumph Bank, the Lender suspended this monthly payment requirement for February, March and April of 2016 up to an aggregate cap of $ 250,000 50,000 Number of Weighted Weighted Aggregate Outstanding at December 31, 2015 - $ - $ - Granted 52 $ 0.21 Exercised - - Forfeited - $ - Outstanding at December 31, 2016 52 $ 0.21 4.37 $ 5 Outstanding at December 31, 2016 52 $ 0.21 Granted 150 $ 2.42 Exercised (2) $ 0.35 Forfeited/Canceled - $ - Outstanding at December 31, 2017 200 $ 1.86 5.80 $ 264 Exercisable at December 31, 2017 200 $ 1.86 5.80 The weighted-average grant-date fair value of common stock warrants granted during the years ended December 31, 2017 and 2016 were $ 1.40 2017 2016 Weighted average expected term 4.38 years 5.0 years Weighted average volatility 136.62 % 122.44 % Weighted average risk-free interest rate 1.51 % 1.48 % Dividend yield 0 % 1.44 % |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (8) INCOME TAXES 2017 2016 Domestic $ 7,494 $ 84 Foreign Total 7,494 84 2017 2016 Current tax (benefit) expense: Federal $ 119 $ 15 State 10 Foreign Total tax (Benefit) expense: 129 15 Deferred tax (benefit) expense: Federal State Foreign Total Deferred tax (benefit) expense: $ 129 $ 15 34 2017 2016 Statutory rate 34 % 34 % State taxes 3 3 Permanent differences and other 0 2 Change in valuation allowance (54) 708 Other (true up) 7 (729) Rate Adjustment 12 Effective rate 2 % 18 % 2017 2016 Long-term deferred tax assets (liabilities): Accrued expenses $ 25 $ 51 Deferred Revenue 217 322 Accounts receivable 19 907 Prepaid Expenses (9) (15) Inventory 92 20 Stock based compensation 137 108 Tax Credits and NOL Carryforward 1,141 4,314 Other 6 9 Property and equipment 35 (115) Amortization 64 105 Tax Credits and NOL Carryforward 1,727 5,706 Less: Valuation allowance (1,727) (5,706) Net deferred tax assets (liabilities) $ - $ - The Tax Act reduces the U.S. statutory corporate tax rate from 35 re-measurement of the federal portion of our deferred tax assets as of December 31, 2017 from 35% to the new 21 The Company has generated a net operating loss carryforward (NOL) for federal income tax purposes of approximately $ 2.9 2037 4.9 As of December 31, 2017 and 2016, the Company has a valuation allowance of approximately $ 1.8 5.7 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, 2017 and 2016, the Company does not have an unrecognized tax liability. The Company classifies penalty and interest expense related to income tax liabilities as an income tax expense. The Company did not incur any interest and penalties for the fiscal year ended December 31, 2017 and 2016. 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 2010 through the current period. |
LINE OF CREDIT
LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | (9) LINE OF CREDIT The Company had an asset-backed revolving credit facility under a Loan and Security Agreement as amended, (the “Triumph Agreement”) with Triumph Healthcare Finance. This credit facility was paid in full on June 30, 2017. The Triumph Agreement contained certain customary restrictive and financial covenants for asset-backed credit facilities. The Company had not been in compliance with the financial covenants under the Triumph Agreement since July 2014. On July 14, 2014, the Company received notice from the Lender of an event of default under the Triumph Agreement. The notice relates to the Company’s default under the minimum debt service coverage ratio requirement for the quarter ended March 31, 2014 and certain other alleged defaults. The Lender notified the Company that it was exercising its default remedies under the Triumph Agreement, including, among others, accelerating the repayment of all outstanding obligations under the Triumph Agreement (outstanding principal and accrued interest) and collecting the Company’s bank deposits to apply towards the outstanding obligations. As of December 31, 2017, $ 0 2.8 11.0 6.75 3 1.25 December 19, 2014 250 50,000 Contractual term 5.0 years Volatility 122.44 % Risk-free interest rate 1.48 % Dividend yield 1.44 % During the three months ended March 31, 2016, the Company recorded bank fee expense related to this stock warrant of $ 15 |
PRIVATE PLACEMENT MEMORANDUM
PRIVATE PLACEMENT MEMORANDUM | 12 Months Ended |
Dec. 31, 2017 | |
Private Placement Memorandum Disclosure [Abstract] | |
PRIVATE PLACEMENT MEMORANDUM | (10) PRIVATE PLACEMENT MEMORANDUM Commencing in November of 2016, the Company conducted a private placement on a “best efforts, minimum-maximum” basis of 12% unsecured subordinated promissory notes, for a minimum of $ 1,000,000 1,500,000 1,035,000 5 10 3 155,000 776,250 255,000 776,250 255,000 342,000 0.5 739,000 December 31, 2017 Proceeds from unsecured subordinated promissory notes $ 1,035 Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses (155) Principal payments on promissory notes (650) Non-cash activity Common stock issued to placement agent (255) Obligation to issue common stock to private placement noteholders (255) Amortization of issuance costs and debt discount 511 Unsecured subordinated promissory notes, net of issuance and debt discount 231 Current portion of unsecured subordinated promissory notes (231) Long-term portion of unsecured subordinated promissory notes $ - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (11) COMMITMENTS AND CONTINGENCIES (a) Lease Commitments We lease office and operating facilities and equipment under non-cancelable operating leases. Current facility leases include our new headquarters in Englewood, Colorado and a small warehouse/office in Denmark. Rent expense was $ 0.6 0.5 We signed a new headquarters facility lease in October 2017 with a term from January 1, 2018 through June 30, 2023 and includes an option to extend the lease for an additional two years through 2025. Our prior headquarters lease in Lone Tree, Colorado contained a termination clause which allowed the Company to terminate the lease at any time with three months written notice. We provided notice to the landlord at the end of October 2017. The Company also leases certain equipment under capital leases which expire on various dates through 2018. Imputed interest rates on the leases range from approximately 5 10 0.5 0.4 0.3 Operating Capital 2018 $ 463 $ 125 2019 830 - 2020 873 - 2021 914 - 2022 956 Thereafter 495 - Total minimum lease payments $ 4,531 125 Less: Amount representing interest (2) Principal balance of capital lease obligation 123 Less: Current portion of capital lease obligation (123) Long-term portion of capital lease obligation $ - (b) - 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 provide 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, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | (12) CONCENTRATIONS The Company’s is exposed to concentration of credit risk related primarily to its cash balances. The Company maintains its cash at major financial institutions. 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 has one major vendor that sourced for approximately 45 The Company had gross receivables from a private health insurance carrier at December 31, 2017 and 2016 that made up approximately 24 10 |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLAN | (13) RETIREMENT PLAN The Company has adopted a retirement plan with a 401(k) deferred compensation provision effective July 1, 2012. Substantially all full-time employees are eligible to participate in the 401(k) plan as long as they are at least 18 years of age and have completed at least three months of employment. The 401(k) plan provides for contributions by the Company at management’s discretion. The Company made no contributions to this plan in 2017 or 2016. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | (14) RELATED PARTY TRANSACTIONS The Company employs Mr. Martin Sandgaard and Mr. Joachim Sandgaard, both sons of Thomas Sandgaard. Compensation for 2017 and 2016 totaled $ 0.2 0.1 3 100,000 Related party payables primarily consist of advances made to the Company and inventory purchases made on behalf of the Company. Accrued liabilities as of December 31, 2016 included a net payable to Thomas Sandgaard and an employee of $ 0.2 0.1 0 |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | (15) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) First Second Third Fourth Quarter Quarter Quarter Quarter Year Ended December 31, 2016 Total revenue $ 3,477 $ 3,286 $ 3,627 $ 2,922 Less: cost of revenue and operating expenses 3,827 3,436 3,005 2,404 Income (loss) from operations (350) (150) 622 518 Income (loss) before income taxes (444) (227) 532 223 Net income (loss) $ (444) $ (227) $ 532 $ 208 Net income per common share: Basic income per common share - net income $ (0.01) $ (0.01) $ 0.02 $ 0.01 Diluted income per common share - net income $ (0.01) $ (0.01) $ 0.02 $ 0.01 Year Ended December 31, 2017 Total revenue $ 3,436 $ 5,042 $ 6,820 $ 8,134 Less: cost of revenue and operating expenses 2,953 3,108 3,885 4,542 Income from operations 483 1,934 2,935 3,592 Income before income taxes 362 1,540 2,244 3,348 Net income $ 353 $ 1,504 $ 2,200 3,308 Net income per common share: Basic income per common share - net income $ 0.01 $ 0.05 $ 0.07 $ 0.10 Diluted income per common share - net income $ 0.01 $ 0.05 $ 0.07 $ 0.10 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | (16) SUBSEQUENT EVENTS On January 10, 2018, the Company appointed Barry D. Michaels and Michael Cress to the Board of Directors and the Audit Committee. Mr. Michaels will serve as the Audit Committee Chairman. |
SIGNIFICANT ACCOUNTING POLICI23
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
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 stockholders’ equity (deficit). Non-controlling interest represents the 20 |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2016 financial statements to conform to the consolidated 2017 financial statement presentation. These reclassifications had no effect on net 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, excess and damaged inventory, the life of its rented equipment, valuation of stock-based compensation, and valuation of long-lived assets and realizability of deferred tax assets. |
Revenue Recognition, Accounts Receivable, Allowance for Billing Adjustments and Collectability | Revenue Recognition, Accounts Receivable, Allowance for Billing Adjustments and Collectability The Company recognizes revenue when each of the following four conditions are met: 1) a contract or sales arrangement exists, 2) products have been delivered and title has transferred 3) the price of the products or services is fixed or determinable, and 4) collectability is reasonably assured. The Company recognizes revenue for medical units and supplies when we receive notice that the product has been prescribed and delivered to the patient. The Company, prior to recognizing revenue verifies the patient’s insurance coverage or obtains the insurance company preauthorization, when required. Revenue from supplies is recognized upon delivery. Revenue from sales to distributors is recognized when the Company receives notice of receipt by the distributor. Revenue is reported net, after adjustments for estimated insurance company or governmental agency (collectively “Third-party Payors”) reimbursement deductions and, for wholesale customers and patient billings, an allowance for uncollectible accounts. The Third-party Payor reimbursement deductions are known throughout the health care industry as “billing adjustments” whereby the Third-party Payors unilaterally reduce the amount they reimburse for the Company’s products. A significant portion of the Company’s revenues are derived, and the related receivables are due, from Third-party Payors. The nature of these receivables within the medical industry has typically resulted in long collection cycles. The process of determining what products will be reimbursed by Third-party Payors and the amounts that they will reimburse is complex and depends on conditions and procedures that vary among providers and may change from time to time. The Company maintains an allowance for billing adjustments and if necessary, an allowance for doubtful accounts. Billing adjustments result from reimbursements from Third-party Payors that are less than amounts claimed and from where the amount claimed by the Company exceeds the Third-party Payors usual, customary and reasonable reimbursement rate. The Company determines the amount of the allowance and adjusts it at the end of each reporting period, based on a number of factors, including historical rates of collection, the aging of the receivables, trends in the historical rates of collection and current relationships and experience with the Third-party Payors. If the rates of collection of past-due receivables recorded for previous fiscal periods changes, or if there is a trend in the rates of collection on those receivables, the Company may be required to change the rate at which it provides for additions to the allowance. A change in the rates of the Company’s collections can result from a number of factors, including experience and training of billing personnel, changes in the reimbursement policies or practices of Third-party Payors, or changes in industry rates of reimbursement. We believe we have a sufficient history of collection experience to estimate the net collectible amounts by payor. However, changes to the allowance for billing adjustments and uncollectible accounts, which are recorded as a reduction of revenue, have historically fluctuated and may continue to fluctuate significantly from quarter to quarter and year to year. Due to the nature of the medical industry and the reimbursement environment in which the Company operates, estimates are required to record net revenues and accounts receivable at their net realizable values (also known as net collectible value). Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of third-party billing arrangements and the uncertainty of reimbursement amounts for certain products or services from 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 reimbursement, as well as changes in our billing practices to increase cash collections, it is possible that management’s estimates could change in the near term, which could have an impact on our results of operations and cash flows. Any differences between estimated settlements and final determinations are reflected as an increase or a reduction to revenue in the period when such final determinations are known. The Company frequently receives refund requests from insurance providers relating to specific patients and dates of service. Billing and reimbursement disputes are very common in the Company’s industry. These requests are sometimes related to a limited number of patients or products; at other times, they include a significant number of refund claims in a single request. The Company reviews and evaluates these requests and determines if any refund request is appropriate. The Company also reviews these refund claims when it is rebilling or pursuing reimbursement from insurance providers. The Company frequently has offsets against such refund requests, and sometimes amounts are due to the Company in excess of the amounts of refunds requested by the insurance providers. Therefore, at the time of receipt of such refund requests, the Company is generally unable to determine if a refund request is valid. The Company maintains an allowance for estimated future refunds which management believes is sufficient to cover future requests for refunds. However, no assurances can be given with respect to such estimates of reimbursements and offsets or the ultimate outcome of any refund requests. In addition to the allowance for billing adjustments, the Company records an allowance for uncollectible accounts receivable for wholesale (sales to distributors) sales and certain patient billings when necessary. Uncollectible accounts receivable are primarily a result of non-payment from patients who have been direct billed for co-payments or deductibles, lack of appropriate insurance coverage and disallowances of charges by Third-party Payors. If there is a change to a material insurance provider contract or policy, application by a provider, a decline in the economic condition of providers or a significant turnover of Company billing personnel resulting in diminished collection effectiveness, the estimate of the allowance for billing adjustments and uncollectible accounts receivable may not be adequate and may result in an increase in the future. As of December 31, 2017, the Company believes its accounts receivable is reasonably stated at its net realizable / collectible value and has an adequate allowance for billing adjustments including all known and estimated insurance disputes and refund requests. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company’s financial instruments at December 31, 2017, include cash, accounts receivable, accounts payable and income taxes, for which current carrying amounts approximate fair value due to their short-term nature. Financial instruments at December 31, 2017, also include the notes payable related to our private placement and capitalized leases, 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. |
Deferred Insurance Reimbursement | Deferred Insurance Reimbursement During the first quarter of 2016, the Company collected $ 880,000 880,000 |
Inventory | Inventory Inventory, which primarily represents finished goods, are valued at the lower of cost (average) or market. 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. Finished goods at December 31, 2017 and 2016 includes products (finished goods, parts and supplies) held at the Company’s headquarters. During 2016, the Company ramped up the EZ Rx Prescribe program, whereby the NexWave electrotherapy device is sold by prescription and is shipped from the Company manufacturing facilities. On December 31, 2017, the Company did not have open material inventory purchase commitments with vendors. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Allowance for Doubtful Accounts The Company estimates uncollectible amounts, when applicable, based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. |
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 and Chief Financial Officer as our chief operating decision-makers (“CODM”). We currently operate our business as one operating segment which includes two revenue types: Product devices and Product supplies. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. The Company removes the cost and the related accumulated depreciation from the accounts of assets sold or retired, and the resulting net gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the useful life of the asset ranging from three to seven years. Repairs and maintenance costs are charged to expense as incurred. |
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. |
Advertising | Advertising The Company expenses advertising costs as they are incurred. Advertising expense for each of the years ended December 31, 2017 and 2016 was approximately $ 0.1 |
Research and Development | Research and Development Research and development costs are expensed when incurred. Research and development expense for the years ended December 31, 2017 and 2016 was approximately $ 0.1 0.3 |
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 use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35 21 The Company is subject to the provisions of the Financial Accounting Standards Board (“FASB”) ASC 740-10, Income Taxes, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 118 requires that the Company include in its financial statements the reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Pursuant to the SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The final impact on the Company from the Tax Act’s transition tax legislation may differ from the aforementioned estimates due to the complexity of calculating and supporting with primary evidence such U.S. tax attributes such as accumulated foreign earnings and profits, foreign tax paid, and other tax components involved in foreign tax credit calculations for prior years back to 1998. Such differences could be material, due to, among other things, changes in interpretations of the Tax Act, future legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition tax's reasonable estimate. The Company will continue to evaluate the impact of the U.S. Tax Act and will record any resulting tax adjustments during 2018. |
Foreign Currency Transactions | Foreign Currency Transactions Foreign currency transaction gains and losses are included in other income (expense) in the accompanying consolidated statements of comprehensive income. Foreign currency transaction gains for the years ended December 31, 2017 and 2016 were insignificant. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2017-12 on our consolidated financial statements. 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, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact that the adoption of ASU 2016-13 will have on our financial condition, results of operations and cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We will adopt the new standard effective January 1, 2019. While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases, as disclosed in Note 11 Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities. In May 2014, the FASB issued ASU No. 2014-09“Revenue from Contracts with Customers” (Topic 606) which amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This accounting guidance is effective for the Company beginning in the first quarter of fiscal year 2018, using one of two prescribed retrospective methods. We will adopt the new standard effective January 1, 2018, using the modified retrospective transition method. We finalized our analysis and the adoption of this guidance will not have a material impact on our consolidated financial statements and our internal controls over financial reporting. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We will adopt the new standard effective January 1, 2018, using the modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the effective date. A cumulative-effect adjustment will capture the write-off of income tax consequences deferred from past intra-entity transfers involving assets other than inventory, new deferred tax assets, and other liabilities for amounts not currently recognized under U.S. GAAP. Based on transactions up to December 31, 2017, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We will adopt the new standard effective January 1, 2018, using the retrospective transition approach for all periods presented. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We will adopt the new standard effective January 1, 2018, on a prospective basis and do not expect the standard to have a material impact on our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements. 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. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of components of certain balance sheet line items | The components of certain balance sheet line items are as follows (in thousands): December 31, 2017 2016 Property and equipment: Office furniture and equipment $ 998 $ 911 Rental inventory - 1,411 Assembly equipment 128 125 Vehicles 76 76 1,202 2,523 Less accumulated depreciation (1,014) (1,943) $ 188 $ 580 December 31, 2017 2016 Assets acquired under capital lease: Original book value $ 461 $ 461 Accumulated depreciation (379) (287) Net book value $ 82 $ 174 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisition of Intangible Assets | At December 31, 2017 and 2016, intangible assets consist of the following (in thousands): Amortization Life Years 2017 2016 Software and development costs 3 $ 325 $ 325 Less: accumulated amortization (325) (291) Total intangible assets, net $ 0 $ 34 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | The calculation of basic and diluted earnings per share for the years ended December 31, 2017 and 2016 is as follows: For the Years Ended December 31, 2017 2016 Basic income per share: Net income available to common stockholders $ 7,365 $ 69 Basic weighted average shares outstanding 32,156 31,271 Basic income per share: $ 0.23 $ 0.00 Diluted income per share: Net income available to common stockholders $ 7,365 $ 69 Weighted average shares outstanding 32,156 31,271 Effect of dilutive securities - options and restricted stock 1,040 - Diluted weighted average shares outstanding 33,196 31,271 Diluted income per share: $ 0.22 $ 0.00 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Stock Option Activity Under the Option Plan | A summary of activity under the 2005 and 2017 Stock Plans for the years ended December 31, 2017 and 2016 are presented below: Number of Shares Weighted Weighted Aggregate Outstanding at December 31, 2015 1,685 $ 0.46 $ 235 Granted 877 $ 0.26 Exercised (1) 0.15 Forfeited (330) $ 0.36 Outstanding at December 31, 2016 2,231 $ 0.40 6.7 $ 135 Outstanding at December 31, 2016 2,231 $ 0.40 Granted 662 $ 0.86 Exercised (38) $ 1.02 Forfeited/Canceled (803) $ 0.33 Outstanding at December 31, 2017 2,052 $ 0.56 6.5 $ 5,334 Exercisable at December 31, 2017 1,460 $ 0.40 5.3 |
Summary of Stock Options Outstanding Under The Plans | The following is a summary of stock options outstanding under the plans as of December 31, 2017: Range Outstanding WA WA Outstanding Exercisable Number of Remaining Exercisable WA $0 to $.50 1,540 6.96 $ 0.27 1,155 6.25 $ 0.24 $.51 to $1.00 283 3.59 $ 0.89 233 2.29 $ 0.93 $1.01 to $1.50 69 3.09 $ 1.24 54 1.19 $ 1.19 $1.51 to $2.00 30 4.19 $ 1.73 18 0.49 $ 1.68 $2.00 to $3.00 130 9.95 $ 2.65 - 0.00 $ - 2,052 6.52 $ 0.56 1,460 5.36 $ 0.40 |
Summary of Status of the Company's Non-Vested Shares Under Option | A summary of status of the Company’s non-vested share awards as of and for the years ended December 31, 2017 and 2016 are presented below: Non-vested Weighted Non-vested at December 31, 2016 572 $ 0.24 Granted 897 $ 0.70 Vested (267) $ 0.25 Exercised - $ - Forfeited (610) $ 0.29 Non-vested at December 31, 2017 592 $ 0.88 |
Stock Option [Member] | |
Fair Value of Stock Options Grants | The Company uses the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions during the years ended December 31, 2017 and 2016: 2017 2016 Weighted average expected term 6.25 years 6.25 years Weighted average volatility 124 % 122 % Weighted average risk-free interest rate 1.83 % 1.48 % Dividend yield 0 % 0 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of stock warrant activity | A summary of stock warrant activity for the years ended December 31, 2017 and 2016 are presented below: Number of Weighted Weighted Aggregate Outstanding at December 31, 2015 - $ - $ - Granted 52 $ 0.21 Exercised - - Forfeited - $ - Outstanding at December 31, 2016 52 $ 0.21 4.37 $ 5 Outstanding at December 31, 2016 52 $ 0.21 Granted 150 $ 2.42 Exercised (2) $ 0.35 Forfeited/Canceled - $ - Outstanding at December 31, 2017 200 $ 1.86 5.80 $ 264 Exercisable at December 31, 2017 200 $ 1.86 5.80 |
Warrant [Member] | |
Schedule of black scholes option pricing model to determine the fair value of common stock warrants | The Company uses the Black Scholes option pricing model to determine the fair value of common stock warrants, using the following assumptions during the years ended December 31, 2017 and 2016: 2017 2016 Weighted average expected term 4.38 years 5.0 years Weighted average volatility 136.62 % 122.44 % Weighted average risk-free interest rate 1.51 % 1.48 % Dividend yield 0 % 1.44 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The pre-tax income from continuing operations on which the provision for income taxes was computed is as follows (in thousands): 2017 2016 Domestic $ 7,494 $ 84 Foreign Total 7,494 84 |
Schedule of Income Tax (Benefit) Expense | Income tax (benefit) expense consists of the following for the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Current tax (benefit) expense: Federal $ 119 $ 15 State 10 Foreign Total tax (Benefit) expense: 129 15 Deferred tax (benefit) expense: Federal State Foreign Total Deferred tax (benefit) expense: $ 129 $ 15 |
Schedule of Reconciliation of Income Tax | A reconciliation of income tax computed at the U.S. statutory rate of 34 2017 2016 Statutory rate 34 % 34 % State taxes 3 3 Permanent differences and other 0 2 Change in valuation allowance (54) 708 Other (true up) 7 (729) Rate Adjustment 12 Effective rate 2 % 18 % |
Schedule of the 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, 2017 and 2016 are as follows ( in thousands) : 2017 2016 Long-term deferred tax assets (liabilities): Accrued expenses $ 25 $ 51 Deferred Revenue 217 322 Accounts receivable 19 907 Prepaid Expenses (9) (15) Inventory 92 20 Stock based compensation 137 108 Tax Credits and NOL Carryforward 1,141 4,314 Other 6 9 Property and equipment 35 (115) Amortization 64 105 Tax Credits and NOL Carryforward 1,727 5,706 Less: Valuation allowance (1,727) (5,706) Net deferred tax assets (liabilities) $ - $ - |
LINE OF CREDIT (Tables)
LINE OF CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of black scholes option pricing model to determine the fair value of the stock warrant | The Company used the Black Scholes option pricing model to determine the fair value of the stock warrant, using the following assumptions: Contractual term 5.0 years Volatility 122.44 % Risk-free interest rate 1.48 % Dividend yield 1.44 % |
PRIVATE PLACEMENT MEMORANDUM (T
PRIVATE PLACEMENT MEMORANDUM (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Private Placement Memorandum Disclosure [Abstract] | |
Schedule of Cash and Non-Cash Components Of The Private Placement Memorandum | The table below summarizes the cash and non-cash components of the private placement memorandum (in thousands): December 31, 2017 Proceeds from unsecured subordinated promissory notes $ 1,035 Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses (155) Principal payments on promissory notes (650) Non-cash activity Common stock issued to placement agent (255) Obligation to issue common stock to private placement noteholders (255) Amortization of issuance costs and debt discount 511 Unsecured subordinated promissory notes, net of issuance and debt discount 231 Current portion of unsecured subordinated promissory notes (231) Long-term portion of unsecured subordinated promissory notes $ - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum commitments under non-cancelable operating leases and capital leases | Future minimum commitments under non-cancelable operating leases and capital leases as of December 31, 2017 are as follows (in thousands): Operating Capital 2018 $ 463 $ 125 2019 830 - 2020 873 - 2021 914 - 2022 956 Thereafter 495 - Total minimum lease payments $ 4,531 125 Less: Amount representing interest (2) Principal balance of capital lease obligation 123 Less: Current portion of capital lease obligation (123) Long-term portion of capital lease obligation $ - |
QUARTERLY FINANCIAL INFORMATI33
QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | Quarterly financial information is as follows (in thousands, except per share data): First Second Third Fourth Quarter Quarter Quarter Quarter Year Ended December 31, 2016 Total revenue $ 3,477 $ 3,286 $ 3,627 $ 2,922 Less: cost of revenue and operating expenses 3,827 3,436 3,005 2,404 Income (loss) from operations (350) (150) 622 518 Income (loss) before income taxes (444) (227) 532 223 Net income (loss) $ (444) $ (227) $ 532 $ 208 Net income per common share: Basic income per common share - net income $ (0.01) $ (0.01) $ 0.02 $ 0.01 Diluted income per common share - net income $ (0.01) $ (0.01) $ 0.02 $ 0.01 Year Ended December 31, 2017 Total revenue $ 3,436 $ 5,042 $ 6,820 $ 8,134 Less: cost of revenue and operating expenses 2,953 3,108 3,885 4,542 Income from operations 483 1,934 2,935 3,592 Income before income taxes 362 1,540 2,244 3,348 Net income $ 353 $ 1,504 $ 2,200 3,308 Net income per common share: Basic income per common share - net income $ 0.01 $ 0.05 $ 0.07 $ 0.10 Diluted income per common share - net income $ 0.01 $ 0.05 $ 0.07 $ 0.10 |
ORGANIZATION, NATURE OF BUSIN34
ORGANIZATION, NATURE OF BUSINESS AND MANAGEMENT’S PLANS (Details Textual) | Dec. 31, 2017 |
ZBC [Member] | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 80.00% |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Equity and Non-controlling interest | 20.00% | |||
Advertising Expense | $ 100,000 | $ 100,000 | ||
Research and Development Expense | 100,000 | 300,000 | ||
Proceeds from Insurance Settlement, Operating Activities | $ 880,000 | |||
Liability for Claims and Claims Adjustment Expense, Total | $ 880,000 | $ 880,000 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% | ||
Scenario, Plan [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
BALANCE SHEET COMPONENTS (Detai
BALANCE SHEET COMPONENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment: | ||
Property, Plant and Equipment, Gross | $ 1,202 | $ 2,523 |
Less accumulated depreciation | (1,014) | (1,943) |
Property and Equipment, Net | 188 | 580 |
Assets acquired under capital lease: | ||
Original book value | 461 | 461 |
Accumulated depreciation | (379) | (287) |
Net book value | 82 | 174 |
Furniture and Fixtures [Member] | ||
Property and equipment: | ||
Property, Plant and Equipment, Gross | 998 | 911 |
Rental Inventory [Member] | ||
Property and equipment: | ||
Property, Plant and Equipment, Gross | 0 | 1,411 |
Equipment [Member] | ||
Property and equipment: | ||
Property, Plant and Equipment, Gross | 128 | 125 |
Vehicles [Member] | ||
Property and equipment: | ||
Property, Plant and Equipment, Gross | $ 76 | $ 76 |
BALANCE SHEET COMPONENTS (Det37
BALANCE SHEET COMPONENTS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation | $ 252 | $ 395 |
Assets Held under Capital Leases [Member] | ||
Depreciation | 100 | 100 |
Rental Inventory [Member] | ||
Depreciation | $ 100 | $ 300 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Acquisition of intangible assets | ||
Software and development costs amortization life years | 3 years | |
Software and development costs | $ 325 | $ 325 |
Less: accumulated amortization | (325) | (291) |
Total intangible assets, net | $ 0 | $ 34 |
INTANGIBLE ASSETS (Details Text
INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Amortization of Intangible Assets | $ 34 | $ 40 |
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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Basic income per share: | ||||||||||||
Net income available to common stockholders | $ 3,308 | $ 2,200 | $ 1,504 | $ 353 | $ 208 | $ 532 | $ (227) | $ (444) | $ 7,365 | [1] | $ 69 | [1] |
Basic weighted average shares outstanding | 32,156 | 31,271 | ||||||||||
Basic income per share: | $ 0.23 | $ 0 | ||||||||||
Diluted income per share: | ||||||||||||
Net income available to common stockholders | $ 3,308 | $ 2,200 | $ 1,504 | $ 353 | $ 208 | $ 532 | $ (227) | $ (444) | $ 7,365 | [1] | $ 69 | [1] |
Weighted average shares outstanding | 32,156 | 31,271 | ||||||||||
Effect of dilutive securities - options and restricted stock | 1,040 | 0 | ||||||||||
Diluted weighted average shares outstanding | 33,196 | 31,271 | ||||||||||
Diluted income per share: | $ 0.22 | $ 0 | ||||||||||
[1] | There is no difference between net income and comprehensive income. |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 1 Months Ended | 12 Months Ended | |
Aug. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 300,000 | 2,200,000 | |
Weighted Average Number Diluted Shares Outstanding Adjustment, Total | 1,040,000 | 0 | |
Common Stock [Member] | Private Placement [Member] | |||
Weighted Average Number Diluted Shares Outstanding Adjustment, Total | 776,250 |
STOCK-BASED COMPENSATION PLAN42
STOCK-BASED COMPENSATION PLANS (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value of stock option grants | ||
Weighted average expected term | 6 years 3 months | 6 years 3 months |
Weighted average volatility | 124.00% | 122.00% |
Weighted average risk-free interest rate | 1.83% | 1.48% |
Dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION PLAN43
STOCK-BASED COMPENSATION PLANS (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of stock option activity under the option Plan | |||
Weighted Average Remaining Contractual Life, Exercisable at December 30, 2017 | 5 years 4 months 10 days | ||
2005 and 2017 Stock Plans [Member] | |||
Summary of stock option activity under the option Plan | |||
Balance Beginning | 2,231 | 1,685 | |
Number of Shares, Granted | 662 | 877 | |
Number of Shares, Exercised | (38) | (1) | |
Number of Shares, Forfeited | (803) | (330) | |
Balance Ending | 2,052 | 2,231 | |
Number of Shares, Exercisable at December 30, 2017 | 1,460 | ||
Weighted Average Exercise Price, Outstanding Beginning | $ 0.40 | $ 0.46 | |
Weighted Average Exercise Price, Granted | 0.86 | 0.26 | |
Weighted Average Exercise Price, Exercised | 1.02 | 0.15 | |
Weighted Average Exercise Price, Forfeited | 0.33 | 0.36 | |
Weighted Average Exercise Price, Outstanding Ending | 0.56 | $ 0.40 | |
Weighted Average Exercise Price, Exercisable at December 30, 2017 | $ 0.4 | ||
Weighted Average Remaining Contractual Life, Outstanding at December 30, 2016 | 6 years 6 months | 6 years 8 months 12 days | |
Weighted Average Remaining Contractual Life, Outstanding at December 30, 2017 | 6 years 6 months | 6 years 8 months 12 days | |
Weighted Average Remaining Contractual Life, Exercisable at December 30, 2017 | 5 years 3 months 18 days | ||
Aggregate Intrinsic Value, Outstanding at December 30, 2016 | $ 5,334 | $ 135 | $ 235 |
STOCK-BASED COMPENSATION PLAN44
STOCK-BASED COMPENSATION PLANS (Details 2) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Outstanding Number of Shares | shares | 2,052 |
WA Remaining Contractual Life (years) | 6 years 6 months 7 days |
WA Outstanding Strike Price | $ 0.56 |
Exercisable Number of Shares | shares | 1,460 |
Remaining Exercisable Contractual Life (years) | 5 years 4 months 10 days |
WA Exercisable Strike Price | $ 0.40 |
Exercise Price Range One [Member] | |
Exercise Price Minimum | 0 |
Exercise Price Maximum | $ 0.50 |
Outstanding Number of Shares | shares | 1,540 |
WA Remaining Contractual Life (years) | 6 years 11 months 16 days |
WA Outstanding Strike Price | $ 0.27 |
Exercisable Number of Shares | shares | 1,155 |
Remaining Exercisable Contractual Life (years) | 6 years 3 months |
WA Exercisable Strike Price | $ 0.24 |
Exercise Price Range Two [Member] | |
Exercise Price Minimum | 0.51 |
Exercise Price Maximum | $ 1 |
Outstanding Number of Shares | shares | 283 |
WA Remaining Contractual Life (years) | 3 years 7 months 2 days |
WA Outstanding Strike Price | $ 0.89 |
Exercisable Number of Shares | shares | 233 |
Remaining Exercisable Contractual Life (years) | 2 years 3 months 14 days |
WA Exercisable Strike Price | $ 0.93 |
Exercise Price Range Three [Member] | |
Exercise Price Minimum | 1.01 |
Exercise Price Maximum | $ 1.50 |
Outstanding Number of Shares | shares | 69 |
WA Remaining Contractual Life (years) | 3 years 1 month 2 days |
WA Outstanding Strike Price | $ 1.24 |
Exercisable Number of Shares | shares | 54 |
Remaining Exercisable Contractual Life (years) | 1 year 2 months 8 days |
WA Exercisable Strike Price | $ 1.19 |
Exercise Price Range Four [Member] | |
Exercise Price Minimum | 1.51 |
Exercise Price Maximum | $ 2 |
Outstanding Number of Shares | shares | 30 |
WA Remaining Contractual Life (years) | 4 years 2 months 8 days |
WA Outstanding Strike Price | $ 1.73 |
Exercisable Number of Shares | shares | 18 |
Remaining Exercisable Contractual Life (years) | 5 months 26 days |
WA Exercisable Strike Price | $ 1.68 |
Exercise Price Range Five [Member] | |
Exercise Price Minimum | 2 |
Exercise Price Maximum | $ 3 |
Outstanding Number of Shares | shares | 130 |
WA Remaining Contractual Life (years) | 9 years 11 months 12 days |
WA Outstanding Strike Price | $ 2.65 |
Exercisable Number of Shares | shares | 0 |
Remaining Exercisable Contractual Life (years) | 0 years |
WA Exercisable Strike Price | $ 0 |
STOCK-BASED COMPENSATION PLAN45
STOCK-BASED COMPENSATION PLANS (Details 3) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of status of the Company's non-vested share awards | ||
Weighted Average Grant Date Fair Value, Granted | $ 0.70 | $ 0.32 |
Non-Vested Share Awards [Member] | ||
Summary of status of the Company's non-vested share awards | ||
Non-vested Shares Under Option, Beginning Balance | 572 | |
Non-vested Shares Under Option, Granted | 897 | |
Non-vested Shares Under Option, Vested | (267) | |
Non-vested Shares Under Option, Exercised | 0 | |
Non-vested Shares Under Option, Forfeited | (610) | |
Non-vested Shares Under Option, Ending Balance | 592 | 572 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ 0.24 | |
Weighted Average Grant Date Fair Value, Granted | 0.70 | |
Weighted Average Grant Date Fair Value, Vested | 0.25 | |
Weighted Average Grant Date Fair Value, Exercised | 0 | |
Weighted Average Grant Date Fair Value, Forfeited | 0.29 | |
Weighted Average Grant Date Fair Value, Ending Balance | $ 0.88 | $ 0.24 |
STOCK-BASED COMPENSATION PLAN46
STOCK-BASED COMPENSATION PLANS (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense related to stock options | $ 500,000 | |
Weighted-average period of unrecognized compensation expense related to stock options | 3 years 3 months 18 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.70 | $ 0.32 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 100,000 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 100,000 | 200,000 |
Proceeds from Stock Options Exercised | $ 39,000 | $ 0 |
Management | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 15,000 | 0 |
Selling, General And Administrative Expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 300,000 | $ 200,000 |
2005 Stock Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,000,000 | |
Stock Incentive Plan 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 400,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 400,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 400,000 |
STOCKHOLDERS_ EQUITY (Details)
STOCKHOLDERS’ EQUITY (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Remaining Contractual Life Exercisable (years) | 5 years 4 months 10 days | ||
Warrant [Member] | |||
Balance Beginning | 52 | 0 | |
Number of Warrants, Granted | 150 | 52 | |
Number of Shares, Exercised | (2) | 0 | |
Number of Warrants, Forfeited | 0 | 0 | |
Balance Ending | 200 | 52 | |
Number of Warrants, Exercisable | 200 | ||
Weighted Average Exercise Price, Outstanding Beginning | $ 0.21 | $ 0 | |
Weighted Average Exercise Price, Granted | 2.42 | 0.21 | |
Weighted Average Exercise Price, Exercised | 0.35 | 0 | |
Weighted Average Exercise Price, Forfeited | 0 | 0 | |
Weighted Average Exercise Price, Outstanding Ending | 1.86 | $ 0.21 | |
Weighted Average Exercise Price, Exercisable | $ 1.86 | ||
Weighted Average Remaining Contractual Life (years) | 5 years 9 months 18 days | 4 years 4 months 13 days | |
Weighted Average Remaining Contractual Life Exercisable (years) | 5 years 9 months 18 days | ||
Aggregate Intrinsic Value Exercisable Balance | $ 264 | $ 5 | $ 0 |
STOCKHOLDERS_ EQUITY (Details 1
STOCKHOLDERS’ EQUITY (Details 1) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average expected term | 6 years 3 months | 6 years 3 months |
Weighted average volatility | 124.00% | 122.00% |
Weighted average risk-free interest rate | 1.83% | 1.48% |
Dividend yield | 0.00% | 0.00% |
Warrant [Member] | ||
Weighted average expected term | 4 years 4 months 17 days | 5 years |
Weighted average volatility | 136.62% | 122.44% |
Weighted average risk-free interest rate | 1.51% | 1.48% |
Dividend yield | 0.00% | 1.44% |
STOCKHOLDERS_ EQUITY (Details T
STOCKHOLDERS’ EQUITY (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2017 | Mar. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 2,000,000 | |||
Stock Repurchased During Period, Value | $ 243,000 | |||
Stock Repurchased During Period, Shares | 86,837 | |||
Treasury Stock Acquired, Average Cost Per Share | $ 2.86 | |||
Common Stock Warrants Issued for Professional Services | 150,000 | |||
Triumph Bank [Member] | ||||
Class of Stock [Line Items] | ||||
Debt Conversion, Original Debt, Amount | $ 250,000 | |||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 50,000 | |||
Warrant [Member] | ||||
Class of Stock [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.40 | $ 0.28 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Domestic | $ 7,494 | $ 84 |
Foreign | 0 | 0 |
Total | $ 7,494 | $ 84 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Current tax (benefit) expense: | ||
Federal | $ 119 | $ 15 |
State | 10 | 0 |
Foreign | 0 | 0 |
Total tax (Benefit) expense: | 129 | 15 |
Deferred tax (benefit) expense: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | 0 | 0 |
Total Deferred tax (benefit) expense: | $ 129 | $ 15 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of reconciliation of income tax | ||
Statutory rate | 34.00% | 34.00% |
State taxes | 3.00% | 3.00% |
Permanent differences and other | 0.00% | 2.00% |
Change in valuation allowance | (54.00%) | 708.00% |
Other (true - up) | 7.00% | (729.00%) |
Rate Adjustment | 12.00% | 0.00% |
Effective rate | 2.00% | 18.00% |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term deferred tax assets (liabilities): | ||
Accrued expenses | $ 25 | $ 51 |
Deferred Revenue | 217 | 322 |
Accounts receivable | 19 | 907 |
Prepaid Expenses | (9) | (15) |
Inventory | 92 | 20 |
Stock based compensation | 137 | 108 |
Tax Credits and NOL Carryforward | 1,141 | 4,314 |
Other | 6 | 9 |
Long-term deferred tax assets (liabilities): | ||
Property and equipment, assets | 35 | |
Property and equipment, liabilities | (115) | |
Amortization | 64 | 105 |
Long-term deferred tax assets (liabilities) | 1,727 | 5,706 |
Less: Valuation allowance | (1,727) | (5,706) |
Net deferred tax assets (liabilities) | $ 0 | $ 0 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Line Items] | |||
Statutory rate | 34.00% | 34.00% | |
Net Income Loss Carry Forward For Income Tax Purpose Offset Period Maximum | 2,037 | ||
Deferred Tax Assets, Valuation Allowance | $ 1.8 | $ 5.7 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% | |
Scenario, Plan [Member] | |||
Income Taxes [Line Items] | |||
Statutory rate | 21.00% | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||
Domestic Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net Income Loss Carryforward For Income Tax Purpose | $ 2.9 | ||
State and Local Jurisdiction [Member] | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | $ 4.9 | ||
Maximum [Member] | |||
Income Taxes [Line Items] | |||
Net Operating Loss Carry Forwards Expiration Period | 7 years | ||
Minimum [Member] | |||
Income Taxes [Line Items] | |||
Net Operating Loss Carry Forwards Expiration Period | 5 years |
LINE OF CREDIT (Details)
LINE OF CREDIT (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Contractual term | 6 years 3 months | 6 years 3 months |
Volatility | 124.00% | 122.00% |
Risk-free interest rate | 1.83% | 1.48% |
Dividend yield | 0.00% | 0.00% |
Warrant [Member] | ||
Contractual term | 5 years | |
Volatility | 122.44% | |
Risk-free interest rate | 1.48% | |
Dividend yield | 1.44% |
LINE OF CREDIT (Details Textual
LINE OF CREDIT (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 28, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Abstract] | ||||
Line of Credit, Current | $ 0 | $ 2,771,000 | ||
Date of Maturity | Dec. 19, 2014 | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 50,000 | |||
Class Of Stock Warrants Or Rights Warrants Issuance Cost | $ 15,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Abstract] | ||||
Line of Credit, Current | $ 0 | |||
Effective interest rate under the Credit Agreement | 11.00% | |||
Interest Rate | 6.75% | |||
Additional default interest rate | 3.00% | |||
Fees include in effective interest rate under the credit agreement | 1.25% | |||
Revolving Credit Facility | Maximum | ||||
Line of Credit Facility [Abstract] | ||||
Aggregate periodic cap payment suspended | $ 250,000 |
PRIVATE PLACEMENT MEMORANDUM (D
PRIVATE PLACEMENT MEMORANDUM (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Proceeds from unsecured subordinated promissory notes | $ 1,035 | $ 0 |
Less debt issuance costs and discount Payment of commission and placement agent fees and related expenses | (155) | 0 |
Principal payments on promissory notes | (650) | 0 |
Non-cash activity | ||
Common stock issued to placement agent | (255) | |
Obligation to issue common stock to private placement noteholders | (255) | |
Amortization of issuance costs and debt discount | 511 | |
Unsecured subordinated promissory notes, net of issuance and debt discount | 231 | |
Current portion of unsecured subordinated promissory notes | (231) | $ 0 |
Long-term portion of unsecured subordinated promissory notes | $ 0 |
PRIVATE PLACEMENT MEMORANDUM 58
PRIVATE PLACEMENT MEMORANDUM (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2017 | Dec. 31, 2017 | Nov. 30, 2016 | |
Amortization of Debt Issuance Costs and Discounts | $ 511,000 | ||
Newbridge Securities Corporation [Member] | |||
Non Accountable Expense Allowance | $ 155,000 | ||
Commission And Fees To Placement Agent | $ 255,000 | ||
Stock to be Issued For Services | 776,250 | ||
Stock Issued During Period, Shares, Issued for Services | 776,250 | ||
Notes Payable, Noncurrent | $ 255,000 | ||
Repayments of Unsecured Debt | $ 342,000 | ||
Amortization of Debt Issuance Costs and Discounts | 500,000 | ||
Percentage Of Commissions In Cash | 10.00% | ||
Non Accountable Expense Allowance Percentage | 3.00% | ||
Increase In Value of Shares To Be Issued | $ 739,000 | ||
Newbridge Securities Corporation [Member] | Unsecured Debt [Member] | |||
Funds Available For Repayment Of Note, Percentage | 5.00% | ||
Debt Instrument, Face Amount | $ 1,035,000 | ||
Newbridge Securities Corporation [Member] | Unsecured Debt [Member] | Minimum [Member] | |||
Debt Instrument, Face Amount | $ 1,000,000 | ||
Newbridge Securities Corporation [Member] | Unsecured Debt [Member] | Maximum [Member] | |||
Debt Instrument, Face Amount | $ 1,500,000 |
COMMITMENTS AND CONTINGENCIES59
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Operating Lease - 2018 | $ 463 | |
Operating Lease - 2019 | 830 | |
Operating Lease - 2020 | 873 | |
Operating Lease - 2021 | 914 | |
Operating Lease - 2022 | 956 | |
Operating Lease - Thereafter | 495 | |
Operating Leases - Total minimum lease payments | 4,531 | |
Capital Lease - 2018 | 125 | |
Capital Lease - 2019 | 0 | |
Capital Lease - 2020 | 0 | |
Capital Lease - 2021 | 0 | |
Capital Lease - 2022 | 0 | |
Capital Lease - Thereafter | 0 | |
Capital Leases - Total minimum lease payments | 125 | |
Less: Amount representing interest | (2) | |
Principal balance of capital lease obligation | 123 | |
Less: Current portion of capital lease obligation | (123) | $ (118) |
Long-term portion of capital lease obligation | $ 0 | $ 136 |
COMMITMENTS AND CONTINGENCIES60
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leases, Rent Expense | $ 600 | $ 500 |
Description of Lessee Leasing Arrangements, Operating Leases | We signed a new headquarters facility lease in October 2017 with a term from January 1, 2018 through June 30, 2023 and includes an option to extend the lease for an additional two years through 2025. | |
Capital Leased Assets, Gross | $ 461 | 461 |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 379 | 287 |
Assets Held under Capital Leases [Member] | ||
Capital Leased Assets, Gross | 500 | 500 |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | $ 400 | $ 300 |
Assets Held under Capital Leases [Member] | Minimum [Member] | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 5.00% | |
Assets Held under Capital Leases [Member] | Maximum [Member] | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 10.00% |
CONCENTRATIONS (Details Textual
CONCENTRATIONS (Details Textual) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 24.00% | 10.00% |
Cost of Goods, Total [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 51.00% | |
Cost of Goods, Total [Member] | Supplier Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 45.00% | |
Cost of Goods, Total [Member] | Supplier Concentration Risk One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 37.00% | |
Cost of Goods, Total [Member] | Supplier Concentration Risk Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 14.00% |
RETIREMENT PLAN (Details Textua
RETIREMENT PLAN (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan Eligibility Age | 18 years | |
Defined Contribution Plan Period Of Employment For Eligibility | 3 months | |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Compensation paid | $ 200,000 | $ 100,000 | |
Employment Arrangement | Immediate Family Members of Management or Principal Owner | |||
Related Party Transaction [Line Items] | |||
Lump sum payment | $ 100,000 | ||
Agreement term | 3 years | ||
Thomas Sandgaard [Member] | |||
Related Party Transaction [Line Items] | |||
Net payable to related party included in accrued liabilities | 0 | $ 200,000 | |
Repayments of Related Party Debt | $ 100,000 |
QUARTERLY FINANCIAL INFORMATI64
QUARTERLY FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Total revenue | $ 8,134 | $ 6,820 | $ 5,042 | $ 3,436 | $ 2,922 | $ 3,627 | $ 3,286 | $ 3,477 | $ 23,432 | $ 13,313 | ||
Less: cost of revenue and operating expenses | 4,542 | 3,885 | 3,108 | 2,953 | 2,404 | 3,005 | 3,436 | 3,827 | ||||
Income (loss) from operations | 3,592 | 2,935 | 1,934 | 483 | 518 | 622 | (150) | (350) | 8,944 | 640 | ||
Income (loss) before income taxes | 3,348 | 2,244 | 1,540 | 362 | 223 | 532 | (227) | (444) | ||||
Net income | $ 3,308 | $ 2,200 | $ 1,504 | $ 353 | $ 208 | $ 532 | $ (227) | $ (444) | $ 7,365 | [1] | $ 69 | [1] |
Net income per common share: | ||||||||||||
Basic income per common share - net income | $ 0.10 | $ 0.07 | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.02 | $ (0.01) | $ (0.01) | ||||
Diluted income per common share - net income | $ 0.10 | $ 0.07 | $ 0.05 | $ 0.01 | $ 0.01 | $ 0.02 | $ (0.01) | $ (0.01) | ||||
[1] | There is no difference between net income and comprehensive income. |