Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 20, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | COGENTIX MEDICAL INC /DE/ | ||
Entity Central Index Key | 894,237 | ||
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 Common Stock, Shares Outstanding | 60,905,666 | ||
Entity Public Float | $ 25,010,958 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 20,909,605 | $ 9,369,624 |
Short-term investments | 6,247,265 | 13,573,057 |
Accounts receivable, net | 8,275,518 | 6,770,838 |
Inventories | 7,176,695 | 7,235,043 |
Other | 1,075,170 | 571,527 |
Total current assets | 43,684,253 | 37,520,089 |
Property, plant, and equipment, net | 2,427,479 | 2,115,316 |
Goodwill | 19,153,554 | 18,749,888 |
Other intangibles, net | 7,362,144 | 9,482,578 |
Long-term investments | 0 | 5,344,004 |
Equity method investment | 1,871,360 | 0 |
Deferred tax assets and other | 245,078 | 163,427 |
Total assets | 74,743,868 | 73,375,302 |
Current liabilities: | ||
Accounts payable | 2,983,899 | 2,689,035 |
Income taxes payable | 87,441 | 113,191 |
Accrued liabilities: | ||
Compensation | 4,171,976 | 4,670,640 |
Deferred revenue | 774,635 | 597,524 |
Other | 1,360,743 | 838,272 |
Total current liabilities | 9,378,694 | 8,908,662 |
Accrued pension liability | 264,692 | 308,918 |
Deferred rent | 586,296 | 639,019 |
Other | 478,347 | 278,780 |
Total liabilities | 10,708,029 | 10,135,379 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued or outstanding at December 31, 2017 and 2016, respectively | 0 | 0 |
Common stock $.01 par value; 100,000,000 shares authorized, 60,905,666 and 60,436,548 shares issued and outstanding at December 31, 2017 and 2016, respectively. | 609,059 | 604,368 |
Additional paid-in capital | 145,982,121 | 144,430,381 |
Accumulated deficit | (81,999,901) | (81,005,654) |
Accumulated other comprehensive loss | (555,440) | (789,172) |
Total shareholders' equity | 64,035,839 | 63,239,923 |
Total liabilities and shareholders' equity | $ 74,743,868 | $ 73,375,302 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Shareholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 60,905,666 | 60,436,548 |
Common stock, shares outstanding (in shares) | 60,905,666 | 60,436,548 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Net sales | $ 56,316,109 | $ 51,851,159 |
Cost of goods sold | 18,872,250 | 16,248,111 |
Gross profit | 37,443,859 | 35,603,048 |
Operating expenses | ||
General and administrative | 8,293,814 | 6,778,010 |
Research and development | 4,742,308 | 4,701,539 |
Selling and marketing | 22,907,468 | 21,313,364 |
One-time costs | 0 | 2,257,654 |
Amortization of intangible assets | 2,389,743 | 2,363,432 |
Total operating expenses | 38,333,333 | 37,413,999 |
Operating loss | (889,474) | (1,810,951) |
Other income (expense) | ||
Interest income | 245,678 | 25,455 |
Interest expense | (29,034) | (1,298,253) |
Debt conversion expense | 0 | (18,841,407) |
Foreign currency exchange gain (loss) | 48,479 | (25,022) |
Other | 7,365 | 0 |
Total other income (expense) | 272,488 | (20,139,227) |
Loss before income taxes | (616,986) | (21,950,178) |
Income tax expense | 137,124 | 144,769 |
Equity-method investment activity, net of tax | 128,640 | 0 |
Net loss | $ (882,750) | $ (22,094,947) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.01) | $ (0.71) |
Weighted average common shares outstanding: | ||
Basic and diluted (in shares) | 59,981,534 | 30,903,035 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||
Net loss | $ (882,750) | $ (22,094,947) |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 226,801 | (111,515) |
Unrealized gain (loss) on available-for-sale investments | 17,335 | (21,349) |
Pension adjustments | (10,404) | 220,190 |
Total other comprehensive income, net of tax | 233,732 | 87,326 |
Comprehensive loss | $ (649,018) | $ (22,007,621) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2015 | $ 260,574 | $ 76,485,650 | $ (58,910,707) | $ (876,498) | $ 16,959,019 |
Balance (in shares) at Dec. 31, 2015 | 26,057,327 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | $ 6,300 | 741,819 | 0 | 0 | 748,119 |
Share-based compensation expense (in shares) | 629,994 | ||||
Restricted stock exchanged for taxes | $ (682) | (56,661) | 0 | 0 | (57,343) |
Restricted stock exchanged for taxes (in shares) | (68,229) | ||||
Conversion of related party debt and accrued interest | $ 176,885 | 43,991,964 | 0 | 0 | 44,168,849 |
Conversion of related party debt and accrued interest (in shares) | 17,688,423 | ||||
Issuance of common stock, net of expenses | $ 161,291 | 23,267,609 | 0 | 0 | 23,428,900 |
Issuance of common stock, net of expenses (in shares) | 16,129,033 | ||||
Comprehensive loss | $ 0 | 0 | (22,094,947) | 87,326 | (22,007,621) |
Balance at Dec. 31, 2016 | $ 604,368 | 144,430,381 | (81,005,654) | (789,172) | 63,239,923 |
Balance (in shares) at Dec. 31, 2016 | 60,436,548 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of ASU 2016-09 | ASU 2016-09 [Member] | $ 0 | 111,497 | (111,497) | 0 | 0 |
Share-based compensation expense | $ 4,722 | 1,448,189 | 0 | 0 | 1,452,911 |
Share-based compensation expense (in shares) | 472,168 | ||||
Proceeds from exercise of stock options, net of shares exchanged for taxes | $ (31) | (7,946) | 0 | 0 | (7,977) |
Proceeds from exercise of stock options, net of shares exchanged for taxes (in shares) | (3,050) | ||||
Comprehensive loss | $ 0 | 0 | (882,750) | 233,732 | (649,018) |
Balance at Dec. 31, 2017 | $ 609,059 | $ 145,982,121 | $ (81,999,901) | $ (555,440) | $ 64,035,839 |
Balance (in shares) at Dec. 31, 2017 | 60,905,666 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (882,750) | $ (22,094,947) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 3,165,980 | 3,136,109 |
Debt conversion expense | 0 | 18,841,407 |
Loss by equity method investee | 128,640 | 0 |
Loss on disposal of equipment | 1,997 | 5,640 |
Amortization of premium on marketable securities | 104,757 | 8,003 |
Share-based compensation expense | 1,452,911 | 748,119 |
Amortization of discount on related party debt | 0 | 940,923 |
Long term incentive plan | 0 | (74,404) |
Deferred income taxes | (80,048) | 57,536 |
Deferred rent | (32,697) | 3,777 |
Restricted stock exchanged for taxes | (17,690) | (57,343) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (661,770) | 1,359,056 |
Inventories | 276,090 | (2,655,221) |
Other current assets | (279,327) | 253,553 |
Accounts payable | (90,320) | 484,237 |
Interest payable | 0 | 292,049 |
Accrued compensation | (768,485) | 1,609,281 |
Accrued liabilities, other | (108,111) | 270,612 |
Accrued pension liability | (85,270) | (116,395) |
Deferred revenue | 182,804 | 288,329 |
Net cash provided by operating activities | 2,306,711 | 3,300,321 |
Cash flows from investing activities: | ||
Proceeds from maturity of available-for-sale-securities | 15,020,000 | 0 |
Purchases of available-for-sale securities | (2,438,322) | (18,945,717) |
Purchase of equity method investment | (2,000,000) | 0 |
Purchases of property, plant and equipment | (856,875) | (355,145) |
Acquisition of business, net of cash acquired | (181,261) | 0 |
Net cash provided by (used in) investing activities | 9,543,542 | (19,300,862) |
Cash flows from financing activities: | ||
Borrowings from line of credit | 3,033,385 | 2,646,500 |
Repayments of line of credit | (3,033,385) | (2,646,500) |
Payments of note payable | (47,329) | 0 |
Payments of secured borrowings | (238,984) | 0 |
Proceeds from exercise of stock options | 9,713 | 0 |
Proceeds from sale of common stock, net | 0 | 23,428,900 |
Net cash provided by (used in) financing activities | (276,600) | 23,428,900 |
Effect of exchange rates on cash and cash equivalents | (33,672) | (35,329) |
Net increase in cash and cash equivalents | 11,539,981 | 7,393,030 |
Cash and cash equivalents at beginning of period | 9,369,624 | 1,976,594 |
Cash and cash equivalents at end of period | 20,909,605 | 9,369,624 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for income tax | 284,374 | 42,957 |
Cash paid during the period for interest | 13,845 | 62,418 |
Non-cash financing activities: | ||
Note payable issued in conjunction with acquisition of business | 462,184 | 0 |
Non-cash debt and interest converted to equity | $ 0 | $ 25,327,441 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1: Summary of Significant Accounting Policies Nature of Business. Cogentix Medical, Inc., headquartered in Minnetonka, Minnesota, with additional operations in New York, Massachusetts, The Netherlands and the United Kingdom, is a global medical device company. We design, develop, manufacture and market products for flexible endoscopy with our unique PrimeSight™ product lines featuring a streamlined visualization system and proprietary sterile disposable microbial barrier providing users with efficient and cost-effective endoscope turnover while enhancing patient safety. We also commercialize the Urgent® PC Neuromodulation System, an FDA-cleared device that delivers percutaneous tibial nerve stimulation (PTNS) for the office-based treatment of overactive bladder (OAB). OAB is a chronic condition that affects approximately 42 million U.S. adults. The symptoms include urinary urgency, frequency and urge incontinence. We also offer Macroplastique®, an injectable urethral bulking agent for the treatment of adult female stress urinary incontinence primarily due to intrinsic sphincter deficiency. Outside the U.S., the Company markets additional bulking agents: PTQ ® ® Change in Control. A change in control of the Company occurred on November 3, 2016 as a result of the conversion of the Company’s convertible debt – related party into equity (see Note 3) and the issuance of common shares to Accelmed Growth Partners (see Note 5). The convertible debt – related party was owed to Lewis Pell, a member of our board of directors. As a result of the transactions described above, Mr. Pell and Accelmed owned or controlled approximately 33% and 27%, respectively, of the outstanding common stock of the Company immediately subsequent to these transactions being consummated. Accelmed and Mr. Pell entered into a voting agreement pursuant to which Mr. Pell and Accelmed have agreed to vote their shares of the Company’s common stock for the other party’s nominees to the board of directors. Further, the securities purchase agreement with Accelmed provides it with numerous protective provisions, including prohibiting the Company, without the prior approval of the Accelmed directors, from engaging in any merger, consolidation, transfer or conversion involving the Company, incurring any new indebtedness in excess of $10,000,000, and changing the size of the Board of Directors. The Company has elected not to apply pushdown accounting adjustments to the Company’s consolidated financial statements related to the change in control as allowed by Accounting Standards Update No. 2014-17. Basis of Presentation. The consolidated financial statements include the accounts of Cogentix Medical, Inc. and its wholly owned subsidiaries. We have eliminated all intercompany accounts and transactions in consolidation. We have reclassified certain prior-year amounts to conform to the current year’s presentation. Revenue Recognition. We recognize revenue in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 605 (Topic 605, Revenue Recognition . 1. persuasive evidence that an arrangement exists; 2. delivery has occurred or services were rendered; 3. the fee is fixed and determinable; and 4. collectability is reasonably assured We recognize revenue when title passes to the customer, generally upon shipment of our products F.O.B. shipping point. Revenue for service repairs of equipment is recognized after service has been completed, and service contract revenue is recognized ratably over the term of the contract. We review our service contracts to determine if multiple element arrangements exist. A multiple element arrangement includes the sale of endoscopes and service contracts. We allocate revenue to all elements based on their stand-alone selling prices by applying the relative stand-alone selling price methodology. Revenue allocated to the endoscopes in these arrangements is recognized upon shipment. Service contract revenue is deferred and represents the allocated selling price of any deliverables of the arrangement for which the customer has provided consideration, but the revenue recognition requirements have not been satisfied. We include shipping and handling charges billed to customers in net sales, and include related costs incurred by us in cost of goods sold. Typically, our agreements contain no customer acceptance provisions or clauses. We sell our products to end users and to distributors. Payment terms range from prepayment to 120 days. Sales to distributors are not contingent on the distributor selling the product to end users. Customers do not have the right to return products except for warranty claims. We offer customary product warranties. We present our sales in our statement of operations net of taxes, such as sales, use, value-added and certain excise taxes, collected from the customers and remitted to governmental authorities. Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Our significant accounting policies and estimates include revenue recognition, short- and long-term investments, accounts receivable, valuation of inventory, foreign currency translation/transactions, purchase price allocations on acquisition, the determination of recoverability of long-lived assets and liabilities and intangible assets, share-based compensation, defined benefit pension plans, and income taxes. Advertising Expenses. Advertising costs are expensed as incurred. Such costs incurred were approximately $360,000 and $363,000 for the twelve months ended December 31, 2017 and 2016, respectively. Research and Development Expenses. Costs of research, new product development, and product redesign are charged to expense as incurred. Share-Based Compensation. We account for share-based compensation costs under ASC 718, “Compensation – Stock Compensation”. ASC 718 covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. We recognize the compensation cost relating to share-based payment transactions, including grants of employee stock options and restricted shares, in our consolidated financial statements. We measure that cost based on the fair value of the equity or liability instruments issued. We account for forfeitures in the period in which they occur. We also recognize certain tax benefits or tax shortfalls upon a restricted-stock award vesting or stock options exercise relative to the deferred tax asset position established in the provision for income taxes line in the consolidated statement of operations. Segment Reporting. We operate in three markets – urology/gynecology, airway management, and industrial. Our Chief Executive Officer has been identified as our chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analysis of the Company as three segments. This is a change from prior periods in which we reported only one segment as discrete financial information was not available for each market individually. Defined Benefit Pension Plans. We have a liability attributed to defined benefit pension plans we offered to certain former and current employees of our subsidiaries in the UK and The Netherlands. The liability is dependent upon numerous factors, assumptions and estimates, and the continued benefit costs we incur may be significantly affected by changes in key actuarial assumptions such as the discount rate, mortality, compensation rates, or retirement dates used to determine the projected benefit obligation. Additionally, changes made to the provisions of the plans may impact current and future benefit costs. In accordance with the provisions of ASC 715, “Compensation – Retirement Benefits”, changes in benefit obligations associated with these factors may not be immediately recognized as costs in the statement of operations, but are recognized in future years over the expected average future service of the active employees or the average remaining life expectancies of inactive employees. Disclosures About Fair Value of Financial Instruments. Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework prioritizes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three broad levels of inputs may be used to measure fair value under the fair value hierarchy: · Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. · Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. · Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions. If the inputs used to measure the financial assets and liabilities fall within more than one of the different levels described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The following tables show our cash and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments as of December 31, 2017 and 2016: December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 4,318,229 $ - $ - $ 4,318,229 $ 4,318,229 $ - $ - Level 1: Money market funds 16,591,376 - - 16,591,376 16,591,376 - - Subtotal 16,591,376 - - 16,591,376 16,591,376 - - Level 2: Certificates of deposit 1,440,000 - (1,783 ) 1,438,217 - 1,438,217 - Commercial paper 1,198,574 - (362 ) 1,198,212 - 1,198,212 - Corporate notes/bonds 3,612,704 - (1,868 ) 3,610,836 - 3,610,836 - U.S. government agencies - - - - - - - Subtotal 6,251,278 - (4,013 ) 6,247,265 - 6,247,265 - Total $ 27,160,883 $ - $ (4,013 ) $ 27,156,870 $ 20,909,605 $ 6,247,265 $ - December 31, 2016 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 3,773,790 $ - $ - $ 3,773,790 $ 3,773,790 $ - $ - Level 1: Money market funds 3,197,958 - - 3,197,958 3,197,958 - - Subtotal 3,197,958 - - 3,197,958 3,197,958 - - Level 2: Certificates of deposit 2,160,010 2,285 - 2,162,295 - 720,031 1,442,264 Commercial paper 5,984,110 - (4,100 ) 5,980,010 2,397,876 3,582,134 - Corporate notes/bonds 9,688,957 - (13,885 ) 9,675,072 - 7,273,992 2,401,080 U.S. government agencies 3,503,208 - (5,648 ) 3,497,560 - 1,996,900 1,500,660 Subtotal 21,336,285 2,285 (23,633 ) 21,314,937 2,397,876 13,573,057 5,344,004 Total $ 28,308,034 $ 2,285 $ (23,633 ) $ 28,286,685 $ 9,369,624 $ 13,573,057 $ 5,344,004 Cash, Cash Equivalents and Marketable Securities. We consider all cash on-hand and highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. We classify marketable securities having original maturities of more than three months when purchased and remaining maturities of one year or less as short-term investments and marketable securities with remaining maturities of more than one year as long-term investments. We further classify marketable securities as available-for-sale. We have not designated any of our marketable securities as trading securities or as held to maturity. We may sell any of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management. At December 31, 2017, we did not have any long-term securities. We consider the declines in market value of our marketable securities investment portfolio to be temporary in nature. We typically invest in highly-rated securities, and our investment policy generally limits the amount of credit exposure to any one issuer. Cash and cash equivalents include highly liquid money market funds and debt securities with original maturities of three months or less totaling $20.1 million and $9.4 million at December 31, 2017 and 2016, respectively. Money market funds present negligible risk of changes in value due to changes in interest rates, and their cost approximates their fair market value. We maintain cash in bank accounts, which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. Cash and cash equivalents held in foreign bank accounts totaled $879,000 and $507,000 at December 31, 2017 and 2016 respectively. Equity Investment. ASC 323, "Investments – Equity Method and Joint Ventures," establishes accounting guidelines for an equity investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest. In this situation, the equity method should be applied to an investment. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of an entity between 20% and 50%, and other factors, such as representation on the Board of Directors, are considered in determining whether the equity method of accounting is appropriate. Accounts Receivable. We grant credit to our customers in the normal course of business and, generally, do not require collateral or any other security to support amounts due. If necessary, we have an outside party assist us with performing credit and reference checks and establishing credit limits for the customer. Concentration of credit risk with respect to accounts receivable relates to certain domestic and international customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, when appropriate, we obtain advance payments for our international sales. As a consequence, we believe that our accounts receivable credit risk exposure is limited. Historically we have not experienced any significant credit losses related to any individual customer or group of customers in any particular industry or geographic area. Accounts outstanding longer than the contractual payment term, are considered past due. We carry our accounts receivable at the original invoice amount less an estimated allowance for doubtful receivables based on a periodic review of all outstanding amounts. We determine the allowance for doubtful accounts based on the customer’s financial health, and both historical and expected credit loss experience. We write off our accounts receivable when we deem them uncollectible. We record recoveries of accounts receivable previously written off when received. We are not always able to timely anticipate changes in the financial condition of our customers and if circumstances related to these customers deteriorate, our estimates of the recoverability of accounts receivable could be materially affected and we may be required to record additional allowances. Alternatively, if more allowances are provided than are ultimately required, we may reverse a portion of such provisions in future periods based on the actual collection experience. Historically, the accounts receivable balances we have written off have generally been within our expectations. The allowance for doubtful accounts was $87,000 and $34,000 at December 31, 2017 and 2016, respectively. Inventories. We value inventory at net realizable value the slow moving and obsolete inventories based upon current and expected future product sales. Inventories consist of approximately the following: December 31, 2017 December 31, 2016 Raw materials $ 3,449,000 $ 4,483,000 Work-in-process 322,000 462,000 Finished goods 3,406,000 2,290,000 $ 7,177,000 $ 7,235,000 Property, Plant and Equipment. We carry property, plant and equipment, including leasehold improvements, at cost, less accumulated depreciation or fair value if acquired in a business combination, which consists of approximately the following balances: December 31, 2017 December 31, 2016 Land $ 147,000 $ 129,000 Building 674,000 588,000 Leasehold improvements 1,248,000 1,240,000 Internal use software 829,000 821,000 Equipment 4,155,000 3,203,000 $ 7,053,000 $ 5,981,000 Less accumulated depreciation and amortization (4,626,000 ) (3,866,000 ) $ 2,427,000 $ 2,115,000 We provide for depreciation using the straight-line method over useful lives of three to seven years for equipment and 40 years for the building. Certain products used as sales demonstration and service loaner equipment are transferred from inventory to machinery and equipment and are depreciated over three years. We charge maintenance and repairs to expense as incurred. We capitalize improvements and amortize them over the shorter of their estimated useful service lives or the remaining lease term. We recognized depreciation and amortization expense of approximately $777,000 and $778,000 in the years ended December 31, 2017 and 2016, respectively. Goodwill. Goodwill results from the Merger and from the acquisition of Genesis (as described in Note 4) and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Annually as of November 30 or if conditions indicate an additional review is necessary, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and if it is necessary to perform the quantitative two-step goodwill impairment test. If the Company performs the quantitative test, it compares the carrying value of the reporting unit to an estimate of the reporting unit’s fair value to identify potential impairment. The fair value of each reporting unit is estimated using a discounted cash flow model. Where available, and as appropriate, comparable market multiples are also used to corroborate the results of the discounted cash flow models. In determining the estimated future cash flow, the Company considers and applies certain estimates and judgments, including current and projected future levels of income based on management’s plans, business trends, prospects and market and economic conditions and market-participant considerations. If the estimated fair value of the reporting unit is less than the carrying value, a second step is performed to determine the amount of the potential goodwill impairment. If impaired, goodwill is written down to its estimated implied fair value. We reassessed the impairment of Goodwill as of December 31, 2017 due to the change in our segment determination as described in Note 10. All of our Goodwill is associated with the medical segment and there was no impairment as of December 31, 2017. There was no goodwill impairment loss for the years ended December 31, 2017 or 2016. Impairment of Long-Lived Assets. Long-lived assets consist of property, plant and equipment and finite lived intangible assets. We review our long-lived assets for impairment whenever events or business circumstances indicate that we may not recover the carrying amount of an asset. We measure recoverability of assets held and used from a comparison of the carrying amount of an asset to future undiscounted net cash flows we expect to generate by the asset. If we consider such assets impaired, we measure the impairment recognized by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no impairment charges for the years ended December 31, 2017 and 2016. Product Warranty. We warrant our products to be free from defects in material and workmanship under normal use and service for a period of twelve months after the date of sale. Under the terms of these warranties, we repair or replace products we deem defective due to material or workmanship. The following table summarizes approximate changes in our warranty reserve: December 31, 2017 December 31, 2016 Warranty reserve at beginning of period $ 127,000 $ 146,000 Warranties accrued during the period 167,000 77,000 Warranties settled during the period (141,000 ) (96,000 ) Warranty reserve at end of period $ 153,000 $ 127,000 Other Current Liabilities. Other current liabilities consist of approximately the following: December 31, 2017 December 31, 2016 Sales tax and VAT payable $ 579,000 $ 328,000 Note payable 214,000 - Accrued legal and accounting fees 21,000 101,000 Accrued vendor payables 142,000 190,000 Other accrued expenses 405,000 219,000 $ 1,361,000 $ 838,000 Foreign Currency Translation. We translate all assets and liabilities of our foreign subsidiaries using period-end exchange rates. We translate statements of operations items using average exchange rates for the period. We record the resulting translation adjustment within accumulated other comprehensive loss, a separate component of shareholders’ equity. We recognize foreign currency transaction gains and losses in our consolidated statements of operations, including unrealized gains and losses on short-term intercompany obligations using period-end exchange rates. We recognize foreign currency transaction gains and losses primarily as a result of fluctuations in currency rates between the U.S. dollar (the functional reporting currency) and the Euro and British pound (functional currencies of our subsidiaries), as well as their effect on the dollar denominated intercompany obligations between us and our foreign subsidiaries. All intercompany balances are revolving in nature and we do not deem any portion of them to be long-term. We recognized foreign currency transaction gains (losses) of approximately $ 48,000 and $(26,000) in the twelve months ended December 31, 2017 and 2016, respectively. Income Taxes. We account for income taxes using the asset and liability method. The asset and liability method provides that deferred tax assets and liabilities be recorded based on the differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. We reduce deferred tax assets by a valuation allowance, when we believe it is more likely than not that some portion or all of the deferred tax assets will not be realized. ASC 740, “Accounting for Income Taxes”, prescribes a recognition threshold and a measurement attribute for financial statement recognition of tax positions we take or expect to take in a tax return. It is management’s responsibility to determine whether it is “more-likely-than-not” that a taxing authority will sustain a tax position upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Under our accounting policies we recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. Basic and Diluted Net Loss per Share. We calculate basic net loss per common share by dividing net loss by the weighted-average common shares outstanding, excluding outstanding shares contingently subject to forfeiture. For calculating diluted net loss per common share amounts, we add additional shares to the weighted-average common shares outstanding for the assumed exercise of stock options and vesting of restricted shares, if dilutive. Because we have had net losses, the following options and warrants outstanding and unvested restricted stock to purchase shares of our common stock were excluded from diluted net loss per common share because of their anti-dilutive effect, and therefore, basic net loss per common share equals dilutive net loss per common share: Number of options, warrants and unvested restricted stock Range of exercise prices Years ended: Twelve months December 31, 2017 3,022,582 $ 0.88 - $24.40 Twelve months December 31, 2016 2,674,000 $ 0.88 - $24.40 Recently Adopted Accounting Pronouncements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This new standard is effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period. We adopted this standard as of January 1, 2017. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU is in response to diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows and provides guidance on eight specific cash flow classification issues. It will be effective for reporting periods beginning after December 15, 2017, and interim periods within that reporting period. Early adoption is permitted, including adoption in an interim period. The Company adopted this standard as of January 1, 2017. The adoption did not have a material impact on our consolidated financial statements. In July 2015, the FASB In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Under U.S. GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30 of this ASU, "Presentation of Financial Statements—Liquidation Basis of Accounting". Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this ASU should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has evaluated the going concern considerations in this ASU. However, management does not believe that the Company has met conditions which would subject the Company's financial statements to additional disclosure. Recently Issued Accounting Pronouncements Not Yet Adopted. In February 2018, the Financial Accounting Standards Board (“FASB”) issues ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The standard is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within these fiscal years. Early adoption is permitted. The new guidance is not expected to have a material impact on our results of operations and financial position. In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, “Compensation – Stock Compensation: Scope of Modification Accounting.” This ASU is intended to provide guidance about which changes to the terms or conditions on a share-based payment award require an entity to apply modification accounting. This new standard is effective for annual periods beginning after December 15, 2017, and interim periods within that reporting period. The Company does not expect these amendments to have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, “Receivables—Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities” related to the amortization period for certain purchased callable debt securities held at a premium. The amendments shorten the amortization period for the premium to the earliest call date. The amendment is effective for interim and annual periods beginning after December 15, 2018. The Company does not expect these amendments to have a material effect on its consolidated financial statements. In January 2017, the FASB, issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the carrying value of the goodwill. The standard is effective for us beginning January 1, 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. The new guidance is not expected to have a material impact on our results of operations and financial position. In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU is in response to diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows and provides guidance on eight specific cash flow classification issues. It will be effective for reporting periods beginning after December 15, 2017, and interim periods within that reporting period. Early adoption is permitted, including adoption in an interim period. We do not believe the adoption of this update will have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-2, “Leases”, under which lessees will recognize most leases on-balance sheet. This will generally increase reported assets and liabilities. For public entities, this ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2018. ASU 2016-2 mandates a modified retrospective transition method for all entities. While the Company is still evaluating the timing and impact of the adoption of this guidance on its consolidated financial statements, it anticipates that the adoption could result in an increase in the assets and liabilities recorded on its consolidated balance sheet. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, as amended by ASU 2015-14, “Deferral of Effective Date”, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017 including interim reporting periods within that reporting per |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | Note 2. Goodwill and Other Intangible Assets Goodwill. There was no change in the goodwill balance as of December 31, 2017 as compared to December 31, 2016 other than the addition of approximately $400,000 related to the Genesis acquisition as described in Note 4. This balance was converted to US dollars at the month end exchange rate as of December 31, 2017. Other Intangible Assets. Other intangible assets consisted of approximately the following at reporting dates presented below: December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Weighted Average Amortization period Gross Carrying Amount Accumulated Amortization Weighted Average Amortization period Developed technology $ 6,200,000 $ 2,436,000 4.25 $ 6,200,000 $ 1,550,000 5.25 Patents & trademarks 5,653,000 5,634,000 7.25 5,653,000 5,616,000 8.25 Trademarks and trade names 190,000 84,000 7.25 190,000 75,000 8.25 Customer relationships 7,540,000 4,067,000 2.27 7,270,000 2,590,000 3.25 19,583,000 $ 12,221,000 19,313,000 $ 9,831,000 Accumulated amortization 12,221,000 9,831,000 Net book value of amortizable intangible assets $ 7,362,000 3.22 $ 9,482,000 4.23 Amortization costs were approximately $2,390,000 in the year ended December 31, 2017 and $2,363,000 in the year ended December 31, 2016. Estimated amortization expense for all intangible assets for the five years subsequent to December 31, 2017 is as follows: Year ending December 31, 2018 $ 2,437,000 2019 2,431,000 2020 1,307,000 2021 894,000 2022 230,000 Thereafter 63,000 Total $ 7,362,000 |
Convertible Debt - Related Part
Convertible Debt - Related Party | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Debt - Related Party [Abstract] | |
Convertible Debt - Related Party | Note 3. Convertible Debt – Related Party Prior to November 2016, the Company had convertible debt – related party payable to Mr. Lewis Pell, one of the Company’s directors. In November 2016, the Company converted the outstanding principal amount (face value of $28,490,000) and accrued interest (approximately $1,000,000) payable under the convertible debt – related party into 17,688,423 shares of our common stock representing a conversion price of $1.67 per share. This conversion was approved by the Company’s stockholders on November 3, 2016. The conversion of the convertible debt – related party was negotiated to be converted at a conversion rate that was significantly lower than the original conversion rates. The transaction was accounted for as an induced conversion and resulted in non-cash debt conversion expense of approximately $18,841,000 for the year ended December 31, 2016. Under purchase accounting for the Merger, the convertible promissory notes were recorded at fair value, resulting in a discount from their face value of $5,960,000. The discount was being amortized over the remaining term based on the effective interest rate method with an imputed interest rate of 4.72%, until the debt was converted. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Note 4. Business Combinations The Company, through its wholly owned subsidiary, Uroplasty LTD, acquired 100% of the issued share capital in Genesis Medical Holdings LTD (“Genesis”) and its subsidiaries effective July 25, 2017 (the “Genesis acquisition”). The Genesis acquisition has been accounted for in accordance with Accounting Standards Codification (ASC) Topic 805, "Business Combinations". The terms of the Genesis acquisition include an upfront payment equal to the estimated fair market value of the tangible net assets, approximately $280,000. The terms also include a purchase price for the ongoing business of approximately $556,000, payable at the rate of 5% of Genesis revenue on a monthly basis. In addition, if Genesis achieves revenue of approximately $4.7 million for the twelve months ended March 31, 2019, the Company will pay an additional amount of approximately $134,000. We have determined the likelihood of paying the $134,000 as probable. The note payable and the contingent consideration have been discounted to a net present value equal to approximately $618,000. All conversions between British Pounds and U.S. Dollars were computed using the July 25, 2017 exchange rate of $1.34 per £1. Under the acquisition method of accounting, the total purchase price was allocated to the net tangible and intangible assets of Genesis based on their fair values at the effective date of the Acquisition. The final allocation is approximately as follows: Cash and cash equivalents $ 104,373 Accounts receivable 811,034 Inventory 202,410 Property, plant and equipment 172,242 Customer relationships 268,000 Goodwill 400,870 Total assets acquired $ 1,958,929 Accounts payable $ 1,001,885 Deferred tax liability 50,920 Total liabilities assumed $ 1,052,805 Total Purchase Price $ 906,124 Cash paid to Genesis, net of cash acquired of $104,000, totaled approximately $181,000. The remaining purchase price was financed via a note payable and contingent consideration as described above. Legal costs directly related to the acquisition of approximately $90,000 have been charged directly to operations and are included in general and administrative expense in our Consolidated Statements of Operations for the twelve months ended December 31, 2017. The goodwill of $400,870 resulting from the acquisition is the excess if the purchase price over the fair value of the net assets acquired. The goodwill primarily reflects the value of enhancing our market opportunity and growth potential in the U.K. None of the goodwill recognized is deductible for income tax purposes as it was a stock acquisition and as such, no deferred taxes have been recorded to goodwill. The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of the following identifiable intangible asset: Amount Weighted Average Life-Years Customer relationships $ 268,000 3 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note 5. Shareholders’ Equity Securities Purchase Agreement On November 3, 2016, we issued 16,129,033 shares of our common stock at $1.55 per share, for aggregate gross proceeds of $25.0 million, to Accelmed Growth Partners, L.P. (“Accelmed”). This issuance of these shares was approved by our stockholders on November 3, 2016. Net proceeds totaled approximately $23,429,000 after deduction of $1,571,000 of expenses related to the issuance. Share-based Compensation. At December 31, 2017, the Company had one active plan, the Cogentix Medical 2015 Omnibus Incentive Plan, for share-based compensation grants (“the 2015 Plan”). Under the 2015 Plan, if we have a change in control (as defined in the 2015 Plan) and the Company is not the surviving entity, all outstanding grants, including those subject to vesting or other performance targets, fully vest immediately if they are not assumed or replaced with equivalent grants. If the Company is the surviving entity, there is no accelerated vesting of equity grants solely upon a change in control. In 2016, the Company experienced a change in control for which it was the surviving entity. Outstanding grants will vest if a participant’s employment or other service with the Company is terminated, without cause or by the participant for good reason, within two years of the November 3, 2016 change in control. Under the 2015 Plan, we reserved 2,500,000 shares of our common stock for share-based grants and 139,738 We grant options at the discretion of our directors. We grant option awards with an exercise price equal to the closing market price of our stock at the date of the grant. We have options outstanding to purchase 2,545,963 shares of common stock granted under the 2015 Plan or predecessor companies’ plans. We determine the fair value of the option awards using the Black-Scholes option pricing model. We used the following weighted-average assumptions to value the options granted during the years ended December 31, 2017 and 2016, respectively: December 31, 2017 December 31, 2016 Expected life, in years 3.00 3.90 Risk-free interest rate 1.45 % .98 % Expected volatility 66.89 % 61.86 % Expected dividend yield 0 % 0 % The expected life for options granted represents the period of time we expect options to be outstanding based on historical data of option holder exercise and termination behavior for similar grants. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate over the expected life at the time of grant. Expected volatility is based upon historical volatility of our common stock. We estimated the forfeiture rate for stock awards to be approximately 15% for executive employees and directors and approximately 20% for non-executive employees for the year ended December 31, 2016 awards based on our historical experience. Beginning January 1, 2017, we no longer have an estimated forfeiture rate because we adopted the rules found in ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, The following table summarizes the activity related to our stock options for the years ended December 31, 2017 and 2016, respectively: Number of shares Weighted average exercise price Weighted average grant date fair value Aggregate intrinsic value Weighted average remaining life in years Balance at December 31, 2015 2,573,640 $ 4.46 - 5.24 Options granted 692,400 1.05 $ 0.49 Options exercised - Options surrendered (1,585,050 ) 3.90 Balance at December 31, 2016 1,680,990 $ 3.54 $ 752,290 6.55 Options granted 1,042,809 1.65 $ 0.74 Options exercised (7,211 ) 1.35 $ 13,001 Options surrendered (170,625 ) 4.36 Balance at December 31, 2017 2,545,963 $ 2.72 $ 3,243,914 6.13 Options exercisable at December 31, 2017 1,031,731 $ 4.55 $ 705,799 3.39 The total fair value of stock options vested during the years ended December 31, 2017 and 2016, was approximately $223,000 and $276,000, respectively. There were no options exercised for the year ended December 31, 2016. We grant restricted shares at the discretion of our directors with vesting terms of six months to three years. The following table summarizes the activity related to our restricted stock for the years ended December 31, 2017 and 2016, respectively: Number of Shares Weighted average grant date fair value Weighted average remaining life in years Aggregate intrinsic value Balance at December 31, 2015 686,910 $ 2.41 1.59 $ 886,114 Shares granted 937,858 1.18 Shares vested (324,521 ) 2.19 652,287 Shares surrendered (307,699 ) 2.45 Balance at December 31, 2016 992,548 $ 1.30 1.35 $ 1,995,021 Shares granted 542,541 1.67 Shares vested (988,097 ) 1.48 $ 3,112,506 Shares surrendered (70,373 ) 1.56 Balance at December 31, 2017 476,619 $ 1.32 1.93 $ 1,501,350 The aggregate intrinsic value shown above for the restricted shares represents the total pre-tax value based on the closing price of our common stock on the dates noted above. We recognize share-based compensation expense in the statement of operations based on the fair value at the time of grant of the share-based payment over the requisite service period. We incurred a total of approximately $1,453,000 and $748,000 in share-based compensation expense for the years ended December 31, 2017 and 2016, respectively. On December 31, 2017, we had approximately $768,000 of unrecognized share-based compensation cost, related to stock options that we expect to recognize over a weighted-average requisite service period of approximately 2.15 years. On December 31, 2016, we had approximately $344,000 of unrecognized share-based compensation cost, net of estimated forfeitures, related to stock options that we expect to recognize over a weighted-average requisite service period of approximately 2.05 years. On December 31, 2017, we had approximately $462,000 of unrecognized share-based compensation cost, related to restricted stock that we expect to recognize over a weighted-average requisite service period of approximately 1.93 years. On December 31, 2016, we had approximately $743,000 of unrecognized share-based compensation cost, net of estimated forfeitures, related to restricted stock that we expect to recognize over a weighted-average requisite service period of approximately 1.26 years. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2017 | |
Line of Credit [Abstract] | |
Line of Credit | Note 6. Line of Credit On September 18, 2015, we entered into a loan agreement with Venture Bank, a Minnesota banking corporation, providing us with a $7.0 million secured revolving credit facility (the “Facility”), subject to eligible accounts receivable and inventory, and secured by substantially all of our assets. The Facility was amended in March 2017. Under the amended Facility, the Facility will expire on September 18, 2018. Under the Facility, we may borrow the lesser of: (a) the sum of (i) eighty percent (80%) of the value of eligible accounts receivable; and (ii) forty percent (40%) of the value of eligible inventory capped at the lesser of (1) $2.5 million; or (b) $7 million. As of December 31, 2017, based on eligible receivables and inventory, our total available borrowing base was $6,409,000. We did not have any borrowings under the facility as of December 31, 2017. Loans under the Facility bear interest at a rate per annum equal to the Wall Street Journal Prime Rate plus 1.25%, provided that in no case will the interest charged be less than 5.25%. In the event that there is an event of default under the Facility, the interest rate will be increased by 6.0% for the entire period that an event of default exists. In addition, the Borrowers will pay a non-usage fee of 0.15% based on the average unused and available portion of the Facility on a monthly basis. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Operating Lease Commitments. We lease office, warehouse, and production space under operating lease agreements, which include escalating lease payments, and lease various automobiles for our European employees. These leases expire at various times through August 2025. At December 31, 2017, the approximate future minimum lease payments in subsequent years under noncancelable operating leases with an initial term in excess of one year are as follows: 2018 $ 817,000 2019 430,000 2020 279,000 2021 254,000 2022 164,000 Thereafter 544,000 $ 2,488,000 Total operating lease expenses were approximately $734,000 and $695,000 for the twelve months ended December 31, 2017 and 2016, respectively. Minimum Purchase Agreement Commitments. In our normal course of business, we have commitments to purchase from various vendors finished goods and manufacturing components under issued purchase orders. At December 31, 2017, the approximate future minimum purchase agreement payments in subsequent years are as follows: 2018 $ - 2019 300,000 2020 600,000 2021 900,000 2022 1,200,000 Thereafter 1,500,000 $ 4,500,000 Employment Agreements. We have entered into employment agreements with certain officers, the terms of which, among other things, specify a base salary subject to annual adjustments by mutual agreement of the parties, and a severance payment to the employee upon employment termination without cause. We provide for various severance amounts payable under the agreements after employment termination. Contemporaneously with the execution of their employment agreement, all of the officers executed an “Employee Confidentiality, Inventions, Non-Solicitation, and Non-Compete Agreement.” This agreement prohibits the employee from disclosing confidential information, requires the employee to assign to us without charge all intellectual property relating to our business which is created or conceived during the term of employment, prohibits the employee from encouraging employees to leave our employment for any reason and prohibits competition with us during the term of employment and for a specified term thereafter. Product Liability. The manufacture and sale of medical devices exposes us to significant risk of product liability claims, some of which may have a negative impact on our business. Any defects or risks that we have not yet identified with our products may give rise to product liability claims. Our existing $10 million of worldwide product liability insurance coverage may be inadequate to protect us from liabilities we may incur or we may not be able to maintain adequate product liability insurance at acceptable rates. If a product liability claim or series of claims is brought against us for uninsured liabilities or in excess of our insurance coverage and it is ultimately determined that we are liable, our business could suffer. |
Savings and Retirement Plans
Savings and Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Savings and Retirement Plans [Abstract] | |
Savings and Retirement Plans | Note 8: Savings and Retirement Plans We sponsor various plans for eligible employees in the United States, the United Kingdom, and The Netherlands. Our retirement savings plan in the United States conforms to Section 401(k) of the Internal Revenue Code of 1986, as amended, and participation is available to substantially all employees. We may also make discretionary contributions ratably to all eligible employees. We made discretionary contributions to the U.S. plan of approximately $585,000 and $438,000 in the years ended December 31, 2017 and 2016, respectively. Our international subsidiaries in the U.K. and The Netherlands have defined benefit retirement plans for eligible employees. These plans provide benefits based on the employee’s years of service and compensation during the years immediately preceding retirement, termination, disability, or death, as defined in the plans. We froze the U.K. subsidiary’s defined benefit plan on December 31, 2004. On March 10, 2005, we established a defined contribution plan for the U.K. subsidiary. As of April 1, 2005, we closed The Netherlands subsidiary’s defined benefit retirement plan for new employees and established a defined contribution plan for them. The total contribution expense associated with the defined contribution plans in The Netherlands and the U.K. was approximately $55,000 and $38,000 for the years ended December 31, 2017 and 2016, respectively. The amortization of actuarial gains or losses is included as a component of the annual expense for a period if, as of the beginning of the period, the cumulative net gain or loss exceeds 10% of the greater of the projected benefit obligation or plan assets. If amortization is required, the amortization is that excess divided by the expected average future service of the active employees participating in the plans or the average remaining life expectancies of inactive employees. The Netherlands defined benefit pension plan. The Netherlands defined benefit pension plan is funded through a guaranteed insurance contract with Zwitser Leven, an insurance company. Our contract with Zwitser Leven requires us to make annual premium payments which are sufficient to fund benefits that will satisfy the vested benefit obligation (“VBO”). Zwitser Leven does not hold separate investment assets for our contract, but rather is obligated to provide the stream of future benefits for the annual premium payments we make to the plan. We calculate the market value of the pension plan assets, held in Zwitser Leven insured assets, as the stream, based on mortality, of the earned guaranteed benefit payments discounted at a market interest rate. The benefit obligation is calculated based on the same assumptions as well. Accordingly, the impact on pension plan assets of a change in assumption for discount rate and mortality would equally offset the change in VBO. At December 31, 2017, we project the following benefit payments in subsequent years: 2018 $ 23,000 2019 24,000 2020 24,000 2021 31,000 2022 39,000 2023 to 2027 262,000 $ 403,000 We contributed approximately $141,000 and $125,000 in the years ended December 31, 2017 and 2016, respectively, and expect to contribute approximately $140,000 in 2018. The following table summarizes the change in benefit obligations and the change in plan assets: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Changes in benefit obligations: Projected benefit obligation, beginning of period $ 3,510,000 $ 3,665,000 Service cost 95,000 104,000 Interest cost 75,000 76,000 Benefits paid (21,000 ) (21,000 ) Plan amendment - (658,000 ) Actuarial loss (gain) (8,000 ) 474,000 Foreign currency translation 498,000 (130,000 ) Projected benefit obligation, end of period $ 4,149,000 $ 3,510,000 Changes in plan assets: Plan assets, beginning of period $ 3,321,000 $ 3,002,000 Contributions to plan 141,000 125,000 Management cost (14,000 ) (12,000 ) Actual return on assets 47,000 357,000 Benefits paid (21,000 ) (21,000 ) Foreign currency translation 472,000 (130,000 ) Plan assets, end of period $ 3,946,000 $ 3,321,000 The amount recognized in other comprehensive loss consists of: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Unrecognized net prior service benefit $ (892,000 ) $ (870,000 ) Unrecognized net losses 865,000 779,000 Additional other comprehensive gain (gross of income taxes) $ (27,000 ) $ (91,000 ) The projected benefit obligation, accumulated benefit obligation and the fair value of plan assets were as follows: December 31, 2017 December 31, 2016 Projected benefit obligation $ 4,149,000 $ 3,510,000 Accumulated benefit obligation 4,005,000 3,376,000 Fair value of plan assets 3,946,000 3,321,000 We have recorded the excess of the projected benefit obligation over the fair value of the plan assets on December 31, 2017 and 2016, of $203,000 and $189,000, respectively, as accrued pension liability. The cost of our defined benefit retirement plan includes the following components: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Gross service cost, net of employee contribution $ 84,000 $ 99,000 Interest cost 75,000 76,000 Management cost 13,000 5,000 Expected return on assets (74,000 ) (66,000 ) Amortization (54,000 ) (30,000 ) Net periodic retirement cost $ 44,000 $ 84,000 Major assumptions used in the above calculations include: December 31, 2017 December 31, 2016 Discount rate 2.00 % 2.00 % Expected return on assets 2.00 % 2.00 % Expected rate of increase in future compensation: General 2.5 % 2.5 % Individual 0 % 0 % The discount rate used is based upon the yields available on high quality corporate bonds with a term that matches the liabilities. The market value of the assets is determined as the discounted stream of guaranteed benefit payments. Given the valuation method of the assets, the expected long-term rate of return on assets equals the discount rate. The U.K. defined benefit pension plan. As of December 31, 2017, and 2016, we held all the assets of the U.K. defined benefit pension plan in a Deposit Administration Contract with Phoenix Life Limited. At December 31, 2017 we project the following benefit payments in subsequent years: 2018 $ 194,000 2019 - 2020 - 2021 - 2022 - 2023 to 2027 714,000 $ 908,000 We contributed approximately $57,000 and $53,000 in the years ended December 31, 2017 and 2016, respectively, and expect to contribute approximately $61,000 in 2018. The following table summarizes the change in benefit obligations and the change in plan assets: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Changes in benefit obligations: Projected benefit obligation, beginning of period $ 736,000 $ 744,000 Service cost 4,000 4,000 Interest cost 20,000 26,000 Benefits paid - (96,000 ) Other (4,000 ) (4,000 ) Actuarial loss 34,000 197,000 Foreign currency translation 72,000 (135,000 ) Projected benefit obligation, end of period $ 862,000 $ 736,000 Changes in plan assets: Plan assets, beginning of period $ 616,000 $ 775,000 Contributions to plan 57,000 53,000 Management cost (4,000 ) (4,000 ) Benefits Paid - (96,000 ) Actual return on assets 68,000 15,000 Foreign currency translation 63,000 (127,000 ) Plan assets, end of period $ 800,000 $ 616,000 The amount recognized in other comprehensive loss consists of: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Unrecognized net losses (gross of deferred taxes) $ 225,000 $ 276,000 The projected benefit obligation, accumulated benefit obligation and the fair value plan assets were as follows: December 31, 2017 December 31, 2016 Projected benefit obligation $ 862,000 $ 736,000 Accumulated benefit obligation 862,000 736,000 Fair value of plan assets 800,000 616,000 We have recorded the excess of the projected benefit obligation over the fair value of the plan assets as of December 31, 2017 and 2016, of $62,000 and $120,000, respectively, as accrued pension liability. The cost of our defined benefit retirement plan includes the following components for the years ended: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Gross service cost, net of employee contribution $ 4,000 $ 5,000 Interest cost 20,000 26,000 Expected return on assets (14,000 ) (21,000 ) Amortization 53,000 7,000 Net periodic retirement cost $ 63,000 $ 17,000 Major assumptions used in the above calculations include: December 31, 2017 December 31, 2016 Discount rate 2.50 % 2.70 % Expected return on assets 2.13 % 2.20 % The discount rate used is based upon the yields available on high quality corporate bonds with a term that matches the liabilities. The expected return on assets assumption on the investment portfolio for the defined benefit plan is based on the long-term expected returns for the assets currently in the portfolio. Management uses historic return trends of the asset portfolio combined with recent market conditions to estimate the future rate of return. Plan Assets. The primary objective of The Netherlands pension plan is to meet retirement income commitments to plan participants at a reasonable cost. In The Netherlands, consistent with typical practice, the pension plan is funded through a guaranteed insurance contract with Zwitser Leven, an insurance company. Zwitser Leven is responsible for the investment strategy of the insurance premiums we make. We have characterized the assets of the pension plan as an “other contract.” The primary objective of the U.K. pension plan is to meet retirement income commitments to plan participants at a reasonable cost. The objective is achieved through growth of capital and safety of funds invested. The pension plan assets are invested in a Deposit Administration Contract with Phoenix Life Limited, an insurance company, with underlying investments primarily in fixed interest U.K. government bonds. The allocation of pension plan assets was as follows: December 31, 2017 December 31, 2016 Target Allocation Actual Allocation Target Allocation Actual Allocation Other Contract (Netherlands Plan) 100 % 100 % 100 % 100 % Deposit Administration Contract (U.K. Plan) 100 % 100 % 100 % 100 % We calculate the market value of the pension plan assets, held in Zwitser Leven insured assets, as the stream, based on mortality (an unobservable input), of the earned guaranteed benefit payments discounted at market interest rate. Accordingly, we have classified The Netherlands pension plan assets as Level 3 assets. The market value of the U.K. pension plan reflects the value of our contributions to the plan and the credited accrued interest at the rate specified in the Deposit Administration Contract. Accordingly, we have classified the U.K. plan assets as Level 2 assets. The fair value of the pension plan assets by asset class is as follows: Asset Class Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 Other Contract (Netherlands Plan) $ 3,946,000 $ - $ - $ 3,946,000 Deposit Administration Contract (U.K. Plan) 800,000 - 800,000 - December 31, 2016 Other Contract (Netherlands Plan) $ 3,321,000 $ (5,000 ) $ - $ 3,326,000 Deposit Administration Contract (U.K. Plan) 616,000 - 616,000 - The reconciliation of beginning and ending balances for our Level 3 assets is as follows: Other Contract (Netherlands Pension Plan Assets) Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Beginning balance $ 3,326,000 $ 3,005,000 Loss recognized in earnings 59,000 54,000 Actuarial loss (26,000 ) 291,000 Purchases 141,000 130,000 Sales (21,000 ) (21,000 ) Transfers (5,000 ) (3,000 ) Foreign currency translation 472,000 (130,000 ) Ending balance $ 3,946,000 $ 3,326,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 9: Income Taxes The components of income tax expense consist of the following: Twelve months ended Twelve months ended Income tax provision: Current: Federal and state $ 13,000 $ 91,000 Foreign 118,000 49,000 Deferred: Federal and state - - Foreign 7,000 5,000 Total income tax expense $ 138,000 $ 145,000 Actual income tax expense differs from statutory federal income tax benefit for the period presented is as follows: Twelve months ended Twelve months ended Statutory federal income tax benefit $ (246,000 ) $ (7,462,000 ) State tax benefit, net of federal taxes 13,000 (55,000 ) Foreign tax (82,000 ) (39,000 ) Nondeductible expenses - debt forgiveness - 5,575,000 Nondeductible expenses – other 130,000 163,000 Subpart F Income - 51,000 Valuation allowance (decrease) (2,795,000 ) (7,334,000 ) Stock compensation shortfall (windfall) (94,000 ) 96,000 Stock compensation true-up and expirations 10,000 958,000 NOL expiration and true-up 204,000 8,110,000 Deferral rate change 3,313,000 - True-up of undistributed foreign earnings (317,000 ) - Other 2,000 80,000 Total income tax expense $ 138,000 $ 143,000 Deferred tax assets (liabilities) consist of approximately the following: December 31, 2017 December 31, 2016 Fixed assets $ 29,000 $ (51,000 ) Intangible assets (1,806,000 ) (3,479,000 ) Equity method investment 33,000 - Pension liability 69,000 76,000 Stock based compensation 446,000 535,000 Inventory 128,000 483,000 Other reserves and accruals 524,000 778,000 Deferred rent 165,000 250,000 Undistributed foreign earnings - (504,000 ) Foreign tax credits 68,000 68,000 Credit carryforwards 88,000 72,000 Net operating losses 7,000,000 11,230,000 Customer relations intangible (44,000 ) - 6,700,000 9,458,000 Less valuation allowance (6,587,000 ) (9,382,000 ) $ 113,000 $ 76,000 At December 31, 2017, we had U.S. net operating loss (NOL) carryforwards of approximately $117.2 million for U.S. income tax purposes before any Section 382 limitations, The NOLs expire in years 2020 through 2035. U.S. net operating loss carryforwards cannot be used to offset taxable income in foreign jurisdictions. In addition, future utilization of NOL carryforwards is subject to certain limitations under Section 382 of the Internal Revenue Code. This section generally relates to a 50 percent change in ownership of a company over a three-year period. Of the $117.2 million of NOLs for U.S. income tax purposes, $88.2 million are expected to expire unutilized. Of the $117.2 million of NOLs for U.S. income tax purposes, $29 million are recorded as gross deferred tax assets. We provide for a valuation allowance when it is more likely than not that we will not realize a portion of the deferred tax assets. We have established a valuation allowance for U.S. deferred tax assets due to the uncertainty that enough taxable income will be generated in the taxing jurisdictions to utilize the assets with the exception of the refundable AMT credit carryforward. Therefore, we have only reflected the benefit of such deferred tax assets in the accompanying consolidated financial statements. The deferred tax asset decreased by approximately $2,758,000 and $7,395,000 in the years ending December 31, 2017 and 2016, respectively. The valuation allowance increased by approximately $2,795,000 in the year ending December 31, 2017, and decreased by approximately $7,335,000 in the year ending December 31, 2016. We reviewed all income tax positions taken or that we expect to be taken for all open years and determined that our income tax positions are appropriately stated and supported for all open years. Under our accounting policies, we recognize interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. As of December 31, 2017, and 2016, we recorded no accrued interest or penalties related to uncertain tax positions. We have provided for U.S. deferred income taxes as of December 31, 2017 for the undistributed earnings from our non-U.S. subsidiaries. We are subject to taxation in the United States and various states and foreign jurisdictions. As of December 31, 2017, tax years for March 31, 2015 through December 31, 2017 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2017, we are no longer subject to U.S. federal or state, examinations by tax authorities for years beginning before April 1, 2014. In addition, we are subject to examination by UK and Netherlands taxing authorities for which the fiscal years 2011 - 2017 and 2012-2017, respectively remain open for examination. On December 22, 2017, the U.S. Tax Cuts and Jobs Act ("TCJA") was signed into law. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The Tax Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective for tax years starting after December 31, 2017, implementing a hybrid territorial tax system, repealing AMT and making pre-2018 credits refundable, and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. As a result, we recorded tax expense of $3.31M in the fourth quarter as a result of revaluation of the deferred tax assets due to the corporate tax rate change from 35% to 21% starting in 2018. The tax expense was directly offset by a change in the valuation allowance except for $70,000 that was not offset. The Company has $68,000 of AMT credit carryforwards that are expected to be fully utilized due to the credit now being refundable under the TCJA. The Company calculated a deemed repatriation income amount due to the change to a territorial tax system under the TCJA. This income can be fully offset with NOLs. The corresponding deferred tax liability associated with it was reversed. The amounts incorporate assumptions made based upon the Company's current interpretation of the Tax Act and may change as the Company receives additional clarification and implementation guidance. In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") 118 to provide guidance for companies that allows for 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 under ASC 740. In accordance with SAB 118, a company must reflect the income tax effect of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, the company must record a provisional estimate in the financial statements. We are still analyzing certain aspects of the Tax Act which could potentially affect the measurement of our deferred tax balances and cause us to revise our estimate in future periods in accordance with SAB 118. These impacts may be material, due to, among other things, further refinement of our calculations, changes in interpretations of the Tax Act, or issuance of additional guidance by the relevant tax authorities. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Business Segment Information [Abstract] | |
Business Segment Information | Note 10: Business Segment Information ASC 280, “Segment Reporting,” Prior to the fourth quarter of 2017, we disclosed only one reporting segment. Beginning in the fourth quarter of 2017, our reportable segments are disclosed as principally organized and managed as three operating segments: the urology/gynecology market, the airway management market and the industrial market. We adopted reportable segments to align with changes in how we manage our business, review operating performance and allocate resources In the urology/ gynecology market, the company markets a number of products through its 50+ direct sales force in the US and 10+ direct sales force in Europe in addition to the use of international distributors. The products serving this market includes endoscopy-based products (flexible fiber and video endoscopes and a proprietary sterile disposable microbial barrier known as EndoSheath technology), Urgent PC® Neuromodulation System (“Urgent PC System”) a minimally-invasive, neuromodulation system that delivers percutaneous tibial nerve stimulation for office-based treatment of overactive bladder and associated symptoms; and Macroplastique® Implants (“Macroplastique”), an injectable, urethral bulking agent for the treatment of adult female stress urinary incontinence. In the airway management market, the company markets endoscopy-based products (including flexible fiber and video endoscopes used in the practices of pulmonology, trans-nasal esophagoscopy and ENT as well as the proprietary sterile disposable microbial barrier known as EndoSheath technology for indications other than ENT). In the industrial market, the company sells scopes and related equipment that are similar in design to those sold for medical applications into industrial markets for applications including aircraft engine inspection. Our Chief Operating Decision Maker ("CODM") is its President and Chief Executive Officer, who utilizes discrete financial information about each segment in order to make decisions on resources allocated to each market. The Company's CODM assesses the performance of each segment and allocates resources to those segments based on revenue and operating income (loss). Operating income (loss) by segment includes items that are directly attributable to each segment, including sales and marketing functions, as well as finance, information technology, human resources, legal and related corporate infrastructure costs, along with certain benefit-related expenses. There are no unallocated expenses for the three segments Financial information regarding revenue and operating income (loss) by segment for the twelve months ended December 31, 2017 and 2016, respectively, is approximately as follows: Segment Revenue December 31, 2017 December 31, 2016 Urology 49,314,000 44,747,000 Airway Management 3,277,000 3,208,000 Industrial 3,725,000 3,896,000 Total 56,316,000 51,851,000 Operating Income (Loss) December 31, 2017 December 31, 2016 Urology 281,000 1,111,000 Airway Management (988,000 ) (940,000 ) Industrial (182,000 ) 240,000 Total (889,000 ) (1,811,000 ) Information regarding geographic area net sales to customers for the twelve months ended December 31, 2017 and 2016, respectively is approximately as follows: United States All Other (Foreign) Countries (1) Consolidated Twelve months ended December 31, 2017 $ 40,888,000 $ 15,428,000 $ 56,316,000 Twelve months ended December 31, 2016 $ 39,513,000 $ 12,338,000 $ 51,851,000 (1) No other (foreign) country accounts for 10% or more of the consolidated net sales Information regarding geographic area long-lived assets at December 31, 2017 and 2016, respectively is approximately as follows: United States United Kingdom and The Netherlands Consolidated December 31, 2017 $ 1,793,000 $ 634,000 $ 2,427,000 December 31, 2016 $ 1,676,000 $ 439,000 $ 2,115,000 Accounting policies for the operations in the various geographic areas are the same as those described in Note 1. Sales attributed to each geographic area are net of intercompany sales and are attributed to countries based on location of customers. No single customer represents 10% or more of our consolidated net sales. Long-lived assets consist of property, plant and equipment. |
Equity Investment
Equity Investment | 12 Months Ended |
Dec. 31, 2017 | |
Equity Investment [Abstract] | |
Equity Investment | Note 11. Equity Investment ASC 323, “Investments – Equity Method and Joint Ventures,” establishes accounting guidelines for an equity investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest. In this situation, the equity method should be applied to an investment. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of an entity between 20% and 50%, and other factors, such as representation on the Board of Directors, are considered in determining whether the equity method of accounting is appropriate. On September 28, 2017, we made an equity investment in Vensica Medical (“Vensica”), a privately-held Israeli-based company developing VensiCare, an ultrasound based, needle-free drug delivery system. Our $2 million investment gave us a 20% ownership in the company and allows us to have one seat on the Vensica Medical Board of Directors along with two call options to acquire the entire company for an additional $8 million. The investment is accounted for using the equity method of accounting because the Company has significant influence, but not control, of the entity. For the period ending December 31, 2017, our net loss in Vensica Medical was $128,640. The equity investment in Vensica is now $1,871,360. |
Subsequent Event - Pending Merg
Subsequent Event - Pending Merger with Laborie Medical Technologies | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Event - Pending Merger with Laborie Medical Technologies [Abstract] | |
Subsequent Event - Pending Merger with Laborie Medical Technologies | Note 12. Subsequent Event – Pending Merger with Laborie Medical Technologies On March 12, 2018, we entered into a definitive merger agreement (“the Agreement”) with Laborie Medical Technologies (“Laborie”). Under the Agreement, Laborie will acquire all of the outstanding shares of Cogentix Medical for a total consideration of approximately $239 million. Under the terms of the Agreement, Laborie, through its wholly-owned subsidiaries LM Parent, Inc., and Camden Merger Sub, Inc. will commence a tender offer for all outstanding shares of Cogentix Medical common stock for $3.85 per share in cash. The offer of $3.85 per share in cash represents a premium of 28% over the average closing stock price of Cogentix Medical common stock over the last thirty days prior to entering into the agreement. We anticipate the transaction will close in the first half of the second quarter of 2018. Upon completion of the transaction, we will become a wholly owned subsidiary of Laborie. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Change in Control | Change in Control. A change in control of the Company occurred on November 3, 2016 as a result of the conversion of the Company’s convertible debt – related party into equity (see Note 3) and the issuance of common shares to Accelmed Growth Partners (see Note 5). The convertible debt – related party was owed to Lewis Pell, a member of our board of directors. As a result of the transactions described above, Mr. Pell and Accelmed owned or controlled approximately 33% and 27%, respectively, of the outstanding common stock of the Company immediately subsequent to these transactions being consummated. Accelmed and Mr. Pell entered into a voting agreement pursuant to which Mr. Pell and Accelmed have agreed to vote their shares of the Company’s common stock for the other party’s nominees to the board of directors. Further, the securities purchase agreement with Accelmed provides it with numerous protective provisions, including prohibiting the Company, without the prior approval of the Accelmed directors, from engaging in any merger, consolidation, transfer or conversion involving the Company, incurring any new indebtedness in excess of $10,000,000, and changing the size of the Board of Directors. The Company has elected not to apply pushdown accounting adjustments to the Company’s consolidated financial statements related to the change in control as allowed by Accounting Standards Update No. 2014-17. |
Basis of Presentation | Basis of Presentation. The consolidated financial statements include the accounts of Cogentix Medical, Inc. and its wholly owned subsidiaries. We have eliminated all intercompany accounts and transactions in consolidation. We have reclassified certain prior-year amounts to conform to the current year’s presentation. |
Revenue Recognition | Revenue Recognition. We recognize revenue in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 605 (Topic 605, Revenue Recognition . 1. persuasive evidence that an arrangement exists; 2. delivery has occurred or services were rendered; 3. the fee is fixed and determinable; and 4. collectability is reasonably assured We recognize revenue when title passes to the customer, generally upon shipment of our products F.O.B. shipping point. Revenue for service repairs of equipment is recognized after service has been completed, and service contract revenue is recognized ratably over the term of the contract. We review our service contracts to determine if multiple element arrangements exist. A multiple element arrangement includes the sale of endoscopes and service contracts. We allocate revenue to all elements based on their stand-alone selling prices by applying the relative stand-alone selling price methodology. Revenue allocated to the endoscopes in these arrangements is recognized upon shipment. Service contract revenue is deferred and represents the allocated selling price of any deliverables of the arrangement for which the customer has provided consideration, but the revenue recognition requirements have not been satisfied. We include shipping and handling charges billed to customers in net sales, and include related costs incurred by us in cost of goods sold. Typically, our agreements contain no customer acceptance provisions or clauses. We sell our products to end users and to distributors. Payment terms range from prepayment to 120 days. Sales to distributors are not contingent on the distributor selling the product to end users. Customers do not have the right to return products except for warranty claims. We offer customary product warranties. We present our sales in our statement of operations net of taxes, such as sales, use, value-added and certain excise taxes, collected from the customers and remitted to governmental authorities. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Our significant accounting policies and estimates include revenue recognition, short- and long-term investments, accounts receivable, valuation of inventory, foreign currency translation/transactions, purchase price allocations on acquisition, the determination of recoverability of long-lived assets and liabilities and intangible assets, share-based compensation, defined benefit pension plans, and income taxes. |
Advertising Expenses | Advertising Expenses. Advertising costs are expensed as incurred. Such costs incurred were approximately $360,000 and $363,000 for the twelve months ended December 31, 2017 and 2016, respectively. |
Research and Development Expenses | Research and Development Expenses. Costs of research, new product development, and product redesign are charged to expense as incurred. |
Share-Based Compensation | Share-Based Compensation. We account for share-based compensation costs under ASC 718, “Compensation – Stock Compensation”. ASC 718 covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. We recognize the compensation cost relating to share-based payment transactions, including grants of employee stock options and restricted shares, in our consolidated financial statements. We measure that cost based on the fair value of the equity or liability instruments issued. We account for forfeitures in the period in which they occur. We also recognize certain tax benefits or tax shortfalls upon a restricted-stock award vesting or stock options exercise relative to the deferred tax asset position established in the provision for income taxes line in the consolidated statement of operations. |
Segment Reporting | Segment Reporting. We operate in three markets – urology/gynecology, airway management, and industrial. Our Chief Executive Officer has been identified as our chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analysis of the Company as three segments. This is a change from prior periods in which we reported only one segment as discrete financial information was not available for each market individually. |
Defined Benefit Pension Plans | Defined Benefit Pension Plans. We have a liability attributed to defined benefit pension plans we offered to certain former and current employees of our subsidiaries in the UK and The Netherlands. The liability is dependent upon numerous factors, assumptions and estimates, and the continued benefit costs we incur may be significantly affected by changes in key actuarial assumptions such as the discount rate, mortality, compensation rates, or retirement dates used to determine the projected benefit obligation. Additionally, changes made to the provisions of the plans may impact current and future benefit costs. In accordance with the provisions of ASC 715, “Compensation – Retirement Benefits”, changes in benefit obligations associated with these factors may not be immediately recognized as costs in the statement of operations, but are recognized in future years over the expected average future service of the active employees or the average remaining life expectancies of inactive employees. |
Disclosures About Fair Value of Financial Instruments | Disclosures About Fair Value of Financial Instruments. Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework prioritizes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three broad levels of inputs may be used to measure fair value under the fair value hierarchy: · Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. · Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. · Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions. If the inputs used to measure the financial assets and liabilities fall within more than one of the different levels described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The following tables show our cash and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments as of December 31, 2017 and 2016: December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 4,318,229 $ - $ - $ 4,318,229 $ 4,318,229 $ - $ - Level 1: Money market funds 16,591,376 - - 16,591,376 16,591,376 - - Subtotal 16,591,376 - - 16,591,376 16,591,376 - - Level 2: Certificates of deposit 1,440,000 - (1,783 ) 1,438,217 - 1,438,217 - Commercial paper 1,198,574 - (362 ) 1,198,212 - 1,198,212 - Corporate notes/bonds 3,612,704 - (1,868 ) 3,610,836 - 3,610,836 - U.S. government agencies - - - - - - - Subtotal 6,251,278 - (4,013 ) 6,247,265 - 6,247,265 - Total $ 27,160,883 $ - $ (4,013 ) $ 27,156,870 $ 20,909,605 $ 6,247,265 $ - December 31, 2016 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 3,773,790 $ - $ - $ 3,773,790 $ 3,773,790 $ - $ - Level 1: Money market funds 3,197,958 - - 3,197,958 3,197,958 - - Subtotal 3,197,958 - - 3,197,958 3,197,958 - - Level 2: Certificates of deposit 2,160,010 2,285 - 2,162,295 - 720,031 1,442,264 Commercial paper 5,984,110 - (4,100 ) 5,980,010 2,397,876 3,582,134 - Corporate notes/bonds 9,688,957 - (13,885 ) 9,675,072 - 7,273,992 2,401,080 U.S. government agencies 3,503,208 - (5,648 ) 3,497,560 - 1,996,900 1,500,660 Subtotal 21,336,285 2,285 (23,633 ) 21,314,937 2,397,876 13,573,057 5,344,004 Total $ 28,308,034 $ 2,285 $ (23,633 ) $ 28,286,685 $ 9,369,624 $ 13,573,057 $ 5,344,004 |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities. We consider all cash on-hand and highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. We classify marketable securities having original maturities of more than three months when purchased and remaining maturities of one year or less as short-term investments and marketable securities with remaining maturities of more than one year as long-term investments. We further classify marketable securities as available-for-sale. We have not designated any of our marketable securities as trading securities or as held to maturity. We may sell any of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management. At December 31, 2017, we did not have any long-term securities. We consider the declines in market value of our marketable securities investment portfolio to be temporary in nature. We typically invest in highly-rated securities, and our investment policy generally limits the amount of credit exposure to any one issuer. Cash and cash equivalents include highly liquid money market funds and debt securities with original maturities of three months or less totaling $20.1 million and $9.4 million at December 31, 2017 and 2016, respectively. Money market funds present negligible risk of changes in value due to changes in interest rates, and their cost approximates their fair market value. We maintain cash in bank accounts, which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. Cash and cash equivalents held in foreign bank accounts totaled $879,000 and $507,000 at December 31, 2017 and 2016 respectively. |
Equity Investment | Equity Investment. ASC 323, "Investments – Equity Method and Joint Ventures," establishes accounting guidelines for an equity investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest. In this situation, the equity method should be applied to an investment. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of an entity between 20% and 50%, and other factors, such as representation on the Board of Directors, are considered in determining whether the equity method of accounting is appropriate. |
Accounts Receivable | Equity Investment. ASC 323, "Investments – Equity Method and Joint Ventures," establishes accounting guidelines for an equity investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest. In this situation, the equity method should be applied to an investment. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of an entity between 20% and 50%, and other factors, such as representation on the Board of Directors, are considered in determining whether the equity method of accounting is appropriate. Accounts Receivable. We grant credit to our customers in the normal course of business and, generally, do not require collateral or any other security to support amounts due. If necessary, we have an outside party assist us with performing credit and reference checks and establishing credit limits for the customer. Concentration of credit risk with respect to accounts receivable relates to certain domestic and international customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, when appropriate, we obtain advance payments for our international sales. As a consequence, we believe that our accounts receivable credit risk exposure is limited. Historically we have not experienced any significant credit losses related to any individual customer or group of customers in any particular industry or geographic area. Accounts outstanding longer than the contractual payment term, are considered past due. We carry our accounts receivable at the original invoice amount less an estimated allowance for doubtful receivables based on a periodic review of all outstanding amounts. We determine the allowance for doubtful accounts based on the customer’s financial health, and both historical and expected credit loss experience. We write off our accounts receivable when we deem them uncollectible. We record recoveries of accounts receivable previously written off when received. We are not always able to timely anticipate changes in the financial condition of our customers and if circumstances related to these customers deteriorate, our estimates of the recoverability of accounts receivable could be materially affected and we may be required to record additional allowances. Alternatively, if more allowances are provided than are ultimately required, we may reverse a portion of such provisions in future periods based on the actual collection experience. Historically, the accounts receivable balances we have written off have generally been within our expectations. The allowance for doubtful accounts was $87,000 and $34,000 at December 31, 2017 and 2016, respectively. |
Inventories | Inventories. We value inventory at net realizable value the slow moving and obsolete inventories based upon current and expected future product sales. Inventories consist of approximately the following: December 31, 2017 December 31, 2016 Raw materials $ 3,449,000 $ 4,483,000 Work-in-process 322,000 462,000 Finished goods 3,406,000 2,290,000 $ 7,177,000 $ 7,235,000 |
Property, Plant, and Equipment | Property, Plant and Equipment. We carry property, plant and equipment, including leasehold improvements, at cost, less accumulated depreciation or fair value if acquired in a business combination, which consists of approximately the following balances: December 31, 2017 December 31, 2016 Land $ 147,000 $ 129,000 Building 674,000 588,000 Leasehold improvements 1,248,000 1,240,000 Internal use software 829,000 821,000 Equipment 4,155,000 3,203,000 $ 7,053,000 $ 5,981,000 Less accumulated depreciation and amortization (4,626,000 ) (3,866,000 ) $ 2,427,000 $ 2,115,000 We provide for depreciation using the straight-line method over useful lives of three to seven years for equipment and 40 years for the building. Certain products used as sales demonstration and service loaner equipment are transferred from inventory to machinery and equipment and are depreciated over three years. We charge maintenance and repairs to expense as incurred. We capitalize improvements and amortize them over the shorter of their estimated useful service lives or the remaining lease term. We recognized depreciation and amortization expense of approximately $777,000 and $778,000 in the years ended December 31, 2017 and 2016, respectively. |
Goodwill | Goodwill. Goodwill results from the Merger and from the acquisition of Genesis (as described in Note 4) and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Annually as of November 30 or if conditions indicate an additional review is necessary, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and if it is necessary to perform the quantitative two-step goodwill impairment test. If the Company performs the quantitative test, it compares the carrying value of the reporting unit to an estimate of the reporting unit’s fair value to identify potential impairment. The fair value of each reporting unit is estimated using a discounted cash flow model. Where available, and as appropriate, comparable market multiples are also used to corroborate the results of the discounted cash flow models. In determining the estimated future cash flow, the Company considers and applies certain estimates and judgments, including current and projected future levels of income based on management’s plans, business trends, prospects and market and economic conditions and market-participant considerations. If the estimated fair value of the reporting unit is less than the carrying value, a second step is performed to determine the amount of the potential goodwill impairment. If impaired, goodwill is written down to its estimated implied fair value. We reassessed the impairment of Goodwill as of December 31, 2017 due to the change in our segment determination as described in Note 10. All of our Goodwill is associated with the medical segment and there was no impairment as of December 31, 2017. There was no goodwill impairment loss for the years ended December 31, 2017 or 2016. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. Long-lived assets consist of property, plant and equipment and finite lived intangible assets. We review our long-lived assets for impairment whenever events or business circumstances indicate that we may not recover the carrying amount of an asset. We measure recoverability of assets held and used from a comparison of the carrying amount of an asset to future undiscounted net cash flows we expect to generate by the asset. If we consider such assets impaired, we measure the impairment recognized by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no impairment charges for the years ended December 31, 2017 and 2016. |
Product Warranty | Product Warranty. We warrant our products to be free from defects in material and workmanship under normal use and service for a period of twelve months after the date of sale. Under the terms of these warranties, we repair or replace products we deem defective due to material or workmanship. The following table summarizes approximate changes in our warranty reserve: December 31, 2017 December 31, 2016 Warranty reserve at beginning of period $ 127,000 $ 146,000 Warranties accrued during the period 167,000 77,000 Warranties settled during the period (141,000 ) (96,000 ) Warranty reserve at end of period $ 153,000 $ 127,000 |
Other Current Liabilities | Other Current Liabilities. Other current liabilities consist of approximately the following: December 31, 2017 December 31, 2016 Sales tax and VAT payable $ 579,000 $ 328,000 Note payable 214,000 - Accrued legal and accounting fees 21,000 101,000 Accrued vendor payables 142,000 190,000 Other accrued expenses 405,000 219,000 $ 1,361,000 $ 838,000 |
Foreign Currency Translation | Foreign Currency Translation. We translate all assets and liabilities of our foreign subsidiaries using period-end exchange rates. We translate statements of operations items using average exchange rates for the period. We record the resulting translation adjustment within accumulated other comprehensive loss, a separate component of shareholders’ equity. We recognize foreign currency transaction gains and losses in our consolidated statements of operations, including unrealized gains and losses on short-term intercompany obligations using period-end exchange rates. We recognize foreign currency transaction gains and losses primarily as a result of fluctuations in currency rates between the U.S. dollar (the functional reporting currency) and the Euro and British pound (functional currencies of our subsidiaries), as well as their effect on the dollar denominated intercompany obligations between us and our foreign subsidiaries. All intercompany balances are revolving in nature and we do not deem any portion of them to be long-term. We recognized foreign currency transaction gains (losses) of approximately $ 48,000 and $(26,000) in the twelve months ended December 31, 2017 and 2016, respectively. |
Income Taxes | Income Taxes. We account for income taxes using the asset and liability method. The asset and liability method provides that deferred tax assets and liabilities be recorded based on the differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. We reduce deferred tax assets by a valuation allowance, when we believe it is more likely than not that some portion or all of the deferred tax assets will not be realized. ASC 740, “Accounting for Income Taxes”, prescribes a recognition threshold and a measurement attribute for financial statement recognition of tax positions we take or expect to take in a tax return. It is management’s responsibility to determine whether it is “more-likely-than-not” that a taxing authority will sustain a tax position upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Under our accounting policies we recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share. We calculate basic net loss per common share by dividing net loss by the weighted-average common shares outstanding, excluding outstanding shares contingently subject to forfeiture. For calculating diluted net loss per common share amounts, we add additional shares to the weighted-average common shares outstanding for the assumed exercise of stock options and vesting of restricted shares, if dilutive. Because we have had net losses, the following options and warrants outstanding and unvested restricted stock to purchase shares of our common stock were excluded from diluted net loss per common share because of their anti-dilutive effect, and therefore, basic net loss per common share equals dilutive net loss per common share: Number of options, warrants and unvested restricted stock Range of exercise prices Years ended: Twelve months December 31, 2017 3,022,582 $ 0.88 - $24.40 Twelve months December 31, 2016 2,674,000 $ 0.88 - $24.40 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This new standard is effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period. We adopted this standard as of January 1, 2017. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU is in response to diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows and provides guidance on eight specific cash flow classification issues. It will be effective for reporting periods beginning after December 15, 2017, and interim periods within that reporting period. Early adoption is permitted, including adoption in an interim period. The Company adopted this standard as of January 1, 2017. The adoption did not have a material impact on our consolidated financial statements. In July 2015, the FASB In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Under U.S. GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30 of this ASU, "Presentation of Financial Statements—Liquidation Basis of Accounting". Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this ASU should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has evaluated the going concern considerations in this ASU. However, management does not believe that the Company has met conditions which would subject the Company's financial statements to additional disclosure. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted. In February 2018, the Financial Accounting Standards Board (“FASB”) issues ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The standard is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within these fiscal years. Early adoption is permitted. The new guidance is not expected to have a material impact on our results of operations and financial position. In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, “Compensation – Stock Compensation: Scope of Modification Accounting.” This ASU is intended to provide guidance about which changes to the terms or conditions on a share-based payment award require an entity to apply modification accounting. This new standard is effective for annual periods beginning after December 15, 2017, and interim periods within that reporting period. The Company does not expect these amendments to have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, “Receivables—Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities” related to the amortization period for certain purchased callable debt securities held at a premium. The amendments shorten the amortization period for the premium to the earliest call date. The amendment is effective for interim and annual periods beginning after December 15, 2018. The Company does not expect these amendments to have a material effect on its consolidated financial statements. In January 2017, the FASB, issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the carrying value of the goodwill. The standard is effective for us beginning January 1, 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. The new guidance is not expected to have a material impact on our results of operations and financial position. In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU is in response to diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows and provides guidance on eight specific cash flow classification issues. It will be effective for reporting periods beginning after December 15, 2017, and interim periods within that reporting period. Early adoption is permitted, including adoption in an interim period. We do not believe the adoption of this update will have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-2, “Leases”, under which lessees will recognize most leases on-balance sheet. This will generally increase reported assets and liabilities. For public entities, this ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2018. ASU 2016-2 mandates a modified retrospective transition method for all entities. While the Company is still evaluating the timing and impact of the adoption of this guidance on its consolidated financial statements, it anticipates that the adoption could result in an increase in the assets and liabilities recorded on its consolidated balance sheet. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, as amended by ASU 2015-14, “Deferral of Effective Date”, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017 including interim reporting periods within that reporting period. The provisions can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. We plan to adopt this ASU effective January 1, 2018 using the cumulative-effect adjustment method. The Company has completed the assessment of this ASU on each of our revenue streams and, based on our review of contracts, we believe the impact on our consolidated financial statements will be immaterial. For each of our products, revenue will still be recognized when title passes to the customer, generally upon shipment. Revenue for service repairs of equipment will continue to be recognized after service has been completed, and service contract revenue will be recognized ratably over the term of the contract. We are still evaluating the impact of the new revenue recognition standard on our disclosures due to the new qualitative and quantitative requirements under the standard. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Available-for-sale Securities | The following tables show our cash and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments as of December 31, 2017 and 2016: December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 4,318,229 $ - $ - $ 4,318,229 $ 4,318,229 $ - $ - Level 1: Money market funds 16,591,376 - - 16,591,376 16,591,376 - - Subtotal 16,591,376 - - 16,591,376 16,591,376 - - Level 2: Certificates of deposit 1,440,000 - (1,783 ) 1,438,217 - 1,438,217 - Commercial paper 1,198,574 - (362 ) 1,198,212 - 1,198,212 - Corporate notes/bonds 3,612,704 - (1,868 ) 3,610,836 - 3,610,836 - U.S. government agencies - - - - - - - Subtotal 6,251,278 - (4,013 ) 6,247,265 - 6,247,265 - Total $ 27,160,883 $ - $ (4,013 ) $ 27,156,870 $ 20,909,605 $ 6,247,265 $ - December 31, 2016 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash $ 3,773,790 $ - $ - $ 3,773,790 $ 3,773,790 $ - $ - Level 1: Money market funds 3,197,958 - - 3,197,958 3,197,958 - - Subtotal 3,197,958 - - 3,197,958 3,197,958 - - Level 2: Certificates of deposit 2,160,010 2,285 - 2,162,295 - 720,031 1,442,264 Commercial paper 5,984,110 - (4,100 ) 5,980,010 2,397,876 3,582,134 - Corporate notes/bonds 9,688,957 - (13,885 ) 9,675,072 - 7,273,992 2,401,080 U.S. government agencies 3,503,208 - (5,648 ) 3,497,560 - 1,996,900 1,500,660 Subtotal 21,336,285 2,285 (23,633 ) 21,314,937 2,397,876 13,573,057 5,344,004 Total $ 28,308,034 $ 2,285 $ (23,633 ) $ 28,286,685 $ 9,369,624 $ 13,573,057 $ 5,344,004 |
Inventories | Inventories consist of approximately the following: December 31, 2017 December 31, 2016 Raw materials $ 3,449,000 $ 4,483,000 Work-in-process 322,000 462,000 Finished goods 3,406,000 2,290,000 $ 7,177,000 $ 7,235,000 |
Components of Property, Plant, and Equipment | We carry property, plant and equipment, including leasehold improvements, at cost, less accumulated depreciation or fair value if acquired in a business combination, which consists of approximately the following balances: December 31, 2017 December 31, 2016 Land $ 147,000 $ 129,000 Building 674,000 588,000 Leasehold improvements 1,248,000 1,240,000 Internal use software 829,000 821,000 Equipment 4,155,000 3,203,000 $ 7,053,000 $ 5,981,000 Less accumulated depreciation and amortization (4,626,000 ) (3,866,000 ) $ 2,427,000 $ 2,115,000 |
Summary of Changes in Warranty Reserve | The following table summarizes approximate changes in our warranty reserve: December 31, 2017 December 31, 2016 Warranty reserve at beginning of period $ 127,000 $ 146,000 Warranties accrued during the period 167,000 77,000 Warranties settled during the period (141,000 ) (96,000 ) Warranty reserve at end of period $ 153,000 $ 127,000 |
Other Current Liabilities | Other current liabilities consist of approximately the following: December 31, 2017 December 31, 2016 Sales tax and VAT payable $ 579,000 $ 328,000 Note payable 214,000 - Accrued legal and accounting fees 21,000 101,000 Accrued vendor payables 142,000 190,000 Other accrued expenses 405,000 219,000 $ 1,361,000 $ 838,000 |
Anti-dilutive Securities Excluded from Diluted Loss per Common Share | Because we have had net losses, the following options and warrants outstanding and unvested restricted stock to purchase shares of our common stock were excluded from diluted net loss per common share because of their anti-dilutive effect, and therefore, basic net loss per common share equals dilutive net loss per common share: Number of options, warrants and unvested restricted stock Range of exercise prices Years ended: Twelve months December 31, 2017 3,022,582 $ 0.88 - $24.40 Twelve months December 31, 2016 2,674,000 $ 0.88 - $24.40 |
Goodwill and Other Intangible22
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Other Intangible Assets [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consisted of approximately the following at reporting dates presented below: December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Weighted Average Amortization period Gross Carrying Amount Accumulated Amortization Weighted Average Amortization period Developed technology $ 6,200,000 $ 2,436,000 4.25 $ 6,200,000 $ 1,550,000 5.25 Patents & trademarks 5,653,000 5,634,000 7.25 5,653,000 5,616,000 8.25 Trademarks and trade names 190,000 84,000 7.25 190,000 75,000 8.25 Customer relationships 7,540,000 4,067,000 2.27 7,270,000 2,590,000 3.25 19,583,000 $ 12,221,000 19,313,000 $ 9,831,000 Accumulated amortization 12,221,000 9,831,000 Net book value of amortizable intangible assets $ 7,362,000 3.22 $ 9,482,000 4.23 |
Estimated Amortization Expense for all Intangible Assets | Estimated amortization expense for all intangible assets for the five years subsequent to December 31, 2017 is as follows: Year ending December 31, 2018 $ 2,437,000 2019 2,431,000 2020 1,307,000 2021 894,000 2022 230,000 Thereafter 63,000 Total $ 7,362,000 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Purchase Price Allocated to Net Tangible and Intangible Assets | The final allocation is approximately as follows: Cash and cash equivalents $ 104,373 Accounts receivable 811,034 Inventory 202,410 Property, plant and equipment 172,242 Customer relationships 268,000 Goodwill 400,870 Total assets acquired $ 1,958,929 Accounts payable $ 1,001,885 Deferred tax liability 50,920 Total liabilities assumed $ 1,052,805 Total Purchase Price $ 906,124 |
Recognition of Identifiable Intangible Asset | The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of the following identifiable intangible asset: Amount Weighted Average Life-Years Customer relationships $ 268,000 3 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders' Equity [Abstract] | |
Weighted-average Assumptions used to Value the Options Granted | We used the following weighted-average assumptions to value the options granted during the years ended December 31, 2017 and 2016, respectively: December 31, 2017 December 31, 2016 Expected life, in years 3.00 3.90 Risk-free interest rate 1.45 % .98 % Expected volatility 66.89 % 61.86 % Expected dividend yield 0 % 0 % |
Stock Option Activity | The following table summarizes the activity related to our stock options for the years ended December 31, 2017 and 2016, respectively: Number of shares Weighted average exercise price Weighted average grant date fair value Aggregate intrinsic value Weighted average remaining life in years Balance at December 31, 2015 2,573,640 $ 4.46 - 5.24 Options granted 692,400 1.05 $ 0.49 Options exercised - Options surrendered (1,585,050 ) 3.90 Balance at December 31, 2016 1,680,990 $ 3.54 $ 752,290 6.55 Options granted 1,042,809 1.65 $ 0.74 Options exercised (7,211 ) 1.35 $ 13,001 Options surrendered (170,625 ) 4.36 Balance at December 31, 2017 2,545,963 $ 2.72 $ 3,243,914 6.13 Options exercisable at December 31, 2017 1,031,731 $ 4.55 $ 705,799 3.39 |
Restricted Shares Activity | The following table summarizes the activity related to our restricted stock for the years ended December 31, 2017 and 2016, respectively: Number of Shares Weighted average grant date fair value Weighted average remaining life in years Aggregate intrinsic value Balance at December 31, 2015 686,910 $ 2.41 1.59 $ 886,114 Shares granted 937,858 1.18 Shares vested (324,521 ) 2.19 652,287 Shares surrendered (307,699 ) 2.45 Balance at December 31, 2016 992,548 $ 1.30 1.35 $ 1,995,021 Shares granted 542,541 1.67 Shares vested (988,097 ) 1.48 $ 3,112,506 Shares surrendered (70,373 ) 1.56 Balance at December 31, 2017 476,619 $ 1.32 1.93 $ 1,501,350 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Lease Payments in Subsequent Fiscal Years Under Noncancelable Operating Leases | At December 31, 2017, the approximate future minimum lease payments in subsequent years under noncancelable operating leases with an initial term in excess of one year are as follows: 2018 $ 817,000 2019 430,000 2020 279,000 2021 254,000 2022 164,000 Thereafter 544,000 $ 2,488,000 |
Future Minimum Purchase Agreement Payments in Subsequent Years | At December 31, 2017, the approximate future minimum purchase agreement payments in subsequent years are as follows: 2018 $ - 2019 300,000 2020 600,000 2021 900,000 2022 1,200,000 Thereafter 1,500,000 $ 4,500,000 |
Savings and Retirement Plans (T
Savings and Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of Pension Plan Assets | The allocation of pension plan assets was as follows: December 31, 2017 December 31, 2016 Target Allocation Actual Allocation Target Allocation Actual Allocation Other Contract (Netherlands Plan) 100 % 100 % 100 % 100 % Deposit Administration Contract (U.K. Plan) 100 % 100 % 100 % 100 % |
Fair value of Pension Plan Assets | The fair value of the pension plan assets by asset class is as follows: Asset Class Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 Other Contract (Netherlands Plan) $ 3,946,000 $ - $ - $ 3,946,000 Deposit Administration Contract (U.K. Plan) 800,000 - 800,000 - December 31, 2016 Other Contract (Netherlands Plan) $ 3,321,000 $ (5,000 ) $ - $ 3,326,000 Deposit Administration Contract (U.K. Plan) 616,000 - 616,000 - |
Reconciliation of Beginning and Ending Balances for Level 3 Assets | The reconciliation of beginning and ending balances for our Level 3 assets is as follows: Other Contract (Netherlands Pension Plan Assets) Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Beginning balance $ 3,326,000 $ 3,005,000 Loss recognized in earnings 59,000 54,000 Actuarial loss (26,000 ) 291,000 Purchases 141,000 130,000 Sales (21,000 ) (21,000 ) Transfers (5,000 ) (3,000 ) Foreign currency translation 472,000 (130,000 ) Ending balance $ 3,946,000 $ 3,326,000 |
The Netherlands Defined Benefit Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit Payments in Subsequent Fiscal Years | At December 31, 2017, we project the following benefit payments in subsequent years: 2018 $ 23,000 2019 24,000 2020 24,000 2021 31,000 2022 39,000 2023 to 2027 262,000 $ 403,000 |
Summary of the Changes in Benefit Obligations and the Change in Plan Assets | The following table summarizes the change in benefit obligations and the change in plan assets: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Changes in benefit obligations: Projected benefit obligation, beginning of period $ 3,510,000 $ 3,665,000 Service cost 95,000 104,000 Interest cost 75,000 76,000 Benefits paid (21,000 ) (21,000 ) Plan amendment - (658,000 ) Actuarial loss (gain) (8,000 ) 474,000 Foreign currency translation 498,000 (130,000 ) Projected benefit obligation, end of period $ 4,149,000 $ 3,510,000 Changes in plan assets: Plan assets, beginning of period $ 3,321,000 $ 3,002,000 Contributions to plan 141,000 125,000 Management cost (14,000 ) (12,000 ) Actual return on assets 47,000 357,000 Benefits paid (21,000 ) (21,000 ) Foreign currency translation 472,000 (130,000 ) Plan assets, end of period $ 3,946,000 $ 3,321,000 |
Amount Recognized in Other Comprehensive Loss | The amount recognized in other comprehensive loss consists of: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Unrecognized net prior service benefit $ (892,000 ) $ (870,000 ) Unrecognized net losses 865,000 779,000 Additional other comprehensive gain (gross of income taxes) $ (27,000 ) $ (91,000 ) |
Projected Benefit Obligation, Accumulated Benefit Obligations and the Fair Value Plan Assets | The projected benefit obligation, accumulated benefit obligation and the fair value of plan assets were as follows: December 31, 2017 December 31, 2016 Projected benefit obligation $ 4,149,000 $ 3,510,000 Accumulated benefit obligation 4,005,000 3,376,000 Fair value of plan assets 3,946,000 3,321,000 |
Components of Benefit Costs for Defined Benefit Retirement Plans | The cost of our defined benefit retirement plan includes the following components: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Gross service cost, net of employee contribution $ 84,000 $ 99,000 Interest cost 75,000 76,000 Management cost 13,000 5,000 Expected return on assets (74,000 ) (66,000 ) Amortization (54,000 ) (30,000 ) Net periodic retirement cost $ 44,000 $ 84,000 |
Major Assumptions Used in Calculations | Major assumptions used in the above calculations include: December 31, 2017 December 31, 2016 Discount rate 2.00 % 2.00 % Expected return on assets 2.00 % 2.00 % Expected rate of increase in future compensation: General 2.5 % 2.5 % Individual 0 % 0 % |
The U.K. Defined Benefit Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit Payments in Subsequent Fiscal Years | At December 31, 2017 we project the following benefit payments in subsequent years: 2018 $ 194,000 2019 - 2020 - 2021 - 2022 - 2023 to 2027 714,000 $ 908,000 |
Summary of the Changes in Benefit Obligations and the Change in Plan Assets | The following table summarizes the change in benefit obligations and the change in plan assets: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Changes in benefit obligations: Projected benefit obligation, beginning of period $ 736,000 $ 744,000 Service cost 4,000 4,000 Interest cost 20,000 26,000 Benefits paid - (96,000 ) Other (4,000 ) (4,000 ) Actuarial loss 34,000 197,000 Foreign currency translation 72,000 (135,000 ) Projected benefit obligation, end of period $ 862,000 $ 736,000 Changes in plan assets: Plan assets, beginning of period $ 616,000 $ 775,000 Contributions to plan 57,000 53,000 Management cost (4,000 ) (4,000 ) Benefits Paid - (96,000 ) Actual return on assets 68,000 15,000 Foreign currency translation 63,000 (127,000 ) Plan assets, end of period $ 800,000 $ 616,000 |
Amount Recognized in Other Comprehensive Loss | The amount recognized in other comprehensive loss consists of: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Unrecognized net losses (gross of deferred taxes) $ 225,000 $ 276,000 |
Projected Benefit Obligation, Accumulated Benefit Obligations and the Fair Value Plan Assets | The projected benefit obligation, accumulated benefit obligation and the fair value plan assets were as follows: December 31, 2017 December 31, 2016 Projected benefit obligation $ 862,000 $ 736,000 Accumulated benefit obligation 862,000 736,000 Fair value of plan assets 800,000 616,000 |
Components of Benefit Costs for Defined Benefit Retirement Plans | The cost of our defined benefit retirement plan includes the following components for the years ended: Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Gross service cost, net of employee contribution $ 4,000 $ 5,000 Interest cost 20,000 26,000 Expected return on assets (14,000 ) (21,000 ) Amortization 53,000 7,000 Net periodic retirement cost $ 63,000 $ 17,000 |
Major Assumptions Used in Calculations | Major assumptions used in the above calculations include: December 31, 2017 December 31, 2016 Discount rate 2.50 % 2.70 % Expected return on assets 2.13 % 2.20 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Components of Income Tax Expense | The components of income tax expense consist of the following: Twelve months ended Twelve months ended Income tax provision: Current: Federal and state $ 13,000 $ 91,000 Foreign 118,000 49,000 Deferred: Federal and state - - Foreign 7,000 5,000 Total income tax expense $ 138,000 $ 145,000 |
Income Tax Expense Differs from Statutory Federal Income Tax Benefit | Actual income tax expense differs from statutory federal income tax benefit for the period presented is as follows: Twelve months ended Twelve months ended Statutory federal income tax benefit $ (246,000 ) $ (7,462,000 ) State tax benefit, net of federal taxes 13,000 (55,000 ) Foreign tax (82,000 ) (39,000 ) Nondeductible expenses - debt forgiveness - 5,575,000 Nondeductible expenses – other 130,000 163,000 Subpart F Income - 51,000 Valuation allowance (decrease) (2,795,000 ) (7,334,000 ) Stock compensation shortfall (windfall) (94,000 ) 96,000 Stock compensation true-up and expirations 10,000 958,000 NOL expiration and true-up 204,000 8,110,000 Deferral rate change 3,313,000 - True-up of undistributed foreign earnings (317,000 ) - Other 2,000 80,000 Total income tax expense $ 138,000 $ 143,000 |
Deferred Tax Assets (Liabilities) | Deferred tax assets (liabilities) consist of approximately the following: December 31, 2017 December 31, 2016 Fixed assets $ 29,000 $ (51,000 ) Intangible assets (1,806,000 ) (3,479,000 ) Equity method investment 33,000 - Pension liability 69,000 76,000 Stock based compensation 446,000 535,000 Inventory 128,000 483,000 Other reserves and accruals 524,000 778,000 Deferred rent 165,000 250,000 Undistributed foreign earnings - (504,000 ) Foreign tax credits 68,000 68,000 Credit carryforwards 88,000 72,000 Net operating losses 7,000,000 11,230,000 Customer relations intangible (44,000 ) - 6,700,000 9,458,000 Less valuation allowance (6,587,000 ) (9,382,000 ) $ 113,000 $ 76,000 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Segment Information [Abstract] | |
Financial Information Regarding Revenue and Operating Income | Financial information regarding revenue and operating income (loss) by segment for the twelve months ended December 31, 2017 and 2016, respectively, is approximately as follows: Segment Revenue December 31, 2017 December 31, 2016 Urology 49,314,000 44,747,000 Airway Management 3,277,000 3,208,000 Industrial 3,725,000 3,896,000 Total 56,316,000 51,851,000 Operating Income (Loss) December 31, 2017 December 31, 2016 Urology 281,000 1,111,000 Airway Management (988,000 ) (940,000 ) Industrial (182,000 ) 240,000 Total (889,000 ) (1,811,000 ) |
Sales to Customers and Long-lived Assets by Geographic Area | Information regarding geographic area net sales to customers for the twelve months ended December 31, 2017 and 2016, respectively is approximately as follows: United States All Other (Foreign) Countries (1) Consolidated Twelve months ended December 31, 2017 $ 40,888,000 $ 15,428,000 $ 56,316,000 Twelve months ended December 31, 2016 $ 39,513,000 $ 12,338,000 $ 51,851,000 (1) No other (foreign) country accounts for 10% or more of the consolidated net sales Information regarding geographic area long-lived assets at December 31, 2017 and 2016, respectively is approximately as follows: United States United Kingdom and The Netherlands Consolidated December 31, 2017 $ 1,793,000 $ 634,000 $ 2,427,000 December 31, 2016 $ 1,676,000 $ 439,000 $ 2,115,000 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies, Nature of Business Through Advertising Expenses (Details) Adult in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)Adult | Dec. 31, 2016USD ($) | |
Nature of Business [Abstract] | ||
Number of adults affected by OAB | Adult | 42 | |
Advertising Expenses [Abstract] | ||
Advertising expense | $ 360,000 | $ 363,000 |
Accelmed [Member] | ||
Change in Control [Abstract] | ||
Ownership percentage | 27.00% | |
Limit of indebtedness without prior approval | $ 10,000,000 | |
Mr. Lewis C. Pell [Member] | ||
Change in Control [Abstract] | ||
Ownership percentage | 33.00% | |
Maximum [Member] | ||
Revenue Recognition [Abstract] | ||
Number of days for receipt of payment of good sold | 120 days |
Summary of Significant Accoun30
Summary of Significant Accounting Policies, Fair Value of Financial Instruments Through Inventories (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017Segment | Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | Segment | 1 | 3 | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | $ 27,160,883 | $ 28,308,034 | ||
Unrealized Gains | 0 | 2,285 | ||
Unrealized Losses | (4,013) | (23,633) | ||
Fair Value | 27,156,870 | 28,286,685 | ||
Cash and Cash Equivalents | 20,909,605 | 9,369,624 | ||
Short-Term Investments | 6,247,265 | 13,573,057 | ||
Long-Term Investments | 0 | 5,344,004 | ||
Cash, Cash Equivalents and Marketable Securities [Abstract] | ||||
Cash and cash equivalents | 20,909,605 | 9,369,624 | $ 1,976,594 | |
Cash and cash equivalents held in foreign bank accounts | 879,000 | 507,000 | ||
Accounts Receivable [Abstract] | ||||
Allowance for doubtful accounts | 87,000 | 34,000 | ||
Inventories [Abstract] | ||||
Raw materials | 3,449,000 | 4,483,000 | ||
Work-in-process | 322,000 | 462,000 | ||
Finished goods | 3,406,000 | 2,290,000 | ||
Inventories | $ 7,176,695 | 7,235,043 | ||
Minimum [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 20.00% | |||
Maximum [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 50.00% | |||
Cash [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | $ 4,318,229 | 3,773,790 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 0 | 0 | ||
Fair Value | 4,318,229 | 3,773,790 | ||
Cash and Cash Equivalents | 4,318,229 | 3,773,790 | ||
Short-Term Investments | 0 | 0 | ||
Long-Term Investments | 0 | 0 | ||
Level 1 [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 16,591,376 | 3,197,958 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 0 | 0 | ||
Fair Value | 16,591,376 | 3,197,958 | ||
Cash and Cash Equivalents | 16,591,376 | 3,197,958 | ||
Short-Term Investments | 0 | 0 | ||
Long-Term Investments | 0 | 0 | ||
Level 1 [Member] | Money Market Funds [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 16,591,376 | 3,197,958 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 0 | 0 | ||
Fair Value | 16,591,376 | 3,197,958 | ||
Cash and Cash Equivalents | 16,591,376 | 3,197,958 | ||
Short-Term Investments | 0 | 0 | ||
Long-Term Investments | 0 | 0 | ||
Level 2 [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 6,251,278 | 21,336,285 | ||
Unrealized Gains | 0 | 2,285 | ||
Unrealized Losses | (4,013) | (23,633) | ||
Fair Value | 6,247,265 | 21,314,937 | ||
Cash and Cash Equivalents | 0 | 2,397,876 | ||
Short-Term Investments | 6,247,265 | 13,573,057 | ||
Long-Term Investments | 0 | 5,344,004 | ||
Level 2 [Member] | Certificates of Deposit [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 1,440,000 | 2,160,010 | ||
Unrealized Gains | 0 | 2,285 | ||
Unrealized Losses | (1,783) | 0 | ||
Fair Value | 1,438,217 | 2,162,295 | ||
Cash and Cash Equivalents | 0 | 0 | ||
Short-Term Investments | 1,438,217 | 720,031 | ||
Long-Term Investments | 0 | 1,442,264 | ||
Level 2 [Member] | Commercial Paper [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 1,198,574 | 5,984,110 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (362) | (4,100) | ||
Fair Value | 1,198,212 | 5,980,010 | ||
Cash and Cash Equivalents | 0 | 2,397,876 | ||
Short-Term Investments | 1,198,212 | 3,582,134 | ||
Long-Term Investments | 0 | 0 | ||
Level 2 [Member] | Corporate Notes/Bonds [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 3,612,704 | 9,688,957 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | (1,868) | (13,885) | ||
Fair Value | 3,610,836 | 9,675,072 | ||
Cash and Cash Equivalents | 0 | 0 | ||
Short-Term Investments | 3,610,836 | 7,273,992 | ||
Long-Term Investments | 0 | 2,401,080 | ||
Level 2 [Member] | U.S. Government Agencies [Member] | ||||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||
Adjusted Cost | 0 | 3,503,208 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 0 | (5,648) | ||
Fair Value | 0 | 3,497,560 | ||
Cash and Cash Equivalents | 0 | 0 | ||
Short-Term Investments | 0 | 1,996,900 | ||
Long-Term Investments | $ 0 | $ 1,500,660 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies, Property Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 7,053,000 | $ 5,981,000 |
Less accumulated depreciation and amortization | (4,626,000) | (3,866,000) |
Property, plant and equipment, net | $ 2,427,479 | 2,115,316 |
Equipment transferred from inventory to machinery and equipment, deprecation period | 3 years | |
Depreciation and amortization expense | $ 777,000 | 778,000 |
Land [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, gross | 147,000 | 129,000 |
Building [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 674,000 | 588,000 |
Property, plant and equipment, useful life | 40 years | |
Leasehold Improvements [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 1,248,000 | 1,240,000 |
Internal Use Software [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, gross | 829,000 | 821,000 |
Equipment [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 4,155,000 | $ 3,203,000 |
Equipment [Member] | Minimum [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, useful life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Components of property, plant, and equipment [Abstract] | ||
Property, plant and equipment, useful life | 7 years |
Summary of Significant Accoun32
Summary of Significant Accounting Policies, Goodwill Through Foreign Currency Translation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Abstract] | ||
Goodwill impairment loss | $ 0 | $ 0 |
Impairment of Long Lived Assets [Abstract] | ||
Impairment of long-lived assets | $ 0 | 0 |
Product Warranty [Abstract] | ||
Period of service of the product after the date of sale | 12 months | |
Warranty Reserve [Abstract] | ||
Warranty reserve at beginning of period | $ 127,000 | 146,000 |
Warranties accrued during the period | 167,000 | 77,000 |
Warranties settled during the period | (141,000) | (96,000) |
Warranty reserve at end of period | 153,000 | 127,000 |
Other Current Liabilities [Abstract] | ||
Sales tax and VAT payable | 579,000 | 328,000 |
Note payable | 214,000 | 0 |
Accrued legal and accounting fees | 21,000 | 101,000 |
Accrued vendor payables | 142,000 | 190,000 |
Other accrued expenses | 405,000 | 219,000 |
Total other liabilities | 1,360,743 | 838,272 |
Foreign Currency Translation [Abstract] | ||
Foreign currency exchange gain (loss) | $ 48,479 | $ (25,022) |
Summary of Significant Accoun33
Summary of Significant Accounting Policies, Basic and Diluted Net Loss Per Share (Details) - Options, Warrants and Unvested Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive shares excluded from computation of diluted loss per common share (in shares) | 3,022,582 | 2,674,000 |
Range of exercise prices - lower range limit (in dollars per share) | $ 0.88 | $ 0.88 |
Range of exercise prices - upper range limit (in dollars per share) | $ 24.40 | $ 24.40 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets (Details) - USD ($) | Jul. 25, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 19,583,000 | $ 19,313,000 | |
Accumulated amortization | $ 12,221,000 | $ 9,831,000 | |
Weighted average amortization period | 3 years 2 months 19 days | 4 years 2 months 23 days | |
Net book value of amortizable intangible assets | $ 7,362,000 | $ 9,482,000 | |
Goodwill | 19,153,554 | 18,749,888 | |
Amortization of intangible assets | 2,389,743 | 2,363,432 | |
Estimated amortization expense for all intangible assets [Abstract] | |||
2,018 | 2,437,000 | ||
2,019 | 2,431,000 | ||
2,020 | 1,307,000 | ||
2,021 | 894,000 | ||
2,022 | 230,000 | ||
Thereafter | 63,000 | ||
Developed Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 6,200,000 | 6,200,000 | |
Accumulated amortization | $ 2,436,000 | $ 1,550,000 | |
Weighted average amortization period | 4 years 3 months | 5 years 3 months | |
Patents & Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 5,653,000 | $ 5,653,000 | |
Accumulated amortization | $ 5,634,000 | $ 5,616,000 | |
Weighted average amortization period | 7 years 3 months | 8 years 3 months | |
Trademarks and Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 190,000 | $ 190,000 | |
Accumulated amortization | $ 84,000 | $ 75,000 | |
Weighted average amortization period | 7 years 3 months | 8 years 3 months | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 7,540,000 | $ 7,270,000 | |
Accumulated amortization | $ 4,067,000 | $ 2,590,000 | |
Weighted average amortization period | 2 years 3 months 7 days | 3 years 3 months | |
Genesis [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 400,870 | $ 400,000 | |
Genesis [Member] | Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 3 years |
Convertible Debt - Related Pa35
Convertible Debt - Related Party (Details) - USD ($) | Nov. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Convertible Debt - Related Party [Abstract] | |||
Outstanding principal amount | $ 28,490,000 | ||
Accrued interest | $ 1,000,000 | ||
Debt conversion, converted shares (in shares) | 17,688,423 | ||
Debt conversion price (in dollars per share) | $ 1.67 | ||
Debt conversion expense | $ 0 | $ 18,841,407 | |
Face value of debt | $ 5,960,000 | ||
Effective interest rate | 4.72% |
Business Combination (Details)
Business Combination (Details) | Jul. 25, 2017USD ($)$ / £ | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||
Cash paid to acquire business, net of cash acquired | $ 181,261 | $ 0 | |
Assets Acquired [Abstract] | |||
Goodwill | $ 19,153,554 | $ 18,749,888 | |
Recognition of Intangible Asset [Abstract] | |||
Customer relationships, Weighted Average Life-Years | 3 years 2 months 19 days | 4 years 2 months 23 days | |
Developed Technology [Member] | |||
Recognition of Intangible Asset [Abstract] | |||
Customer relationships, Weighted Average Life-Years | 4 years 3 months | 5 years 3 months | |
Customer Relationships [Member] | |||
Recognition of Intangible Asset [Abstract] | |||
Customer relationships, Weighted Average Life-Years | 2 years 3 months 7 days | 3 years 3 months | |
Uroplasty Inc [Member] | |||
Business Acquisition [Line Items] | |||
Ownership percentage | 100.00% | ||
Genesis Medical Holdings, Ltd [Member] | |||
Business Acquisition [Line Items] | |||
Upfront payment fee | $ 280,000 | ||
Purchase price of ongoing business | $ 556,000 | ||
Percentage of revenue paid on monthly basis | 5.00% | ||
Expected revenue of acquired company | $ 4,700,000 | ||
Additional payment on achievement of expected revenue | 134,000 | ||
Note payable and contingent consideration discounted to net present value | $ 618,000 | ||
Exchange rate | $ / £ | 1.34 | ||
Cash paid to acquire business, net of cash acquired | $ 181,000 | ||
Assets Acquired [Abstract] | |||
Cash and cash equivalents | 104,373 | ||
Accounts receivable | 811,034 | ||
Inventory | 202,410 | ||
Property, plant and equipment | 172,242 | ||
Customer relationships | 268,000 | ||
Goodwill | 400,870 | $ 400,000 | |
Total assets acquired | 1,958,929 | ||
Liabilities Assumed [Abstract] | |||
Accounts payable | 1,001,885 | ||
Deferred tax liability | 50,920 | ||
Total liabilities assumed | 1,052,805 | ||
Total purchase price | 906,124 | ||
Recognition of Intangible Asset [Abstract] | |||
Customer relationships, Amount | 268,000 | ||
Genesis Medical Holdings, Ltd [Member] | General and Administrative Expense [Member] | |||
Business Acquisition [Line Items] | |||
Legal cost related to acquisition | $ 90,000 | ||
Genesis Medical Holdings, Ltd [Member] | Customer Relationships [Member] | |||
Assets Acquired [Abstract] | |||
Customer relationships | 268,000 | ||
Recognition of Intangible Asset [Abstract] | |||
Customer relationships, Amount | $ 268,000 | ||
Customer relationships, Weighted Average Life-Years | 3 years |
Shareholders' Equity, Securitie
Shareholders' Equity, Securities Purchase Agreement and Share-based Compensation (Details) | Nov. 03, 2016USD ($)$ / sharesshares | Dec. 31, 2017USD ($)Plan$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares |
Securities Purchase Agreement [Abstract] | ||||
Common stock issued (in shares) | 60,905,666 | 60,436,548 | ||
Net proceeds from common stock issuance | $ | $ 0 | $ 23,428,900 | ||
Accelmed [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Common stock issued (in shares) | 16,129,033 | |||
Common stock issued price (in dollars per share) | $ / shares | $ 1.55 | |||
Gross proceeds from common stock issuance | $ | $ 25,000,000 | |||
Net proceeds from common stock issuance | $ | 23,429,000 | |||
Common stock issuance expense | $ | $ 1,571,000 | |||
Stock Options [Member] | ||||
Weighted-average assumptions used to value the options granted [Abstract] | ||||
Expected life, in years | 3 years | 3 years 10 months 24 days | ||
Risk-free interest rate | 1.45% | 0.98% | ||
Expected volatility | 66.89% | 61.86% | ||
Expected dividend yield | 0.00% | 0.00% | ||
Stock options, number of shares [Roll Forward] | ||||
Outstanding, beginning of period (in shares) | 1,680,990 | 2,573,640 | ||
Options granted (in shares) | 1,042,809 | 692,400 | ||
Options exercised (in shares) | (7,211) | 0 | ||
Options surrendered (in shares) | (170,625) | (1,585,050) | ||
Outstanding, end of period (in shares) | 2,545,963 | 1,680,990 | 2,573,640 | |
Exercisable, end of period (in shares) | 1,031,731 | |||
Stock options, weighted average exercise price [Roll Forward] | ||||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 3.54 | $ 4.46 | ||
Options granted (in dollars per share) | $ / shares | 1.65 | 1.05 | ||
Options exercised (in dollars per share) | $ / shares | 1.35 | |||
Options surrendered (in dollars per share) | $ / shares | 4.36 | 3.90 | ||
Outstanding, end of period (in dollars per share) | $ / shares | 2.72 | 3.54 | $ 4.46 | |
Exercisable, end of period (in dollars per share) | $ / shares | 4.55 | |||
Stock options, additional disclosures [Abstract] | ||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 0.74 | $ 0.49 | ||
Outstanding, Aggregate intrinsic value, beginning of period | $ | $ 752,290 | $ 0 | ||
Exercised, Aggregate intrinsic value | $ | 13,001 | |||
Outstanding, Aggregate intrinsic value, end of period | $ | 3,243,914 | $ 752,290 | $ 0 | |
Exercisable, Aggregate intrinsic value, end of period | $ | $ 705,799 | |||
Outstanding, Weighted average remaining life in years | 6 years 1 month 17 days | 6 years 6 months 18 days | 5 years 2 months 26 days | |
Options exercisable, Weighted average remaining life in years | 3 years 4 months 20 days | |||
Stock Options [Member] | Executive Employees and Directors [Member] | ||||
Weighted-average assumptions used to value the options granted [Abstract] | ||||
Forfeiture rate | 15.00% | |||
Stock Options [Member] | Non-Executive Employees [Member] | ||||
Weighted-average assumptions used to value the options granted [Abstract] | ||||
Forfeiture rate | 20.00% | |||
2015 Plan [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Number of active plans for share-based compensation grants | Plan | 1 | |||
Number of shares reserved for share-based grants (in shares) | 2,500,000 | |||
Shares remain available for grant (in shares) | 139,738 | |||
Vesting period | 2 years | |||
2015 Plan [Member] | Stock Options [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Vesting period | 3 years | |||
Stock options, number of shares [Roll Forward] | ||||
Outstanding, end of period (in shares) | 2,545,963 | |||
2015 Plan [Member] | Stock Options [Member] | Minimum [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Term of share-based payment award | 7 years | |||
2015 Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Term of share-based payment award | 10 years |
Shareholders' Equity, Restricte
Shareholders' Equity, Restricted Shares, Stock Warrants-Related Party and Long-Term Incentive Plan and Awards (Details) - USD ($) | 12 Months Ended | 21 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted shares warrants, additional disclosures [Abstract] | |||
Proceeds from exercise of stock options | $ 9,713 | $ 0 | |
Share-based compensation expense | 1,453,000 | 748,000 | |
Stock Options [Member] | |||
Restricted shares warrants, additional disclosures [Abstract] | |||
Fair value of stock options vested | 223,000 | 276,000 | |
Proceeds from exercise of stock options | 0 | ||
Unrecognized share-based compensation expense | $ 768,000 | $ 344,000 | |
Unrecognized compensation expense, weighted average period of recognition | 2 years 1 month 24 days | 2 years 18 days | |
Restricted Stock [Member] | |||
Restricted shares and warrants, number of shares [Roll Forward] | |||
Balance, beginning of period (in shares) | 992,548 | 686,910 | |
Shares granted (in shares) | 542,541 | 937,858 | |
Shares vested (in shares) | (988,097) | (324,521) | |
Shares surrendered (in shares) | (70,373) | (307,699) | |
Balance, end of period (in shares) | 476,619 | 992,548 | 686,910 |
Restricted shares, weighted average grant date fair value [Roll Forward] | |||
Balance, beginning of period (in dollars per share) | $ 1.30 | $ 2.41 | |
Shares granted (in dollars per share) | 1.67 | 1.18 | |
Shares vested (in dollars per share) | 1.48 | 2.19 | |
Shares surrendered (in dollars per share) | 1.56 | 2.45 | |
Balance, end of period (in dollars per share) | $ 1.32 | $ 1.30 | $ 2.41 |
Restricted shares warrants, additional disclosures [Abstract] | |||
Weighted average remaining life in years, Balance | 1 year 11 months 5 days | 1 year 4 months 6 days | 1 year 7 months 2 days |
Aggregate intrinsic value, Balance | $ 1,995,021 | $ 886,114 | |
Shares vested, Aggregate intrinsic value | 3,112,506 | 652,287 | |
Aggregate intrinsic value, Balance | 1,501,350 | 1,995,021 | $ 886,114 |
Unrecognized share-based compensation expense | $ 462,000 | $ 743,000 | |
Unrecognized compensation expense, weighted average period of recognition | 1 year 11 months 5 days | 1 year 3 months 4 days | |
Restricted Stock [Member] | Minimum [Member] | |||
Restricted shares warrants, additional disclosures [Abstract] | |||
Vesting period | 6 months | ||
Restricted Stock [Member] | Maximum [Member] | |||
Restricted shares warrants, additional disclosures [Abstract] | |||
Vesting period | 3 years |
Line of Credit (Details)
Line of Credit (Details) - Revolving Credit Facility [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Sep. 18, 2015 | |
Line of Credit Facility [Line Items] | ||
Borrowing capacity percentage based on value of eligible accounts receivable | 80.00% | |
Borrowing capacity percentage based on value of eligible inventory | 40.00% | |
Notes principal balance outstanding cap value | $ 2,500,000 | |
Line of credit facility available borrowing | 6,409,000 | |
Amount borrowed under credit facility | $ 0 | |
Variable interest rate per annum | 1.25% | |
Line of credit interest rate | 5.25% | |
Line of credit interest rate increase | 6.00% | |
Line of credit non-usage fee | 0.15% | |
Venture Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility amount | $ 7,000,000 |
Commitments and Contingencies40
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments in subsequent fiscal years under noncancelable operating leases [Abstract] | ||
2,018 | $ 817,000 | |
2,019 | 430,000 | |
2,020 | 279,000 | |
2,021 | 254,000 | |
2,022 | 164,000 | |
Thereafter | 544,000 | |
Total future minimum lease payments | 2,488,000 | |
Total operating lease expenses | 734,000 | $ 695,000 |
Future minimum purchase agreement payments in subsequent years [Abstract] | ||
2,018 | 0 | |
2,019 | 300,000 | |
2,020 | 600,000 | |
2,021 | 900,000 | |
2,022 | 1,200,000 | |
Thereafter | 1,500,000 | |
Total future minimum purchase agreement payments | 4,500,000 | |
Product Liability [Abstract] | ||
Product liability insurance coverage | $ 10,000,000 |
Savings and Retirement Plans (D
Savings and Retirement Plans (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Cumulative gains losses as percentage of benefit obligations or plan assets | 10.00% | |||
Deposit Administration Contract [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | $ 616,000 | |||
Plan assets, end of period | 800,000 | $ 616,000 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 616,000 | 616,000 | $ 800,000 | $ 616,000 |
Allocation of pension plan assets [Abstract] | ||||
Target Allocation | 100.00% | 100.00% | ||
Actual Allocation | 100.00% | 100.00% | ||
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 616,000 | 616,000 | $ 800,000 | $ 616,000 |
Deposit Administration Contract [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 0 | |||
Plan assets, end of period | 0 | 0 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | 0 | 0 |
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 0 | 0 | 0 | 0 |
Deposit Administration Contract [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 616,000 | |||
Plan assets, end of period | 800,000 | 616,000 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 616,000 | 616,000 | 800,000 | 616,000 |
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 616,000 | 616,000 | 800,000 | 616,000 |
Deposit Administration Contract [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 0 | |||
Plan assets, end of period | 0 | 0 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | 0 | 0 |
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 0 | 0 | 0 | 0 |
Other Contracts [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 3,321,000 | |||
Plan assets, end of period | 3,946,000 | 3,321,000 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 3,946,000 | 3,321,000 | $ 3,946,000 | $ 3,321,000 |
Allocation of pension plan assets [Abstract] | ||||
Target Allocation | 100.00% | 100.00% | ||
Actual Allocation | 100.00% | 100.00% | ||
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 3,946,000 | 3,321,000 | $ 3,946,000 | $ 3,321,000 |
Reconciliation of beginning and ending balances for Level 3 assets [Roll Forward] | ||||
Beginning balance | 3,326,000 | 3,005,000 | ||
Loss recognized in earnings | 59,000 | 54,000 | ||
Actuarial loss | (26,000) | 291,000 | ||
Purchases | 141,000 | 130,000 | ||
Sales | (21,000) | (21,000) | ||
Transfers | (5,000) | (3,000) | ||
Foreign currency translation | 472,000 | (130,000) | ||
Ending balance | 3,946,000 | 3,326,000 | ||
Other Contracts [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | (5,000) | |||
Plan assets, end of period | 0 | (5,000) | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | (5,000) | (5,000) | 0 | (5,000) |
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | (5,000) | (5,000) | 0 | (5,000) |
Other Contracts [Member] | Significant Observable Inputs (Level 2) [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 0 | |||
Plan assets, end of period | 0 | 0 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | 0 | 0 |
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 0 | 0 | 0 | 0 |
Other Contracts [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 3,326,000 | |||
Plan assets, end of period | 3,946,000 | 3,326,000 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Fair value of plan assets | 3,326,000 | 3,326,000 | 3,946,000 | 3,326,000 |
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | 3,326,000 | 3,326,000 | 3,946,000 | 3,326,000 |
The U.S. Defined Contribution Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer discretionary contribution amount to U.S. plan | 585,000 | 438,000 | ||
The Netherlands and U.K. Defined Contribution Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total contribution expense associated with the plan | 55,000 | 38,000 | ||
The Netherlands Defined Benefit Pension Plan [Member] | ||||
Benefit payments in subsequent fiscal years [Abstract] | ||||
2,018 | 23,000 | |||
2,019 | 24,000 | |||
2,020 | 24,000 | |||
2,021 | 31,000 | |||
2,022 | 39,000 | |||
2023 to 2027 | 262,000 | |||
Total benefit payments | 403,000 | |||
Contributions by employer in next fiscal year | 140,000 | |||
Changes in benefit obligations [Roll Forward] | ||||
Projected benefit obligation, beginning of period | 3,510,000 | 3,665,000 | ||
Service cost | 95,000 | 104,000 | ||
Interest cost | 75,000 | 76,000 | ||
Benefits paid | (21,000) | (21,000) | ||
Plan amendment | 0 | (658,000) | ||
Actuarial loss (gain) | (8,000) | 474,000 | ||
Foreign currency translation | 498,000 | (130,000) | ||
Projected benefit obligation, end of period | 4,149,000 | 3,510,000 | ||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 3,321,000 | 3,002,000 | ||
Contributions to plan | 141,000 | 125,000 | ||
Management cost | (14,000) | (12,000) | ||
Actual return on assets | 47,000 | 357,000 | ||
Benefits paid | (21,000) | (21,000) | ||
Foreign currency translation | 472,000 | (130,000) | ||
Plan assets, end of period | 3,946,000 | 3,321,000 | ||
Amount recognized in other comprehensive loss [Abstract] | ||||
Unrecognized net prior service benefit | (892,000) | (870,000) | ||
Unrecognized net losses | 865,000 | 779,000 | ||
Additional other comprehensive (gain) /loss (gross of income taxes) | (27,000) | (91,000) | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Projected benefit obligation | 3,510,000 | 3,510,000 | 4,149,000 | 3,510,000 |
Accumulated benefit obligation | 4,005,000 | 3,376,000 | ||
Fair value of plan assets | 3,321,000 | 3,321,000 | 3,946,000 | 3,321,000 |
Excess of the projected benefit obligation over the fair value of the plan assets | 203,000 | 189,000 | ||
Components of benefit costs for defined benefit retirement plans [Abstract] | ||||
Gross service cost, net of employee contribution | 84,000 | 99,000 | ||
Interest cost | 75,000 | 76,000 | ||
Management cost | 13,000 | 5,000 | ||
Expected return on assets | (74,000) | (66,000) | ||
Amortization | (54,000) | (30,000) | ||
Net periodic retirement cost | $ 44,000 | $ 84,000 | ||
Major assumptions used in the calculations [Abstract] | ||||
Discount rate | 2.00% | 2.00% | ||
Expected return on assets | 2.00% | 2.00% | ||
Expected rate of increase in future compensation [Abstract] | ||||
Expected rate of increase in future compensation, General | 2.50% | 2.50% | ||
Expected rate of increase in future compensation, Individual | 0.00% | 0.00% | ||
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | $ 3,321,000 | $ 3,321,000 | 3,946,000 | 3,321,000 |
The U.K. Defined Benefit Pension Plan [Member] | ||||
Benefit payments in subsequent fiscal years [Abstract] | ||||
2,018 | 194,000 | |||
2,019 | 0 | |||
2,020 | 0 | |||
2,021 | 0 | |||
2,022 | 0 | |||
2023 to 2027 | 714,000 | |||
Total benefit payments | 908,000 | |||
Contributions by employer in next fiscal year | 61,000 | |||
Changes in benefit obligations [Roll Forward] | ||||
Projected benefit obligation, beginning of period | 736,000 | 744,000 | ||
Service cost | 4,000 | 4,000 | ||
Interest cost | 20,000 | 26,000 | ||
Benefits paid | 0 | (96,000) | ||
Other | (4,000) | (4,000) | ||
Actuarial loss (gain) | 34,000 | 197,000 | ||
Foreign currency translation | 72,000 | (135,000) | ||
Projected benefit obligation, end of period | 862,000 | 736,000 | ||
Changes in plan assets [Roll Forward] | ||||
Plan assets, beginning of period | 616,000 | 775,000 | ||
Contributions to plan | 57,000 | 53,000 | ||
Management cost | (4,000) | (4,000) | ||
Actual return on assets | 68,000 | 15,000 | ||
Benefits paid | 0 | (96,000) | ||
Foreign currency translation | 63,000 | (127,000) | ||
Plan assets, end of period | 800,000 | 616,000 | ||
Amount recognized in other comprehensive loss [Abstract] | ||||
Unrecognized net losses | 225,000 | 276,000 | ||
Projected benefit obligation, accumulated benefit obligations and the fair value plan assets [Abstract] | ||||
Projected benefit obligation | 736,000 | 736,000 | 862,000 | 736,000 |
Accumulated benefit obligation | 862,000 | 736,000 | ||
Fair value of plan assets | 616,000 | 616,000 | 800,000 | 616,000 |
Excess of the projected benefit obligation over the fair value of the plan assets | 62,000 | 120,000 | ||
Components of benefit costs for defined benefit retirement plans [Abstract] | ||||
Gross service cost, net of employee contribution | 4,000 | 5,000 | ||
Interest cost | 20,000 | 26,000 | ||
Expected return on assets | (14,000) | (21,000) | ||
Amortization | 53,000 | 7,000 | ||
Net periodic retirement cost | $ 63,000 | $ 17,000 | ||
Major assumptions used in the calculations [Abstract] | ||||
Discount rate | 2.50% | 2.70% | ||
Expected return on assets | 2.13% | 2.20% | ||
Fair value of pension plan assets [Abstract] | ||||
Fair value of pension plan assets | $ 616,000 | $ 616,000 | $ 800,000 | $ 616,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current [Abstract] | ||||
Federal and state | $ 13,000 | $ 91,000 | ||
Foreign | 118,000 | 49,000 | ||
Deferred [Abstract] | ||||
Federal and state | 0 | 0 | ||
Foreign | 7,000 | 5,000 | ||
Total income tax expense | 137,124 | 144,769 | ||
Income tax expense differs from statutory federal income tax benefit [Abstract] | ||||
Statutory federal income tax benefit | (246,000) | (7,462,000) | ||
State tax benefit, net of federal taxes | 13,000 | (55,000) | ||
Foreign tax | (82,000) | (39,000) | ||
Nondeductible expenses - debt forgiveness | 0 | 5,575,000 | ||
Nondeductible expenses - other | 130,000 | 163,000 | ||
Subpart F Income | 0 | 51,000 | ||
Valuation allowance (decrease) | (2,795,000) | (7,334,000) | ||
Stock compensation shortfall (windfall) | (94,000) | 96,000 | ||
Stock compensation true-up and expirations | 10,000 | 958,000 | ||
NOL expiration and true-up | 204,000 | 8,110,000 | ||
Deferral rate change | 3,313,000 | 0 | ||
True-up of undistributed foreign earnings | (317,000) | 0 | ||
Other | 2,000 | 80,000 | ||
Total income tax expense | 137,124 | 144,769 | ||
Deferred tax assets (liabilities) [Abstract] | ||||
Fixed assets | $ 29,000 | 29,000 | ||
Fixed assets | (51,000) | |||
Intangible assets | (1,806,000) | (1,806,000) | (3,479,000) | |
Equity method investment | 33,000 | 33,000 | 0 | |
Pension liability | 69,000 | 69,000 | 76,000 | |
Stock based compensation | 446,000 | 446,000 | 535,000 | |
Inventory | 128,000 | 128,000 | 483,000 | |
Other reserves and accruals | 524,000 | 524,000 | 778,000 | |
Deferred rent | 165,000 | 165,000 | 250,000 | |
Undistributed foreign earnings | 0 | 0 | (504,000) | |
Foreign tax credits | 68,000 | 68,000 | 68,000 | |
Credit carryforwards | 88,000 | 88,000 | 72,000 | |
Net operating losses | 7,000,000 | 7,000,000 | 11,230,000 | |
Customer relations intangible | (44,000) | (44,000) | 0 | |
Deferred tax assets (liabilities), gross | 6,700,000 | 6,700,000 | 9,458,000 | |
Less valuation allowance | (6,587,000) | (6,587,000) | (9,382,000) | |
Deferred tax assets (liabilities), net | $ 113,000 | $ 113,000 | 76,000 | |
Operating Loss Carryforwards [Line Items] | ||||
Percentage change in ownership of an entity | 50.00% | 50.00% | ||
Period of change in ownership of entity | 3 years | |||
Net operating loss carryforward expected to expire | $ 88,200,000 | |||
Recorded gross deferred tax assets | $ 29,000,000 | 29,000,000 | ||
Decrease in deferred income tax asset | (2,758,000) | (7,395,000) | ||
Increase (decrease) in valuation allowance | 2,795,000 | (7,335,000) | ||
Interest on income taxes accrued | 0 | 0 | 0 | |
Tax penalties accrued | 0 | $ 0 | $ 0 | |
Income Tax Disclosure [Line Items] | ||||
Federal tax rate | 35.00% | |||
Tax expense, revaluation of deferred tax assets | 3,310,000 | |||
Tax expense not offset | $ 70,000 | |||
AMT credit carryforwards | 68,000 | 68,000 | ||
Plan [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Federal tax rate | 21.00% | |||
U.S. [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 117,200,000 | $ 117,200,000 | ||
U.S. [Member] | Minimum [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards, expiration dates | Dec. 31, 2020 | |||
U.S. [Member] | Maximum [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards, expiration dates | Dec. 31, 2035 |
Business Segment Information (D
Business Segment Information (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017Segment | Dec. 31, 2017USD ($)SegmentSalesForce | Dec. 31, 2016USD ($) | |
Business Segment Information [Abstract] | |||
Number of operating segments | Segment | 1 | 3 | |
Segment Reporting Information [Line Items] | |||
Segment revenue | $ 56,316,109 | $ 51,851,159 | |
Operating income (loss) | $ (889,474) | (1,810,951) | |
US [Member] | |||
Segment Reporting Information [Line Items] | |||
Minimum number of direct sales force | SalesForce | 50 | ||
Europe [Member] | |||
Segment Reporting Information [Line Items] | |||
Minimum number of direct sales force | SalesForce | 10 | ||
Reportable Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment revenue | $ 56,316,000 | 51,851,000 | |
Operating income (loss) | (889,000) | (1,811,000) | |
Reportable Segments [Member] | Urology [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment revenue | 49,314,000 | 44,747,000 | |
Operating income (loss) | 281,000 | (1,111,000) | |
Reportable Segments [Member] | Airway Management [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment revenue | 3,277,000 | 3,208,000 | |
Operating income (loss) | (988,000) | (940,000) | |
Reportable Segments [Member] | Industrial [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment revenue | 3,725,000 | 3,896,000 | |
Operating income (loss) | $ (182,000) | $ 240,000 |
Business Segment Information, G
Business Segment Information, Geographic Area (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 56,316,109 | $ 51,851,159 | |
Long-lived assets | 2,427,479 | 2,115,316 | |
United States [Member] | Reportable Geographical Components [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 40,888,000 | 39,513,000 | |
Long-lived assets | 1,793,000 | 1,676,000 | |
All Other (Foreign) Countries [Member] | Reportable Geographical Components [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | [1] | 15,428,000 | 12,338,000 |
United Kingdom and The Netherlands [Member] | Reportable Geographical Components [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 634,000 | $ 439,000 | |
[1] | No other (foreign) country accounts for 10% or more of the consolidated net sales. |
Equity Investment (Details)
Equity Investment (Details) | Sep. 28, 2017USD ($)SeatOptions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Schedule of Equity Method Investments [Line Items] | |||
Investment amount | $ 1,871,360 | $ 0 | |
Vensica Medical [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment amount | $ 2,000,000 | 1,871,360 | |
Ownership percentage | 20.00% | ||
Number of seats allowed for board of directors in 20% ownership | Seat | 1 | ||
Number of call options | Options | 2 | ||
Additional investment amount | $ 8,000,000 | ||
Net loss | $ (128,640) |
Subsequent Event - Pending Me46
Subsequent Event - Pending Merger with Laborie Medical Technologies (Details) - Subsequent Event [Member] $ / shares in Units, $ in Millions | Mar. 12, 2018USD ($)$ / shares |
Subsequent Event [Line Items] | |
Consideration in definitive merger agreement | $ | $ 239 |
Tender offer for common stock in cash (in dollars per share) | $ / shares | $ 3.85 |
Percentage of premium over average closing stock price | 28.00% |
Period prior to definitive merger agreement | 30 days |
Schedule I - Valuation and Qual
Schedule I - Valuation and Qualifying Accounts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at beginning of fiscal year | $ 34,000 | $ 27,000 |
Additions charged to expenses/revenues | 70,000 | 21,000 |
Written off, less recoveries | (18,000) | (14,000) |
Effects of foreign currency fluctuations | 1,000 | 0 |
Balance at end of fiscal year | 87,000 | 34,000 |
Allowance for Sales Returns [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at beginning of fiscal year | 49,000 | 41,000 |
Additions charged to expenses/revenues | 0 | 9,000 |
Written off, less recoveries | (34,000) | (1,000) |
Effects of foreign currency fluctuations | 0 | 0 |
Balance at end of fiscal year | $ 15,000 | $ 49,000 |