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Retractable (RVP)

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Mar. 31, 2021May 03, 2021
Cover
Entity Registrant NameRETRACTABLE TECHNOLOGIES INC
Entity Central Index Key0000946563
Document Type10-Q
Document Period End DateMar. 31,
2021
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity Filer CategoryNon-accelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Entity Shell Companyfalse
Entity Common Stock, Shares Outstanding34,004,104
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ1
Trading SymbolRVP
Title of 12(b) SecurityCommon Stock
Security Exchange NameNYSE

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)Mar. 31, 2021Dec. 31, 2020
Current assets:
Cash and cash equivalents $ 30,924,687 $ 17,566,682
Accounts receivable, net34,364,259 32,910,919
Investments in debt and equity securities, at fair value13,763,887 8,081,833
Inventories, net8,946,051 10,234,646
Other current assets813,490 684,317
Total current assets88,812,374 69,478,397
Property, plant, and equipment, net43,216,851 30,816,504
Deferred tax asset6,370,001 4,631,206
Other assets31,723 44,567
Total assets138,430,949 104,970,674
Current liabilities:
Accounts payable14,303,586 16,256,444
Current portion of long-term debt1,489,318 1,030,763
Accrued compensation1,303,568 826,762
Dividends payable39,050 49,091
Accrued royalties to shareholder2,921,597 1,973,781
Other accrued liabilities3,266,909 3,398,904
Income taxes payable12,699,408 4,365,770
Total current liabilities36,023,436 27,901,515
Other long-term liabilities32,383,550 24,478,697
Long-term debt, net of current maturities2,183,654 2,710,337
Total liabilities70,590,640 55,090,549
Commitments and contingencies - see Note 8
Preferred stock, $1 par value:
Common stock, no par value
Additional paid-in capital59,294,701 59,285,401
Retained earnings8,287,663 (9,668,221)
Total stockholders' equity67,840,309 49,880,125
Total liabilities and stockholders' equity138,430,949 104,970,674
Series II, Class B
Preferred stock, $1 par value:
Preferred stock156,200 156,200
Series III Preferred Stock
Preferred stock, $1 par value:
Preferred stock $ 101,745 $ 106,745

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / sharesMar. 31, 2021Dec. 31, 2020
CONDENSED BALANCE SHEETS
Preferred stock, par value (in dollars per share) $ 1 $ 1
Common stock, par value (in dollars per share) $ 0 $ 0

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($)3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Sales, net $ 50,073,725 $ 11,202,217
Cost of sales
Total cost of sales22,078,938 7,671,783
Gross profit27,994,787 3,530,434
Operating expenses:
Sales and marketing931,231 1,135,980
Research and development149,283 138,537
General and administrative3,493,236 1,775,204
Total operating expenses4,573,750 3,049,721
Income from operations23,421,037 480,713
Interest and other income (loss)1,194,779 (141,417)
Interest expense(65,095)(33,849)
Income before income taxes24,550,721 305,447
Provision (benefit) for income taxes6,594,837 (17,326)
Net income17,955,884 322,773
Preferred Stock dividend requirements(64,938)(174,143)
Income applicable to common shareholders $ 17,890,946 $ 148,630
Basic earnings per share $ 0.53 $ 0
Diluted earnings per share $ 0.52 $ 0
Weighted average common shares outstanding:
Basic (in shares)33,967,771 32,681,204
Diluted (in shares)34,378,683 32,745,972
Costs of manufactured product
Cost of sales
Total cost of sales $ 19,157,341 $ 6,802,675
Royalty expense to shareholder
Cost of sales
Total cost of sales $ 2,921,597 $ 869,108

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Cash flows from operating activities
Net income $ 17,955,884 $ 322,773
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization210,683 210,369
Net unrealized (gain) loss on investments(1,103,972)164,342
Accreted interest32,277
Deferred taxes(1,738,795)
Provision for doubtful accounts150,000 125,000
(Increase) decrease in operating assets:
Accounts receivable(7,904,815)1,245,531
Inventories1,288,595 1,077,460
Other current assets(129,173)(34,566)
Other assets12,844 20,483
Increase (decrease) in operating liabilities:
Accounts payable(1,952,858)(572,637)
Accrued liabilities1,433,224 (466,610)
Income taxes payable8,333,638
Net cash provided by operating activities16,587,532 2,092,145
Cash flows from investing activities
Purchase of property, plant, and equipment(12,611,028)(186,030)
Purchase of debt and equity securities(4,578,082)(41,763)
Net cash used by investing activities(17,189,110)(227,793)
Cash flows from financing activities
Repayments of long-term debt(68,128)(64,167)
Proceeds from TIA15,235,812
Proceeds from the exercise of stock options43,350
Payment of preferred stock redemption price payable(101,250)
Payment of preferred stock repurchase payable(1,101,110)(75,000)
Payment of preferred stock dividends(49,091)(54,800)
Net cash provided (used) by financing activities13,959,583 (193,967)
Net increase in cash and cash equivalents13,358,005 1,670,385
Cash and cash equivalents at:
Beginning of period17,566,682 5,934,749
End of period30,924,687 7,605,134
Supplemental schedule of cash flow information:
Interest paid32,818 33,851
Supplemental schedule of noncash investing and financing activities:
Preferred dividends declared, not paid39,050 $ 54,800
Conversion of preferred stock to common stock5,000
Amounts receivable under TIA $ 5,477,603

CONDENSED STATEMENTS OF CHANGES

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)Preferred StockSeries I, Class BPreferred StockSeries II, Class BPreferred StockSeries III Preferred StockPreferred StockSeries IV Preferred StockPreferred StockSeries V Preferred StockAdditional Paid-in CapitalRetained Earnings/Accumulated DeficitTotal
Balance at Dec. 31, 2019 $ 96,000 $ 171,200 $ 129,245 $ 342,500 $ 34,000 $ 61,660,744 $ (33,891,234) $ 28,542,455
Increase (Decrease) in Stockholders' Equity
Exchange of Preferred Stock for Common Stock(2,500)(5,000)(67,500)(75,000)
Dividends(54,800)(54,800)
Net income322,773 322,773
Balance at Mar. 31, 2020 $ 96,000 171,200 126,745 $ 337,500 $ 34,000 61,538,444 (33,568,461)28,735,428
Balance at Dec. 31, 2020156,200 106,745 59,285,401 (9,668,221)49,880,125
Increase (Decrease) in Stockholders' Equity
Conversion of Preferred Stock into Common Stock(5,000)5,000
Stock Option Exercises43,350 43,350
Dividends(39,050)(39,050)
Net income17,955,884 17,955,884
Balance at Mar. 31, 2021 $ 156,200 $ 101,745 $ 59,294,701 $ 8,287,663 $ 67,840,309

BUSINESS OF THE COMPANY AND BAS

BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION3 Months Ended
Mar. 31, 2021
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION1. BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION
Business of the Company
Retractable Technologies, Inc. (the “Company”) was incorporated in Texas on May 9, 1994, and designs, develops, manufactures, and markets safety syringes and other safety medical products for the healthcare profession. The Company began to develop its manufacturing operations in 1995. The Company’s manufacturing and administrative facilities are located in Little Elm, Texas. The Company’s products are the VanishPoint ® 0.5mL insulin syringe; 1mL tuberculin, insulin, and allergy antigen syringes; 0.5mL, 1mL, 2mL, 3mL, 5mL, and 10mL syringes; the blood collection tube holder; the small diameter tube adapter; the allergy tray; the IV safety catheter; the Patient Safe ® syringes; the Patient Safe ® Luer Cap; the VanishPoint ® Blood Collection Set; and the EasyPoint ® needle as well as a standard 3mL syringe packaged with an EasyPoint ® needle. The Company also sells VanishPoint ® autodisable syringes in the international market in addition to the Company’s other products .
Basis of presentation
The accompanying condensed financial statements are unaudited and, in the opinion of Management, reflect all adjustments that are necessary for a fair presentation of the financial position and results of operations for the periods presented. All such adjustments are of a normal and recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the entire year. The unaudited condensed financial statements should be read in conjunction with the financial statement disclosures contained in the Company’s audited financial statements incorporated into its Form 10-K filed on March 31, 2021 for the year ended December 31, 2020.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES3 Months Ended
Mar. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. The amount reported as a contractual allowance for rebates involves examination of past historical trends related to sales to customers and the related credits issued once contractual obligations of the customers have been met. The establishment of a liability for future claims of rebates against sales in the current period requires that the Company has an understanding of the relevant sales with respect to product categories, sales distribution channels, and the likelihood of contractual obligations being satisfied.
Cash and cash equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and investments with original maturities of three months or less.
Accounts receivable
The Company records trade receivables when revenue is recognized. No product has been consigned to customers. The Company’s allowance for doubtful accounts is primarily determined by review of specific trade receivables. Those accounts that are doubtful of collection are included in the allowance. This provision is reviewed to determine the adequacy of the allowance for doubtful accounts. Trade receivables are charged off when there is certainty as to their being uncollectible. Trade receivables are considered delinquent when payment has not been made within contract terms. The Allowance for bad debt was $352,217 and $205,822 as of March 31, 2021 and December 31, 2020, respectively.
The Company requires certain customers to make a prepayment prior to beginning production or shipment of their order. Customers may apply such prepayments to their outstanding invoices or pay the invoice and continue to carry forward the deposit for future orders. Such amounts are included in Other accrued liabilities on the Condensed Balance Sheets and are shown in Note 6, Other Accrued Liabilities.
The Company records an allowance for estimated returns as a reduction to Accounts receivable and Gross sales. Historically, returns have been insignificant.
Inventories
Inventories are valued at the lower of cost or net realizable value, with cost being determined using actual average cost. The Company compares the average cost to the net realizable value and records the lower value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Management considers such factors as the amount of inventory on hand and in the distribution channel, estimated time to sell such inventory, the shelf life of inventory, and current market conditions when determining excess or obsolete inventories. Once inventory items are deemed to be either excess or obsolete, they are excluded from the stated net realizable value.
Investments in debt and equity securities
The Company holds high-grade exchange-traded and closed-end funds (ETFs), mutual funds, equity securities, and debt securities as investments. These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. Net unrealized and realized gains or losses on investments in debt and equity securities are reflected as a component of Interest and other income (loss). Realized gains or losses on investments in debt and equity securities are recognized using the specific identification method.
Property, plant, and equipment
Property, plant, and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Cost includes major expenditures for improvements and replacements which extend useful lives or increase capacity and interest cost associated with significant capital additions. Gains or losses from disposals are included in operations.
The Company's property, plant, and equipment primarily consist of buildings, land, assembly equipment, molding machines, molds, office equipment, furniture, and fixtures. Depreciation and amortization are calculated using the straight-line method over the following useful lives:
Production equipment
3 to 13 years
Office furniture and equipment
3 to 10 years
Buildings
39 years
Building improvements
15 years
Long-lived assets
The Company assesses the recoverability of long-lived assets using an assessment of the estimated undiscounted future cash flows related to such assets. In the event that assets are found to be carried at amounts which are in excess of estimated gross future cash flows, the assets will be adjusted for impairment to a level commensurate with fair value determined using a discounted cash flow analysis or appraised values of the underlying assets.
Fair value measurements
For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model.
Financial instruments
The Company estimates the fair value of financial instruments through the use of public market prices, quotes from financial institutions, and other available information. Judgment is required in interpreting data to develop estimates of fair value and, accordingly, amounts are not necessarily indicative of the amounts that could be realized in a current market exchange. Short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on Management's estimates, equals their recorded values. Investments in equity securities consist primarily of individual equity securities, exchange-traded and closed-end funds and mutual funds and are reported at their fair value based upon quoted prices in active markets. Investments in U.S. Treasury Notes are reported at their fair value based upon quoted prices in active markets. Investments in certificates of deposit (CD) with original maturities of greater than three months are reported at their estimated fair value based upon the duration of the CD and the interest rate earned on the CD versus current interest rates of similar duration CDs. The fair value of long-term liabilities, based on Management’s estimates, approximates their reported values.
Concentration risks
The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash, cash equivalents, certificates of deposit, U.S. Treasury Notes, exchange-traded and closed-end funds, mutual funds, equity securities, and accounts receivable. Cash balances, some of which exceed federally insured limits, are maintained in financial institutions; however, Management believes the institutions are of high credit quality. The Company assesses market risk in debt and equity securities through consultation with its outside investment advisors. Management is responsible for directing investment activity based on current economic conditions. The majority of accounts receivable are due from companies which are well-established entities. In the first quarter of 2021, a significant portion of the Company’s sales were to the U.S. government, which Management does not consider a credit risk. As a consequence, Management considers any exposure from concentrations of credit risks to be limited.
The following table reflects significant customers for the first quarters of 2021 and 2020:
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Number of significant customers
1
3
Aggregate dollar amount of net sales to significant customers
$
37.8 million
$
5.4 million
Percentage of net sales to significant customers
75.5
%
48.2
%
In the first quarter of 2021, approximately $37.8 million of the Company's sales were to the Department of Health and Human Services of the United States. Management expects the U.S. government to remain a significant customer through at least September 2021. There were no sales to the Department of Health and Human Services in the first quarter of 2020.
The Company manufactures some of its products in Little Elm, Texas as well as utilizing manufacturers in China. The Company obtained roughly 90.3% and 80.3% of its products in the first three months of 2021 and 2020, respectively, from its Chinese manufacturers. In the event that the Company becomes unable to purchase products from its Chinese manufacturers, the Company would need to find an alternate manufacturer for its blood collection set, IV catheter, Patient Safe ® syringe, 0.5mL insulin syringe, 0.5mL autodisable syringe, and 2mL, 5mL, and 10mL syringes, and would increase domestic production for the 1mL and 3mL syringes and EasyPoint ® needles.
Revenue recognition
The Company recognizes revenue when it has satisfied all performance obligations to the customer, generally when title and risk of loss pass to the customer. Payments from customers with approved credit terms are typically due 30 days from the invoice date. Under certain contracts, revenue is recorded on the basis of sales price to distributors, less contractual pricing allowances. Contractual pricing allowances consist of: (i) rebates granted to distributors who provide tracking reports which show, among other things, the facility that purchased the products, and (ii) a provision for estimated contractual pricing allowances for products for which the Company has not received tracking reports. When rebates are issued, they are applied against the customer’s receivable balance. Distributors receive a rebate for the difference between the Wholesale Acquisition Cost and the appropriate contract price as reflected on a tracking report provided by the distributor to the Company. If product is sold by a distributor to an entity that has no contract, there is a standard rebate (lower than a contracted rebate) given to the distributor. One of the purposes of the rebate is to encourage distributors to submit tracking reports to the Company. The provision for contractual pricing allowances is recognized in the period the related sales are recognized and is reviewed at the end of each quarter and adjusted for changes in levels of products for which there is no tracking report. Additionally, if it becomes clear that tracking reports will not be provided by individual distributors, the provision is further adjusted. The estimated contractual allowance is included in Accounts payable in the Condensed Balance Sheets and deducted from Revenues in the Condensed Statements of Operations. Accounts payable included estimated contractual allowances for $4,893,647 and $3,435,352 as of March 31, 2021 and December 31, 2020, respectively. The terms and conditions of contractual pricing allowances are governed by contracts between the Company and its distributors. Revenue for shipments directly to end-users is recognized when title and risk of ownership pass from the Company. End-users do not receive any contractual allowances on their purchases. Any product shipped or distributed for evaluation purposes is expensed.
The Company provides product warranties that: i) the products are fit for medical use as generally defined within the boundaries of United States FDA approval; ii) the products are not defective; and iii) the products will conform to the descriptions set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written directions for use. The Company has historically not incurred significant warranty claims.
The Company’s domestic return policy provides that a customer may return incorrect shipments within 10 days following arrival at the distributor’s facility. In all such cases, the distributor must obtain an authorization code from the Company and affix the code to the returned product. The Company’s domestic return policy also generally provides that a customer may return product that is overstocked. Overstocking returns are limited to two times in each 12-month period up to 1% of distributor’s total purchase of products for the prior 12-month period. All product overstocks and returns are subject to inspection and acceptance by the Company.
The Company’s international distribution agreements generally do not provide for any returns.
The Company requires certain customers to pay in advance of product shipment. Such prepayments from customers are recorded in Other accrued liabilities and are generally recognized as revenue upon shipment of the product.
The Company recognizes revenue from licensing agreements when collection of such amounts from third parties is reasonably assured. If the Company licenses its products for sale, the Company is obligated to pay Thomas J. Shaw, the owner of certain patented technology, a certain percentage of such revenue pursuant to the terms of the Technology License Agreement between the Company and Mr. Shaw.
Disaggregated information of revenue recognized from contracts with customers and licensing fees recognized are as follows:
For the three months ended March 31, 2021:
Blood
Total
Collection
EasyPoint ®
Other
Product
Geographic Segment
Syringes
Products
Needles
Products
Sales
U.S. sales (excluding U.S. government)
$
8,759,314
$
574,008
$
1,612,333
$
15,536
$
10,961,191
Sales to U.S. government
37,782,360



37,782,360
North and South America sales (excluding U.S.)
825,820

11,968
109,440
947,228
Other international sales
199,316
37,350
144,780
1,500
382,946
Total
$
47,566,810
$
611,358
$
1,769,081
$
126,476
$
50,073,725
For the three months ended March 31, 2020:
Blood
Total
Collection
EasyPoint ®
Other
Product
Geographic Segment
Syringes
Products
Needles
Products
Sales
U.S. sales
$
6,972,935
$
580,123
$
765,860
$
17,879
$
8,336,797
North and South America sales (excluding U.S.)
2,054,784
2,700
1,496
687,420
2,746,400
Other international sales
114,830
1,740

2,450
119,020
Total
$
9,142,549
$
584,563
$
767,356
$
707,749
$
11,202,217
Income taxes
The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in the financial statements based on whether it is “more-likely-than-not” that a tax position will be sustained based upon the technical merits of the position. Measurement of the tax position is based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
The Company provides for deferred income taxes through utilizing an asset and liability approach for financial accounting and reporting based on the tax effects of differences between the financial statement and tax bases of assets and liabilities, based on enacted rates expected to be in effect when such differences reverse in future periods. Deferred tax assets are periodically reviewed for realizability. In prior periods, the Company established a valuation allowance for its net deferred tax asset as future taxable income which could not be reasonably assured. During the quarter ended June 30, 2020, the Company released its valuation allowance based on available evidence supporting that its deferred tax assets will be realized in full.
Earnings per share
The Company computes basic earnings or loss per share (“EPS”) by dividing net earnings for the period (adjusted for any cumulative dividends for the period) by the weighted average number of common shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect, if any, of the common stock deliverable pursuant to stock options or common stock issuable upon the conversion of convertible preferred stock. At March 31, 2021, the calculation of diluted EPS under the treasury stock method included 152,967 shares of Common Stock underlying issued and outstanding stock options. Common stock issuable upon the conversion of 257,945 convertible preferred shares is included in the calculation of diluted EPS for the three months ended March 31, 2021. Preferred stock was excluded from the calculation of diluted EPS for the period ended March 31, 2020 because the effect was antidilutive. The potential dilution, if any, is shown on the following schedule:
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Net income
$
17,955,884
$
322,773
Preferred stock dividend requirements
(64,938)
(174,143)
Income applicable to common shareholders
$
17,890,946
$
148,630
Average common shares outstanding
33,967,771
32,681,204
Average common and common equivalent shares outstanding — assuming dilution
34,378,683
32,745,972
Basic earnings per share
$
0.53
$
0.00
Diluted earnings per share
$
0.52
$
0.00
Shipping and handling costs
The Company classifies shipping and handling costs as part of Cost of sales in the Condensed Statements of Operations.
Research and development costs
Research and development costs are expensed as incurred.
Leases
The Company determines if an arrangement is a lease at inception. Operating and finance leases are included in Other assets, Other accrued liabilities, and Other long-term liabilities on the Condensed Balance Sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on information available at the commencement date was used in determining the present value of lease payments.
The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of twelve months or less are not recorded on the Condensed Balance Sheets; however, rent expense is recognized on a straight-line basis over the lease term.
Technology Investment Agreement (TIA)
Effective July 1, 2020, the Company entered into a Technology Investment Agreement (“TIA”) with the United States Government Department of Defense, U.S. Army Contracting Command-Aberdeen Proving Ground, Natick Contracting Division & Edgewood Contracting Division (ACC-APG, NCD & ECD) on behalf of the Biomedical Advanced Research and Development Authority (BARDA) for $53,664,286 in Government funding for expanding the Company’s domestic production of needles and syringes. Pursuant to the terms of the TIA, the Company is expected to make significant additions to its facilities which should allow the Company to increase domestic production. As reimbursements are received from the U.S. government for such expenditures, the Company records a deferred liability. The deferred liability will be systematically amortized as a gain over the life of the related property, plant, and equipment as to offset the related depreciation expense of the assets acquired. The amortization will be presented separately from the depreciation expense on the Condensed Statements of Operations.
Recently Adopted Pronouncements
The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” as well as subsequent clarifying amendments on January 1, 2020. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Many of the loss estimation techniques applied previously will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The adoption of ASU 2016-13, as well as the Targeted Transition Relief as provided by ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326) – Targeted Transition Relief” did not have a significant impact on the Company’s financial statements.
The Company adopted ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a Consensus of the FASB Emerging Issues Task Force)" on January 1, 2020. This amendment requires that implemented costs incurred in a hosting arrangement that is a service contract should be accounted for in accordance with ASC 350-40 Internal-Use Software. Accordingly, costs incurred during the preliminary project and post-implementation stages are expensed and costs associated with the application development phase are capitalized. The amendment also requires that capitalized costs be amortized over the term of the hosting arrangement and that capitalized costs should be evaluated for impairment. The adoption of this ASU did not have a significant impact on the Company's financial statements or disclosures.
In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The amendment modifies, among other things, disclosure requirements on fair value measurements and eliminates certain disclosures related to transfers and valuation levels of Level 3 fair value measurements. Additionally, the amendment requires disclosure of changes in unrealized gains and losses in other comprehensive income for Level 3 fair value measurements and certain qualitative factors related to significant unobservable inputs used in Level 3 valuations.
The amendment was effective for annual periods beginning after December 15, 2019 and interim periods within the annual period. The adoption of ASU 2018-13 did not have a significant effect on the Company's financial statements , as the Company does not currently have any investments classified as Level 3 fair value measurements.
In December 2019, the FASB issued ASU 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes”. The new standard is intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within the annual period, with early adoption permitted. Adoption of the standard requires certain changes primarily be made prospectively, with some changes to be made retrospectively. The Company has determined that the adoption of ASU 2019-12 did not have a material impact on its financial statements.
Recently Issued Pronouncement
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients for contracts that reference LIBOR, if certain criteria are met, that can be applied through December 31, 2022. As reference rate reform is still an ongoing process, the Company will continue to evaluate the timing and potential impact of adoption for optional expedients when deemed necessary.

INVENTORIES

INVENTORIES3 Months Ended
Mar. 31, 2021
INVENTORIES
INVENTORIES3. INVENTORIES
Inventories consist of the following:
March 31, 2021
December 31, 2020
Raw materials
$
1,576,376
$
1,358,552
Finished goods
7,666,883
9,243,259
Inventory reserve
(297,208)
(297,208)
$
8,946,051
$

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS3 Months Ended
Mar. 31, 2021
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS4. FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820, “Fair Value Measurements”, defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows:
·
Level 1 – quoted market prices in active markets for identical assets and liabilities
·
Level 2 – inputs other than quoted prices that are directly or indirectly observable
·
Level 3 - unobservable inputs where there is little or no market activity
The following tables summarize the values of assets designated as Investments in debt and equity securities:
March 31, 2021
Level 1
Level 2
Level 3
Total
Equity securities
$
9,647,668
$

$

$
9,647,668
Mutual funds and exchange traded funds
4,039,440


4,039,440
Certificates of deposit

76,779

76,779
$
13,687,108
$
76,779
$

$
13,763,887
December 31, 2020
Level 1
Level 2
Level 3
Total
Equity securities
$
$

$

$
Mutual funds and exchange traded funds
4,013,956


Certificates of deposit


$
$
$

$
The Company holds high-grade ETFs, mutual funds, individual equity stocks, and debt securities as investments. These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. The Company intends to hold these assets for possible future operating requirements. The following table summarizes gross unrealized gains and losses from Investments in debt and equity securities:
March 31, 2021
Gross Unrealized
Aggregate
Cost
Gains
Losses
Fair Value
Equity securities
$
6,636,822
$
3,010,846
$

$
9,647,668
Mutual funds and exchange traded funds
3,948,768
95,899
(5,227)
4,039,440
Certificates of deposit
75,000
1,779

76,779
$
10,660,590
$
3,108,524
$
(5,227)
$
13,763,887
December 31, 2020
Gross Unrealized
Aggregate
Cost
Gains
Losses
Fair Value
Equity securities
$
$
$

$
Mutual funds and exchange traded funds

Certificates of deposit

$
$
$

$
Unrealized gains (losses) on investments in debt and equity securities were $1,103,972 and $(164,342) for the three months ended March 31, 2021 and 2020, respectively.

INCOME TAXES

INCOME TAXES3 Months Ended
Mar. 31, 2021
INCOME TAXES
INCOME TAXES5. INCOME TAXES
The Company’s effective tax rate on the net income before income taxes was 26.9% and 0.2% for the three months ended March 31, 2021 and March 31, 2020, respectively. For the three months ended March 31, 2021 and 2020, the Company’s effective tax rate was determined based on the estimated annual effective income tax rate.
A reconciliation of the federal statutory corporate tax rate to the Company’s effective tax rate is as follows:
March 31, 2021
December 31, 2020
U.S. statutory federal tax rate
21.0
%
21.0
%
Valuation Allowance

(21.0)
%
State taxes
5.9
%
0.2
%
Effective tax rate
26.9
%
0.2
%
The Company uses the recognition and measurement provisions of the FASB ASC Topic 740, Income Taxes (“Topic 740”), to account for income taxes. The provisions of Topic 740 require a company to record a valuation allowance when the “more likely than not” criterion for realizing net deferred tax assets cannot be met. Furthermore, the weight given to the potential effect of such evidence should be commensurate with the extent to which it can be objectively verified. As a result, we reviewed the operating results, as well as all of the positive and negative evidence related to realization of such deferred tax assets to evaluate the need for a valuation allowance at March 31, 2021 and 2020.
The effective tax rate for the three months ended March 31,2021 was different from the federal statutory rate due primarily to the apportionment of earnings across various state jurisdictions. The Company determined that no valuation allowance should be recorded at March 31, 2021.
The effective tax rate for the three months ended March 31, 2020 was different from the federal statutory rate due primarily to the valuation allowance recorded on net operating losses.

OTHER ACCRUED LIABILITIES

OTHER ACCRUED LIABILITIES3 Months Ended
Mar. 31, 2021
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES6. OTHER ACCRUED LIABILITIES
Other accrued liabilities consist of the following:
March 31, 2021
December 31, 2020
Prepayments from customers
$
1,566,167
$
Accrued property taxes
112,847

Accrued professional fees
368,995
Current portion — preferred stock repurchase
1,058,935
Other accrued expenses
159,965
Total
$
3,266,909
$
3,398,904

OTHER LONG-TERM LIABILITIES

OTHER LONG-TERM LIABILITIES3 Months Ended
Mar. 31, 2021
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES7. OTHER LONG-TERM LIABILITIES
Other long-term liabilities consists of the following:
March 31, 2021
December 31, 2020
Technology Investment Agreement (TIA)
$
31,378,662
$
22,444,324
Stock repurchase
1,004,888
2,034,373
Total
$
32,383,550
$
24,478,697
The TIA provides for reimbursement to the Company for the purchase of equipment and supplies related to the expansion of the Company’s domestic production of needles and syringes. Under the TIA, reimbursable amounts will be reflected as a liability until the time its deferred income can be systematically amortized over a period matching the useful life of the purchased assets.
The stock repurchase liability represents the long-term portion, at net present value, of $2,057,823 gross payable by the Company to former preferred shareholders as a result of private stock purchases in 2020 of 320,333 shares of Class B Series IV preferred stock and 25,000 shares of Class B Series V preferred stock. The purchase price is payable in three annual installments of $1,101,110.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES3 Months Ended
Mar. 31, 2021
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES8. COMMITMENTS AND CONTINGENCIES
On November 7, 2019, the Company filed a lawsuit in the 44 th District Court of Dallas County, Texas (No. DC-19-17946) against Locke Lord, LLP and Roy Hardin in connection with their legal representation of the Company in its previous litigation against Becton, Dickinson and Company ("BD"). The Company alleges that the defendants breached their fiduciary duties, committed malpractice, and were negligent in their representation of the Company. The Company seeks actual and exemplary damages, disgorgement, costs, and interest. On October 6, 2020, the Court dismissed BD’s motion to dismiss. Such order was affirmed on April 20, 2021 by the Court of Appeals, Fifth District of Texas at Dallas.

BUSINESS SEGMENT

BUSINESS SEGMENT3 Months Ended
Mar. 31, 2021
BUSINESS SEGMENT
BUSINESS SEGMENT9. BUSINESS SEGMENT
The Company does not operate in separate reportable segments. Shipments to international customers generally require a prepayment either by wire transfer or an irrevocable confirmed letter of credit. The Company does extend credit to international customers on some occasions depending upon certain criteria, including, but not limited to, the credit worthiness of the customer, the stability of the country, banking restrictions, and the size of the order. All transactions are in U.S. currency.
Revenues by geography are as follows:
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
U.S. sales (excluding U.S. government)
$
10,961,191
$
8,336,797
Sales to U.S. government
37,782,360

North and South America sales (excluding U.S.)
947,228
2,746,400
Other international sales
382,946
119,020
Total sales
$
50,073,725
$
11,202,217
Long-lived assets by geography are as follows:
March 31, 2021
December 31, 2020
Long-lived assets
U.S.
$
43,157,637
$
International
59,214
Total
$
43,216,851
$
30,816,504

DIVIDENDS

DIVIDENDS3 Months Ended
Mar. 31, 2021
DIVIDENDS
DIVIDENDS10.
The Board declared and the Company paid cash dividends to Series I and Series II Class B Preferred Shareholders within one month of the end of each quarter in 2020. Cumulatively, dividend payments of $48,000, and $168,642 were made to Series I and Series II preferred shareholders, respectively, in 2020 and one payment of $10,041, and $39,050 was made to Series I and Series II preferred shareholders, respectively, in January 2021. A cash dividend of $39,050 was paid in April 2021 to Series II preferred shareholders.

LEASES

LEASES3 Months Ended
Mar. 31, 2021
LEASES
LEASES11. LEASES
The Company has operating leases for a warehouse and equipment. The leases have a remaining lease term of less than one year. The Company currently has no finance leases. The ROU asset is determined based on the lease liability adjusted for lease incentives received. Lease expense is recognized on a straight-line basis over the lease term. The leases may include various expenses incidental to the use of the property, such as common area maintenance, property taxes and insurance. These costs are separate from the minimum rent payment and are not considered in the determination of the lease liability and ROU asset. The Company has not noted any material instances in its leases where these costs were combined with the minimum rent payment and has therefore elected the policy to not separate lease from non-lease components if they are combined with the minimum rent payment. The option periods are not included in the determination of the lease liability and right-of-use asset as the Company is not reasonably certain if it will extend at the time of lease commencement.
The operating lease cost component of the lease expense was $12,843 for the three-month period ended March 31, 2021. The cash paid for amounts included in the measurement of lease liabilities as a component of cash flows related to leases was $12,843 for the three months ended March 31, 2021. The operating lease cost component of the lease expense was $20,283 at March 31, 2020. The cash paid for amounts included in the measurement of lease liabilities as a component of cash flows related to leases was $20,283 for the three months ended March 31, 2020.
Assets and liabilities associated with these leases included in the Condensed Balance Sheets are as follows:
March 31, 2021
December 31, 2020
OPERATING LEASES
Other assets
$
26,049
$
Other accrued liabilities
$
26,049
$
Other long-term liabilities


Total operating lease liabilities
$
26,049
$
The weighted average remaining lease term is 6 months and the weighted average discount rate is 3.75%.
Future minimum payments under non-cancelable operating leases and financing leases consist of the following at March 31, 2021:
Quarter ending March 31, 2021
$
26,335
Less imputed interest
(286)
Total
$
26,049

EXCHANGE OF COMMON STOCK FOR PR

EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK3 Months Ended
Mar. 31, 2021
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK12. EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK
In 2020, the Company entered into several agreements with shareholders to purchase its outstanding Class B Convertible Preferred Stock. The consideration for these purchases consisted of both cash and Common Stock. In addition, in each such transaction, the preferred shareholder counterparty waived their rights to unpaid dividends in arrears. The aggregate cash consideration equaled $3,786,000, of which $482,670 was paid in 2020 with the rest payable over a three-year period beginning February 2021.

STOCK OPTIONS

STOCK OPTIONS3 Months Ended
Mar. 31, 2021
STOCK OPTIONS
STOCK OPTIONS13. STOCK OPTIONS
Stock options were exercised by the Company’s employees and directors at various dates during the three months ended March 31, 2021, and, consequently, a total of 20,400 shares of Common Stock were issued for an aggregate payment to the Company of $43,350 to exercise such options.

COVID-19

COVID-193 Months Ended
Mar. 31, 2021
COVID-19
COVID-1914. COVID-19
To date, the Company's manufacturing facility in Little Elm, Texas has continued to operate due to its status as an essential business. As a result of the COVID-19 pandemic, the Company has implemented certain safety precautions at its facility to reduce the risk of the potential spread of the novel coronavirus. The Company has implemented arrangements to reduce the number of office staff employees working on-site at the production facility, as well as instituting personal distancing policies and monitoring of essential production staff to minimize the risk of infection. The Company continues to monitor the evolving situation and will work to further mitigate risks to staff and to customers. The Company is continuing to evaluate the ever-changing circumstances surrounding this pandemic as it relates to its ability to continue to source materials and products, maintain a workforce, and operate its business effectively and efficiently. Despite the global disruption of the coronavirus pandemic, the Company has not experienced a significant disruption to its supply chain. During 2020 and 2021, the Company has experienced an increase in demand for its products and has been able to meet such demand with increased volumes despite the pandemic. The Company is unable to predict with certainty its ability to maintain its current operational functionality.

TECHNOLOGY INVESTMENT AGREEMENT

TECHNOLOGY INVESTMENT AGREEMENT3 Months Ended
Mar. 31, 2021
TECHNOLOGY INVESTMENT AGREEMENT
TECHNOLOGY INVESTMENT AGREEMENT15. TECHNOLOGY INVESTMENT AGREEMENT
Effective July 1, 2020, the Company entered into the TIA with the U.S. government. The principal purpose of the TIA is to fund the expansion of the Company’s manufacturing capacity for hypodermic safety needles and corresponding syringes in response to the worldwide COVID-19 global pandemic. The award is an expenditure-type TIA, whereby the U.S. government will make payments to the Company for the Company’s expenditures for equipment and supplies in carrying out the expansion of the Company’s domestic production. The Company’s contributions under the terms of the TIA to enhance domestic capacity of pandemic-essential technology include providing facilities, technical expertise, labor, and maintenance of the TIA-funded equipment for a ten-year term.
As of March 31, 2021, the Company had negotiated contracts for the purchase of automated assembly equipment, molds, and molding equipment, as well as portions of auxiliary equipment, for approximately $50.6 million. The Company has substantially completed construction of expanded facilities consisting of approximately 27,800 square feet of additional controlled environment within existing properties and is expected to complete approximately 55,000 square feet of new warehouse space within the second quarter of 2021. The estimated cost of the controlled environment within existing properties is $6.5 million. The new warehouse space is estimated to cost $5.8 million. The cost of the controlled environment will be funded by the U.S. government under the TIA, while the cost of the new warehouse will be funded by the Company.

PAYCHECK PROTECTION PROGRAM LOA

PAYCHECK PROTECTION PROGRAM LOAN3 Months Ended
Mar. 31, 2021
PAYCHECK PROTECTION PROGRAM LOAN
PAYCHECK PROTECTION PROGRAM LOAN16. PAYCHECK PROTECTION PROGRAM LOAN
On April 17, 2020, the Company entered into a promissory note in the principal amount of $1,363,000 (the “PPP Loan”) in favor of Independent Bank pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), administered by the U.S. Small Business Administration (“SBA”). The PPP Loan’s original maturity date was April 17, 2022 with an interest rate of 1.0% per annum. The PPP Loan had a prepayment option with no prepayment penalties. The PPP Loan was unsecured and was a non-recourse obligation. On May 13, 2021, the Company was informed that the SBA granted its request for loan forgiveness for the entire original principal amount of $1,363,000.
Prior to loan forgiveness and as of March 31, 2021, the Company’s obligations under the PPP Loan were as follows:
2021
$
755,907
2022
607,093
$
1,363,000

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS3 Months Ended
Mar. 31, 2021
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS17. SUBSEQUENT EVENTS
In April 2021, the Company received a preliminary notice from the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Preparedness & Response (“DHHS/ASPR”) expressing its intent to exercise at least the first two one-month options under the February 2021 contract between DHHS/ASPR and the Company. Such option exercises would extend the July 14, 2021 base period expiration date to September 14, 2021. The two one-month option periods referenced by the preliminary notice would relate to an overall purchase price of approximately $23.5 million, including freight costs.
As discussed in Note 16, on May 13, 2021, the Company was informed that the SBA granted its request for loan forgiveness for the PPP Loan for the entire original principal amount of $1,363,000.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)3 Months Ended
Mar. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting estimatesAccounting estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. The amount reported as a contractual allowance for rebates involves examination of past historical trends related to sales to customers and the related credits issued once contractual obligations of the customers have been met. The establishment of a liability for future claims of rebates against sales in the current period requires that the Company has an understanding of the relevant sales with respect to product categories, sales distribution channels, and the likelihood of contractual obligations being satisfied.
Cash and cash equivalentsCash and cash equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, and investments with original maturities of three months or less.
Accounts receivableAccounts receivable
The Company records trade receivables when revenue is recognized. No product has been consigned to customers. The Company’s allowance for doubtful accounts is primarily determined by review of specific trade receivables. Those accounts that are doubtful of collection are included in the allowance. This provision is reviewed to determine the adequacy of the allowance for doubtful accounts. Trade receivables are charged off when there is certainty as to their being uncollectible. Trade receivables are considered delinquent when payment has not been made within contract terms. The Allowance for bad debt was $352,217 and $205,822 as of March 31, 2021 and December 31, 2020, respectively.
The Company requires certain customers to make a prepayment prior to beginning production or shipment of their order. Customers may apply such prepayments to their outstanding invoices or pay the invoice and continue to carry forward the deposit for future orders. Such amounts are included in Other accrued liabilities on the Condensed Balance Sheets and are shown in Note 6, Other Accrued Liabilities.
The Company records an allowance for estimated returns as a reduction to Accounts receivable and Gross sales. Historically, returns have been insignificant.
InventoriesInventories
Inventories are valued at the lower of cost or net realizable value, with cost being determined using actual average cost. The Company compares the average cost to the net realizable value and records the lower value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Management considers such factors as the amount of inventory on hand and in the distribution channel, estimated time to sell such inventory, the shelf life of inventory, and current market conditions when determining excess or obsolete inventories. Once inventory items are deemed to be either excess or obsolete, they are excluded from the stated net realizable value.
Investments in debt and equity securitiesInvestments in debt and equity securities
The Company holds high-grade exchange-traded and closed-end funds (ETFs), mutual funds, equity securities, and debt securities as investments. These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. Net unrealized and realized gains or losses on investments in debt and equity securities are reflected as a component of Interest and other income (loss). Realized gains or losses on investments in debt and equity securities are recognized using the specific identification method.
Property, plant, and equipmentProperty, plant, and equipment
Property, plant, and equipment are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Cost includes major expenditures for improvements and replacements which extend useful lives or increase capacity and interest cost associated with significant capital additions. Gains or losses from disposals are included in operations.
The Company's property, plant, and equipment primarily consist of buildings, land, assembly equipment, molding machines, molds, office equipment, furniture, and fixtures. Depreciation and amortization are calculated using the straight-line method over the following useful lives:
Production equipment
3 to 13 years
Office furniture and equipment
3 to 10 years
Buildings
39 years
Building improvements
15 years
Long-lived assetsLong-lived assets
The Company assesses the recoverability of long-lived assets using an assessment of the estimated undiscounted future cash flows related to such assets. In the event that assets are found to be carried at amounts which are in excess of estimated gross future cash flows, the assets will be adjusted for impairment to a level commensurate with fair value determined using a discounted cash flow analysis or appraised values of the underlying assets.
Fair value measurementsFair value measurements
For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model.
Financial instrumentsFinancial instruments
The Company estimates the fair value of financial instruments through the use of public market prices, quotes from financial institutions, and other available information. Judgment is required in interpreting data to develop estimates of fair value and, accordingly, amounts are not necessarily indicative of the amounts that could be realized in a current market exchange. Short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on Management's estimates, equals their recorded values. Investments in equity securities consist primarily of individual equity securities, exchange-traded and closed-end funds and mutual funds and are reported at their fair value based upon quoted prices in active markets. Investments in U.S. Treasury Notes are reported at their fair value based upon quoted prices in active markets. Investments in certificates of deposit (CD) with original maturities of greater than three months are reported at their estimated fair value based upon the duration of the CD and the interest rate earned on the CD versus current interest rates of similar duration CDs. The fair value of long-term liabilities, based on Management’s estimates, approximates their reported values.
Concentration risksConcentration risks
The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash, cash equivalents, certificates of deposit, U.S. Treasury Notes, exchange-traded and closed-end funds, mutual funds, equity securities, and accounts receivable. Cash balances, some of which exceed federally insured limits, are maintained in financial institutions; however, Management believes the institutions are of high credit quality. The Company assesses market risk in debt and equity securities through consultation with its outside investment advisors. Management is responsible for directing investment activity based on current economic conditions. The majority of accounts receivable are due from companies which are well-established entities. In the first quarter of 2021, a significant portion of the Company’s sales were to the U.S. government, which Management does not consider a credit risk. As a consequence, Management considers any exposure from concentrations of credit risks to be limited.
The following table reflects significant customers for the first quarters of 2021 and 2020:
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Number of significant customers
1
3
Aggregate dollar amount of net sales to significant customers
$
37.8 million
$
5.4 million
Percentage of net sales to significant customers
75.5
%
48.2
%
In the first quarter of 2021, approximately $37.8 million of the Company's sales were to the Department of Health and Human Services of the United States. Management expects the U.S. government to remain a significant customer through at least September 2021. There were no sales to the Department of Health and Human Services in the first quarter of 2020.
The Company manufactures some of its products in Little Elm, Texas as well as utilizing manufacturers in China. The Company obtained roughly 90.3% and 80.3% of its products in the first three months of 2021 and 2020, respectively, from its Chinese manufacturers. In the event that the Company becomes unable to purchase products from its Chinese manufacturers, the Company would need to find an alternate manufacturer for its blood collection set, IV catheter, Patient Safe ® syringe, 0.5mL insulin syringe, 0.5mL autodisable syringe, and 2mL, 5mL, and 10mL syringes, and would increase domestic production for the 1mL and 3mL syringes and EasyPoint ® needles.
Revenue recognitionRevenue recognition
The Company recognizes revenue when it has satisfied all performance obligations to the customer, generally when title and risk of loss pass to the customer. Payments from customers with approved credit terms are typically due 30 days from the invoice date. Under certain contracts, revenue is recorded on the basis of sales price to distributors, less contractual pricing allowances. Contractual pricing allowances consist of: (i) rebates granted to distributors who provide tracking reports which show, among other things, the facility that purchased the products, and (ii) a provision for estimated contractual pricing allowances for products for which the Company has not received tracking reports. When rebates are issued, they are applied against the customer’s receivable balance. Distributors receive a rebate for the difference between the Wholesale Acquisition Cost and the appropriate contract price as reflected on a tracking report provided by the distributor to the Company. If product is sold by a distributor to an entity that has no contract, there is a standard rebate (lower than a contracted rebate) given to the distributor. One of the purposes of the rebate is to encourage distributors to submit tracking reports to the Company. The provision for contractual pricing allowances is recognized in the period the related sales are recognized and is reviewed at the end of each quarter and adjusted for changes in levels of products for which there is no tracking report. Additionally, if it becomes clear that tracking reports will not be provided by individual distributors, the provision is further adjusted. The estimated contractual allowance is included in Accounts payable in the Condensed Balance Sheets and deducted from Revenues in the Condensed Statements of Operations. Accounts payable included estimated contractual allowances for $4,893,647 and $3,435,352 as of March 31, 2021 and December 31, 2020, respectively. The terms and conditions of contractual pricing allowances are governed by contracts between the Company and its distributors. Revenue for shipments directly to end-users is recognized when title and risk of ownership pass from the Company. End-users do not receive any contractual allowances on their purchases. Any product shipped or distributed for evaluation purposes is expensed.
The Company provides product warranties that: i) the products are fit for medical use as generally defined within the boundaries of United States FDA approval; ii) the products are not defective; and iii) the products will conform to the descriptions set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written directions for use. The Company has historically not incurred significant warranty claims.
The Company’s domestic return policy provides that a customer may return incorrect shipments within 10 days following arrival at the distributor’s facility. In all such cases, the distributor must obtain an authorization code from the Company and affix the code to the returned product. The Company’s domestic return policy also generally provides that a customer may return product that is overstocked. Overstocking returns are limited to two times in each 12-month period up to 1% of distributor’s total purchase of products for the prior 12-month period. All product overstocks and returns are subject to inspection and acceptance by the Company.
The Company’s international distribution agreements generally do not provide for any returns.
The Company requires certain customers to pay in advance of product shipment. Such prepayments from customers are recorded in Other accrued liabilities and are generally recognized as revenue upon shipment of the product.
The Company recognizes revenue from licensing agreements when collection of such amounts from third parties is reasonably assured. If the Company licenses its products for sale, the Company is obligated to pay Thomas J. Shaw, the owner of certain patented technology, a certain percentage of such revenue pursuant to the terms of the Technology License Agreement between the Company and Mr. Shaw.
Disaggregated information of revenue recognized from contracts with customers and licensing fees recognized are as follows:
For the three months ended March 31, 2021:
Blood
Total
Collection
EasyPoint ®
Other
Product
Geographic Segment
Syringes
Products
Needles
Products
Sales
U.S. sales (excluding U.S. government)
$
8,759,314
$
574,008
$
1,612,333
$
15,536
$
10,961,191
Sales to U.S. government
37,782,360



37,782,360
North and South America sales (excluding U.S.)
825,820

11,968
109,440
947,228
Other international sales
199,316
37,350
144,780
1,500
382,946
Total
$
47,566,810
$
611,358
$
1,769,081
$
126,476
$
50,073,725
For the three months ended March 31, 2020:
Blood
Total
Collection
EasyPoint ®
Other
Product
Geographic Segment
Syringes
Products
Needles
Products
Sales
U.S. sales
$
6,972,935
$
580,123
$
765,860
$
17,879
$
8,336,797
North and South America sales (excluding U.S.)
2,054,784
2,700
1,496
687,420
2,746,400
Other international sales
114,830
1,740

2,450
119,020
Total
$
9,142,549
$
584,563
$
767,356
$
707,749
$
11,202,217
Income taxesIncome taxes
The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in the financial statements based on whether it is “more-likely-than-not” that a tax position will be sustained based upon the technical merits of the position. Measurement of the tax position is based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
The Company provides for deferred income taxes through utilizing an asset and liability approach for financial accounting and reporting based on the tax effects of differences between the financial statement and tax bases of assets and liabilities, based on enacted rates expected to be in effect when such differences reverse in future periods. Deferred tax assets are periodically reviewed for realizability. In prior periods, the Company established a valuation allowance for its net deferred tax asset as future taxable income which could not be reasonably assured. During the quarter ended June 30, 2020, the Company released its valuation allowance based on available evidence supporting that its deferred tax assets will be realized in full.
Earnings per shareEarnings per share
The Company computes basic earnings or loss per share (“EPS”) by dividing net earnings for the period (adjusted for any cumulative dividends for the period) by the weighted average number of common shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect, if any, of the common stock deliverable pursuant to stock options or common stock issuable upon the conversion of convertible preferred stock. At March 31, 2021, the calculation of diluted EPS under the treasury stock method included 152,967 shares of Common Stock underlying issued and outstanding stock options. Common stock issuable upon the conversion of 257,945 convertible preferred shares is included in the calculation of diluted EPS for the three months ended March 31, 2021. Preferred stock was excluded from the calculation of diluted EPS for the period ended March 31, 2020 because the effect was antidilutive. The potential dilution, if any, is shown on the following schedule:
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Net income
$
17,955,884
$
322,773
Preferred stock dividend requirements
(64,938)
(174,143)
Income applicable to common shareholders
$
17,890,946
$
148,630
Average common shares outstanding
33,967,771
32,681,204
Average common and common equivalent shares outstanding — assuming dilution
34,378,683
32,745,972
Basic earnings per share
$
0.53
$
0.00
Diluted earnings per share
$
0.52
$
0.00
Shipping and handling costsShipping and handling costs
The Company classifies shipping and handling costs as part of Cost of sales in the Condensed Statements of Operations.
Research and development costsResearch and development costs
Research and development costs are expensed as incurred.
LeasesLeases
The Company determines if an arrangement is a lease at inception. Operating and finance leases are included in Other assets, Other accrued liabilities, and Other long-term liabilities on the Condensed Balance Sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on information available at the commencement date was used in determining the present value of lease payments.
The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of twelve months or less are not recorded on the Condensed Balance Sheets; however, rent expense is recognized on a straight-line basis over the lease term.
Technology Investment Agreement (TIA)Technology Investment Agreement (TIA)
Effective July 1, 2020, the Company entered into a Technology Investment Agreement (“TIA”) with the United States Government Department of Defense, U.S. Army Contracting Command-Aberdeen Proving Ground, Natick Contracting Division & Edgewood Contracting Division (ACC-APG, NCD & ECD) on behalf of the Biomedical Advanced Research and Development Authority (BARDA) for $53,664,286 in Government funding for expanding the Company’s domestic production of needles and syringes. Pursuant to the terms of the TIA, the Company is expected to make significant additions to its facilities which should allow the Company to increase domestic production. As reimbursements are received from the U.S. government for such expenditures, the Company records a deferred liability. The deferred liability will be systematically amortized as a gain over the life of the related property, plant, and equipment as to offset the related depreciation expense of the assets acquired. The amortization will be presented separately from the depreciation expense on the Condensed Statements of Operations.
Recently Adopted Pronouncements and Recently Issued PronouncementRecently Adopted Pronouncements
The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” as well as subsequent clarifying amendments on January 1, 2020. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Many of the loss estimation techniques applied previously will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The adoption of ASU 2016-13, as well as the Targeted Transition Relief as provided by ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326) – Targeted Transition Relief” did not have a significant impact on the Company’s financial statements.
The Company adopted ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a Consensus of the FASB Emerging Issues Task Force)" on January 1, 2020. This amendment requires that implemented costs incurred in a hosting arrangement that is a service contract should be accounted for in accordance with ASC 350-40 Internal-Use Software. Accordingly, costs incurred during the preliminary project and post-implementation stages are expensed and costs associated with the application development phase are capitalized. The amendment also requires that capitalized costs be amortized over the term of the hosting arrangement and that capitalized costs should be evaluated for impairment. The adoption of this ASU did not have a significant impact on the Company's financial statements or disclosures.
In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The amendment modifies, among other things, disclosure requirements on fair value measurements and eliminates certain disclosures related to transfers and valuation levels of Level 3 fair value measurements. Additionally, the amendment requires disclosure of changes in unrealized gains and losses in other comprehensive income for Level 3 fair value measurements and certain qualitative factors related to significant unobservable inputs used in Level 3 valuations.
The amendment was effective for annual periods beginning after December 15, 2019 and interim periods within the annual period. The adoption of ASU 2018-13 did not have a significant effect on the Company's financial statements , as the Company does not currently have any investments classified as Level 3 fair value measurements.
In December 2019, the FASB issued ASU 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes”. The new standard is intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within the annual period, with early adoption permitted. Adoption of the standard requires certain changes primarily be made prospectively, with some changes to be made retrospectively. The Company has determined that the adoption of ASU 2019-12 did not have a material impact on its financial statements.
Recently Issued Pronouncement
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients for contracts that reference LIBOR, if certain criteria are met, that can be applied through December 31, 2022. As reference rate reform is still an ongoing process, the Company will continue to evaluate the timing and potential impact of adoption for optional expedients when deemed necessary.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)3 Months Ended
Mar. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of estimated useful lives of property, plant and equipmentProduction equipment
3 to 13 years
Office furniture and equipment
3 to 10 years
Buildings
39 years
Building improvements
15 years
Schedule of significant customersThree Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Number of significant customers
1
3
Aggregate dollar amount of net sales to significant customers
$
37.8 million
$
5.4 million
Percentage of net sales to significant customers
75.5
%
48.2
%
Schedule of disaggregated information of revenue recognized from contracts with customers and licensing feesFor the three months ended March 31, 2021:
Blood
Total
Collection
EasyPoint ®
Other
Product
Geographic Segment
Syringes
Products
Needles
Products
Sales
U.S. sales (excluding U.S. government)
$
8,759,314
$
574,008
$
1,612,333
$
15,536
$
10,961,191
Sales to U.S. government
37,782,360



37,782,360
North and South America sales (excluding U.S.)
825,820

11,968
109,440
947,228
Other international sales
199,316
37,350
144,780
1,500
382,946
Total
$
47,566,810
$
611,358
$
1,769,081
$
126,476
$
50,073,725
For the three months ended March 31, 2020:
Blood
Total
Collection
EasyPoint ®
Other
Product
Geographic Segment
Syringes
Products
Needles
Products
Sales
U.S. sales
$
6,972,935
$
580,123
$
765,860
$
17,879
$
8,336,797
North and South America sales (excluding U.S.)
2,054,784
2,700
1,496
687,420
2,746,400
Other international sales
114,830
1,740

2,450
119,020
Total
$
9,142,549
$
584,563
$
767,356
$
707,749
$
11,202,217
Schedule of earnings per shareThree Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Net income
$
17,955,884
$
322,773
Preferred stock dividend requirements
(64,938)
(174,143)
Income applicable to common shareholders
$
17,890,946
$
148,630
Average common shares outstanding
33,967,771
32,681,204
Average common and common equivalent shares outstanding — assuming dilution
34,378,683
32,745,972
Basic earnings per share
$
0.53
$
0.00
Diluted earnings per share
$
0.52
$
0.00

INVENTORIES (Tables)

INVENTORIES (Tables)3 Months Ended
Mar. 31, 2021
INVENTORIES
Schedule of inventoriesMarch 31, 2021
December 31, 2020
Raw materials
$
1,576,376
$
1,358,552
Finished goods
7,666,883
9,243,259
Inventory reserve
(297,208)
(297,208)
$
8,946,051
$

FAIR VALUE OF FINANCIAL INSTR_2

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)3 Months Ended
Mar. 31, 2021
FAIR VALUE OF FINANCIAL INSTRUMENTS
Summary of value of assets designated as investments in debt and equity securitiesMarch 31, 2021
Level 1
Level 2
Level 3
Total
Equity securities
$
9,647,668
$

$

$
9,647,668
Mutual funds and exchange traded funds
4,039,440


4,039,440
Certificates of deposit

76,779

76,779
$
13,687,108
$
76,779
$

$
13,763,887
December 31, 2020
Level 1
Level 2
Level 3
Total
Equity securities
$
$

$

$
Mutual funds and exchange traded funds
4,013,956


Certificates of deposit


$
$
$

$
Schedule of unrealized gains (losses) on investments in equity securitiesMarch 31, 2021
Gross Unrealized
Aggregate
Cost
Gains
Losses
Fair Value
Equity securities
$
6,636,822
$
3,010,846
$

$
9,647,668
Mutual funds and exchange traded funds
3,948,768
95,899
(5,227)
4,039,440
Certificates of deposit
75,000
1,779

76,779
$
10,660,590
$
3,108,524
$
(5,227)
$
13,763,887
December 31, 2020
Gross Unrealized
Aggregate
Cost
Gains
Losses
Fair Value
Equity securities
$
$
$

$
Mutual funds and exchange traded funds

Certificates of deposit

$
$
$

$

INCOME TAXES (Tables)

INCOME TAXES (Tables)3 Months Ended
Mar. 31, 2021
INCOME TAXES
Schedule of reconciliation of income taxes based on the federal statutory rate and the effective income tax rateMarch 31, 2021
December 31, 2020
U.S. statutory federal tax rate
21.0
%
21.0
%
Valuation Allowance

(21.0)
%
State taxes
5.9
%
0.2
%
Effective tax rate
26.9
%
0.2
%

OTHER ACCRUED LIABILITIES (Tabl

OTHER ACCRUED LIABILITIES (Tables)3 Months Ended
Mar. 31, 2021
OTHER ACCRUED LIABILITIES
Schedule of other accrued liabilitiesMarch 31, 2021
December 31, 2020
Prepayments from customers
$
1,566,167
$
Accrued property taxes
112,847

Accrued professional fees
368,995
Current portion — preferred stock repurchase
1,058,935
Other accrued expenses
159,965
Total
$
3,266,909
$
3,398,904

OTHER LONG-TERM LIABILITIES (Ta

OTHER LONG-TERM LIABILITIES (Tables)3 Months Ended
Mar. 31, 2021
OTHER LONG-TERM LIABILITIES
Schedule of other long-term liabilitiesMarch 31, 2021
December 31, 2020
Technology Investment Agreement (TIA)
$
31,378,662
$
22,444,324
Stock repurchase
1,004,888
2,034,373
Total
$
32,383,550
$
24,478,697

BUSINESS SEGMENT (Tables)

BUSINESS SEGMENT (Tables)3 Months Ended
Mar. 31, 2021
BUSINESS SEGMENT
Schedule of company's sales and long-lived assets by geographyRevenues by geography are as follows:
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
U.S. sales (excluding U.S. government)
$
10,961,191
$
8,336,797
Sales to U.S. government
37,782,360

North and South America sales (excluding U.S.)
947,228
2,746,400
Other international sales
382,946
119,020
Total sales
$
50,073,725
$
11,202,217
Long-lived assets by geography are as follows:
March 31, 2021
December 31, 2020
Long-lived assets
U.S.
$
43,157,637
$
International
59,214
Total
$
43,216,851
$
30,816,504

LEASES (Tables)

LEASES (Tables)3 Months Ended
Mar. 31, 2021
LEASES
Schedule of assets and liabilities relating to leases included in the Condensed Balance SheetsMarch 31, 2021
December 31, 2020
OPERATING LEASES
Other assets
$
26,049
$
Other accrued liabilities
$
26,049
$
Other long-term liabilities


Total operating lease liabilities
$
26,049
$
Schedule of future minimum payments under non-cancelable operating leases and financing leasesFuture minimum payments under non-cancelable operating leases and financing leases consist of the following at March 31, 2021:
Quarter ending March 31, 2021
$
26,335
Less imputed interest
(286)
Total
$
26,049

PAYCHECK PROTECTION PROGRAM L_2

PAYCHECK PROTECTION PROGRAM LOAN (Tables)3 Months Ended
Mar. 31, 2021
PAYCHECK PROTECTION PROGRAM LOAN
Schedule of Company's obligations under the PPP Loan prior to loan forgivenessPrior to loan forgiveness and as of March 31, 2021, the Company’s obligations under the PPP Loan were as follows:
2021
$
755,907
2022
607,093
$
1,363,000

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable (Details) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Accounts receivable
Allowance for bad debt $ 352,217 $ 205,822

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, plant and equipment (Details)3 Months Ended
Mar. 31, 2021
Production equipment | Minimum
Property, plant, and equipment
Useful lives (in years)3 years
Production equipment | Maximum
Property, plant, and equipment
Useful lives (in years)13 years
Office furniture and equipment | Minimum
Property, plant, and equipment
Useful lives (in years)3 years
Office furniture and equipment | Maximum
Property, plant, and equipment
Useful lives (in years)10 years
Buildings
Property, plant, and equipment
Useful lives (in years)39 years
Building Improvements
Property, plant, and equipment
Useful lives (in years)15 years

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration risks (Details)3 Months Ended
Mar. 31, 2021USD ($)customerMar. 31, 2020USD ($)customer
Concentration risks
Aggregate dollar amount of net sales to significant customers $ 50,073,725 $ 11,202,217
Customer Concentration Risk
Concentration risks
Number of significant customers | customer1 3
Aggregate dollar amount of net sales to significant customers $ 37,800,000 $ 5,400,000
Percentage of net sales to significant customers75.50%48.20%
Supplier Concentration Risk | China
Concentration risks
Concentration risk, geographic90.3%80.3%
Department of health and human
Concentration risks
Aggregate dollar amount of net sales to significant customers $ 37,800,000

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details)3 Months Ended12 Months Ended
Mar. 31, 2021USD ($)itemMar. 31, 2020USD ($)Dec. 31, 2020USD ($)
Revenue recognition
Estimated contractual allowance $ 4,893,647 $ 3,435,352
Period for return of incorrect shipments10 days
Number of times overstocking returns are limited | item2
Period for return of product due to overstock12 months
Maximum percentage of distributor's total purchase for the prior 12-month period1.00%
Sales, net $ 50,073,725 $ 11,202,217
Syringes
Revenue recognition
Sales, net47,566,810 9,142,549
Blood Collection Products
Revenue recognition
Sales, net611,358 584,563
Easy Point Needles
Revenue recognition
Sales, net1,769,081 767,356
Other Products
Revenue recognition
Sales, net126,476 707,749
Department of health and human
Revenue recognition
Sales, net37,800,000
U.S.
Revenue recognition
Sales, net10,961,191 8,336,797
U.S. | Syringes
Revenue recognition
Sales, net8,759,314 6,972,935
U.S. | Blood Collection Products
Revenue recognition
Sales, net574,008 580,123
U.S. | Easy Point Needles
Revenue recognition
Sales, net1,612,333 765,860
U.S. | Other Products
Revenue recognition
Sales, net15,536 17,879
U.S. government
Revenue recognition
Sales, net37,782,360
U.S. government | Syringes
Revenue recognition
Sales, net37,782,360
North and South America sales (excluding U.S.)
Revenue recognition
Sales, net947,228 2,746,400
North and South America sales (excluding U.S.) | Syringes
Revenue recognition
Sales, net825,820 2,054,784
North and South America sales (excluding U.S.) | Blood Collection Products
Revenue recognition
Sales, net2,700
North and South America sales (excluding U.S.) | Easy Point Needles
Revenue recognition
Sales, net11,968 1,496
North and South America sales (excluding U.S.) | Other Products
Revenue recognition
Sales, net109,440 687,420
Other international sales
Revenue recognition
Sales, net382,946 119,020
Other international sales | Syringes
Revenue recognition
Sales, net199,316 114,830
Other international sales | Blood Collection Products
Revenue recognition
Sales, net37,350 1,740
Other international sales | Easy Point Needles
Revenue recognition
Sales, net144,780
Other international sales | Other Products
Revenue recognition
Sales, net $ 1,500 $ 2,450

SUMMARY OF SIGNIFICANT ACCOUN_8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) - USD ($)3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Earnings per share
Additional stock options included in calculation of diluted EPS152,967
Common stock issuable upon the conversion of convertible preferred shares257,945
Net income $ 17,955,884 $ 322,773
Preferred stock dividend requirements(64,938)(174,143)
Income applicable to common shareholders $ 17,890,946 $ 148,630
Average common shares outstanding33,967,771 32,681,204
Average common and common equivalent shares outstanding - assuming dilution34,378,683 32,745,972
Basic earnings per share $ 0.53 $ 0
Diluted earnings per share $ 0.52 $ 0

SUMMARY OF SIGNIFICANT ACCOUN_9

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Technology Investment Agreement (TIA) (Details)3 Months Ended
Mar. 31, 2021USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Research and development agreement with government funding amount $ 53,664,286

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)Mar. 31, 2021Dec. 31, 2020
INVENTORIES
Raw materials $ 1,576,376 $ 1,358,552
Finished goods7,666,883 9,173,302
Inventory, gross9,243,259 10,531,854
Inventory reserve(297,208)(297,208)
Inventory, net $ 8,946,051 $ 10,234,646

FAIR VALUE OF FINANCIAL INSTR_3

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($)3 Months Ended12 Months Ended
Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Investments in equity securities
Investments in debt and equity securities, at fair value $ 13,763,887 $ 8,081,833
Gross Unrealized
Cost10,660,590 6,082,508
Gross Unrealized Gains3,108,524 1,999,325
Gross Unrealized Losses(5,227)
Unrealized gains (loss) on investments in debt and equity securities1,103,972 $ (164,342)
Level 1
Investments in equity securities
Investments in debt and equity securities, at fair value13,687,108 8,004,489
Level 2
Investments in equity securities
Investments in debt and equity securities, at fair value76,779 77,344
Equity securities
Investments in equity securities
Investments in debt and equity securities, at fair value9,647,668 3,990,533
Gross Unrealized
Cost6,636,822 2,098,144
Gross Unrealized Gains3,010,846 1,892,389
Equity securities | Level 1
Investments in equity securities
Investments in debt and equity securities, at fair value9,647,668 3,990,533
Mutual funds and exchange traded funds
Investments in equity securities
Investments in debt and equity securities, at fair value4,039,440 4,013,956
Gross Unrealized
Cost3,948,768 3,909,364
Gross Unrealized Gains95,899 104,592
Gross Unrealized Losses(5,227)
Mutual funds and exchange traded funds | Level 1
Investments in equity securities
Investments in debt and equity securities, at fair value4,039,440 4,013,956
Certificates of deposit
Investments in equity securities
Investments in debt and equity securities, at fair value76,779 77,344
Gross Unrealized
Cost75,000 75,000
Gross Unrealized Gains1,779 2,344
Certificates of deposit | Level 2
Investments in equity securities
Investments in debt and equity securities, at fair value $ 76,779 $ 77,344

INCOME TAXES (Details)

INCOME TAXES (Details)3 Months Ended12 Months Ended
Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Reconciliation of income taxes based on the federal statutory rate and the effective income tax rate
U.S. statutory federal tax rate (as a percent)21.00%21.00%
Valuation Allowance (as a percent)(21.00%)
State taxes (as a percent)5.90%0.20%
Effective tax rate (as a percent)26.90%0.20%0.20%

OTHER ACCRUED LIABILITIES (Deta

OTHER ACCRUED LIABILITIES (Details) - USD ($)Mar. 31, 2021Dec. 31, 2020
OTHER ACCRUED LIABILITIES
Prepayments from customers $ 1,566,167 $ 1,686,868
Accrued property taxes112,847
Accrued professional fees368,995 331,204
Current portion - preferred stock repurchase1,058,935 1,092,282
Other accrued expenses159,965 288,550
Total $ 3,266,909 $ 3,398,904

OTHER LONG-TERM LIABILITIES (De

OTHER LONG-TERM LIABILITIES (Details) - USD ($)Mar. 31, 2021Dec. 31, 2020
OTHER LONG-TERM LIABILITIES
Technology Investment Agreement (TIA) $ 31,378,662 $ 22,444,324
Stock repurchase1,004,888 2,034,373
Total $ 32,383,550 $ 24,478,697

OTHER LONG-TERM LIABILITIES- Ad

OTHER LONG-TERM LIABILITIES- Additional information (Details)3 Months Ended
Mar. 31, 2021USD ($)shares
OTHER LONG-TERM LIABILITIES
Net present value | $ $ 2,057,823
Purchase price is payable | $ $ 1,101,110
Series IV Preferred Stock
OTHER LONG-TERM LIABILITIES
Preferred shareholders as a result of private stock purchases | shares320,333
Series V Preferred Stock
OTHER LONG-TERM LIABILITIES
Preferred shareholders as a result of private stock purchases | shares25,000

BUSINESS SEGMENT (Details)

BUSINESS SEGMENT (Details) - USD ($)3 Months Ended
Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Sales by geography
Sales, net $ 50,073,725 $ 11,202,217
Long-lived assets
Long-lived assets43,216,851 $ 30,816,504
U.S.
Sales by geography
Sales, net10,961,191 8,336,797
Long-lived assets
Long-lived assets43,157,637 30,751,259
U.S. government
Sales by geography
Sales, net37,782,360
North and South America sales (excluding U.S.)
Sales by geography
Sales, net947,228 2,746,400
Other international sales
Sales by geography
Sales, net382,946 $ 119,020
International
Long-lived assets
Long-lived assets $ 59,214 $ 65,245

DIVIDENDS (Details)

DIVIDENDS (Details) - USD ($)1 Months Ended3 Months Ended12 Months Ended
Apr. 30, 2021Jan. 31, 2021Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Dividends
Dividends paid $ 39,050 $ 54,800
Series I, Class B
Dividends
Dividends paid $ 10,041 $ 48,000
Series II, Class B
Dividends
Dividends paid $ 39,050 $ 39,050 $ 168,642

LEASES (Details)

LEASES (Details) - USD ($)3 Months Ended
Mar. 31, 2021Mar. 31, 2020Jan. 31, 2021Dec. 31, 2020
LEASES
Operating lease cost $ 12,843 $ 20,283
Cash outflows related to leases12,843 20,283
Assets and liabilities associated with these leases in Balance Sheets
Other assets $ 26,049 $ 38,892
Other assets [Extensible List]us-gaap:OtherAssetsus-gaap:OtherAssets
Other accrued liabilities $ 26,049 $ 38,892
Other accrued liabilities [Extensible List]us-gaap:OtherAccruedLiabilitiesCurrentus-gaap:OtherAccruedLiabilitiesCurrent
Other long-term liabilities [Extensible List]us-gaap:OtherLiabilitiesNoncurrentus-gaap:OtherLiabilitiesNoncurrent
Total operating lease liabilities $ 26,049 $ 26,049 $ 38,892
Weighted average remaining lease term6 months
Weighted average discount rate3.75%
Maximum
LEASES
Remaining lease term1 year

LEASES - Future minimum payment

LEASES - Future minimum payments (Details) - USD ($)Mar. 31, 2021Dec. 31, 2020Mar. 31, 2020
Future minimum payments under non-cancelable operating leases and financing leases
Remainder of 2021 $ 26,335
Less imputed interest(286)
Total operating lease liabilities $ 26,049 $ 38,892 $ 26,049

EXCHANGE OF COMMON STOCK FOR _2

EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK (Details) - USD ($)3 Months Ended12 Months Ended
Mar. 31, 2021Dec. 31, 2020
EXCHANGE OF COMMON STOCK FOR PREFERRED STOCK
Aggregate cash consideration $ 3,786,000
Payment for repurchase of stock $ 482,670
Cash consideration payment period3 years

STOCK OPTIONS (Details)

STOCK OPTIONS (Details)3 Months Ended
Mar. 31, 2021USD ($)shares
STOCK OPTIONS
Shares of Common Stock issued for exercises | shares20,400
Proceeds from the exercise of stock options | $ $ 43,350

TECHNOLOGY INVESTMENT AGREEME_2

TECHNOLOGY INVESTMENT AGREEMENT (Details) $ in MillionsJul. 01, 2020Mar. 31, 2021USD ($)ft²
TECHNOLOGY INVESTMENT AGREEMENT
Technology investment agreement term10 years
Purchase of automated assembly and auxiliary equipment $ 50.6
Area of land for existing properties | ft²27,800
Area of land for new warehouse | ft²55,000
Estimated cost of the controlled environment within existing properties $ 6.5
Estimated cost of the construction of the new warehouse $ 5.8

PAYCHECK PROTECTION PROGRAM L_3

PAYCHECK PROTECTION PROGRAM LOAN (Details) - Paycheck Protection Program, CARES Act - USD ($)May 13, 2021Apr. 17, 2020
Paycheck Protection Program
Principal amount, COVID-19 $ 1,363,000
Interest rate (as a percent)1.00%
Subsequent Events
Paycheck Protection Program
Loan amount forgiveness, CARES Act $ 1,363,000

PAYCHECK PROTECTION PROGRAM L_4

PAYCHECK PROTECTION PROGRAM LOAN - Future payments (Details) - Paycheck Protection Program, CARES ActMar. 31, 2021USD ($)
Paycheck Protection Program
2021 $ 755,907
2022607,093
Long term debt total $ 1,363,000

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Events - USD ($)May 13, 2021Apr. 30, 2021
SUBSEQUENT EVENTS
Preliminary notice, notice of intent to extend Government contract, purchase price $ 23,500,000
Paycheck Protection Program, CARES Act
SUBSEQUENT EVENTS
Loan amount forgiveness, CARES Act $ 1,363,000