Document and Entity Information
v3.3.0.814
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2016
May. 12, 2016
Document and Entity Information [Abstract]    
Entity Registrant Name ARRHYTHMIA RESEARCH TECHNOLOGY INC /DE/  
Entity Central Index Key 0000819689  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Document Type 10-Q  
Document Period End Date Mar. 31, 2016  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   2,816,639

Condenced Consolidated Balance Sheets
v3.3.0.814
Condenced Consolidated Balance Sheets - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Current assets:    
Cash and cash equivalents $ 220,299 $ 272,291
Trade accounts receivable, net of allowance for doubtful accounts of $60,000 at March 31, 2016 and December 31, 2015 3,339,549 2,798,353
Inventories 2,115,071 2,118,712
Prepaid expenses and other current assets 637,529 614,129
Total current assets 6,312,448 5,803,485
Property, plant and equipment, net 6,638,327 6,626,069
Assets held for sale, net 665,000 665,000
Intangible assets, net 18,206 18,645
Other assets 239,480 268,835
Total assets 13,873,461 13,382,034
Current liabilities:    
Equipment line of credit, current portion 51,299 35,718
Term notes payable, current portion 596,255 589,635
Subordinated promissory notes 480,056 473,135
Accounts payable 1,671,531 1,553,388
Accrued expenses and other current liabilities 374,769 275,777
Customer deposits 359,662 93,407
Deferred revenue, current 258,543 272,837
Total current liabilities 3,792,115 3,293,897
Long-term liabilities:    
Revolving line of credit, non-current portion 1,981,495 1,511,495
Equipment line of credit, non-current portion 285,551 301,132
Term notes payable, non-current portion 969,209 1,120,652
Deferred revenue, non-current 280,279 272,181
Total long-term liabilities 3,516,534 3,205,460
Total liabilities $ 7,308,649 $ 6,499,357
Commitments and Contingencies
Shareholders' equity:    
Preferred stock, $0.001 par value; 2,000,000 shares authorized, none issued $ 0 $ 0
Common stock, $0.01 par value; 10,000,000 shares authorized; 3,926,491 issued, 2,816,639 outstanding at March 31, 2016 and 3,926,491 issued, 2,801,639 outstanding at December 31, 2015 39,265 39,265
Additional paid-in-capital 11,406,887 11,381,536
Treasury stock at cost, 1,109,852 shares at March 31, 2016 and 1,124,852 sahres at December 31,2015 (3,028,564) (3,069,496)
Accumulated deficit (1,852,776) (1,468,628)
Total shareholders' equity 6,564,812 6,882,677
Total liabilities and shareholders' equity $ 13,873,461 $ 13,382,034

Condenced Consolidated Balance Sheets (Parenthetical)
v3.3.0.814
Condenced Consolidated Balance Sheets (Parenthetical) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Consolidated Balance Sheets [Abstract]    
Allowance for doubtful accounts receivable, current $ 60,000 $ 60,000
Preferred stock, par value per share $ 0.001 $ 0.001
Preferred stock, shares authorized 2,000,000 2,000,000
Preferred stock, shares issued 0 0
Common stock, par value per share $ 0.01 $ 0.01
Common stock, shares authorized 10,000,000 10,000,000
Common stock, shares issued 3,926,491 3,926,491
Common stock, shares outstanding 2,816,639 2,801,639
Treasury stock, shares 1,109,852 1,124,852

Condenced Consolidated Statements of Operations
v3.3.0.814
Condenced Consolidated Statements of Operations - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Condenced Consolidated Statements of Operations [Abstract]    
Net sales $ 4,983,281 $ 5,858,342
Cost of sales 4,298,162 5,061,946
Gross profit 685,119 796,396
Selling and marketing 293,346 257,972
General and administrative 690,635 648,227
Research and development 25,843 92,561
Total operating expenses 1,009,824 998,760
Net loss from continuing operations (324,705) (202,364)
Other expense:    
Interest expense (60,220) (65,693)
Other income, net 777 13,509
Total other expense, net (59,443) (52,184)
Loss from continuing operations before income taxes (384,148) (254,548)
Income tax provision 0 0
Net loss from continuing operations (384,148) (254,548)
Discontinued Operations:    
Income from discontinued operations, net of tax provision of $0 for the three months ended March 31, 2016 and 2015 0 362,610
Net income (loss) $ (384,148) $ 108,062
Earnings (loss) per share - basic    
Continuing operations $ (0.14) $ (0.09)
Discontinued operations 0.00 0.13
Earnings (loss) per share - basic (0.14) 0.04
Earnings (loss) per share - diluted    
Continuing operations (0.14) (0.09)
Discontinued operations 0.00 0.13
Earnings (loss) per share - diluted $ (0.14) $ 0.04
Weighted average common shares outstanding - basic 2,816,144 2,778,935
Weighted average common shares outstanding - diluted 2,816,144 2,877,599

Condenced Consolidated Statements of Operations (Parenthetical)
v3.3.0.814
Condenced Consolidated Statements of Operations (Parenthetical) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Condenced Consolidated Statements of Operations [Abstract]    
Tax provision, discontinued operations $ 0 $ 0

Condenced Consolidated Statements of Cash Flows
v3.3.0.814
Condenced Consolidated Statements of Cash Flows - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities:    
Net income (loss) $ (384,148) $ 108,062
Income from discontinued operations 0 (362,610)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
(Gain) loss on sale of property, plant and equipment 0 (11,029)
Depreciation and amortization 361,440 356,382
Non-cash interest expense 6,921 6,921
Change in allowance for doubtful accounts 0 3,000
Share-based compensation expense 15,133 7,186
Changes in operating assets and liabilities:    
Accounts receivable (541,196) (476,322)
Inventories 3,641 (11,947)
Prepaid expenses and other current assets (23,400) (96,785)
Other non-current assets 29,355 168,405
Accounts payable 118,143 411,677
Accrued expenses and other current liabilities 350,954 357,803
Other non-current liabilities 8,097 (185,641)
Net cash provided by (used in) operating activities (55,060) 275,102
Cash flows from investing activities:    
Purchases of property, plant and equipment (373,259) (242,390)
Proceeds from sale of property, plant and equipment 0 17,000
Cash paid for patents and trademarks 0 (1,057)
Net cash provided by (used in) investing activities (373,259) (226,447)
Cash flows from financing activities:    
Proceeds from (payments on) revolving line of credit, net 470,000 250,000
Payments on term notes payable (144,823) (120,551)
Proceeds from stock option exercises 51,150 3,880
Net cash provided by (used in) financing activities 376,327 133,329
Net increase (decrease) in cash and cash equivalents (51,992) 181,984
Cash and cash equivalents, beginning of period 272,291 209,398
Cash and cash equivalents, end of period 220,299 391,382
Supplemental Cash Flow Information    
Cash paid for interest $ 55,579 $ 53,705

Basis of Presentation
v3.3.0.814
Basis of Presentation
3 Months Ended
Mar. 31, 2016
Basis of Presentation [Abstract]  
Basis of Presentation

1.  Basis of Presentation



The consolidated financial statements (the "financial statements") include the accounts of Arrhythmia Research Technology, Inc.® (“ART”) and its subsidiary, Micron Products, Inc.® ("Micron" and together with ART, the “Company”). ART discontinued operations of its wholly-owned Pennsylvania subsidiary, RMDDxUSA Corp. (“RMDDxUSA”) and that subsidiary’s Prince Edward Island subsidiary, RMDDx Corporation (“RMDDx” and collectively with RMDDxUSA,“WirelessDx”) in the third quarter of 2012.  In May 2014, RMDDxUSA filed for bankruptcy and the Chapter 7 discharge order was issued on March 20, 2015 and the case was closed (see Note 10).   The WirelessDx results are presented herein as discontinued operations.  All intercompany balances and transactions have been eliminated in consolidation.



The unaudited interim condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC").  Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations.  These financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 10, 2016.  



The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company's balance sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements.



The information presented reflects, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial results for the interim periods presented. The preparation of financial statements in conformity with 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 from those estimates. 

 


Earnings per Share
v3.3.0.814
Earnings per Share
3 Months Ended
Mar. 31, 2016
Earnings per Share [Abstract]  
Earnings per Share

2.  Earnings per Share ("EPS")



Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding.  The computation of diluted earnings (loss) per share is similar to the computation of basic earnings (loss) per share except that the denominator is increased to include the average number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.  In addition, the numerator is adjusted for any changes in net income (loss) that would result from the assumed conversions of those potential shares.



The following table presents the calculation of both basic and diluted EPS:







 

 

 

 

 

 



 

 

 

 

 

 



 

Three Months Ended



 

March 31,



 

2016

 

2015

Income (loss) from continuing operations

 

$

(384,148)

 

$

(254,548)

Income from discontinued operations, net of tax

 

 

 —

 

 

362,610 

Net income (loss) available to common shareholders

 

$

(384,148)

 

$

108,062 

Basic EPS:

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

2,816,144 

 

 

2,778,935 

Earnings (loss) per share - basic

 

 

 

 

 

 

Continuing operations

 

$

(0.14)

 

$

(0.09)

Discontinued operations

 

 

 —

 

 

0.13 

Consolidated basic EPS

 

$

(0.14)

 

$

0.04 

Diluted EPS:

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

2,816,144 

 

 

2,778,935 

Assumed conversion of net common shares issuable
under stock option plans

 

 

 —

 

 

62,164 

Assumed conversion of net common shares issuable
under warrants

 

 

 —

 

 

36,500 

Weighted average common and common equivalent shares
outstanding, diluted

 

 

2,816,144 

 

 

2,877,599 

Earnings (loss) per share - diluted

 

 

 

 

 

 

Continuing operations

 

$

(0.14)

 

$

(0.09)

Discontinued operations

 

 

 —

 

 

0.13 

Consolidated diluted EPS

 

$

(0.14)

 

$

0.04 

 


Earnings per share (Tables)
v3.3.0.814
Earnings per share (Tables)
3 Months Ended
Mar. 31, 2016
Earnings per Share [Abstract]  
Calculation of basic and diluted EPS



 

 

 

 

 

 



 

 

 

 

 

 



 

Three Months Ended



 

March 31,



 

2016

 

2015

Income (loss) from continuing operations

 

$

(384,148)

 

$

(254,548)

Income from discontinued operations, net of tax

 

 

 —

 

 

362,610 

Net income (loss) available to common shareholders

 

$

(384,148)

 

$

108,062 

Basic EPS:

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

2,816,144 

 

 

2,778,935 

Earnings (loss) per share - basic

 

 

 

 

 

 

Continuing operations

 

$

(0.14)

 

$

(0.09)

Discontinued operations

 

 

 —

 

 

0.13 

Consolidated basic EPS

 

$

(0.14)

 

$

0.04 

Diluted EPS:

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

2,816,144 

 

 

2,778,935 

Assumed conversion of net common shares issuable
under stock option plans

 

 

 —

 

 

62,164 

Assumed conversion of net common shares issuable
under warrants

 

 

 —

 

 

36,500 

Weighted average common and common equivalent shares
outstanding, diluted

 

 

2,816,144 

 

 

2,877,599 

Earnings (loss) per share - diluted

 

 

 

 

 

 

Continuing operations

 

$

(0.14)

 

$

(0.09)

Discontinued operations

 

 

 —

 

 

0.13 

Consolidated diluted EPS

 

$

(0.14)

 

$

0.04 




Earnings per share (Calculation of EPS ) (Details)
v3.3.0.814
Earnings per share (Calculation of EPS ) (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Earnings per Share [Abstract]    
Income (loss) from continuing operations $ (384,148) $ (254,548)
Income from discontinued operations, net of tax 0 362,610
Net income (loss) available to common shareholder $ (384,148) $ 108,062
Basic EPS:    
Weighted average common shares outstanding 2,816,144 2,778,935
Earnings (loss) per share - basic    
Continuing operations $ (0.14) $ (0.09)
Discontinued operations 0.00 0.13
Earnings (loss) per share - basic $ (0.14) $ 0.04
Diluted EPS:    
Weighted average common shares outstanding 2,816,144 2,778,935
Assumed conversion of net common shares issuable under stock option plans 0 62,164
Assumed conversion of net common shares issuable under warrants 0 36,500
Weighted average common and common equivalent shares outstanding, diluted 2,816,144 2,877,599
Earnings (loss) per share - diluted    
Continuing operations $ (0.14) $ (0.09)
Discontinued operations 0.00 0.13
Earnings (loss) per share - diluted $ (0.14) $ 0.04

Inventories
v3.3.0.814
Inventories
3 Months Ended
Mar. 31, 2016
Inventories [Abstract]  
Inventories

3.  Inventories



Inventories consist of the following:







 

 

 

 

 

 



 

 

 

 

 

 



 

March 31,

 

December 31,



 

2016

 

2015

Raw materials

 

$

744,320 

 

$

775,427 

Work-in-process

 

 

397,850 

 

 

265,113 

Finished goods

 

 

972,901 

 

 

1,078,172 

Total

 

$

2,115,071 

 

$

2,118,712 



Silver included in raw materials, work-in-process and finished goods inventory had an estimated cost of $297,851 and $313,738 as of March 31, 2016 and December 31, 2015, respectively.

 


Inventories (Tables)
v3.3.0.814
Inventories (Tables)
3 Months Ended
Mar. 31, 2016
Inventories [Abstract]  
Inventories



 

 

 

 

 

 



 

 

 

 

 

 



 

March 31,

 

December 31,



 

2016

 

2015

Raw materials

 

$

744,320 

 

$

775,427 

Work-in-process

 

 

397,850 

 

 

265,113 

Finished goods

 

 

972,901 

 

 

1,078,172 

Total

 

$

2,115,071 

 

$

2,118,712 




Inventories (Details)
v3.3.0.814
Inventories (Details) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Inventories [Abstract]    
Raw materials $ 744,320 $ 775,427
Work-in-process 397,850 265,113
Finished goods 972,901 1,078,172
Total 2,115,071 2,118,712
Silver inventory $ 297,851 $ 313,738

Property, Plant and Equipment, net
v3.3.0.814
Property, Plant and Equipment, net
3 Months Ended
Mar. 31, 2016
Property, Plant and Equipment, net [Abstract]  
Property, Plant and Equipment, net

4.  Property, Plant and Equipment, net



Property, plant and equipment, net consist of the following:







 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

Asset Lives

 

March 31,

 

December 31,



 

(in years)

 

2016

 

2015

Machinery and equipment

 

3

to

15

 

$

15,285,910 

 

$

15,168,377 

Building and improvements

 

5

to

25

 

 

3,978,387 

 

 

3,978,387 

Vehicles

 

3

to

5

 

 

90,713 

 

 

90,713 

Furniture, fixtures, computers and software

 

3

to

5

 

 

1,439,381 

 

 

1,437,692 

Construction in progress

 

 

 

 

 

 

936,106 

 

 

682,069 

Total property, plant and equipment

 

 

 

 

 

 

21,730,497 

 

 

21,357,238 

Less: accumulated depreciation

 

 

 

 

 

 

(15,092,170)

 

 

(14,731,169)

Property, plant and equipment, net

 

 

 

 

 

$

6,638,327 

 

$

6,626,069 



For the three months ended March 31, 2016 and 2015, the Company recorded depreciation expense of $361,001 and $355,388, respectively.



On December 4, 2015, the Company entered into a Letter of Intent to sell its two unoccupied buildings, with a total of approximately 52,000 square feet, and land, at its Fitchburg, Massachusetts campus.  On January 13, 2016, the Company entered into a Purchase and Sale Agreement to sell these two buildings which have been classified as Assets Held for Sale at March 31, 2016 and December 31, 2015. The carrying value of the properties ($665,000) approximated the fair value less the cost to sell. The Company expects the sale of the properties to be completed by the end of 2016 and does not expected any material impact on the statement of operations.


Property, Plant and Equipment, net (Narrative) (Details)
v3.3.0.814
Property, Plant and Equipment, net (Narrative) (Details)
3 Months Ended
Dec. 04, 2015
ft²
item
Mar. 31, 2016
USD ($)
Mar. 31, 2015
USD ($)
Dec. 31, 2015
USD ($)
Depreciation expense   $ 361,001 $ 355,388  
Assets held for sale, net   $ 665,000   $ 665,000
Fitchburg, Massachusetts [Member]        
Number of unoccupied buildings with letter of intent to sale | item 2      
Area of unoccupied buildings | ft² 52,000      

Property, Plant and Equipment, net (Property, Plant and Equipment) (Details)
v3.3.0.814
Property, Plant and Equipment, net (Property, Plant and Equipment) (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment    
Machinery and equipment $ 15,285,910 $ 15,168,377
Buildings and improvements 3,978,387 3,978,387
Vehicles 90,713 90,713
Furniture,fixtures, computers and software 1,439,381 1,437,692
Construction in progress 936,106 682,069
Total property, plant and equipment 21,730,497 21,357,238
Less: accumulated depreciation (15,092,170) (14,731,169)
Property, plant and equipment, net $ 6,638,327 $ 6,626,069
Maximum [Member] | Machinery and Equipment [Member]    
Property, Plant and Equipment    
Useful life 15 years  
Maximum [Member] | Building and Improvements [Member]    
Property, Plant and Equipment    
Useful life 25 years  
Maximum [Member] | Vehicles [Member]    
Property, Plant and Equipment    
Useful life 5 years  
Maximum [Member] | Furniture, Fixtures, Computers and Software [Member]    
Property, Plant and Equipment    
Useful life 5 years  
Minimum [Member] | Machinery and Equipment [Member]    
Property, Plant and Equipment    
Useful life 3 years  
Minimum [Member] | Building and Improvements [Member]    
Property, Plant and Equipment    
Useful life 5 years  
Minimum [Member] | Vehicles [Member]    
Property, Plant and Equipment    
Useful life 3 years  
Minimum [Member] | Furniture, Fixtures, Computers and Software [Member]    
Property, Plant and Equipment    
Useful life 3 years  

Intangible Assets, net
v3.3.0.814
Intangible Assets, net
3 Months Ended
Mar. 31, 2016
Intangible Assets, net [Abstract]  
Intangibles Assets, net

5.  Intangible Assets, net



The Company assesses the impairment of long-lived assets and intangible assets with finite lives annually or whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable. For the three months ended March 31, 2016 and 2015, no impairment was required. 



Intangible assets consist of the following:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Estimated

 

March 31, 2016

 

December 31, 2015



 

Useful Life

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Accumulated

 

 

 



 

(in years)

 

Gross

 

Amortization

 

Net

 

Gross

 

Amortization

 

Net

Patents and trademarks

 

10 

 

$

26,626 

 

 

8,420 

 

$

18,206 

 

$

26,626 

 

$

7,981 

 

$

18,645 

Total intangible assets

 

 

 

$

26,626 

 

$

8,420 

 

$

18,206 

 

$

26,626 

 

$

7,981 

 

$

18,645 



For the three months ended March 31, 2016 and 2015, the Company recorded amortization expense of $439 and $994, respectively. 


Intangible Assets, net (Tables)
v3.3.0.814
Intangible Assets, net (Tables)
3 Months Ended
Mar. 31, 2016
Intangible Assets, net [Abstract]  
Intangibles Assets, net



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Estimated

 

March 31, 2016

 

December 31, 2015



 

Useful Life

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Accumulated

 

 

 



 

(in years)

 

Gross

 

Amortization

 

Net

 

Gross

 

Amortization

 

Net

Patents and trademarks

 

10 

 

$

26,626 

 

 

8,420 

 

$

18,206 

 

$

26,626 

 

$

7,981 

 

$

18,645 

Total intangible assets

 

 

 

$

26,626 

 

$

8,420 

 

$

18,206 

 

$

26,626 

 

$

7,981 

 

$

18,645 




Intangible Assets, net (Narrative) (Details)
v3.3.0.814
Intangible Assets, net (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Intangible Assets, net [Abstract]    
Intangible asset impairment $ 0 $ 0
Amortization expense $ 439 $ 994

Intangible Assets, net (Intangible Assets) (Details)
v3.3.0.814
Intangible Assets, net (Intangible Assets) (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Intangible Assets [Line Items]    
Gross $ 26,626 $ 26,626
Accumulated Amortization 8,420 7,981
Net $ 18,206 18,645
Patents and Trademarks [Member]    
Intangible Assets [Line Items]    
Estimated Useful Life (in years) 10 years  
Gross $ 26,626 26,626
Accumulated Amortization 8,420 7,981
Net $ 18,206 $ 18,645

Debt
v3.3.0.814
Debt
3 Months Ended
Mar. 31, 2016
Debt [Abstract]  
Debt



6.  Debt



The following table sets forth the items which comprise debt for the Company:





 

 

 

 

 

 



 

 

 

 

 

 



 

March 31,

 

December 31,



 

2016

 

2015

Revolving line of credit

 

$

1,981,495 

 

$

1,511,495 

Equipment line of credit

 

$

336,850 

 

$

336,850 

Subordinated promissory notes

 

$

480,056 

 

$

473,135 



 

 

 

 

 

 

Term notes payable:

 

 

 

 

 

 

Commercial term loan

 

$

638,199 

 

$

714,175 

Equipment term loans

 

 

824,993 

 

 

879,898 

Equipment notes

 

 

102,272 

 

 

116,214 

Total term notes payable

 

$

1,565,464 

 

$

1,710,287 



 

 

 

 

 

 

Total Debt

 

$

4,363,865 

 

$

4,031,767 







Bank Debt



The revolving line of credit (the "revolver"), commercial term loan, two equipment term loans and an equipment line of credit are all under the terms of a multi-year credit facility with a bank as detailed below. The debt is secured by substantially all assets of the Company with the exception of real property.



Revolver



The revolver provides for borrowings up to 80% of eligible accounts receivable and 50% of eligible raw materials inventory.  The interest rate on the revolver is calculated at the bank's prime rate plus 0.25%  (3.75% at March 31, 2016). The revolver has a maturity date of June 2017. Amounts available to borrow under the revolver are $264,731 at March 31, 2016.



Commercial term loan



The commercial term loan has a five year term with a maturity date in March 2018. The interest rate on the loan is a fixed 4.25% per annum, and requires monthly payments of approximately $28,000.  



Equipment line of credit and equipment term loans



On March 29, 2013, the Company entered into an equipment line of credit that allowed for advances of up to $1.0 million and included a one-year draw period during which payments were interest only. The draw period ended March 29, 2014 and the then outstanding balance on the equipment line of credit of $740,999 was converted to an equipment term loan with a five-year term, maturing on of March 29, 2019. The equipment term loan requires monthly payments of approximately $14,000, consisting of principal and interest at a fixed rate of 4.65%.



On June 26, 2014, the Company entered into an equipment line of credit that allowed for advances of up to $1.0 million and included a one-year draw period during which payments were interest only. The draw period ended June 26, 2015 and the then outstanding balance on the equipment line of credit of $415,785 was converted to an equipment term loan with a five-year term, maturing on of June 26, 2020. The equipment term loan requires monthly payments of approximately $8,000, consisting of principal and interest at a fixed rate of 4.67%.



On June 19, 2015, the Company entered into a new equipment line of credit for $1.0 million under the Company's multi-year credit facility. At March 31, 2016, the Company has drawn $336,850 on the new equipment line of credit. The term of this equipment line of credit is six years, maturing on June 19, 2021, inclusive of a maximum one-year draw period. Repayment shall consist of monthly interest only payments, equal to the bank's prime rate plus 0.25% as to each advance commencing on the date of the loan through the earlier of: (i) one year from the date of the loan or (ii) the date upon which the equipment line of credit is fully advanced (the “Conversion Date”). On the Conversion Date, principal and interest payments will be due and payable monthly in an amount sufficient to pay the loan in full based upon an amortization schedule commensurate with the remaining term of the loan.



Other Debt



Equipment notes



In January 2013, the Company entered into two equipment notes totaling $272,500 with a financing company to acquire production equipment. The notes bear interest at the fixed rate of 4.66% and require monthly payments of principal and interest of approximately $5,000 over a five year term maturing in January 2018.



Subordinated promissory notes



In December 2013, the Company completed a private offering in which the Company sold an aggregate of $500,000 in subordinated promissory notes. The notes are unsecured and require quarterly interest-only payments at a rate of 10% per annum for the first two years, increasing to 12% per annum in December 2015. The notes mature in December 2016 at which point the outstanding balance is due in full. The subordinated promissory notes may be prepaid by the Company at any time following the first anniversary thereof without penalty. The notes are subordinated to all indebtedness of the Company pursuant to the bank credit facility.



In connection with the subordinated promissory notes, the Company issued warrants to purchase the Company's common stock at $3.51 per share. The warrants expire in December 2016. The proceeds were allocated between the notes and warrants on a relative fair value basis resulting in $416,950 allocated to the notes and $83,050 allocated to the warrants as part of Additional-Paid-in-Capital. The total discount on the notes is being recognized as non-cash interest expense over the term of the notes. The Company recorded $6,921 for the three months ended March 31, 2016 and 2015 of non-cash interest expense related to the amortization of the discount. The unamortized discount which is net against the outstanding balance of the subordinated promissory notes is $19,944 at March 31, 2016 and $26,865 at December 31, 2015.

 


Debt (Bank Debt Narrative) (Details)
v3.3.0.814
Debt (Bank Debt Narrative) (Details)
3 Months Ended
Mar. 31, 2016
USD ($)
item
Dec. 31, 2015
USD ($)
Jun. 26, 2015
USD ($)
Mar. 29, 2014
USD ($)
Debt Instrument [Line Items]        
Outstanding balance, line of credit $ 1,981,495 $ 1,511,495    
Revolving Credit Facility [Member]        
Debt Instrument [Line Items]        
Percent Borrowable of net Elegible Recievable 80.00%      
Percent Borrowable of net Eligible Raw Materials Inventory 50.00%      
Revolver, interest rate at end of period 3.75%      
Amount available under line of credit facility $ 264,731      
Debt instrument, maturity date Jun. 01, 2017      
Revolving Credit Facility [Member] | Prime Rate [Member]        
Debt Instrument [Line Items]        
Spread on variable rate 0.25%      
Equipment Line Of Credit 2013 [Member] | Equipment Line of Credit [Member]        
Debt Instrument [Line Items]        
Line of credit, draw period 1 year      
Maximum borrowing capacity $ 1,000,000      
Outstanding balance, line of credit       $ 740,999
Equipment Term Loan 2014 [Member] | Equipment Line of Credit [Member]        
Debt Instrument [Line Items]        
line of credit, interest during period 4.65%      
Line of credit, maturity period 5 years      
Approximate monthly principal and interest payment $ 14,000      
Debt instrument, maturity date Mar. 29, 2019      
Equipment Line Of Credit 2014 [Member] | Equipment Line of Credit [Member]        
Debt Instrument [Line Items]        
Line of credit, draw period 1 year      
Maximum borrowing capacity $ 1,000,000      
Outstanding balance, line of credit     $ 415,785  
Equipment Term Loan 2015 [Member] | Equipment Line of Credit [Member]        
Debt Instrument [Line Items]        
line of credit, interest during period 4.67%      
Line of credit, maturity period 5 years      
Approximate monthly principal and interest payment $ 8,000      
Debt instrument, maturity date Jun. 26, 2020      
Equipment Line Of Credit 2015 [Member] | Equipment Line of Credit [Member]        
Debt Instrument [Line Items]        
Line of credit, draw period 1 year      
Maximum borrowing capacity $ 1,000,000      
Outstanding balance, line of credit $ 336,850      
Line of credit, maturity period 6 years      
Debt instrument, maturity date Jun. 19, 2021      
Earliest repayment period, from date of loan 1 year      
Equipment Line Of Credit 2015 [Member] | Equipment Line of Credit [Member] | Prime Rate [Member]        
Debt Instrument [Line Items]        
Spread on variable rate 0.25%      
Term Debt And Equipment Notes [Member]        
Debt Instrument [Line Items]        
Number of Equipment Term Loans | item 2      
Term Debt And Equipment Notes [Member] | Commercial Term Loan [Member]        
Debt Instrument [Line Items]        
Debt instrument, interest rate 4.25%      
Line of credit, maturity date 5 years      
Approximate monthly principal and interest payment $ 28,000      
Debt instrument, maturity date Mar. 01, 2018      

Debt (Other Debt Narrative) (Details)
v3.3.0.814
Debt (Other Debt Narrative) (Details)
3 Months Ended
Mar. 31, 2016
USD ($)
item
Mar. 31, 2015
USD ($)
Dec. 31, 2015
USD ($)
Dec. 19, 2013
USD ($)
$ / shares
Jan. 31, 2013
USD ($)
Term Debt And Equipment Notes [Member]          
Debt Instruments [Line Items]          
Number of Equipment Notes | item 2        
Term Debt And Equipment Notes [Member] | Equipment Term Loans [Member]          
Debt Instruments [Line Items]          
Number of Equipment Notes | item 2        
Debt instrument, face amount         $ 272,500
Debt instrument, interest rate 4.66%        
Approximate monthly principal and interest payment $ 5,000        
Debt instrument, term 5 years        
Subordinated Promissory Notes [Member]          
Debt Instruments [Line Items]          
Debt instrument, face amount       $ 500,000  
Debt, fair value $ 416,950        
Non-cash interest expense 6,921 $ 6,921      
Unamortized discount 19,944   $ 26,865    
Subordinated promissory notes, exercise price of warrants | $ / shares       $ 3.51  
Subordinated Promissory Notes [Member] | Debt Instrument, Redemption, Period One [Member]          
Debt Instruments [Line Items]          
Interest rate       10.00%  
Subordinated Promissory Notes [Member] | Debt Instrument, Redemption, Period Two [Member]          
Debt Instruments [Line Items]          
Interest rate       12.00%  
Subordinated Promissory Notes [Member] | Additional Paid-in Capital, Attributable to Convertible Option [Member]          
Debt Instruments [Line Items]          
Debt instrument, face amount $ 83,050        

Debt (Summary of Debt) (Details)
v3.3.0.814
Debt (Summary of Debt) (Details) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]    
Revolving line of credit $ 1,981,495 $ 1,511,495
Equipment line of credit 336,850 336,850
Subordinated promissory notes 480,056 473,135
Term notes payable 1,565,464 1,710,287
Total Debt 4,363,865 4,031,767
Term Debt And Equipment Notes [Member] | Commercial Term Loan [Member]    
Debt Instrument [Line Items]    
Commercial term loan 638,199 714,175
Term Debt And Equipment Notes [Member] | Equipment Term Loans [Member]    
Debt Instrument [Line Items]    
Equipment term laons 824,993 879,898
Term Debt And Equipment Notes [Member] | Equipment Notes [Member]    
Debt Instrument [Line Items]    
Equipment notes $ 102,272 $ 116,214

Income Taxes
v3.3.0.814
Income Taxes
3 Months Ended
Mar. 31, 2016
Income Taxes [Abstract]  
Income Taxes

7.  Income Taxes



No provision for income taxes has been recorded in the three months ended March 31, 2016 or 2015, respectively.    The Company has a full valuation allowance against its deferred tax assets as of March 31, 2016 and December 31, 2015



The Company has federal and state net operating loss carryforwards totaling $8,196,000 and $8,231,000, respectively, which begin to expire in 2030. The Company also had federal and state tax credit carryovers of $361,000 and $380,000 respectively. The federal and state tax credits begin to expire in 2029 and 2016, respectively. 




Income Taxes (Narrative) (Details)
v3.3.0.814
Income Taxes (Narrative) (Details)
Mar. 31, 2016
USD ($)
Federal Tax Authority [Member]  
Income Taxes [Line Items]  
Tax credit carryforwards $ 361,000
State Jurisdiction [Member]  
Income Taxes [Line Items]  
Tax credit carryforwards 380,000
Federal Tax Authority [Member]  
Income Taxes [Line Items]  
Net operating loss carryforwards 8,196,000
State Jurisdiction [Member]  
Income Taxes [Line Items]  
Net operating loss carryforwards $ 8,231,000

Commitments and Contingencies
v3.3.0.814
Commitments and Contingencies
3 Months Ended
Mar. 31, 2016
Commitments and Contingencies [Abstract]  
Commitments and Contingencies

8.  Commitments and Contingencies



Legal matters



In the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations.



Off-balance sheet arrangements



The Company has two operating leases for office equipment. Lease expense under all operating leases was approximately $1,822 for the three months ended March 31, 2016 and 2015.




Commitments and Contingencies - (Narrative) (Details)
v3.3.0.814
Commitments and Contingencies - (Narrative) (Details)
3 Months Ended
Mar. 31, 2016
USD ($)
agreement
Mar. 31, 2015
USD ($)
Commitments and Contingencies [Abstract]    
Number of operating lease agreements 2  
Operating lease expense, office equipment | $ $ 1,822 $ 1,822

Stock Options and Share-Based Incentive Plan
v3.3.0.814
Stock Options and Share-Based Incentive Plan
3 Months Ended
Mar. 31, 2016
Stock Options and Share-Based Incentive Plan [Abstract]  
Stock Options and Share-Based Incentive Plan

9.  Stock Options and Share-Based Incentive Plan



Options



The following table sets forth the stock option transactions for the three months ended March 31, 2016:







 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

Weighted

 

 

 



 

 

 

Weighted

 

average

 

 

 



 

 

 

Average

 

remaining

 

Aggregate



 

Number of

 

Exercise

 

contractual

 

Intrinsic



 

options

 

Price

 

term (in years)

 

Value

Outstanding at December 31, 2015

 

184,500 

 

$

6.21 

 

6.80 

 

$

235,293 

Granted

 

 —

 

 

 —

 

 

 

 

 

Exercised

 

(15,000)

 

 

3.41 

 

 

 

 

 

Forfeited

 

 —

 

 

 —

 

 

 

 

 

Expired

 

 —

 

 

 —

 

 

 

 

 

Outstanding at March 31, 2016

 

169,500 

 

 

6.46 

 

7.15 

 

$

186,843 

Exercisable at March 31, 2016

 

73,500 

 

$

7.33 

 

5.74 

 

$

58,115 

Exercisable at December 31, 2015

 

83,500 

 

$

6.60 

 

4.73 

 

$

106,565 



For the three months ended March 31, 2016 and 2015, share-based compensation expense related to stock options amounted to $15,133 and $7,186, respectively, and is included in general and administrative expenses.



For the three months ended March 31, 2016, there were no new options granted and no options expired or were forfeited. There were 15,000 options exercised generating proceeds of $51,150.



For the three months ended March 31, 2015,  25,000 options were granted, 7,500 options were forfeited and no options expired. Additionally, 1,100 options were exercised generating proceeds of $3,880.



Warrants



For the three months ended March 31, 2016 and 2015, there were no warrants exercised. As of March 31, 2016,  70,000 warrants remain unexercised.


Stock Options and Share-based Incentive Plan (Tables)
v3.3.0.814
Stock Options and Share-based Incentive Plan (Tables)
3 Months Ended
Mar. 31, 2016
Stock Options and Share-Based Incentive Plan [Abstract]  
Stock Option Transactions



 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

Weighted

 

 

 



 

 

 

Weighted

 

average

 

 

 



 

 

 

Average

 

remaining

 

Aggregate



 

Number of

 

Exercise

 

contractual

 

Intrinsic



 

options

 

Price

 

term (in years)

 

Value

Outstanding at December 31, 2015

 

184,500 

 

$

6.21 

 

6.80 

 

$

235,293 

Granted

 

 —

 

 

 —

 

 

 

 

 

Exercised

 

(15,000)

 

 

3.41 

 

 

 

 

 

Forfeited

 

 —

 

 

 —

 

 

 

 

 

Expired

 

 —

 

 

 —

 

 

 

 

 

Outstanding at March 31, 2016

 

169,500 

 

 

6.46 

 

7.15 

 

$

186,843 

Exercisable at March 31, 2016

 

73,500 

 

$

7.33 

 

5.74 

 

$

58,115 

Exercisable at December 31, 2015

 

83,500 

 

$

6.60 

 

4.73 

 

$

106,565 




Stock Options and Share-based Incentive Plan (Narrative) (Details)
v3.3.0.814
Stock Options and Share-based Incentive Plan (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stock Options and Share-Based Incentive Plan [Abstract]    
Share-based compensation expense $ 15,133 $ 7,186
Number of options, granted in period 0 25,000
Number of options, expired in period 0 0
Number of options, forfeited in period 0 7,500
Number of options, exercised in period 15,000 1,100
Proceeds from stock options exercises $ 51,150 $ 3,880
Warrants exercised 0 0
Warrants unexercised 70,000  

Shareholders' Equity (Stock Option Transactions) (Details)
v3.3.0.814
Shareholders' Equity (Stock Option Transactions) (Details) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Stock Options and Share-Based Incentive Plan [Abstract]      
Number of options, outstanding, beginning balance 184,500    
Weighted average exercise price, options outstanding $ 6.46   $ 6.21
Weighted average remaining contractual term (in years), options outstanding 7 years 1 month 24 days   6 years 9 months 18 days
Aggregate intrinsic value, options outstanding $ 186,843   $ 235,293
Number of options, granted in period 0 25,000  
Weighted average exercise price, options granted in period $ 0.00    
Number of options, exercised in period (15,000) (1,100)  
Weighted average exercise price, options exercised in period $ 3.41    
Number of options, forfeited in period 0 7,500  
Weighted average exercise price, options forfeited in period $ 0.00    
Number of options, expired in period 0 0  
Weighted average exercise price, options expired in period $ 0.00    
Number of options, outstanding, ending balance 169,500   184,500
Number of options, exercisable 73,500   83,500
Weighted average exercise price, options exercisable $ 7.33   $ 6.60
Weighted average remaining contractual term (in years), options exercisable 5 years 8 months 27 days   4 years 8 months 23 days
Aggregate intrinsic value, options exercisable $ 58,115   $ 106,565

Discontinued Operations
v3.3.0.814
Discontinued Operations
3 Months Ended
Mar. 31, 2016
Discontinued Operations [Abstract]  
Discontinued Operations

10.  Discontinued Operations



The Company's subsidiary, RMDDxUSA Corp. and its Prince Edward Island subsidiary RMDDx Corporation (collectively "WirelessDx"), discontinued operations 2012, filed for relief under Chapter 7 (Liquidation) of the United States Bankruptcy Code in 2014 and on March 20, 2015, the Chapter 7 Order was formally discharged and the case was closed.



For the three months ended March 31, 2015, net income of $362,610 was recorded from discontinued operations as a result of the write-off of the remaining liabilities of $320,056 and the reversal of accumulated other comprehensive income of $42,553 from cumulative translation adjustments from RMDDx Corporation.



 


Discontinued Operations (Narrative) (Details)
v3.3.0.814
Discontinued Operations (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Discontinued Operations [Line Items]    
Income from discontinued operations, net of tax $ 0 $ 362,610
Discontinued Operations [Member] | WirelessDx [Member]    
Discontinued Operations [Line Items]    
Income from discontinued operations, net of tax   362,610
Liabilities written off, discontinued operations   320,056
Accumulated other comprehensive income   $ 42,553