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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File No.:  001-36534

IRADIMED CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware

    

73-1408526

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number

1025 Willa Springs Drive
Winter Springs, Florida

32708

(Address of principal executive offices)

(Zip Code)

(407) 677-8022

(Registrant’s telephone number, including area code)

N/A

(Former Name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common stock, par value $0.0001

IRMD

NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 

Indicate by check mark whether the registrant has submitted electronically pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 

The registrant had 12,269,524 shares of common stock, par value $0.0001 per share, outstanding as of November 1, 2020.

Table of Contents

IRADIMED CORPORATION

Table of Contents

Page

Cautionary Note Regarding Forward-Looking Statements

3

Part I

Financial Information

5

 

Item 1

Condensed Financial Statements

5

 

(a)     Condensed Balance Sheets as of September 30, 2020 (Unaudited) and December 31, 2019

5

 

(b)     Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)

6

 

(c)     Condensed Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)

7

 

(d)     Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)

8

 

(e)     Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (Unaudited)

10

 

(f)      Notes to Unaudited Condensed Financial Statements

11

 

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

 

Item 3

Quantitative and Qualitative Disclosures About Market Risk

27

 

Item 4

Controls and Procedures

27

Part II

Other Information

28

 

Item 1

Legal Proceedings

28

 

Item 1A

Risk Factors

28

 

Item 2

Unregistered Sale of Equity Securities and Use of Proceeds

29

 

Item 3

Default Upon Senior Securities

29

 

Item 4

Mine Safety Disclosures

29

 

Item 5

Other Information

29

 

Item 6

Exhibits

30

Signatures

31

2

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements relate to future events or our future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements include, but are not limited to, statements about:

our ability to respond and adapt to unexpected hospital, legal and regulatory changes resulting from the ongoing COVID-19 pandemic, such as changes in hospital treatment and financial practices, shelter-in-place orders, travel, social distancing and quarantine policies, curtailment of trade, and other business restrictions affecting our ability to assemble and sell our products;
our ability to receive 510(k) clearance for our products and product candidates, complete inspections conducted by the FDA or other regulatory bodies resulting in favorable outcomes, additional actions by or requests from the U.S. Food & Drug Administration (“FDA”), including a request to cease domestic distribution of products, or other regulatory bodies and unanticipated costs or delays associated with the resolution of these matters;
the timing and likelihood of regulatory approvals or clearances from the FDA or other regulatory bodies and regulatory actions on our product candidates and product marketing activities;
unexpected costs, expenses and diversion of management attention resulting from actions or requests posed to us by the FDA or other regulatory bodies;
our primary reliance on a limited number of products;
our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;
our expectations regarding the sales and marketing of our products, product candidates and services;
our expectations regarding the integrity of our supply chain for our products;
the potential for adverse application of environmental, health and safety and other laws and regulations of any jurisdiction on our operations;
our expectations for market acceptance of our new products;
the potential for our marketed products to be withdrawn due to recalls, patient adverse events or deaths;
our ability to establish and maintain intellectual property on our products and our ability to successfully defend these in cases of infringement;
the implementation of our business strategies;
the potential for exposure to product liability claims;
our financial performance expectations and interpretations thereof by securities analysts and investors;
our ability to compete in the development and marketing of our products and product candidates with other companies in our industry;

3

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difficulties or delays in the development, production, manufacturing and marketing of new or existing products and services, including difficulties or delays associated with obtaining requisite regulatory approvals or clearances associated with those activities;
changes in laws and regulations or in the interpretation or application of laws or regulations, as well as possible failures to comply with applicable laws or regulations as a result of possible misinterpretations or misapplications;
cost-containment efforts of our customers, purchasing groups, third-party payers and governmental organizations;
costs associated with protecting our trade secrets and enforcing our patent, copyright and trademark rights, and successful challenges to the validity of our patents, copyrights or trademarks;
actions of regulatory bodies and other government authorities, including the FDA and foreign counterparts, that could delay, limit or suspend product development, manufacturing or sales or result in recalls, seizures, consent decrees, injunctions and monetary sanctions;
costs or claims resulting from potential errors or defects in our manufacturing that may injure persons or damage property or operations, including costs from remediation efforts or recalls;
the results, consequences, effects or timing of any commercial disputes, patent infringement claims or other legal proceedings or any government investigations;
interruption in our ability to manufacture our products or an inability to obtain key components or raw materials or increased costs in such key components or raw materials;
uncertainties in our industry due to the effects of government-driven or mandated healthcare reform;
competitive pressures in the markets in which we operate;
the loss of, or default by, one or more key customers or suppliers; and
unfavorable changes to the terms of key customer or supplier relationships.

Forward-looking statements are not guarantees of future performance and are subject to substantial risks and uncertainties that could cause the actual results to differ materially from those that we predicted in the forward-looking statements. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in more detail in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q. Readers should carefully review these risks, as well as the additional risks described in other documents we file from time to time with the Securities and Exchange Commission (“SEC”). In light of the significant risks and uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that such results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking statements. Except as required by law, we undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. You should read this Quarterly Report on Form 10-Q and the documents we file with the SEC with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Unless expressly indicated or the context requires otherwise, references in this Quarterly Report to “IRADIMED,” the “Company,” “we,” “our,” and “us” refer to IRADIMED CORPORATION.

4

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

IRADIMED CORPORATION

CONDENSED BALANCE SHEETS

September 30, 

December 31, 

    

2020

    

2019

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

47,549,619

$

43,481,781

Accounts receivable, net of allowance for doubtful accounts of $43,286 as of September 30, 2020 and $69,093 as of December 31, 2019

4,252,329

7,293,303

Investments

 

2,320,407

 

2,768,287

Inventory, net

 

4,589,741

 

3,641,561

Prepaid expenses and other current assets

 

475,039

 

407,802

Prepaid income taxes

 

3,716,442

 

1,370,947

Total current assets

 

62,903,577

 

58,963,681

Property and equipment, net

 

2,164,391

 

2,053,806

Intangible assets, net

 

975,879

 

860,087

Operating lease right-of-use asset

2,776,599

2,955,873

Deferred income taxes, net

 

1,346,214

 

1,663,415

Other assets

 

258,457

 

232,002

Total assets

$

70,425,117

$

66,728,864

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

580,309

$

993,742

Accrued payroll and benefits

 

1,642,772

 

2,166,209

Other accrued taxes

 

123,196

 

596,576

Warranty reserve

 

87,059

 

81,761

Deferred revenue

 

1,956,180

 

1,671,420

Current portion of operating lease liability

251,901

240,843

Other current liability

108,421

108,421

Accrued income taxes

10,390

Total current liabilities

 

4,760,228

 

5,858,972

Deferred revenue

 

2,423,733

 

2,630,467

Operating lease liability, less current portion

2,524,698

2,715,030

Total liabilities

 

9,708,659

 

11,204,469

Stockholders’ equity:

Common stock; $0.0001 par value; 31,500,000 shares authorized; 12,269,123 shares issued and outstanding as of September 30, 2020 and 11,765,875 shares issued and outstanding as of December 31, 2019

 

1,227

 

1,177

Additional paid-in capital

 

23,636,433

 

19,192,394

Retained earnings

 

37,032,037

 

36,300,450

Accumulated other comprehensive income

 

46,761

 

30,374

Total stockholders’ equity

 

60,716,458

 

55,524,395

Total liabilities and stockholders’ equity

$

70,425,117

$

66,728,864

See accompanying notes to unaudited condensed financial statements.

5

Table of Contents

IRADIMED CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

Revenue

$

7,699,096

$

9,963,299

$

23,171,329

$

27,626,488

 

Cost of revenue

 

1,958,036

 

2,168,208

 

6,036,353

 

6,074,323

Gross profit

 

5,741,060

 

7,795,091

 

17,134,976

 

21,552,165

Operating expenses:

General and administrative

 

2,196,935

 

2,609,722

 

10,062,089

 

7,482,790

Sales and marketing

 

2,282,491

 

2,297,002

 

7,090,192

 

6,607,477

Research and development

 

476,876

 

369,526

 

1,389,812

 

1,053,409

Total operating expenses

 

4,956,302

 

5,276,250

 

18,542,093

 

15,143,676

Income (loss) from operations

 

784,758

 

2,518,841

 

(1,407,117)

 

6,408,489

Other income, net

 

9,352

 

110,064

 

125,706

 

280,663

Income (loss) before provision for income taxes

 

794,110

 

2,628,905

 

(1,281,411)

 

6,689,152

Provision for income tax (benefit) expense

 

(280,536)

 

174,035

 

(2,012,998)

 

299,876

Net income

$

1,074,646

$

2,454,870

$

731,587

$

6,389,276

 

Net income per share:

Basic

$

0.09

$

0.22

$

0.06

$

0.57

 

Diluted

$

0.09

$

0.20

$

0.06

$

0.52

 

Weighted average shares outstanding:

Basic

 

12,243,362

 

11,369,404

 

12,071,027

 

11,188,761

Diluted

 

12,493,309

 

12,309,948

 

12,414,932

 

12,248,102

See accompanying notes to unaudited condensed financial statements.

6

Table of Contents

IRADIMED CORPORATION

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

Net income

$

1,074,646

$

2,454,870

$

731,587

$

6,389,276

Other comprehensive (loss) income:

Change in fair value of available-for-sale securities, net of tax (benefit) expense of $(1,402) and $4,429 for the three months ended September 30, 2020 and 2019, respectively, and $9,071 and $24,756 for the nine months ended September 30, 2020 and 2019, respectively

(7,181)

11,615

23,049

74,233

Realized gain on available-for-sale securities reclassified to net income, net of tax expense of $0 and $1,895 for the three months ended September 30, 2020 and 2019, respectively, and $2,199 and $958 for the nine months ended September 30, 2020 and 2019, respectively

(5,742)

(6,662)

(2,901)

Other comprehensive (loss) income

 

(7,181)

 

5,873

 

16,387

 

71,332

Comprehensive income

$

1,067,465

$

2,460,743

$

747,974

$

6,460,608

See accompanying notes to unaudited condensed financial statements.

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IRADIMED CORPORATION

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Accumulated

Additional

Other

Common Stock

Paid-in

Retained

Comprehensive

Stockholders’

    

Shares

    

Amount

    

Capital

    

Earnings

    

Income

    

Equity

Balances, December 31, 2019

 

11,765,875

$

1,177

$

19,192,394

$

36,300,450

$

30,374

$

55,524,395

Net income

 

 

 

 

1,769,211

 

 

1,769,211

Other comprehensive income

 

 

 

 

 

10,433

 

10,433

Stock-based compensation expense

 

 

 

568,958

 

 

 

568,958

Net share settlement of restricted stock units

 

14,521

 

1

 

(133,873)

 

 

 

(133,872)

Exercise of stock options

 

190,541

 

19

 

322,160

 

 

 

322,179

Balances, March 31, 2020

 

11,970,937

$

1,197

$

19,949,639

$

38,069,661

$

40,807

$

58,061,304

Net loss

 

 

 

 

(2,112,270)

 

 

(2,112,270)

Other comprehensive income

 

 

 

 

 

13,135

 

13,135

Stock-based compensation expense

 

 

 

2,658,632

 

 

 

2,658,632

Net share settlement of restricted stock units

 

76,381

 

8

 

(725,393)

 

 

 

(725,385)

Exercise of stock options

 

150,519

 

15

 

468,795

 

 

 

468,810

Balances, June 30, 2020

 

12,197,837

$

1,220

$

22,351,673

$

35,957,391

$

53,942

$

58,364,226

Net income

1,074,646

1,074,646

Other comprehensive income

(7,181)

(7,181)

Stock-based compensation expense

416,525

416,525

Net share settlement of restricted stock units

8,245

1

(63,491)

(63,490)

Exercise of stock options

63,041

6

931,726

931,732

Balances, September 30, 2020

12,269,123

$

1,227

$

23,636,433

$

37,032,037

$

46,761

$

60,716,458

See accompanying notes to unaudited condensed financial statements.

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IRADIMED CORPORATION

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(Unaudited)

Accumulated

 

Additional

Other

 

Common Stock

Paid-in

Retained

Comprehensive

Stockholders’

    

Shares

    

Amount

    

Capital

    

Earnings

    

Income

    

Equity

Balances, December 31, 2018

10,989,111

 

$

1,099

 

$

15,317,335

 

$

26,669,491

 

$

(42,192)

 

$

41,945,733

Net income

 

 

 

1,845,565

 

 

1,845,565

Other comprehensive income

 

 

 

 

38,194

 

38,194

Stock-based compensation expense

 

 

382,353

 

 

 

382,353

Net share settlement of restricted stock units

4,322

 

 

(22,507)

 

 

 

(22,507)

Exercise of stock options

150,763

 

15

 

456,724

 

 

 

456,739

Balances, March 31, 2019

11,144,196

 

$

1,114

 

$

16,133,905

 

$

28,515,056

 

$

(3,998)

 

$

44,646,077

Net income

 

 

 

2,088,841

 

 

2,088,841

Other comprehensive income

 

 

 

 

27,265

 

27,265

Stock-based compensation expense

 

 

468,436

 

 

 

468,436

Net share settlement of restricted stock units

23,331

 

3

 

(125,708)

 

 

 

(125,705)

Exercise of stock options

28,875

 

3

 

43,505

 

 

 

43,508

Balances, June 30, 2019

 

11,196,402

 

$

1,120

 

$

16,520,138

 

$

30,603,897

 

$

23,267

 

$

47,148,422

Net income

2,454,870

2,454,870

Other comprehensive income

5,873

5,873

Stock-based compensation expense

455,641

455,641

Net share settlement of restricted stock units

121

(1,186)

(1,186)

Exercise of stock options

234,944

23

1,709,255

1,709,278

Balances, September 30, 2019

11,431,467

$

1,143

$

18,683,848

$

33,058,767

$

29,140

$

51,772,898

See accompanying notes to unaudited condensed financial statements.

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IRADIMED CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended

September 30, 

    

2020

    

2019

Operating activities:

Net income

$

731,587

$

6,389,276

Adjustments to reconcile net income to net cash provided by operating activities:

Change in allowance for doubtful accounts

41,786

27,532

Change in provision for excess and obsolete inventory

 

29,209

 

104,407

Depreciation and amortization

 

999,812

 

961,597

Stock-based compensation

 

3,644,115

 

1,306,430

Deferred income taxes, net

310,329

26,071

Gain on maturities of investments

(8,861)

(3,859)

Changes in operating assets and liabilities:

Accounts receivable

 

2,999,188

 

(2,742,517)

Inventory

 

(1,062,455)

 

(570,242)

Prepaid expenses and other current assets

 

(642,982)

 

(547,694)

Other assets

 

(40,899)

 

(150,386)

Accounts payable

 

(468,615)

 

293,810

Accrued payroll and benefits

 

(523,437)

 

434,328

Other accrued taxes

 

(473,380)

 

(48,216)

Warranty reserve

 

5,298

 

2,973

Deferred revenue

 

119,658

 

537,700

(Prepaid) accrued income taxes

(2,335,105)

261,805

Other

(3,820)

859

Net cash provided by operating activities

 

3,321,428

 

6,283,874

Investing activities:

Proceeds from maturity of investments

480,000

2,522,000

Purchases of property and equipment

 

(349,283)

 

(196,369)

Capitalized intangible assets

 

(184,281)

 

(59,912)

Net cash (used in) provided by investing activities

 

(53,564)

 

2,265,719

Financing activities:

Proceeds from exercises of stock options

1,722,721

2,209,525

Taxes paid related to the net share settlement of equity awards

(922,747)

(149,398)

Net cash provided by financing activities

 

799,974

 

2,060,127

Net increase in cash and cash equivalents

 

4,067,838

 

10,609,720

Cash and cash equivalents, beginning of period

 

43,481,781

 

28,027,688

Cash and cash equivalents, end of period

$

47,549,619

$

38,637,408

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

$

12,000

Right-of-use asset recognized in exchange for new lease obligation

$

$

3,182,724

Operating and short-term lease payments recorded within cash flow from operating activities

$

321,856

$

320,907

See accompanying notes to unaudited condensed financial statements.

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IRADIMED CORPORATION

Notes to Unaudited Condensed Financial Statements

1 — Basis of Presentation

The accompanying interim condensed financial statements of IRADIMED CORPORATION (“IRADIMED”, the “Company”, “we”, “our”) have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The interim financial information is unaudited, but reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

These accompanying interim condensed financial statements should be read with the financial statements and related footnotes to financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. The accounting policies followed in the preparation of these interim condensed financial statements, except as described in Note 1, are consistent in all material respects with those described in Note 1 of our Form 10-K.

We operate in one reportable segment which is the development, manufacture and sale of MRI compatible medical devices, related accessories, disposables and service for use by hospitals and acute care facilities during MRI procedures.

Certain Significant Risks and Uncertainties

We market our products to end users in the U.S. and to distributors internationally. Sales to end users in the U.S. are generally made on open credit terms. Management maintains an allowance for potential credit losses.

COVID-19 Considerations

We are subject to risks and uncertainties as a result of the spread of COVID-19. We have experienced a decline in operating results, which has limited our generation of capital resources. The extent of the impact of COVID-19 on our business is highly uncertain and difficult to predict. Our future results of operations and liquidity could be adversely impacted by, among other things, delays in payments from customers, supply chain disruptions, and uncertain demand. As of the date of the issuance of these financial statements, the extent to which COVID-19 may materially impact our financial condition, liquidity, or results of operations in future periods is uncertain.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements to be Implemented

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. We do not expect ASU 2019-12 to have a material impact on financial condition, results of operations or cash flows.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. In November 2018, April 2019 and May 2019, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses and ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, which provided additional implementation guidance on ASU 2016-03. The previously mentioned ASUs are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. We do not expect the adoption of these ASUs to have a material impact on our financial condition, results of operations or cash flows.

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2 — Revenue Recognition

Disaggregation of Revenue

We disaggregate revenue from contracts with customers by geographic region and revenue type as we believe it best depicts the nature, amount, timing and uncertainty of our revenue and cash flow.

Revenue information by geographic region is as follows:

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

(unaudited)

(unaudited)

United States

 

$

6,465,184

 

$

8,281,854

 

$

17,430,206

 

$

22,916,642

 

International

 

1,233,912

 

1,681,445

 

5,741,123

 

4,709,846

Total revenue

 

$

7,699,096

 

$

9,963,299

 

$

23,171,329

 

$

27,626,488

 

Revenue information by type is as follows:

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

(unaudited)

(unaudited)

Devices:

MRI Compatible IV Infusion Pump Systems

 

$

2,153,699

 

$

4,769,252

 

$

6,693,692

 

$

13,512,548

 

MRI Compatible Patient Vital Signs Monitoring Systems

 

2,282,943

 

2,557,889

 

6,829,932

 

6,215,528

Total Devices revenue

 

4,436,642

 

7,327,141

 

13,523,624

 

19,728,076

Disposables, service and other

 

2,802,039

 

2,162,602

 

8,269,487

 

6,513,030

Amortization of extended warranty agreements

 

460,415

 

473,556

 

1,378,218

 

1,385,382

Total revenue

 

$

7,699,096

 

$

9,963,299

 

$

23,171,329

 

$

27,626,488

 

Contract Liabilities

Our contract liabilities consist of:

September 30, 

December 31, 

    

2020

    

2019

(unaudited)

Advance payments from customers

 

$

103,669

 

$

12,765

 

Shipments in-transit

 

41,632

 

4,250

Extended warranty agreements

 

4,234,612

 

4,284,872

Total

 

$

4,379,913

 

$

4,301,887

 

Changes in the contract liabilities during the periods presented are as follows:

Deferred

    

Revenue

Contract liabilities, December 31, 2019

 

$

4,301,887

Increases due to cash received from customers

 

1,655,021

Decreases due to recognition of revenue

 

(1,576,995)

Contract liabilities, September 30, 2020

 

$

4,379,913

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Deferred 

    

Revenue

Contract liabilities, December 31, 2018

$

3,605,789

Increases due to cash received from customers

 

2,530,978

Decreases due to recognition of revenue

 

(2,033,473)

Contract liabilities, September 30, 2019

$

4,103,294

Capitalized Contract Costs

Our capitalized contract costs consist of:

September 30, 

December 31, 

    

2020

    

2019

(unaudited)

Capitalized contract costs

$

362,123

$

352,250

3 — Basic and Diluted Net Income per Share

Basic net income per share is based upon the weighted-average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Stock options and restricted stock units granted by us represent the only dilutive effect reflected in diluted weighted-average shares outstanding.

The following table presents the computation of basic and diluted net income per share:

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2020

    

2019

    

2020

    

2019

(unaudited)

(unaudited)

Net income

$

1,074,646

$

2,454,870

$

731,587

$

6,389,276

Weighted-average shares outstanding — Basic

 

12,243,362

 

11,369,404

 

12,071,027

 

11,188,761

Effect of dilutive securities:

Underwriters’ warrants

41,124

69,183

Stock Options

204,108

822,128

294,202

899,311

Restricted Stock Units

45,839

77,292

49,703

90,847

Weighted-average shares outstanding — Diluted

 

12,493,309

 

12,309,948

 

12,414,932

 

12,248,102

Basic net income per share

$

0.09

$

0.22

$

0.06

$

0.57

Diluted net income per share

$

0.09

$

0.20

$

0.06

$

0.52

Stock options and restricted stock units excluded from the calculation of diluted net income per share because the effect would have been anti-dilutive are as follows:

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

(unaudited)

(unaudited)

Anti-dilutive stock options and restricted stock units

 

10,024

117,584

 

48,706

14,991

 

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4 — Inventory

Inventory consists of:

September 30, 

December 31, 

    

2020

    

2019

(unaudited)

Raw materials

$

3,734,471

$

2,939,451

Work in process

 

246,227

 

229,479

Finished goods

 

778,085

 

697,483

Inventory before allowance for excess and obsolete

4,758,783

3,866,413

Allowance for excess and obsolete

(169,042)

(224,852)

Total

$

4,589,741

$

3,641,561

5 — Property and Equipment

Property and equipment consist of:

September 30, 

December 31, 

    

2020

    

2019

(unaudited)

Computer software and hardware

$

673,576

$

627,624

Furniture and fixtures

 

1,246,566

 

1,112,550

Leasehold improvements

 

225,841

 

225,841

Machinery and equipment

 

1,818,023

 

1,778,524

Tooling in-process

 

433,168

 

163,105

 

4,397,174

 

3,907,644

Accumulated depreciation

 

(2,232,783)

 

(1,853,838)

Total

$

2,164,391

$

2,053,806

Depreciation expense of property and equipment was $128,513 and $122,834 for the three months ended September 30, 2020 and 2019, respectively, and $382,766 and $373,828 for the nine months ended September 30, 2020 and 2019, respectively.

Property and equipment, net, information by geographic region is as follows: