Quarterly report pursuant to Section 13 or 15(d)

Accounts Payable and Accrued Expenses

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Accounts Payable and Accrued Expenses
6 Months Ended
Jun. 30, 2017
Payables and Accruals [Abstract]  
Accounts Payable and Accrued Expenses

NOTE 15 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following:

 

    December 31, 2016     June 30, 2017  
          (Unaudited)  
             
Accounts payable   $ 6,195,000     $ 7,299,000  
Accrued warranty     472,000       413,000  
Accrued severance     609,000       312,000  
Accrued compensation     297,000       482,000  
Other current liabilities     49,000       33,000  
                 
    $ 7,622,000     $ 8,539,000  

 

Included in accounts payable and accrued expenses at December 31, 2016 and June 30, 2017 is accrued severance of $609,000 and $312,000, respectively, to Kenneth Ehrman and Norman L. Ellis, the former Chief Executive Officer and Chief Operating Officer of the Company, respectively. The accrued severance is payable in equal monthly installments of approximately $37,000 as of June 30, 2017.

 

The Company’s products are warranted against defects in materials and workmanship for a period of 12 months from the date of acceptance of the product by the customer. The customers may purchase an extended warranty providing coverage up to a maximum of 60 months. A provision for estimated future warranty costs is recorded for expected or historical warranty matters related to equipment shipped and is included in accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets as of December 31, 2016 and June 30, 2017.

 

The following table summarizes warranty activity for the six-month periods ended June 30, 2016 and 2017:

 

   

Six Months Ended

June 30,

 
    2016     2017  
             
Accrued warranty reserve, beginning of period   $ 614,000     $ 472,000  
Accrual for product warranties issued     306,000       56,000  
Product replacements and other warranty expenditures     (206,000 )     (35,000 )
Expiration of warranties     (175,000 )     (80,000 )
                 
Accrued warranty reserve, end of period   $ 539,000     $ 413,000