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STEREOTAXIS, INC. filed this Form 10-K on 03/15/2019
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The new standard provides a number of optional practical expedients in transition. The Company expects to elect the ‘package of practical expedients’, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the new standard provides practical expedients for an entity’s ongoing accounting that the Company anticipates making, such as the (1) the election for certain classes of underlying asset to not separate non-lease components from lease components and (2) the election for short-term lease recognition exemption for all leases that qualify.


As a lessee, the Company believes the largest impact will be on its consolidated balance sheets for the accounting of facilities-related leases, which represents the majority of the operating leases it has entered into as a lessee. These leases will be recognized under the new standard as Right of Use (“ROU”) assets and operating lease liabilities. The Company will also be required to provide expanded disclosures for its leasing arrangements. As of December 31, 2018, the Company had between $6.0 million and $7.0 million of operating lease commitments that are not recognized on its consolidated balance sheets as determined under the current standard. For a lessee, the results of operations are not expected to significantly change after adoption of the new standard.


In addition, from time to time, the Company has sublet a portion of its operating facilities. Under the existing standard, the Company recorded any sub-lease proceeds as a reduction to its operating expenses. Under the new standard, as a lessor, the Company will record these amounts as Other Income. The Company does not expect this change to have a material impact on its consolidated financial statements.


While substantially complete, the Company is still finalizing its adoption of ASC 842 and the related impact on the Company’s financial statements and disclosures. As the Company completes its evaluation of this new standard during the first quarter of 2019, new information may arise that could change the Company’s current assessment of the impact to existing accounting. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession, and adjust the Company’s assessment and implementation plans accordingly.


3. Inventory


Inventory consists of the following:


   December 31, 2018   December 31, 2017 
Raw materials  $2,686,870   $2,528,270 
Work in process   2,594    4,836 
Finished goods   2,963,013    2,515,637 
Reserve for obsolescence   (4,460,811)   (3,901,772)
Total inventory  $1,191,666   $1,146,971 


4. Prepaid Expenses and Other Current Assets


Prepaid expenses and other current assets consist of the following:


   December 31, 2018   December 31, 2017 
Prepaid expenses  $401,972   $575,501 
Prepaid commissions   304,585    - 
Deferred financing costs   -    24,658 
Deposits   455,508    194,358 
Total prepaid expenses and other assets   1,162,065    794,517 
Less: Noncurrent prepaid expenses and other assets   (198,365)   (44,432)
Total current prepaid expenses and other assets  $963,700   $750,085 


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