Note 5 - Investment in Limited Liability Company

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

5. Investment in Limited Liability Company

On August 8, 2017, the Company entered into an exclusive Distributorship Agreement (the “Distributorship Agreement”) with InControl Medical, LLC (“ICM”), a Wisconsin limited liability company focused on women's health, pursuant to which the Company will directly market, promote, distribute and sell ICM’s products to licensed medical professional offices and hospitals in North America. 

In connection with the Distributorship Agreement, the Company also entered into a Membership Unit Subscription Agreement with ICM and the associated limited liability company operating agreement of ICM, pursuant to which the Company invested $2,500,000 in, and acquired membership units of, ICM. This investment has been recorded in investment in a limited liability company in the consolidated balance sheets. The Company used the equity method to account for the investment in ICM because the Company does not control it but has the ability to exercise significant influence over it. As of December 31, 2021, the Company owns approximately 7% ownership interest in ICM. The Company recognizes its allocated portion of ICM’s results of operations on a three-month lag due to the timing of financial information. For the years ended December 31, 2021 and 2020, the allocated net loss from ICM’s operations was $256,000 and $383,000 respectively. The allocated net loss from ICM’s operations was recorded as a loss from minority interest in limited liability company in the consolidated statements of operations.

In February 2019, the Company executed a mutual termination of the Distributorship Agreement with ICM. As a result, the Company no longer has a minimum purchase requirement to purchase a certain quantity of ICM products per month.

During the years ended December 31, 2021 and 2020, the Company purchased 140 and 485 units of ICM products for approximately $17,000 and $51,000, respectively. The Company paid ICM approximately $17,000 and $52,000 for product related costs during the years ended December 31, 2021 and 2020, respectively. There were no amounts due to ICM for accounts payable as of December 31, 2021 and 2020.