Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 26, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Inrad Optics, Inc. | ||
Entity Central Index Key | 0000719494 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 9,489,437 | ||
Trading Symbol | INRD | ||
Entity Common Stock, Shares Outstanding | 13,632,388 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 1,185,553 | $ 799,953 |
Accounts receivable (net of allowance for doubtful accounts of $15,000 in 2018 and 2017) | 1,296,487 | 1,034,398 |
Inventories, net | 3,015,883 | 3,196,001 |
Other current assets | 180,893 | 127,900 |
Total Current Assets | 5,678,816 | 5,158,252 |
Plant and Equipment: | ||
Plant and equipment at cost | 14,696,966 | 14,726,638 |
Less: Accumulated depreciation and amortization | (14,069,880) | (14,013,850) |
Total plant and equipment | 627,086 | 712,788 |
Precious Metals | 562,347 | 563,760 |
Intangible Assets, net of accumulated amortization | 32,156 | 70,219 |
Other Assets | 32,020 | 37,486 |
Total Assets | 6,932,425 | 6,542,505 |
Current Liabilities: | ||
Current portion of long-term notes payable -other | 12,960 | 12,486 |
Accounts payable and accrued liabilities | 835,015 | 1,217,157 |
Customer advances | 772,927 | 869,677 |
Total Current Liabilities | 1,620,902 | 2,099,320 |
Related Party Convertible Notes Payable | 2,500,000 | 2,500,000 |
Long-Term Notes Payable -other, net of current portion | 244,781 | 257,738 |
Total Liabilities | 4,365,683 | 4,857,058 |
Commitments | ||
Shareholders' Equity: | ||
Common stock: $.01 par value; 60,000,000 authorized shares 13,636,988 issued at December 31, 2018 and 13,521,200 issued at December 31, 2017 | 136,371 | 135,213 |
Capital in excess of par value | 19,055,615 | 18,882,086 |
Accumulated deficit | (16,610,294) | (17,316,902) |
Stockholders' Equity before Treasury Stock | 2,581,692 | 1,700,397 |
Less - Common stock in treasury, at cost (4,600 shares) | (14,950) | (14,950) |
Total Shareholders' Equity | 2,566,742 | 1,685,447 |
Total Liabilities and Shareholders' Equity | $ 6,932,425 | $ 6,542,505 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts (in dollars) | $ 15,000 | $ 15,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 13,636,988 | 13,521,200 |
Treasury stock, shares | 4,600 | 4,600 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | ||
Net sales | $ 11,488,727 | $ 9,859,201 |
Cost and expenses | ||
Cost of goods sold | 8,387,527 | 7,936,534 |
Selling, general and administrative expense | 2,233,760 | 2,416,794 |
Costs and Expenses, Total | 10,621,287 | 10,353,328 |
Operating income (loss) | 867,440 | (494,127) |
Other income (expense), net | ||
Interest expense, net | (158,544) | (160,643) |
(Loss) gain on exchange of precious metals | (2,288) | (51,761) |
Gain on sale or disposal of plant and equipment | 0 | 24,000 |
Nonoperating Income (Expense) | (160,832) | (188,404) |
Income (Loss) before income taxes | 706,608 | (682,531) |
Income tax provision | 0 | 0 |
Net income (loss) | $ 706,608 | $ (682,531) |
Net income (loss) per share – basic | $ 0.05 | $ (0.05) |
Net income (loss) per share – diluted | $ 0.05 | $ (0.05) |
Weighted average shares outstanding – basic | 13,561,207 | 13,357,622 |
Weighted average shares outstanding – diluted | 13,930,708 | 13,357,622 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Total | Common Stock [Member] | Capital in excess of par value [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] |
Balance at Dec. 31, 2016 | $ 2,182,098 | $ 131,567 | $ 18,699,852 | $ (16,634,371) | $ (14,950) |
Balance (in share) at Dec. 31, 2016 | 13,156,544 | ||||
401K contribution | 124,289 | $ 3,563 | 120,726 | 0 | 0 |
401K contribution (in shares) | 356,323 | ||||
Common stock issued on exercise of options | 2,063 | $ 83 | 1,980 | 0 | 0 |
Common stock issued on exercise of options (in shares) | 8,333 | ||||
Stock-based compensation expense | 59,528 | $ 0 | 59,528 | 0 | 0 |
Net income (loss) for the year | (682,531) | 0 | 0 | (682,531) | 0 |
Balance at Dec. 31, 2017 | 1,685,447 | $ 135,213 | 18,882,086 | (17,316,902) | (14,950) |
Balance (in shares) at Dec. 31, 2017 | 13,521,200 | ||||
401K contribution | 92,781 | $ 1,113 | 91,668 | 0 | 0 |
401K contribution (in shares) | 111,288 | ||||
Common stock issued on exercise of options | 1,388 | $ 45 | 1,343 | 0 | 0 |
Common stock issued on exercise of options (in shares) | 4,500 | ||||
Stock-based compensation expense | 80,518 | $ 0 | 80,518 | 0 | 0 |
Net income (loss) for the year | 706,608 | 0 | 0 | 706,608 | 0 |
Balance at Dec. 31, 2018 | $ 2,566,742 | $ 136,371 | $ 19,055,615 | $ (16,610,294) | $ (14,950) |
Balance (in shares) at Dec. 31, 2018 | 13,636,988 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 706,608 | $ (682,531) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 278,173 | 365,048 |
401K common stock contribution | 92,780 | 124,289 |
(Gain) on sale or disposal of plant and equipment | 0 | (24,000) |
Loss (gain) on exchange of precious metals | 2,288 | 51,761 |
Stock-based compensation expense | 80,518 | 59,528 |
Change in inventory reserve | 39,003 | 198,528 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (262,088) | 170,510 |
Inventories | 141,115 | (654,665) |
Other current assets | (52,993) | 16,070 |
Other assets | 5,466 | (7,148) |
Accounts payable and accrued liabilities | (419,643) | 104,986 |
Customer advances | (96,750) | 270,337 |
Accrued interest on related party note payable | 37,500 | 37,500 |
Total adjustments and changes | (154,631) | 712,744 |
Net cash provided by operating activities | 551,977 | 30,213 |
Cash flows from investing activities: | ||
Purchase of plant and equipment | (154,407) | (119,483) |
Purchase of precious metals | (875) | (1,874) |
Proceeds from sale of plant and equipment | 24,000 | |
Net cash used in investing activities | (155,282) | (97,357) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 1,388 | 2,063 |
Principal payments of notes payable-other | (12,483) | (108,299) |
Net cash (used in) financing activities | (11,095) | (106,236) |
Net increase (decrease) in cash and cash equivalents | 385,600 | (173,380) |
Cash and cash equivalents at beginning of the year | 799,953 | 973,333 |
Cash and cash equivalents at end of the year | 1,185,553 | 799,953 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 197,581 | 124,987 |
Income taxes paid | 0 | 1,050 |
Non Cash Investing Activities: | ||
Exchange of Precious Metals | $ 2,000 | $ 48,757 |
Nature of Business and Operatio
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1. Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates a. Nature of Business and Operations Inrad Optics, Inc. and Subsidiaries (the “Company”), was incorporated in the state of New Jersey and is a manufacturer of crystals, crystal devices, electro-optic and optical components, and sophisticated laser devices and instruments. The Company has administrative offices and manufacturing operations in Northvale, New Jersey. The Company’s principal customers include commercial instrumentation companies and OEM laser systems manufacturers, research laboratories, government agencies, and defense contractors. The Company’s products are sold domestically using its own sales staff, and in major overseas markets, principally Europe, Israel, Japan, and Asia, using independent sales agents. b. Liquidity As of December 31, 2018, the Company had working capital of $4,057,914 and cash and cash equivalents of $1,185,553. Management believes based on the Company’s operations and its existing working capital resources together with existing cash flows, the Company has sufficient cash flows to fund operations through at least March 31, 2020. c. Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Upon consolidation, all inter-company accounts and transactions are eliminated. d. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, determining our allowance for doubtful accounts, our allowance for inventory obsolescence, the fair value and depreciable lives of long-lived tangible and intangible assets, and deferred taxes and the associated valuation allowance. Actual results could differ from these estimates. e. Cash and cash equivalents The Company considers cash-on-hand and highly liquid investments with original maturity dates of three months or less at the date of purchase to be cash and cash equivalents. f. Accounts receivable Accounts receivable are carried at net realizable value, net of write-offs and allowances. The Company establishes an allowance for doubtful accounts based on estimates as to the collectability of accounts receivable. Management specifically analyzes past-due accounts receivable balances and, additionally, considers bad debt history, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Uncollectible accounts receivable are written-off when it is determined that the balance will not be collected. g. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net-realizable value. Cost of manufactured goods includes material, labor and overhead. The Company records a reserve for slow moving inventory as a charge against earnings for all products identified as surplus, slow moving or discontinued. Excess work-in-process costs are charged against earnings whenever estimated costs-of-completion exceed unbilled revenues. h. Plant and Equipment Plant and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets which range between five and seven years. Amortization of leasehold improvements is computed using the straight-line method over the lesser of 10 Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and a gain or loss is recorded. i. Income taxes Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the amounts of assets and liabilities recorded for income tax and financial reporting purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance, and the company has maintained the full valuation allowance on its deferred tax asset. The Company recognizes the financial statement benefit of an uncertain tax position only after determining that the relevant tax authority would more likely than not sustain the position. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company classifies interest and penalties related to income taxes as income tax expense in its Consolidated Financial Statements. The Company had no unrecognized tax benefits or liabilities, and no adjustment to its financial position, results of operations, or cash flows relating to uncertain tax positions taken on all open tax years. The Company is no longer subject to federal income tax examinations by tax authorities for the years before 2015 and state or local income tax examinations by tax authorities for the years before 2015. j. Impairment of long-lived assets Long-lived assets, such as plant and equipment and purchased intangibles with finite lives, which are subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Long-lived assets held for sale would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. k. Stock-based compensation Stock based compensation expense is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value of restricted stock units granted is estimated based on the closing market price of the Company’s common stock on the date of the grant. The fair value of these awards, adjusted for estimated forfeitures, is amortized over the requisite service period of the award, which is generally the vesting period. l. Revenue recognition The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach. Revenue from the Company’s sales continue to generally be recognized either when products are shipped (i.e. point in time) or under certain long-term government contracts, as the Company transfers control of the product or service to its customers (i.e. over time), Internal research and development costs see note 2. m. Internal research and development costs Internal research and development costs are charged to expense as incurred. n. Precious metals Precious metals are stated at cost and consist of various fixtures used in the high temperature crystal growth manufacturing process . From time to time the quoted market values of these precious metals may be below cost . o. Advertising costs Advertising costs included in selling, general and administrative expenses were $25,000 and $11,000 for the years ended December 31, 2018 and 2017, respectively. Advertising costs are charged to expense when the related services are incurred or related events take place. p. Concentrations and credit risk The concentration of credit risk in the Company’s accounts receivable is mitigated by the Company’s credit evaluation process, familiarity with its small base of recurring customers and reasonably short collection terms and the geographical dispersion of revenue. The Company generally does not require collateral but, in some cases, the Company negotiates cash advances prior to the undertaking of the work. These cash advances are recorded as current liabilities on the balance sheet until corresponding revenues are realized. The Company utilizes many relatively uncommon materials and compounds to manufacture its products and relies on outside vendors for certain manufacturing services. Therefore, any failure by its suppliers to deliver materials of an adequate quality and quantity could have an adverse effect on the Company’s ability to meet the commitments of its customers. For the year ended December 31, 2018, the Company had three customers who had sales representing 22.3%, 12.9% and 9.4% of total revenues, respectively. In 2017, the Company had the same three customers had sales representing 14.4%, 14.8%, and 5.6% of total revenues. Since the Company is a supplier of custom manufactured components to OEM customers, the relative size and identity of the largest customer accounts changes somewhat from year to year. In the short term, the loss of any one of these large customer accounts could have a material adverse effect on business, results of operations, and financial condition. q. Fair value measurements The Company follows U.S. GAAP accounting guidance which establishes a framework for measuring fair value and expanded related disclosures. The framework requires fair value to be determined based on the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The valuation techniques required are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The accounting guidance requires the following fair value hierarchy: Level 1 - Quoted prices (unadjusted) for identical assets and liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 - Values determined by models, significant inputs to which are unobservable and are primarily based on internally derived assumptions regarding the timing and amount of expected cash flows. Long-lived assets, including goodwill and other intangible assets, may be measured at fair value if such assets are held for sale or if there is a determination that the asset is impaired. Managements’ determination of fair value, although highly subjective, is based on the best information available, including internal projections of future earnings and cash flows discounted at an appropriate interest rate, quoted market prices when available, market prices for similar assets, broker quotes and independent appraisals, as appropriate. r. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition.” ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue, cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach. Revenue from the Company’s sales continue to generally be recognized either when products are shipped (i.e. point in time) or under certain long-term government contracts, as the Company transfers control of the product or service to its customers (i.e. over time), which approximates the previously used percentage-of-completion method of accounting. As such, the adoption of ASU 2014-09 had no material impact to the Company’s financial position or results of operations; however, the Company has now presented the disclosures required by this new standard, refer to Note 2. In January 2017, the FASB issued guidance which clarifies the definition of a business and provides revised criteria and a framework to determine whether an integrated set of assets and activities is a business. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted the new guidance on January 1, 2018 as required, with no impact on the Company’s consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15, Statement of cash flows (Topic 230) which provides guidance on the classification of certain cash receipts and payments in the statement of cash flows intended to reduce diversity in practice. The guidance is effective for interim and annual periods beginning in 2018. Early adoption is permitted. The guidance is to be applied retrospectively to all periods presented but may be applied prospectively if retrospective application would be impracticable. The Company adopted the new guidance on January 1, 2018 as required. There are no significant impacts to the Company’s consolidated financial statements from the adoption of the new guidance. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments" (“ASU 2016-13” which amended guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for interim and annual periods beginning in 2020, with earlier application permitted in 2019. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payments, including income tax consequences, application of award forfeitures to expense, classification on the statement of cash flows, and classification of awards as either equity or liabilities. This guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of the guidance in ASU No. 2016-09 on January 1, 2017 did not have a material effect on the Company’s financial statements and related footnote disclosures. In February 2016, the FASB created Topic 842 and issued ASU 2016-02, Leases. The guidance in this update supersedes Topic 840, Leases. This ASU requires lessees to recognize a right-of-use assets and a lease liability, initially measured at the present value of the lease payments on the balance sheet. For public companies, the amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company will adopt ASU 2016-02 and we do not expect a material impact on the financial statements and disclosure . In January 2016, the FASB issued ASU 2016-01, “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which changes how entities measure certain equity investments and how entities present changes in the fair value of financial liabilities measured under the fair value option that are attributable to instrument-specific credit risk. The adoption of ASU 2016-01 did not have a material impact to the Company’s financial position or results of operations. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | 2. REVENUE The Company’s revenues are comprised of product sales as well as products and services provided under long-term government contracts with its customers. All revenue is recognized when the Company satisfies its performance obligation(s) under the contract (either implicit or explicit) by transferring the promised product or service to its customer either when (or as) its customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of standalone selling price for each distinct product or service in the contract, which is generally based on an observable price. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value added, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs are included in cost of goods sold. The Company’s performance obligations under long-term government contracts are generally satisfied over time. Revenue from products or services transferred to customers over time accounted for approximately 5.0% and 2.1% of revenue for 2018 and 2017, respectively. Revenue under these long-term government contracts are generally recognized over time using an input measure based upon the proportion of actual costs incurred to estimated total project costs, which is a method used to best depict the Company’s performance to date under the terms of the contract. Accounting for these long-term government contracts involves the use of various techniques to estimate total revenue and costs. The Company estimates profit on these long-term government contracts as the difference between total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, among other things, labor productivity, costs and availability of materials, and timing of funding by the U.S. government. The nature of these long-term agreements may give rise to several types of variable consideration, such as claims, awards and incentive fees. Historically, these amounts of variable consideration are not considered significant. Additionally, contract estimates may include additional revenue for submitted contract modifications if there exists an enforceable right to the modification, the amount can be reasonably estimated and its realization is probable. These estimates are based on historical collection experience, anticipated performance, and the Company’s best judgement at the time. These amounts are generally included in the contract’s transaction price and are allocated over the remaining performance obligations. Changes in judgments on these above estimates could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of associated income. Under these long-term government contracts, the Company may receive payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. In the event a contract loss becomes known, the entire amount of the estimated loss is recognized in the Consolidated Statements of Operations. The majority of the Company’s revenue is from products and services transferred to customers at a point in time and were approximately 95.0% and 97.9% of revenue for 2018 and 2017, respectively. The Company recognizes revenue at the point in time in which the customer obtains control of the product or service, which is generally when product title passes to the customer upon shipment. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at its physical location. As part of the adoption of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, the Company reviewed its sales by market area and reassigned certain customers within the existing markets. In addition, the Universities and National Lab market was renamed to Scientific/R&D. Sales by market area, as previously presented for 2017, were reclassified accordingly. The following table summarizes the Company’s sales by market area: December 31, 2018 2017 Aerospace & Defense $ 2,584,785 $ 3,137,708 Process Control & Metrology 5,890,753 4,243,562 Laser Systems 1,550,180 1,030,534 Scientific / R&D 1,463,009 1,447,397 Total $ 11,488,727 $ 9,859,201 Net sales by timing to transfers of goods and services is as follows: December 31, 2018 2017 Transfer at point in time $ 10,914,423 $ 9,656,598 Transfer over time 574,304 202,603 Total net sales $ 11,488,727 $ 9,859,201 |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 3. Inventories, net Inventories are comprised of the following and are shown net of inventory reserves of approximately $2,486,000 for 2018 and $2,447,000 for 2017: December 31, 2018 2017 (In thousands) Raw materials $ 1,143 $ 1,174 Work in process, including manufactured parts and components 1,389 1,462 Finished goods 484 560 $ 3,016 $ 3,196 |
Plant and Equipment
Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 4. Plant and Equipment Plant and equipment are comprised of the following: December 31, 2018 2017 (In thousands) Office and computer equipment $ 1,352 $ 1,333 Machinery and equipment 11,062 11,118 Leasehold improvements 2,283 2,276 14,697 14,727 Less accumulated depreciation and amortization (14,070 ) (14,014 ) $ 627 $ 713 Depreciation expense recorded by the Company totaled approximately $240,000 and $284,000 for 2018 and 2017, respectively. Plant and equipment with a net book value of $0 was sold in 2017 for proceeds of $24,000, Fully depreciated assets of $184,079 were written off in 2018. The Company evaluates its property and equipment for impairment when events or circumstances indicate and impairment may exist. Based on this evaluation, the Company concluded that, at December 31, 2018, its long-lived assets were not impaired. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 5. Intangible Assets Intangible assets include acquired intangible assets with finite lives, consisting principally of non-contractual customer relationships, completed technology, trademark and licensed patents. Intangible assets with finite lives are amortized on a straight-line basis over the assets’ estimated useful life up to 14 years. Based on management’s judgement, there were no events or circumstances that would lead us to conclude that a possible impairment of intangible assets exists as of December 31, 2018. Amortization expense was approximately $38,000 and $81,000 for the years ended December 31, 2018 and 2017, respectively. Lower amortization for 2018 was due to an Intangible Asset fully amortized by February 2018. Aggregate amortization for the five succeeding years from January 1, 2019 through December 31, 2023 is expected to be approximately $17,000. The following schedule details the Company’s intangible asset balance by major asset class. At December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Customer-related $ 550 (542 ) $ 8 Completed technology 363 (363 ) — Trademarks 187 (187 ) — Licensed Patents 30 (6 ) 24 Total $ 1,130 (1,098 ) $ 32 At December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Customer-related $ 550 $ (535 ) $ 15 Completed technology 363 (348 ) 15 Trademarks 187 (173 ) 14 Licensed Patents 30 (4 ) 26 Total $ 1,130 $ (1,060 ) $ 70 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 6. Related Party Transactions On April 12, 2018 the maturity dates of a $1,500,000 Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible Promissory Note to an affiliate of Clarex were each extended to April 1, 2021 from April 1,2019. The notes bear interest at 6%. Interest accrues yearly and is payable on maturity. Unpaid interest, along with principal, may be converted into securities of the Company as follows: the notes are convertible in the aggregate into 1,500,000 units and 1,000,000 units, respectively, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to acquire 0.75 shares of common stock at a price of $1.35 per share. As part of the agreement, the expiration dates of the warrants were extended from April 1, 2022 to April 1,2024. The Company paid $187,500 and $112,500 for interest on the notes in 2018 and 2017, respectively. Accrued interest of $75,000 and $112,000 is included in Accounts payable and accrued liabilities as of December 31, 2018 and 2017, respectively. |
Other Long-Term Notes
Other Long-Term Notes | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities Disclosure [Text Block] | 7. Other Long-Term Notes Other Long-Term Notes consist of the following: December 31, 2018 2017 (In thousands) U.S. Small Business Administration term note payable in monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in May 2032. $ 258 $ 270 258 270 Less current portion (13 ) (12 ) Other Long-Term Notes, excluding current portion $ 245 $ 258 Other Long-Term Notes mature as follows: Year ending December 31: (In thousands) 2019 13 2020 13 2021 14 2022 15 2023 15 Thereafter 188 $ 258 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 8. Accounts Payable and Accrued Liabilities Accounts payable and accrued expenses are comprised of the following: December 31, 2018 2017 (In thousands) Trade accounts payable and accrued purchases $ 399 $ 740 Accrued payroll 114 121 Accrued 401K company matching contribution 125 143 Accrued expenses – other 197 213 $ 835 $ 1,217 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 9. Income Taxes The Company did not record a current provision for income tax due to the availability of net operation loss carryforwards to offset taxable income for both federal and state tax purposes. A reconciliation of the income tax provision computed at the statutory Federal income tax rate to our effective income tax rate follows (in percent): Years Ended December 31, 2018 2017 Federal statutory rate (21 )% (34 )% State statutory rate (9 ) (7 ) Reduction in Federal rate due to tax reform 0 259 Reduction in State rate due to tax rate change 24 0 Change in Valuation Allowance 8 (214 ) Permanent Differences (2 ) (2 ) Effective income tax rate 0 % 0 % At December 31, 2018 and 2017, the Company had estimated Federal net operating loss carry forwards of approximately $8,699,000 and $9,435,000, respectively and State net operating loss carry forwards of approximately $5,221,000 and $5,977,000, respectively. These tax loss carry forwards expire at various dates through 2037. Internal Revenue Code Section 382 places a limitation on the utilization of Federal net operating loss and other credit carry forwards when an ownership change, as defined by the tax law, occurs. Generally, this occurs when a greater than 50 percentage point change in ownership occurs. Accordingly, the actual utilization of the net operating loss and carryforwards for tax purposes may be limited annually to a percentage (based on the risk free interest rate) of the fair market value of the Company at the time of any such ownership change. The Company has not prepared an analysis of ownership changes but does not believe that a greater than 50% change of ownership has occurred and such limitations would not apply to the Company. The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Tax Act eliminates alternative minimum taxes and lowers the U.S. federal corporate income tax from 34% to 21% effective January 1, 2018. The Company remeasured its net deferred tax assets at December 31, 2017 using the new Federal Tax Rate and posted a one-time reduction of $1,765,000 in deferred tax assets and $1,765,000 to the valuation allowance to reflect the lower realization rate to be applied commencing in 2018. Deferred tax assets (liabilities) are comprised of the following: December 31, 2018 2017 (In thousands) Account receivable reserves $ 4 $ 4 Inventory reserves 746 685 Inventory capitalization 102 101 Depreciation 312 291 Loss carry forwards 2,229 2,371 Gross deferred tax assets 3,393 3,452 Valuation allowance (3,393 ) (3,452 ) Net deferred tax asset $ — $ — In evaluating the Company’s ability to recover deferred tax assets in future periods, management considers the available positive and negative factors, including the Company’s recent operating results, the existence of cumulative losses and near term forecasts of future taxable income that is consistent with the plans and estimates management is using to manage the underlying business. A significant piece of objective negative evidence evaluated was the cumulative loss incurred by the Company over the three-year period ended December 31, 2017. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2018 and 2017, the valuation allowance was decreased by $59,000 and increased by $302,000, respectively. The company concluded it was more likely than not that it would not be able to realize any portion of the benefit on the deferred tax assets and the valuation allowance was adjusted to provide a full valuation against the deferred tax assets. The Company files income tax returns in the United States, which typically provides for a three-year statute of limitations on assessments. The Company is no longer subject to federal, state or local income tax examinations by tax authorities for the years before 2015. The guidance for accounting for uncertainties in income taxes requires that we recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. There were no unrecognized tax benefits that impacted our effective tax rate and accordingly, there was no material effect to our financial position, results of operations or cash flows. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged to us in relation to the underpayment of income taxes. We do not anticipate that our unrecognized tax benefits will significantly increase in the next 12 months. |
Equity Compensation Program and
Equity Compensation Program and Stock-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 10. Equity Compensation Program and Stock-based Compensation a. 2010 Equity Compensation Program The Company’s 2010 Equity Compensation Program provides for grants of options, stock appreciation rights and restricted stock awards to employees, officers, directors, and others who render services to the Company. The Program is comprised of four parts including: (i) the Incentive Stock Option Plan which provides for grants of “incentive stock options”, (ii) the Supplemental Stock Option Plan which provides for grants of stock options that shall not be “incentive stock options”, (iii) the Stock Appreciation Rights Plan which allows the granting of stock appreciation rights and, (iv) the Restricted Stock Award Plan which provides for the granting of restrictive shares of Common Stock and restricted stock units. The plan is administered by the Compensation Committee of the Board of Directors. Under this plan, an aggregate of up to 4,000,000 shares of common stock may be granted. b. 2000 Equity Compensation Program The Company’s 2000 Equity Compensation Program expired on June 2, 2010. All outstanding grants of options, stock appreciation rights and performance shares issued under the Program will remain outstanding and shall expire on the date determined by the terms of the original grant. The latest date of expiration for outstanding grants under the plan is March 28, 2020. c. Stock Option Expense The Company's results for the years ended December 31, 2018 and 2017 include stock-based compensation expense for stock option grants totaling $80,000 and $60,000, respectively. Such amounts have been included in the Consolidated Statements of Operations within cost of goods sold ($22,000 for 2018 and $17,000 for 2017), and selling, general and administrative expenses ($58,000 for 2018 and $43,000 for 2017). As of December 31, 2018 and 2017, there were $180,000 and $89,000 of unrecognized compensation costs, net of estimated forfeitures, related to non-vested stock options, which are expected to be recognized over a weighted average period of approximately 1.89 years and 1.4 years, respectively. The weighted average estimated fair value of stock options granted in the two years ended December 31, 2018 and 2017 was $0.98 and $0.56, respectively. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an option award. The Company assumes a dividend yield of zero, as the Company has not paid dividends in the past and does not expect to in the foreseeable future. The expected volatility is based upon the historical volatility of our common stock which the Company believes results in the best estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future volatility. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant with maturity dates approximately equal to the expected life at the grant date. The expected life is based upon the period of expected benefit based on the Company’s evaluation of historical and expected future employee exercise behavior. The following range of weighted-average assumptions were used for to determine the fair value of stock option grants during the years ended December 31, 2018 and 2017: Years Ended December 31, 2018 2017 Dividend yield — % — % Volatility 140.0 % 133-134 % Risk-free interest rate 2.6 % 2.2 – 2.3 % Expected life 10 years 10 years d. Stock Option Activity A summary of the Company’s outstanding stock options as of and for the years ended December 31, 2018 and 2017 is presented below: Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Options Price (In Years) Value(a) Outstanding as of January 1, 2017 760,214 $ .60 Granted 180,000 .58 Exercised (8,333 ) .25 Forfeited /Expired (28,873 ) $ 1.09 Outstanding as of December 31, 2017 (b) 903,008 $ .58 5.20 648,410 Granted 175,000 1.00 Exercised (4,500 ) .31 Forfeited /Expired (15,300 ) .98 Outstanding as of December 31, 2018 (b) 1,058,208 $ .64 5.58 337,997 Exercisable as of December 31, 2018 708,717 $ .59 3.45 264,192 (a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices as of December 31, 2018 exceeds the exercise prices of the respective options. All of the options used in the calculation of the aggregate intrinsic value for outstanding options are exercisable as of December 31, 2018. (b) Based on the Company’s historical forfeiture rate, the number of options expected to vest is the same as the total outstanding at December 31, 2018. The following table represents non-vested stock options granted, vested, and forfeited for the year ended December 31, 2018. Non-vested Options Options Weighted-Average Grant- Date Fair Value - $ Non-vested - January 1, 2018 330,495 .44 Granted 175,000 .98 Vested (156,004 ) .38 Forfeited — — Non-vested – December 31, 2018 349,491 .74 The total weighted average grant date fair value of options vested during the years ended December 31, 2018 and 2017, was $62,000 and $34,000, respectively. The following table summarizes information about stock options outstanding at December 31, 2018: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Price Outstanding Life in Years Price Outstanding Price $0.18 - $0.35 407,167 6.26 $ .29 352,676 $ .28 $0.50 - $1.00 636,100 2.66 $ .86 341,100 $ .88 $1.50 - $1.75 14,941 0.10 $ 1.75 14,941 $ 1.75 |
Net Income (Loss) per Share
Net Income (Loss) per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 11. Net Income (Loss) per Share Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options, stock grants and warrants using the average market prices during the period, including potential common shares issuable upon conversion of outstanding convertible notes, except if the effect on the per share amounts is anti-dilutive. For the year ended December 31, 2018, a total of 2,500,000 anti-dilutive common shares issuable upon conversion of outstanding convertible notes and 1,875,000 common shares underlying warrants issuable upon conversion of outstanding related party convertible notes have been excluded from the diluted computation of net income per share because their effect is anti-dilutive. In addition, 1,058,208 common stock equivalents related to outstanding options have been excluded from the diluted computation because their effect is anti-dilutive. For the year ended December 31, 2017, all common equivalent shares outstanding have been excluded from the diluted computation because their effect is anti-dilutive. This included 903,008 common stock equivalents related to outstanding options, in addition to 2,500,000 common shares and 1,875,000 common shares underlying warrants issuable upon conversion of outstanding related party convertible notes. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Disclosure [Text Block] | 12. Commitments a. Lease commitments The Company occupies approximately 42,000 square feet of space located at 181 Legrand Avenue, Northvale, New Jersey pursuant to a net lease. Under the terms of the lease, the Company is obligated for all real estate taxes, maintenance and operating costs of the facility. The lease for the Northvale facility was renewed for a term of two years from June 1, 2015 to May 31, 2017 along with options to renew the lease for two additional one year terms running through May 31, 2019, at substantially the same terms. In 2017, the Company exercised its option to renew the Northvale lease for an additional one year term running through May 31, 2018. The Company exercised the option to renew the lease for a one-year term through May 31, 2019. The company intends to have a new lease agreement prior to May, 31, 2019. The Company’s total rent expense for the year ended December 31, 2018 and 2017 was $290,000 and $283,000, respectively. The Company also paid real estate taxes and insurance premiums under the terms of the lease that totaled approximately $94,000 in 2018 and $91,000 in 2017. Future minimum annual rentals at December 31, 2018 which cover the remaining lease term expiring on May 31, 2019. total $122,310. b. Retirement plans The Company maintains a 401(k) savings plan (the “Plan”) for all eligible employees (as defined in the plan). The 401(k) plan allows employees to contribute up to 70% of their compensation on a salary reduction, pre-tax basis up to the statutory limitation. The 401(k) plan also provides that the Company, at the discretion of the Board of Directors, may match employee contributions based on a pre-determined formula. In 2018, the Company’s 401(k) matching contribution for employees was $124,783. This will be funded by way of a contribution of 134,176 shares of the Company’s common stock, which will be issued to the Plan in April, 2019. In 2017, the Company’s 401(k) matching contribution for employees was $123,706. This was funded by way of cash contribution of $31,000 and a contribution of 111,288 shares of the Company’s common stock, which were issued to the Plan in June, 2018. The Company records the distribution of the common shares in the Consolidated Statement of Shareholders’ Equity as of the date of distribution to the 401(k) plan administrator. |
Product Sales, Foreign Sales an
Product Sales, Foreign Sales and Sales to Major Customers | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 13. Product Sales, Foreign Sales and Sales to Major Customers The Company’s export sales, which are primarily to customers in countries within Europe, Israel, Asia and Japan, amounted to approximately 40% and 32.5% of product sales in 2018 and 2017, respectively. The Company had sales to three major customers which accounted for approximately 44.6% of sales in 2018. One customer, a division of a major U.S. defense industry corporation that manufactures electro-optical systems for U.S. and foreign governments accounted for 12.9% of 2018 sales. The two other customers included one foreign-based and one domestic-based manufacturer of process control and metrology equipment whose sales represented 22.3% and 9.4% of sales, respectively. For 2017 the top three customers represented 14.4%, 14.8% and 5.6% respectively. Given the concentration of sales within a small number of customers, the loss of any of these customers would have a significant negative impact on the Company and its business units. During the past two years, sales to the Company’s top five customers represented approximately 56.1%, and 45.2 % of sales, respectively. Given the concentration of sales within a small number of customers, the loss of any of these customers would have a significant negative impact on the Company and its business units. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 14. Shareholders’ Equity a. Common shares reserved at December 31, 2018, are as follows: 2010 Equity compensation plan 4,000,000 2000 Equity compensation plan 80,341 Subordinated convertible notes 2,500,000 Warrants issuable on conversion of Subordinated convertible notes 1,875,000 8,455,341 b. Warrants The Company had no outstanding warrants as of December 31, 2018 and 2017. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments Disclosure [Text Block] | 15. Fair Value of Financial Instruments The methods and assumptions used to estimate the fair value of the following classes of financial instruments were: Current Assets and Current Liabilities: The carrying amount of cash, current receivables and payables and certain other short-term financial instruments approximate their fair value as of December 31, 2018 due to their short-term maturities. Long-Term Debt: The fair value of the Company’s long-term debt, including the current portion, for notes payable and subordinated convertible debentures, was estimated using a discounted cash flow analysis, based on the Company’s assumed incremental borrowing rates for similar types of borrowing arrangements. The fair value of long-term debt is estimated to be $2,752,000 compared to its carrying amount of $2,758,000 as of December 31, 2018. |
Nature of Business and Operat_2
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | a. Nature of Business and Operations Inrad Optics, Inc. and Subsidiaries (the “Company”), was incorporated in the state of New Jersey and is a manufacturer of crystals, crystal devices, electro-optic and optical components, and sophisticated laser devices and instruments. The Company has administrative offices and manufacturing operations in Northvale, New Jersey. The Company’s principal customers include commercial instrumentation companies and OEM laser systems manufacturers, research laboratories, government agencies, and defense contractors. The Company’s products are sold domestically using its own sales staff, and in major overseas markets, principally Europe, Israel, Japan, and Asia, using independent sales agents. |
Liquidity Disclosure Policy [Policy Text Block] | b. Liquidity As of December 31, 2018, the Company had working capital of $4,057,914 and cash and cash equivalents of $1,185,553. Management believes based on the Company’s operations and its existing working capital resources together with existing cash flows, the Company has sufficient cash flows to fund operations through at least March 31, 2020. |
Consolidation, Policy [Policy Text Block] | c. Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Upon consolidation, all inter-company accounts and transactions are eliminated. |
Use of Estimates, Policy [Policy Text Block] | d. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, determining our allowance for doubtful accounts, our allowance for inventory obsolescence, the fair value and depreciable lives of long-lived tangible and intangible assets, and deferred taxes and the associated valuation allowance. Actual results could differ from these estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | e. Cash and cash equivalents The Company considers cash-on-hand and highly liquid investments with original maturity dates of three months or less at the date of purchase to be cash and cash equivalents. |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | f. Accounts receivable Accounts receivable are carried at net realizable value, net of write-offs and allowances. The Company establishes an allowance for doubtful accounts based on estimates as to the collectability of accounts receivable. Management specifically analyzes past-due accounts receivable balances and, additionally, considers bad debt history, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Uncollectible accounts receivable are written-off when it is determined that the balance will not be collected. |
Inventory, Policy [Policy Text Block] | g. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net-realizable value. Cost of manufactured goods includes material, labor and overhead. The Company records a reserve for slow moving inventory as a charge against earnings for all products identified as surplus, slow moving or discontinued. Excess work-in-process costs are charged against earnings whenever estimated costs-of-completion exceed unbilled revenues. |
Property, Plant and Equipment, Policy [Policy Text Block] | h. Plant and Equipment Plant and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets which range between five and seven years. Amortization of leasehold improvements is computed using the straight-line method over the lesser of 10 Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and a gain or loss is recorded. |
Income Tax, Policy [Policy Text Block] | i. Income taxes Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the amounts of assets and liabilities recorded for income tax and financial reporting purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance, and the company has maintained the full valuation allowance on its deferred tax asset. The Company recognizes the financial statement benefit of an uncertain tax position only after determining that the relevant tax authority would more likely than not sustain the position. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company classifies interest and penalties related to income taxes as income tax expense in its Consolidated Financial Statements. The Company had no unrecognized tax benefits or liabilities, and no adjustment to its financial position, results of operations, or cash flows relating to uncertain tax positions taken on all open tax years. The Company is no longer subject to federal income tax examinations by tax authorities for the years before 2015 and state or local income tax examinations by tax authorities for the years before 2015. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | j. Impairment of long-lived assets Long-lived assets, such as plant and equipment and purchased intangibles with finite lives, which are subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Long-lived assets held for sale would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | k. Stock-based compensation Stock based compensation expense is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value of restricted stock units granted is estimated based on the closing market price of the Company’s common stock on the date of the grant. The fair value of these awards, adjusted for estimated forfeitures, is amortized over the requisite service period of the award, which is generally the vesting period. |
Revenue Recognition, Policy [Policy Text Block] | l. Revenue recognition The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach. Revenue from the Company’s sales continue to generally be recognized either when products are shipped (i.e. point in time) or under certain long-term government contracts, as the Company transfers control of the product or service to its customers (i.e. over time), Internal research and development costs see note 2. |
Research and Development Expense, Policy [Policy Text Block] | m. Internal research and development costs Internal research and development costs are charged to expense as incurred. |
Precious Metals Policy [Policy Text Block] | n. Precious metals Precious metals are stated at cost and consist of various fixtures used in the high temperature crystal growth manufacturing process . From time to time the quoted market values of these precious metals may be below cost . |
Advertising Costs, Policy [Policy Text Block] | o. Advertising costs Advertising costs included in selling, general and administrative expenses were $25,000 and $11,000 for the years ended December 31, 2018 and 2017, respectively. Advertising costs are charged to expense when the related services are incurred or related events take place. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | p. Concentrations and credit risk The concentration of credit risk in the Company’s accounts receivable is mitigated by the Company’s credit evaluation process, familiarity with its small base of recurring customers and reasonably short collection terms and the geographical dispersion of revenue. The Company generally does not require collateral but, in some cases, the Company negotiates cash advances prior to the undertaking of the work. These cash advances are recorded as current liabilities on the balance sheet until corresponding revenues are realized. The Company utilizes many relatively uncommon materials and compounds to manufacture its products and relies on outside vendors for certain manufacturing services. Therefore, any failure by its suppliers to deliver materials of an adequate quality and quantity could have an adverse effect on the Company’s ability to meet the commitments of its customers. For the year ended December 31, 2018, the Company had three customers who had sales representing 22.3%, 12.9% and 9.4% of total revenues, respectively. In 2017, the Company had the same three customers had sales representing 14.4%, 14.8%, and 5.6% of total revenues. Since the Company is a supplier of custom manufactured components to OEM customers, the relative size and identity of the largest customer accounts changes somewhat from year to year. In the short term, the loss of any one of these large customer accounts could have a material adverse effect on business, results of operations, and financial condition. |
Fair Value Measurement, Policy [Policy Text Block] | q. Fair value measurements The Company follows U.S. GAAP accounting guidance which establishes a framework for measuring fair value and expanded related disclosures. The framework requires fair value to be determined based on the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The valuation techniques required are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The accounting guidance requires the following fair value hierarchy: Level 1 - Quoted prices (unadjusted) for identical assets and liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 - Values determined by models, significant inputs to which are unobservable and are primarily based on internally derived assumptions regarding the timing and amount of expected cash flows. Long-lived assets, including goodwill and other intangible assets, may be measured at fair value if such assets are held for sale or if there is a determination that the asset is impaired. Managements’ determination of fair value, although highly subjective, is based on the best information available, including internal projections of future earnings and cash flows discounted at an appropriate interest rate, quoted market prices when available, market prices for similar assets, broker quotes and independent appraisals, as appropriate. |
New Accounting Pronouncements, Policy [Policy Text Block] | r. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition.” ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue, cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach. Revenue from the Company’s sales continue to generally be recognized either when products are shipped (i.e. point in time) or under certain long-term government contracts, as the Company transfers control of the product or service to its customers (i.e. over time), which approximates the previously used percentage-of-completion method of accounting. As such, the adoption of ASU 2014-09 had no material impact to the Company’s financial position or results of operations; however, the Company has now presented the disclosures required by this new standard, refer to Note 2. In January 2017, the FASB issued guidance which clarifies the definition of a business and provides revised criteria and a framework to determine whether an integrated set of assets and activities is a business. For public companies, the new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company adopted the new guidance on January 1, 2018 as required, with no impact on the Company’s consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15, Statement of cash flows (Topic 230) which provides guidance on the classification of certain cash receipts and payments in the statement of cash flows intended to reduce diversity in practice. The guidance is effective for interim and annual periods beginning in 2018. Early adoption is permitted. The guidance is to be applied retrospectively to all periods presented but may be applied prospectively if retrospective application would be impracticable. The Company adopted the new guidance on January 1, 2018 as required. There are no significant impacts to the Company’s consolidated financial statements from the adoption of the new guidance. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments" (“ASU 2016-13” which amended guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for interim and annual periods beginning in 2020, with earlier application permitted in 2019. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payments, including income tax consequences, application of award forfeitures to expense, classification on the statement of cash flows, and classification of awards as either equity or liabilities. This guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of the guidance in ASU No. 2016-09 on January 1, 2017 did not have a material effect on the Company’s financial statements and related footnote disclosures. In February 2016, the FASB created Topic 842 and issued ASU 2016-02, Leases. The guidance in this update supersedes Topic 840, Leases. This ASU requires lessees to recognize a right-of-use assets and a lease liability, initially measured at the present value of the lease payments on the balance sheet. For public companies, the amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company will adopt ASU 2016-02 and we do not expect a material impact on the financial statements and disclosure . In January 2016, the FASB issued ASU 2016-01, “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which changes how entities measure certain equity investments and how entities present changes in the fair value of financial liabilities measured under the fair value option that are attributable to instrument-specific credit risk. The adoption of ASU 2016-01 did not have a material impact to the Company’s financial position or results of operations. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenues [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table summarizes the Company’s sales by market area: December 31, 2018 2017 Aerospace & Defense $ 2,584,785 $ 3,137,708 Process Control & Metrology 5,890,753 4,243,562 Laser Systems 1,550,180 1,030,534 Scientific / R&D 1,463,009 1,447,397 Total $ 11,488,727 $ 9,859,201 Net sales by timing to transfers of goods and services is as follows: December 31, 2018 2017 Transfer at point in time $ 10,914,423 $ 9,656,598 Transfer over time 574,304 202,603 Total net sales $ 11,488,727 $ 9,859,201 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories are comprised of the following and are shown net of inventory reserves of approximately $2,486,000 for 2018 and $2,447,000 for 2017: December 31, 2018 2017 (In thousands) Raw materials $ 1,143 $ 1,174 Work in process, including manufactured parts and components 1,389 1,462 Finished goods 484 560 $ 3,016 $ 3,196 |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Plant and equipment are comprised of the following: December 31, 2018 2017 (In thousands) Office and computer equipment $ 1,352 $ 1,333 Machinery and equipment 11,062 11,118 Leasehold improvements 2,283 2,276 14,697 14,727 Less accumulated depreciation and amortization (14,070 ) (14,014 ) $ 627 $ 713 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following schedule details the Company’s intangible asset balance by major asset class. At December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Customer-related $ 550 (542 ) $ 8 Completed technology 363 (363 ) — Trademarks 187 (187 ) — Licensed Patents 30 (6 ) 24 Total $ 1,130 (1,098 ) $ 32 At December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In thousands) Customer-related $ 550 $ (535 ) $ 15 Completed technology 363 (348 ) 15 Trademarks 187 (173 ) 14 Licensed Patents 30 (4 ) 26 Total $ 1,130 $ (1,060 ) $ 70 |
Other Long-Term Notes (Tables)
Other Long-Term Notes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Other Long-Term Notes consist of the following: December 31, 2018 2017 (In thousands) U.S. Small Business Administration term note payable in monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in May 2032. $ 258 $ 270 258 270 Less current portion (13 ) (12 ) Other Long-Term Notes, excluding current portion $ 245 $ 258 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Other Long-Term Notes mature as follows: Year ending December 31: (In thousands) 2019 13 2020 13 2021 14 2022 15 2023 15 Thereafter 188 $ 258 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accounts payable and accrued expenses are comprised of the following: December 31, 2018 2017 (In thousands) Trade accounts payable and accrued purchases $ 399 $ 740 Accrued payroll 114 121 Accrued 401K company matching contribution 125 143 Accrued expenses – other 197 213 $ 835 $ 1,217 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the income tax provision computed at the statutory Federal income tax rate to our effective income tax rate follows (in percent): Years Ended December 31, 2018 2017 Federal statutory rate (21 )% (34 )% State statutory rate (9 ) (7 ) Reduction in Federal rate due to tax reform 0 259 Reduction in State rate due to tax rate change 24 0 Change in Valuation Allowance 8 (214 ) Permanent Differences (2 ) (2 ) Effective income tax rate 0 % 0 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred tax assets (liabilities) are comprised of the following: December 31, 2018 2017 (In thousands) Account receivable reserves $ 4 $ 4 Inventory reserves 746 685 Inventory capitalization 102 101 Depreciation 312 291 Loss carry forwards 2,229 2,371 Gross deferred tax assets 3,393 3,452 Valuation allowance (3,393 ) (3,452 ) Net deferred tax asset $ — $ — |
Equity Compensation Program a_2
Equity Compensation Program and Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The following range of weighted-average assumptions were used for to determine the fair value of stock option grants during the years ended December 31, 2018 and 2017: Years Ended December 31, 2018 2017 Dividend yield — % — % Volatility 140.0 % 133-134 % Risk-free interest rate 2.6 % 2.2 – 2.3 % Expected life 10 years 10 years |
Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the Company’s outstanding stock options as of and for the years ended December 31, 2018 and 2017 is presented below: Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Options Price (In Years) Value(a) Outstanding as of January 1, 2017 760,214 $ .60 Granted 180,000 .58 Exercised (8,333 ) .25 Forfeited /Expired (28,873 ) $ 1.09 Outstanding as of December 31, 2017 (b) 903,008 $ .58 5.20 648,410 Granted 175,000 1.00 Exercised (4,500 ) .31 Forfeited /Expired (15,300 ) .98 Outstanding as of December 31, 2018 (b) 1,058,208 $ .64 5.58 337,997 Exercisable as of December 31, 2018 708,717 $ .59 3.45 264,192 (a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices as of December 31, 2018 exceeds the exercise prices of the respective options. All of the options used in the calculation of the aggregate intrinsic value for outstanding options are exercisable as of December 31, 2018. (b) Based on the Company’s historical forfeiture rate, the number of options expected to vest is the same as the total outstanding at December 31, 2018. |
Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested [Table Text Block] | The following table represents non-vested stock options granted, vested, and forfeited for the year ended December 31, 2018. Non-vested Options Options Weighted-Average Grant- Date Fair Value - $ Non-vested - January 1, 2018 330,495 .44 Granted 175,000 .98 Vested (156,004 ) .38 Forfeited — — Non-vested – December 31, 2018 349,491 .74 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The following table summarizes information about stock options outstanding at December 31, 2018: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Price Outstanding Life in Years Price Outstanding Price $0.18 - $0.35 407,167 6.26 $ .29 352,676 $ .28 $0.50 - $1.00 636,100 2.66 $ .86 341,100 $ .88 $1.50 - $1.75 14,941 0.10 $ 1.75 14,941 $ 1.75 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock by Class [Table Text Block] | a. Common shares reserved at December 31, 2018, are as follows: 2010 Equity compensation plan 4,000,000 2000 Equity compensation plan 80,341 Subordinated convertible notes 2,500,000 Warrants issuable on conversion of Subordinated convertible notes 1,875,000 8,455,341 |
Nature of Business and Operat_3
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Amortization Period Of Lease hold Improvements | 10 years | ||
Advertising Expense | $ 25,000 | $ 11,000 | |
Working Capital (Deficit) | 4,057,914 | ||
Cash and Cash Equivalents, at Carrying Value, Total | $ 1,185,553 | $ 799,953 | $ 973,333 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% | |
Maximum [Member] | |||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||
Minimum [Member] | |||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||
Sales Revenue, Net [Member] | |||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Concentration Risk, Percentage | 44.60% | ||
Customer One [Member] | Sales Revenue, Net [Member] | |||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Concentration Risk, Percentage | 22.30% | 14.40% | |
Customer Two [Member] | Sales Revenue, Net [Member] | |||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Concentration Risk, Percentage | 12.90% | 14.80% | |
Customer Three [Member] | Sales Revenue, Net [Member] | |||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||
Concentration Risk, Percentage | 9.40% | 5.60% |
REVENUE (Details)
REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 11,488,727 | $ 9,859,201 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,914,423 | 9,656,598 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 574,304 | 202,603 |
Aerospace & Defense [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,584,785 | 3,137,708 |
Process Control & Metrology [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,890,753 | 4,243,562 |
Laser Systems [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,550,180 | 1,030,534 |
Scientific / R&D [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,463,009 | $ 1,447,397 |
REVENUE (Details Textual)
REVENUE (Details Textual) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue from Products or Services | 5.00% | 2.10% |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue from Products or Services | 95.00% | 97.90% |
Inventories, net (Details)
Inventories, net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Raw materials | $ 1,143,000 | $ 1,174,000 |
Work in process, including manufactured parts and components | 1,389,000 | 1,462,000 |
Finished goods | 484,000 | 560,000 |
Inventories, net | $ 3,015,883 | $ 3,196,001 |
Inventories, net (Details Textu
Inventories, net (Details Textual) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Inventory Valuation Reserves | $ 2,486,000 | $ 2,447,000 |
Plant and Equipment (Details)
Plant and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 14,696,966 | $ 14,726,638 |
Less accumulated depreciation and amortization | (14,069,880) | (14,013,850) |
Total plant and equipment | 627,086 | 712,788 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,352,000 | 1,333,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 11,062,000 | 11,118,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,283,000 | $ 2,276,000 |
Plant and Equipment (Details Te
Plant and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 240,000 | $ 284,000 |
Property, Plant and Equipment, Disposals | 0 | |
Proceeds from Sale of Property, Plant, and Equipment | $ 24,000 | |
Write Off Of Fixed Assets | $ 184,079 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,130,000 | $ 1,130,000 |
Accumulated Amortization | (1,098,000) | (1,060,000) |
Net Carrying Amount | 32,156 | 70,219 |
Customer Relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 550,000 | 550,000 |
Accumulated Amortization | (542,000) | (535,000) |
Net Carrying Amount | 8,000 | 15,000 |
Completed Technology [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 363,000 | 363,000 |
Accumulated Amortization | (363,000) | (348,000) |
Net Carrying Amount | 0 | 15,000 |
Trademarks [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 187,000 | 187,000 |
Accumulated Amortization | (187,000) | (173,000) |
Net Carrying Amount | 0 | 14,000 |
Licensed Patents [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 30,000 | 30,000 |
Accumulated Amortization | (6,000) | (4,000) |
Net Carrying Amount | $ 24,000 | $ 26,000 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 38,000 | $ 81,000 |
Finite-Lived Intangible Assets, Net | $ 32,156 | $ 70,219 |
Finite-Lived Intangible Asset, Useful Life | 14 years |
Related Party Transactions (Det
Related Party Transactions (Details Textual) | Apr. 12, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |||
Dividends and Interest Paid | $ 187,500 | $ 112,500 | |
Interest Payable | $ 75,000 | $ 112,000 | |
Affiliate Of Clarex [Member] | Warrant [Member] | |||
Related Party Transaction [Line Items] | |||
Debt Instrument, Maturity Date | Apr. 1, 2022 | ||
Debt Instrument, Convertible, Number of Equity Instruments | 1,000,000 | ||
Warrants To Purchase Common Stock Number Of Shares Per Warrant | shares | 0.75 | ||
Affiliate Of Clarex [Member] | Common Stock [Member] | |||
Related Party Transaction [Line Items] | |||
Debt Instrument, Convertible, Number of Equity Instruments | 1,500,000 | ||
Investment Warrants, Exercise Price | $ / shares | $ 1.35 | ||
Convertible Subordinated Debt [Member] | |||
Related Party Transaction [Line Items] | |||
Convertible Subordinated Debt | $ 1,500,000 | ||
Convertible Subordinated Debt [Member] | Affiliate Of Clarex [Member] | |||
Related Party Transaction [Line Items] | |||
Convertible Subordinated Debt | $ 1,000,000 | ||
Debt Instrument, Maturity Date | Apr. 1, 2021 | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% |
Other Long-Term Notes (Details)
Other Long-Term Notes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Note Payable | $ 258,000 | $ 270,000 |
Less current portion | (12,960) | (12,486) |
Other Long-Term Notes, excluding current portion | 244,781 | 257,738 |
Us Small Business Administration Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Note Payable | $ 258,000 | $ 270,000 |
Other Long-Term Notes (Details
Other Long-Term Notes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
2019 | $ 13 | |
2020 | 13 | |
2021 | 14 | |
2022 | 15 | |
2023 | 15 | |
Thereafter | 188 | |
Other Notes Payable | $ 258 | $ 270 |
Other Long-Term Notes (Detail_2
Other Long-Term Notes (Details Textual) - Us Small Business Administration Note Payable [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Debt Instrument, Frequency of Periodic Payment | 1,922 |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable And Accrued Liabilities [Line Items] | ||
Trade accounts payable and accrued purchases | $ 399,000 | $ 740,000 |
Accrued payroll | 114,000 | 121,000 |
Accrued 401K company matching contribution | 125,000 | 143,000 |
Accrued expenses – other | 197,000 | 213,000 |
Accounts Payable and Accrued Liabilities, Current, Total | $ 835,015 | $ 1,217,157 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal statutory rate | (21.00%) | (34.00%) |
State statutory rate | (9.00%) | (7.00%) |
Change in Valuation Allowance | 8.00% | (214.00%) |
Permanent Differences | (2.00%) | (2.00%) |
Effective income tax rate | 0.00% | 0.00% |
Federal [Member] | ||
Reduction in rate due to tax rate | 0.00% | 259.00% |
State [Member] | ||
Reduction in rate due to tax rate | 24.00% | 0.00% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Line Items] | ||
Account receivable reserves | $ 4 | $ 4 |
Inventory reserves | 746 | 685 |
Inventory capitalization | 102 | 101 |
Depreciation | 312 | 291 |
Loss carry forwards | 2,229 | 2,371 |
Gross deferred tax assets | 3,393 | 3,452 |
Valuation allowance | (3,393) | (3,452) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards Expiration Date Description | 2037 | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 59,000 | $ 302,000 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% |
Increase Decrease In Deferred Tax Assets | $ 1,765,000 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 1,765,000 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards | 8,699,000 | 9,435,000 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards | $ 5,221,000 | $ 5,977,000 |
Equity Compensation Program a_3
Equity Compensation Program and Stock-based Compensation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 8212.00% | 8212.00% |
Volatility | 140.00% | |
Risk-free interest rate | 2.60% | |
Expected life | 10 years | 10 years |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 133.00% | |
Risk-free interest rate | 2.20% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 134.00% | |
Risk-free interest rate | 2.30% |
Equity Compensation Program a_4
Equity Compensation Program and Stock-based Compensation (Details 1) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted Average Exercise Price Options, Outstanding at the End of the period (in dollars per share) | [1] | $ 0.64 | ||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options, Outstanding at the Beginning of the period | 903,008 | [1] | 760,214 | |
Options, Granted | 175,000 | 180,000 | ||
Options, Exercised | (4,500) | (8,333) | ||
Option, Expired/Forfeited | (15,300) | (28,873) | ||
Options, Outstanding at the End of the period | [1] | 1,058,208 | 903,008 | |
Options, Exercisable at December 31, 2018 | 708,717 | |||
Weighted Average Exercise Price Options, Outstanding at the Beginning of the period (in dollars per share) | $ 0.58 | [1] | $ 0.60 | |
Weighted Average Exercise Price per Option, Granted | 1 | 0.58 | ||
Weighted Average Exercise Price per Option, Exercised | 0.31 | 0.25 | ||
Weighted Average Exercise Price per Option, Expired/Forfeited | 0.98 | 1.09 | ||
Weighted Average Exercise Price Options, Outstanding at the End of the period (in dollars per share) | [1] | $ 0.58 | ||
Weighted Average Exercise Price per Option, Exercisable at December 31, 2018 | $ 0.59 | |||
Weighted Average Remaining Contractual Term, Options Outstanding | [1] | 5 years 6 months 29 days | 5 years 2 months 12 days | |
Weighted Average Remaining Contractual Term, Exercisable at December 31, 2018 | 3 years 5 months 12 days | |||
Aggregate Intrinsic Value, Options Outstanding (in dollars) | [1],[2] | $ 337,997 | $ 648,410 | |
Aggregate Intrinsic Value, Options Exercisable at December 31, 2018 | [2] | $ 264,192 | ||
[1] | Based on the Company’s historical forfeiture rate, the number of options expected to vest is the same as the total outstanding at December 31, 2018. | |||
[2] | Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices as of December 31, 2018 exceeds the exercise prices of the respective options. All of the options used in the calculation of the aggregate intrinsic value for outstanding options are exercisable as of December 31, 2018. |
Equity Compensation Program a_5
Equity Compensation Program and Stock-based Compensation (Details 2) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options - Non-vested - January 1, 2017 | shares | 330,495 |
Options - Granted | shares | 175,000 |
Options - Vested | shares | (156,004) |
Options - Forfeited | shares | 0 |
Options - Non-vested - December 31, 2017 | shares | 349,491 |
Weighted-Average Grant-Date Fair Value - Non-vested at January 1, 2017 (in dollars per share) | $ / shares | $ 0.44 |
Weighted-Average Grant-Date Fair Value - Granted (in dollars per share) | $ / shares | 0.98 |
Weighted-Average Grant-Date Fair Value - Vested (in dollars per share) | $ / shares | 0.38 |
Weighted-Average Grant-Date Fair Value - Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value - Non-vested at December 31, 2017 (in dollars per share) | $ / shares | $ 0.74 |
Equity Compensation Program a_6
Equity Compensation Program and Stock-based Compensation (Details 3) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Weighted Average Exercise Price | $ 0.29 |
Exercise Price Range One [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range | 0.18 |
Exercise Price, Upper Range | $ 0.35 |
Options Outstanding, Number | shares | 407,167 |
Outstanding Options, Weighted Average Remaining Contractual Life in Years | 6 years 3 months 4 days |
Options Exercisable, Number Outstanding | shares | 352,676 |
Options Exercisable, Weighted Average Exercise Price | $ 0.28 |
Exercise Price Range Two [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range | 0.50 |
Exercise Price, Upper Range | $ 1 |
Options Outstanding, Number | shares | 636,100 |
Outstanding Options, Weighted Average Remaining Contractual Life in Years | 2 years 7 months 28 days |
Outstanding Options, Weighted Average Exercise Price | $ 0.86 |
Options Exercisable, Number Outstanding | shares | 341,100 |
Options Exercisable, Weighted Average Exercise Price | $ 0.88 |
Exercise Price Range Three [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range | 1.50 |
Exercise Price, Upper Range | $ 1.75 |
Options Outstanding, Number | shares | 14,941 |
Outstanding Options, Weighted Average Remaining Contractual Life in Years | 1 month 6 days |
Outstanding Options, Weighted Average Exercise Price | $ 1.75 |
Options Exercisable, Number Outstanding | shares | 14,941 |
Options Exercisable, Weighted Average Exercise Price | $ 1.75 |
Equity Compensation Program a_7
Equity Compensation Program and Stock-based Compensation (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Options Grants In Period Weighted Average Grant Date Fair Value | $ 0.98 | $ 0.56 |
Equity Compensation 2010 Program [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 4,000,000 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 180,000 | $ 89,000 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years) | 1 year 10 months 20 days | 1 year 4 months 24 days |
Allocated Share-based Compensation Expense | $ 80,000 | $ 60,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | 62,000 | 34,000 |
Employee Stock Option [Member] | Cost of Sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 22,000 | 17,000 |
Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 58,000 | $ 43,000 |
Net Income (Loss) per Share (De
Net Income (Loss) per Share (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Convertible Notes Payable [Member] | Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 | 2,500,000 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,058,208 | 903,008 |
Warrant [Member] | Convertible Notes Payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,875,000 | 1,875,000 |
Commitments (Details Textual)
Commitments (Details Textual) | 12 Months Ended | |
Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)ft²shares | |
Commitments Disclosure [Line Items] | ||
Operating Leases, Rent Expense | $ 290,000 | $ 283,000 |
Real Estate Taxes and Insurance, Total | 94,000 | $ 91,000 |
Area of Land | ft² | 42,000 | |
Operating Leases, Future Minimum Payments Due | $ 122,310 | |
Defined Contribution Plan Employer Matching Contribution (In Shares) | shares | 111,288 | |
Retirement Plans [Member] | ||
Commitments Disclosure [Line Items] | ||
Defined Contribution Plan Employer Matching Contribution In Cash | $ 31,000 | |
Defined Contribution Plan Employer Matching Contribution (In Shares) | shares | 134,176 | |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 124,783 | $ 123,706 |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 70.00% |
Product Sales, Foreign Sales _2
Product Sales, Foreign Sales and Sales to Major Customers (Details Textual) - Sales Revenue, Net [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 44.60% | |
Customers In Europe Asia Japan [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 40.00% | 32.50% |
Major Customers One [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 12.90% | 14.40% |
Major Customers Two [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 22.30% | 14.80% |
Major Customers Three [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 9.40% | 5.60% |
Top Five Customers [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 56.10% | 45.20% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Dec. 31, 2018shares |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance | 8,455,341 |
Equity Compensation Plan 2010 [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance | 4,000,000 |
Equity Compensation Plan 2000 [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance | 80,341 |
Warrants Issuable On Conversion Of Subordinated Convertible Notes [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance | 1,875,000 |
Convertible Subordinated Debt [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance | 2,500,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details Textual) | Dec. 31, 2018USD ($) |
Investments, All Other Investments [Abstract] | |
Long-term Debt, Gross | $ 2,752,000 |
Long-term Debt, Fair Value | $ 2,758,000 |