Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 11, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Entity File Number | 0-11668 | |
Entity Registrant Name | INRAD OPTICS, INC. | |
Entity Address, State or Province | NJ | |
Entity Tax Identification Number | 22-2003247 | |
Entity Address, Address Line One | 181 Legrand Avenue | |
Entity Address, City or Town | Northvale | |
Entity Incorporation, State or Country Code | NJ | |
Entity Address, Postal Zip Code | 07647 | |
City Area Code | 201 | |
Local Phone Number | 767-1910 | |
Title of 12(b) Security | None | |
No Trading Symbol Flag | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,967,257 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000719494 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,819,737 | $ 1,129,703 |
Accounts receivable, net | 1,293,081 | 824,452 |
Inventories, net | 2,888,560 | 3,206,057 |
Other current assets | 83,575 | 214,748 |
Total current assets | 6,084,953 | 5,374,960 |
Plant and equipment: | ||
Plant and equipment, at cost | 15,232,270 | 15,191,610 |
Less: Accumulated depreciation and amortization | (14,668,346) | (14,564,186) |
Total plant and equipment | 563,924 | 627,424 |
Precious metals | 561,909 | 561,909 |
Lease right-of-use, net | 199,716 | 415,377 |
Other assets | 48,421 | 48,421 |
Total Assets | 7,458,923 | 7,028,091 |
Current liabilities: | ||
Current portion of other long-term notes | 16,288 | 16,288 |
Accounts payable and accrued liabilities | 655,797 | 717,536 |
Contract liabilities | 694,835 | 856,802 |
Current portion of lease obligation | 213,916 | 304,844 |
Total current liabilities | 1,580,836 | 1,895,470 |
Related party convertible notes payable | 2,500,000 | 2,500,000 |
Other long-term notes, net of current portion | 166,054 | 1,133,682 |
Lease obligation, net of current portion | 8,159 | 144,228 |
Total liabilities | 4,255,049 | 5,673,380 |
Shareholders' equity: | ||
Common stock: $.01 par value; 60,000,000 authorized shares; 13,967,257 shares issued at September 30, 2021, and 13,824,928 shares issued at December 31, 2020 | 139,674 | 138,251 |
Capital in excess of par value | 19,709,233 | 19,516,363 |
Accumulated deficit | (16,630,083) | (18,284,953) |
Stockholders' Equity before Treasury Stock | 3,218,824 | 1,369,661 |
Less - Common stock in treasury, at cost (4,600 shares) | (14,950) | (14,950) |
Total shareholders' equity | 3,203,874 | 1,354,711 |
Total Liabilities and shareholders' equity | $ 7,458,923 | $ 7,028,091 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
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 | 13,967,257 | 13,824,928 |
Treasury stock, shares | 4,600 | 4,600 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Total revenue | $ 2,822,767 | $ 2,237,711 | $ 8,484,066 | $ 6,812,196 |
Cost and expenses: | ||||
Cost of goods sold | 1,956,881 | 1,819,844 | 5,747,689 | 5,239,077 |
Selling, general and administrative expenses | 683,347 | 545,272 | 1,930,796 | 1,922,996 |
Costs and Expenses, Total | 2,640,228 | 2,365,116 | 7,678,485 | 7,162,073 |
Income (loss) from operations | 182,539 | (127,405) | 805,581 | (349,877) |
Other expense: | ||||
Gain on forgiveness of PPP loan | 0 | 0 | 973,166 | 0 |
Interest expense-net | (42,719) | (36,594) | (123,877) | (112,814) |
Nonoperating Income (Expense) | (42,719) | (36,594) | 849,289 | (112,814) |
Income (loss) before income taxes | 139,820 | (163,999) | 1,654,870 | (462,691) |
Income tax (provision) benefit | 0 | 0 | 0 | 0 |
Net income (loss) | $ 139,820 | $ (163,999) | $ 1,654,870 | $ (462,691) |
Net income (loss) per common share - basic | $ 0.01 | $ (0.01) | $ 0.12 | $ (0.03) |
Net income (loss) per common share - diluted | $ 0.01 | $ (0.01) | $ 0.12 | $ (0.03) |
Weighted average shares outstanding - basic | 13,962,657 | 13,820,328 | 13,851,957 | 13,750,522 |
Weighted average shares outstanding - diluted | 14,297,879 | 13,820,328 | 14,135,274 | 13,750,522 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Capital in excess of par value | Accumulated Deficit | Treasury Stock | Total |
Balance at Dec. 31, 2019 | $ 137,353 | $ 19,281,255 | $ (17,386,392) | $ (14,950) | $ 2,017,266 |
Balance (in shares) at Dec. 31, 2019 | 13,735,177 | ||||
401K contribution | $ 0 | 0 | 0 | 0 | 0 |
401K contribution (in shares) | 0 | ||||
Stock-based compensation expense | $ 0 | 27,980 | 0 | 0 | 27,980 |
Net income (loss) | 0 | 0 | (324,487) | 0 | (324,487) |
Balance at Mar. 31, 2020 | $ 137,353 | 19,309,235 | (17,710,879) | (14,950) | 1,720,759 |
Balance (in shares) at Mar. 31, 2020 | 13,735,177 | ||||
Balance at Dec. 31, 2019 | $ 137,353 | 19,281,255 | (17,386,392) | (14,950) | 2,017,266 |
Balance (in shares) at Dec. 31, 2019 | 13,735,177 | ||||
Net income (loss) | (462,691) | ||||
Balance at Sep. 30, 2020 | $ 138,251 | 19,488,613 | (17,849,083) | (14,950) | 1,762,831 |
Balance (in shares) at Sep. 30, 2020 | 13,824,928 | ||||
Balance at Mar. 31, 2020 | $ 137,353 | 19,309,235 | (17,710,879) | (14,950) | 1,720,759 |
Balance (in shares) at Mar. 31, 2020 | 13,735,177 | ||||
401K contribution | $ 898 | 123,457 | 0 | 0 | 124,355 |
401K contribution (in shares) | 89,751 | ||||
Stock-based compensation expense | $ 0 | 28,157 | 0 | 0 | 28,157 |
Net income (loss) | 0 | 0 | 25,795 | 0 | 25,795 |
Balance at Jun. 30, 2020 | $ 138,251 | 19,460,849 | (17,685,084) | (14,950) | 1,899,066 |
Balance (in shares) at Jun. 30, 2020 | 13,824,928 | ||||
401K contribution | $ 0 | 0 | 0 | 0 | 0 |
401K contribution (in shares) | 0 | ||||
Stock-based compensation expense | $ 0 | 27,764 | 0 | 0 | 27,764 |
Net income (loss) | 0 | 0 | (163,999) | 0 | (163,999) |
Balance at Sep. 30, 2020 | $ 138,251 | 19,488,613 | (17,849,083) | (14,950) | 1,762,831 |
Balance (in shares) at Sep. 30, 2020 | 13,824,928 | ||||
Balance at Dec. 31, 2020 | $ 138,251 | 19,516,363 | (18,284,953) | (14,950) | 1,354,711 |
Balance (in shares) at Dec. 31, 2020 | 13,824,928 | ||||
401K contribution | $ 0 | 0 | 0 | 0 | 0 |
401K contribution (in shares) | 0 | ||||
Stock-based compensation expense | $ 0 | 29,303 | 0 | 0 | 29,303 |
Net income (loss) | 0 | 0 | 1,140,334 | 0 | 1,140,334 |
Balance at Mar. 31, 2021 | $ 138,251 | 19,545,666 | (17,144,619) | (14,950) | 2,524,348 |
Balance (in shares) at Mar. 31, 2021 | 13,824,928 | ||||
Balance at Dec. 31, 2020 | $ 138,251 | 19,516,363 | (18,284,953) | (14,950) | 1,354,711 |
Balance (in shares) at Dec. 31, 2020 | 13,824,928 | ||||
Net income (loss) | 1,654,870 | ||||
Balance at Sep. 30, 2021 | $ 139,674 | 19,709,233 | (16,630,083) | (14,950) | 3,203,874 |
Balance (in shares) at Sep. 30, 2021 | 13,967,257 | ||||
Balance at Mar. 31, 2021 | $ 138,251 | 19,545,666 | (17,144,619) | (14,950) | 2,524,348 |
Balance (in shares) at Mar. 31, 2021 | 13,824,928 | ||||
401K contribution | $ 1,423 | 101,926 | 0 | 0 | 103,349 |
401K contribution (in shares) | 142,329 | ||||
Stock-based compensation expense | $ 0 | 39,631 | 0 | 0 | 39,631 |
Net income (loss) | 0 | 0 | 374,716 | 0 | 374,716 |
Balance at Jun. 30, 2021 | $ 139,674 | 19,687,223 | (16,769,903) | (14,950) | 3,042,044 |
Balance (in shares) at Jun. 30, 2021 | 13,967,257 | ||||
401K contribution | $ 0 | 0 | 0 | 0 | 0 |
401K contribution (in shares) | 0 | ||||
Stock-based compensation expense | $ 0 | 22,010 | 0 | 0 | 22,010 |
Net income (loss) | 0 | 0 | 139,820 | 0 | 139,820 |
Balance at Sep. 30, 2021 | $ 139,674 | $ 19,709,233 | $ (16,630,083) | $ (14,950) | $ 3,203,874 |
Balance (in shares) at Sep. 30, 2021 | 13,967,257 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,654,870 | $ (462,691) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 104,160 | 212,292 |
401K common stock contribution - non cash item | 103,349 | 124,355 |
Stock based compensation | 90,944 | 83,901 |
Gain on forgiveness of PPP loan | (973,166) | 0 |
Capitalized interest on promissory note | 5,538 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (468,629) | 87,521 |
Inventories, net | 317,497 | (395,335) |
Other current assets | 131,173 | 88,473 |
Other assets | 0 | (3,842) |
Accounts payable and accrued liabilities | (73,075) | (229,858) |
Contract liabilities | (161,967) | 341,933 |
Total adjustments and changes | (924,176) | 309,440 |
Net cash provided by (used in) operating activities | 730,694 | (153,251) |
Cash flows from investing activities: | ||
Capital expenditures | (40,660) | (158,855) |
Net cash used in investing activities | (40,660) | (158,855) |
Cash flows from financing activities: | ||
Proceeds from PPP loan | 0 | 973,166 |
Principal payments on notes payable-other | 0 | (6,566) |
Net cash provided by (used in) financing activities | 0 | 966,600 |
Net increase (decrease) in cash and cash equivalents | 690,034 | 654,494 |
Cash and cash equivalents at beginning of period | 1,129,703 | 950,705 |
Cash and cash equivalents at end of period | 1,819,737 | 1,605,199 |
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 126,584 | $ 187,500 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | INRAD OPTICS, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Inrad Optics, Inc. and its subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated. The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued. Management Estimates These unaudited condensed consolidated financial statements and related disclosures have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. 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. Reserves for uncollectible accounts receivable are recorded as part of selling, general and administrative expenses in the Consolidated Statements of Operations, and were $90,000 at September 30, 2021, and $91,000 at December 31, 2020. Inventories Inventories are stated at the lower of cost (first-in-first-out basis) and net realizable value. 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. Inventories are comprised of the following and are shown net of inventory reserves of $2,886,000 and $2,489,000 at September 30, 2021 and December 31, 2020, respectively: September 30, December 31, 2021 2020 (Unaudited) (in thousands) Raw materials $ 1,097 $ 1,130 Work in process, including manufactured parts and components 1,331 1,718 Finished goods 461 358 $ 2,889 $ 3,206 Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the year in which the differences are expected to reverse. 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 consistent with the plans and estimates that management uses 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, 2020. 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 September 30, 2021, the Company’s management concluded that it is more likely than not that the Company will not be able to realize any portion of the benefit on the net deferred tax asset balance of $3,160,000 and therefore the Company continues to maintain a valuation allowance for the full amount of the net deferred tax asset balance. When sufficient positive evidence exists, the Company’s income tax expense will be charged with the increase or decrease in its valuation allowance. An increase or reversal of the Company’s valuation allowance could have a significant negative or positive impact on the Company’s future earnings. For the three and nine months ended September 30, 2021, the Company did not record a current provision for income taxes due to the availability of net operating loss carryforwards to offset taxable income for both federal and state tax purposes. For the three months and nine months ended September 30, 2020, the Company did not record a current provision for income taxes due to losses incurred for both income tax and financial reporting purposes. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net 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 three and nine months ended September 30, 2021, a total of 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes in addition to 274,300 common stock options in each respective period, were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. For the three and nine months ended September 30, 2020, a total of 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes in addition to 1,155,567 common stock options for each period, were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. A reconciliation of the shares used in the calculation of basic and diluted income (loss) per common share is as follows: Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic income (loss) per share: Net income (loss) $ 139,820 13,962,657 $ 0.01 $ (163,999) 13,820,328 $ (0.01) Effect of dilutive securities: — — — — — — Convertible notes — — — — — — Accrued interest on convertible notes — — — — — — Warrants — — — — — — Stock options — 335,222 — — — — Diluted income (loss) per share: $ 139,820 14,297,879 $ 0.01 $ (163,999) 13,820,328 $ (0.01) Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic income (loss) per share: Net income (loss) $ 1,654,870 13,851,957 $ 0.12 $ (462,691) 13,750,522 $ (0.03) Effect of dilutive securities: — — — — — — Convertible notes — — — — — — Accrued interest on convertible notes — — — — — — Warrants — — — — — — Stock options — 283,317 — — — — Diluted income (loss) per share: $ 1,654,870 14,135,274 $ 0.12 $ (462,691) 13,750,522 $ (0.03) 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 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. Recent Accounting Standards In June 2016, the FASB issued ASU 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 2023. The Company is currently evaluating the impact of adoption on its consolidated financial statements and does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s statements of operations or cash flows. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance was effective for entities with fiscal years beginning after December 15, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
SALES REVENUE
SALES REVENUE | 9 Months Ended |
Sep. 30, 2021 | |
SALES REVENUE | |
SALES REVENUE | NOTE 2 – SALES REVENUE The Company’s revenues are comprised of the sale of products and services, including 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 a 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 add, 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 under these performance obligations accounted for approximately 0% and 0.5% of revenue for the three and nine months ended September 30, 2021, and 3.4% and 1.1% of revenue for the three and nine months ended September 30, 2020, respectively. This revenue is generally recognized 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 was approximately 99.5% and 98.9% of revenue for the nine months ended September 30, 2021 and 2020, 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. The following table summarizes the Company’s sales by market area: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Aerospace & Defense $ 604,221 $ 846,304 $ 2,833,925 $ 2,666,943 Process Control & Metrology 1,825,609 826,402 4,074,841 2,771,799 Laser Systems 168,201 180,253 561,992 541,746 Scientific / R&D 224,736 384,752 1,013,308 831,708 Total $ 2,822,767 $ 2,237,711 $ 8,484,066 $ 6,812,196 Net sales by timing of transfers of goods and services is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Transfer at point in time $ 2,822,767 $ 2,161,878 $ 8,443,847 $ 6,736,363 Transfer over time — 75,833 40,219 75,833 Total net sales $ 2,822,767 $ 2,237,711 $ 8,484,066 $ 6,812,196 The timing of revenue recognition, billings and cash collections results in billed receivables, costs in excess of billings (contract assets), and billings in excess of costs (contract liabilities, previously deferred revenue) on the Consolidated Balance Sheet. Contract liabilities also include customer advances or prepayments. Costs in excess of billings and billings in excess of costs associated with long-term government contracts were not significant at September 30, 2021 or 2020. The Company had no remaining revenue to be recognized from long-term government contracts at September 30, 2021 or 2020. On September 30, 2021, the Company had approximately $9.8 million of performance obligations, which is also referred to as backlog. Approximately 5.9% of the September 30, 2021 backlog, is related to projects that will extend beyond September 30, 2022. |
EQUITY COMPENSATION PROGRAM AND
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | NOTE 3- EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION a) Stock Option Expense The Company’s results of operations for the three months ended September 30, 2021 and 2020, include stock-based compensation expense for stock option grants totaling $22,010 and $27,764, respectively. For the nine months ended September 30, 2021 and 2020, stock-based compensation expense for stock option grants totaled $90,944 and $83,901, respectively. The following table shows the amounts for stock-based compensation included in cost of sales and selling, general and administrative expense for the three months and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cost of sales $ 4,101 $ 7,201 $ 17,285 $ 21,604 Selling, general and administrative 17,909 20,563 73,659 62,297 Total stock-based compensation expense $ 22,010 $ 27,764 $ 90,944 $ 83,901 As of September 30, 2021 and 2020, there were $144,878 and $125,399 of unrecognized compensation cost, net of estimated forfeitures, related to non-vested stock options, which are expected to be recognized over a weighted average period of approximately 1.57 years and 1.16 years, respectively. There were 200,000 stock options granted during the nine months ended September 30, 2021, and 22,500 stock options granted during the nine months ended September 30, 2020. The following range of weighted-average assumptions were used to determine the fair value of stock option grants during the nine months ended September 30, 2021 and 2020: Nine months Ended September 30, 2021 2020 Expected Dividend yield — % — % Expected Volatility 106 % 122 % Risk-free interest rate 0.86 % 1.96 % Expected term 10 years 10 years b) Stock Option Activity The following table represents stock options granted, exercised and forfeited during the nine months ended September 30, 2021: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value Outstanding January 1, 2021 1,150,867 $ 0.64 6.61 $ 107,573 Granted 200,000 0.62 Exercised — — Expired/Forfeited (126,400) 0.81 Outstanding September 30, 2021 1,224,467 $ 0.64 6.81 $ 341,514 Exercisable at September 30, 2021 947,797 $ 0.62 5.81 $ 239,525 The following table represents non-vested stock options granted, vested and forfeited for the three months ended September 30, 2021: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2021 210,840 0.89 Granted 200,000 0.57 Vested (130,837) 0.22 Forfeited (3,333) 0.68 Non-Vested - September 30, 2021 276,670 0.66 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 4 - STOCKHOLDERS’ EQUITY The Company approved a matching contribution to participants in the Inrad Optics 401k Plan (the “Plan”) for the year ended December 31, 2020, in February 2021. A total of 142,329 common shares of Inrad Optics, Inc. and $42,000 were contributed to the Plan in June 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY TRANSACTIONS On July 22, 2020, 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, 2024 from April 1, 2021. The notes bear interest at an annual rate of 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, 2024 to April 1, 2027. As of September 30, 2021, the Company had accrued interest in the amount of $37,500 associated with these notes. |
OTHER LONG-TERM NOTES
OTHER LONG-TERM NOTES | 9 Months Ended |
Sep. 30, 2021 | |
OTHER LONG-TERM NOTES | |
OTHER LONG-TERM NOTES | NOTE 6 – OTHER LONG-TERM NOTES Other Long-Term Notes consist of the following: September 30, December 31, 2021 2020 (Unaudited) (in thousands) U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. $ 182 $ 177 Less current portion (16) (16) PPP Loan — 973 Long-term debt, excluding current portion $ 166 $ 1,134 |
PAYROLL PROTECTION PROGRAM
PAYROLL PROTECTION PROGRAM | 9 Months Ended |
Sep. 30, 2021 | |
PAYROLL PROTECTION PROGRAM | |
PAYROLL PROTECTION PROGRAM | NOTE 7 – PAYROLL PROTECTION PROGRAM On May 6, 2020, the Company received loan proceeds of approximately $973,000 (the “PPP Loan”), under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) which was enacted March 27, 2020. The PPP Loan, which was in the form of a promissory note, dated May 4, 2020, issued by the Company, originally matured on May 4, 2022, and bore an interest at a rate of 1.0% per annum. The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during the 24-week period after the loan origination for certain eligible purposes including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, provided that at least 60% of the loan amount is used for eligible payroll costs; the employer maintaining or rehiring employees and maintaining salaries at certain levels; and other factors. Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during a covered eight-week or twenty-four-week period qualify for forgiveness. Any forgiveness of the PPP Loan is subject to approval by the Small Business Administration. At December 31, 2020, the PPP Loan is included in other long-term notes on the accompanying balance sheet. On January 19, 2021, the Company received notification from the Small Business Administration that the Company’s Forgiveness Application of the PPP Loan and accrued interest, totaling $980,000, was approved in full, and the Company had no further obligations related to the PPP Loan. Accordingly, the Company recorded a gain on the forgiveness of the PPP Loan. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
LEASES | |
LEASES | NOTE 8 – LEASES Maturities of lease liabilities as of September 30, 2021, were as follows: Maturity of Lease Liability (in thousands) 2021 (Remaining) $ 81 2022 144 2023 3 Total undiscounted lease payments 228 Less: imputed interest (5) Present value of operating lease liability $ 223 The Company’s lease liabilities consist of a financing lease for certain computer equipment and an operating lease for the Company’s facility. Operating lease costs were $0.1 and $0.3 million during the three and nine months ended September 30, 2021, respectively. |
IMPACT OF COVID-19
IMPACT OF COVID-19 | 9 Months Ended |
Sep. 30, 2021 | |
IMPACT OF COVID-19 | |
IMPACT OF COVID-19 | NOTE 9 – IMPACT OF COVID-19 We are conducting business to ensure the safety of our employees and associates actively and earnestly, following all best practice CDC guidelines for prevention in the workplace. We have applied social distancing in our operations and implemented a connected, remote workforce where practicable. We cannot predict what actions may be required by federal, state, or local authorities in the future, nor can we predict what actions any new mandates may have on our customers and suppliers. We continue to actively monitor the situation and may be required to take further actions that alter our business operations or that we determine are in the best interests of our employees, customers, partners, suppliers and shareholders. The total impact of the global emergence of COVID-19 on our business and financial results are not completely known, and we cannot predict what impact it may have on our continuing operations and the effect to our financial results. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Inrad Optics, Inc. and its subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated. The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued. |
Management Estimates | Management Estimates These unaudited condensed consolidated financial statements and related disclosures have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. |
Accounts Receivable | 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. Reserves for uncollectible accounts receivable are recorded as part of selling, general and administrative expenses in the Consolidated Statements of Operations, and were $90,000 at September 30, 2021, and $91,000 at December 31, 2020. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in-first-out basis) and net realizable value. 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. Inventories are comprised of the following and are shown net of inventory reserves of $2,886,000 and $2,489,000 at September 30, 2021 and December 31, 2020, respectively: September 30, December 31, 2021 2020 (Unaudited) (in thousands) Raw materials $ 1,097 $ 1,130 Work in process, including manufactured parts and components 1,331 1,718 Finished goods 461 358 $ 2,889 $ 3,206 |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the year in which the differences are expected to reverse. 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 consistent with the plans and estimates that management uses 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, 2020. 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 September 30, 2021, the Company’s management concluded that it is more likely than not that the Company will not be able to realize any portion of the benefit on the net deferred tax asset balance of $3,160,000 and therefore the Company continues to maintain a valuation allowance for the full amount of the net deferred tax asset balance. When sufficient positive evidence exists, the Company’s income tax expense will be charged with the increase or decrease in its valuation allowance. An increase or reversal of the Company’s valuation allowance could have a significant negative or positive impact on the Company’s future earnings. For the three and nine months ended September 30, 2021, the Company did not record a current provision for income taxes due to the availability of net operating loss carryforwards to offset taxable income for both federal and state tax purposes. For the three months and nine months ended September 30, 2020, the Company did not record a current provision for income taxes due to losses incurred for both income tax and financial reporting purposes. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net 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 three and nine months ended September 30, 2021, a total of 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes in addition to 274,300 common stock options in each respective period, were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. For the three and nine months ended September 30, 2020, a total of 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes in addition to 1,155,567 common stock options for each period, were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. A reconciliation of the shares used in the calculation of basic and diluted income (loss) per common share is as follows: Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic income (loss) per share: Net income (loss) $ 139,820 13,962,657 $ 0.01 $ (163,999) 13,820,328 $ (0.01) Effect of dilutive securities: — — — — — — Convertible notes — — — — — — Accrued interest on convertible notes — — — — — — Warrants — — — — — — Stock options — 335,222 — — — — Diluted income (loss) per share: $ 139,820 14,297,879 $ 0.01 $ (163,999) 13,820,328 $ (0.01) Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic income (loss) per share: Net income (loss) $ 1,654,870 13,851,957 $ 0.12 $ (462,691) 13,750,522 $ (0.03) Effect of dilutive securities: — — — — — — Convertible notes — — — — — — Accrued interest on convertible notes — — — — — — Warrants — — — — — — Stock options — 283,317 — — — — Diluted income (loss) per share: $ 1,654,870 14,135,274 $ 0.12 $ (462,691) 13,750,522 $ (0.03) |
Stock-Based Compensation | 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 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. |
Recent Accounting Standards | Recent Accounting Standards In June 2016, the FASB issued ASU 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 2023. The Company is currently evaluating the impact of adoption on its consolidated financial statements and does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s statements of operations or cash flows. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance was effective for entities with fiscal years beginning after December 15, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of inventory, current | September 30, December 31, 2021 2020 (Unaudited) (in thousands) Raw materials $ 1,097 $ 1,130 Work in process, including manufactured parts and components 1,331 1,718 Finished goods 461 358 $ 2,889 $ 3,206 |
Schedule of reconciliation of shares used in calculation of basic and diluted earnings per common share | A reconciliation of the shares used in the calculation of basic and diluted income (loss) per common share is as follows: Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic income (loss) per share: Net income (loss) $ 139,820 13,962,657 $ 0.01 $ (163,999) 13,820,328 $ (0.01) Effect of dilutive securities: — — — — — — Convertible notes — — — — — — Accrued interest on convertible notes — — — — — — Warrants — — — — — — Stock options — 335,222 — — — — Diluted income (loss) per share: $ 139,820 14,297,879 $ 0.01 $ (163,999) 13,820,328 $ (0.01) Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic income (loss) per share: Net income (loss) $ 1,654,870 13,851,957 $ 0.12 $ (462,691) 13,750,522 $ (0.03) Effect of dilutive securities: — — — — — — Convertible notes — — — — — — Accrued interest on convertible notes — — — — — — Warrants — — — — — — Stock options — 283,317 — — — — Diluted income (loss) per share: $ 1,654,870 14,135,274 $ 0.12 $ (462,691) 13,750,522 $ (0.03) |
SALES REVENUE (Tables)
SALES REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
SALES REVENUE | |
Schedule of Disaggregation of Revenue | The following table summarizes the Company’s sales by market area: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Aerospace & Defense $ 604,221 $ 846,304 $ 2,833,925 $ 2,666,943 Process Control & Metrology 1,825,609 826,402 4,074,841 2,771,799 Laser Systems 168,201 180,253 561,992 541,746 Scientific / R&D 224,736 384,752 1,013,308 831,708 Total $ 2,822,767 $ 2,237,711 $ 8,484,066 $ 6,812,196 |
Schedule of Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | Net sales by timing of transfers of goods and services is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Transfer at point in time $ 2,822,767 $ 2,161,878 $ 8,443,847 $ 6,736,363 Transfer over time — 75,833 40,219 75,833 Total net sales $ 2,822,767 $ 2,237,711 $ 8,484,066 $ 6,812,196 |
EQUITY COMPENSATION PROGRAM A_2
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | |
Schedule of Stock-based Compensation Included in Cost of Sales and Selling, General and Administrative Expense | Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cost of sales $ 4,101 $ 7,201 $ 17,285 $ 21,604 Selling, general and administrative 17,909 20,563 73,659 62,297 Total stock-based compensation expense $ 22,010 $ 27,764 $ 90,944 $ 83,901 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Nine months Ended September 30, 2021 2020 Expected Dividend yield — % — % Expected Volatility 106 % 122 % Risk-free interest rate 0.86 % 1.96 % Expected term 10 years 10 years |
Schedule of Share-based Compensation, Stock Options, Activity | The following table represents stock options granted, exercised and forfeited during the nine months ended September 30, 2021: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value Outstanding January 1, 2021 1,150,867 $ 0.64 6.61 $ 107,573 Granted 200,000 0.62 Exercised — — Expired/Forfeited (126,400) 0.81 Outstanding September 30, 2021 1,224,467 $ 0.64 6.81 $ 341,514 Exercisable at September 30, 2021 947,797 $ 0.62 5.81 $ 239,525 |
Schedule of Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested | The following table represents non-vested stock options granted, vested and forfeited for the three months ended September 30, 2021: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2021 210,840 0.89 Granted 200,000 0.57 Vested (130,837) 0.22 Forfeited (3,333) 0.68 Non-Vested - September 30, 2021 276,670 0.66 |
OTHER LONG-TERM NOTES (Tables)
OTHER LONG-TERM NOTES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
OTHER LONG-TERM NOTES | |
Schedule of Debt | September 30, December 31, 2021 2020 (Unaudited) (in thousands) U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. $ 182 $ 177 Less current portion (16) (16) PPP Loan — 973 Long-term debt, excluding current portion $ 166 $ 1,134 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
LEASES | |
Summary of maturities of lease liabilities | Maturities of lease liabilities as of September 30, 2021, were as follows: Maturity of Lease Liability (in thousands) 2021 (Remaining) $ 81 2022 144 2023 3 Total undiscounted lease payments 228 Less: imputed interest (5) Present value of operating lease liability $ 223 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 1,097,000 | $ 1,130,000 |
Work in process, including manufactured parts and components | 1,331,000 | 1,718,000 |
Finished goods | 461,000 | 358,000 |
Inventories, net | $ 2,888,560 | $ 3,206,057 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basic and diluted earnings (loss) per common share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income(Loss) (Numerator) | ||||
Net income (loss) | $ 139,820 | $ (163,999) | $ 1,654,870 | $ (462,691) |
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities | 0 | 0 | 0 | 0 |
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Accrued Interest On Convertible Notes | 0 | 0 | 0 | 0 |
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Warrants | 0 | 0 | 0 | 0 |
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units | 0 | 0 | 0 | 0 |
Diluted Income (Loss) Per Share: | ||||
Net Income (Loss) | $ 139,820 | $ (163,999) | $ 1,654,870 | $ (462,691) |
Shares (Denominator) | ||||
Weighted Average Number of Shares Outstanding, Basic | 13,962,657 | 13,820,328 | 13,851,957 | 13,750,522 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 0 | 0 | 0 | 0 |
Incremental Common Shares Attributable to Dilutive Effect of Accrued Interest On Convertible Notes | 0 | 0 | 0 | 0 |
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 0 | 0 | 0 | 0 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 335,222 | 0 | 283,317 | 0 |
Diluted income (loss) per share: | ||||
Weighted Average Number of Shares Outstanding, Diluted (In shares) | 14,297,879 | 13,820,328 | 14,135,274 | 13,750,522 |
Basic income (loss) per share: | ||||
Earnings Per Share, Basic | $ 0.01 | $ (0.01) | $ 0.12 | $ (0.03) |
Earnings per share diluted, conversion notes | 0 | 0 | 0 | 0 |
Earnings per Share diluted, accrued interest on convertible notes | 0 | 0 | 0 | 0 |
Earnings per share diluted, warrants | 0 | 0 | 0 | 0 |
Earnings per share diluted, stock options | 0 | 0 | 0 | 0 |
Diluted Income (Loss) Per Share: | ||||
Earnings Per Share, Diluted | $ 0.01 | $ (0.01) | $ 0.12 | $ (0.03) |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Inventory Reserves | $ 2,886,000 | $ 2,886,000 | $ 2,489,000 | ||
Deferred Tax Assets, Valuation Allowance, Total | 3,160,000 | 3,160,000 | |||
Income tax expenses | 0 | $ 0 | 0 | $ 0 | |
Operating Lease, Liability | $ 223,000 | 223,000 | |||
Selling Expense [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Provision for Doubtful Accounts | $ 90,000 | $ 91,000 | |||
Employee Stock Option [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 274,300 | 1,155,567 | 274,300 | 1,155,567 | |
Warrant [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,875,000 | 1,875,000 | 1,875,000 | 1,875,000 | |
Common Stock | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 |
SALES REVENUE - Disaggregation
SALES REVENUE - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,822,767 | $ 2,237,711 | $ 8,484,066 | $ 6,812,196 |
Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 604,221 | 846,304 | 2,833,925 | 2,666,943 |
Process Control & Metrology | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,825,609 | 826,402 | 4,074,841 | 2,771,799 |
Laser Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 168,201 | 180,253 | 561,992 | 541,746 |
Scientific / R&D | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 224,736 | $ 384,752 | $ 1,013,308 | $ 831,708 |
SALES REVENUE - Transfer of Goo
SALES REVENUE - Transfer of Goods and Services (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,822,767 | $ 2,237,711 | $ 8,484,066 | $ 6,812,196 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,822,767 | 2,161,878 | 8,443,847 | 6,736,363 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 75,833 | $ 40,219 | $ 75,833 |
SALES REVENUE - Additional Info
SALES REVENUE - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Remaining revenue to be recognized from the long-term government contracts | $ 0 | $ 0 | ||
Revenue, Remaining Performance Obligation | $ 9,800,000 | $ 9,800,000 | ||
Revenue, Remaining Performance Obligation | 5.90% | 5.90% | ||
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue from Products or Services | 0.00% | 3.40% | 0.50% | 1.10% |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue from Products or Services | 99.50% | 98.90% |
EQUITY COMPENSATION PROGRAM A_3
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details) - Employee Stock Option [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 22,010 | $ 27,764 | $ 90,944 | $ 83,901 |
Cost of Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 4,101 | 7,201 | 17,285 | 21,604 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 17,909 | $ 20,563 | $ 73,659 | $ 62,297 |
EQUITY COMPENSATION PROGRAM A_4
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Weighted-average assumptions (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | ||
Expected Dividend yield | 0.00% | 0.00% |
Expected Volatility | 106.00% | 122.00% |
Risk-free interest rate | 0.86% | 1.96% |
Expected term | 10 years | 10 years |
EQUITY COMPENSATION PROGRAM A_5
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options, Granted | 200,000 | 22,500 | |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options, Outstanding at January 1, 2021 | 1,150,867 | ||
Options, Granted | 200,000 | ||
Options, Exercised | 0 | ||
Option, Expired/Forfeited | (126,400) | ||
Options, Outstanding at September 30, 2021 | 1,224,467 | 1,150,867 | |
Options, Exercisable at September 30, 2021 | 947,797 | ||
Weighted Average Exercise Price Per Options Outstanding at January 1, 2021 (in dollars per share) | $ 0.64 | ||
Weighted Average Exercise Price per Option, Granted | 0.62 | ||
Weighted Average Exercise Price per Option, Exercised | 0 | ||
Weighted Average Exercise Price per Option, Expired/Forfeited | 0.81 | ||
Weighted Average Exercise Price Options Outstanding at September 30, 2021 (in dollars per share) | 0.64 | $ 0.64 | |
Weighted Average Exercise Price per Option, Exercisable at September 30, 2021 | $ 0.62 | ||
Weighted Average Remaining Contractual Term, Options Outstanding at January 1, 2021 | 6 years 9 months 21 days | 6 years 7 months 9 days | |
Weighted Average Remaining Contractual Term, Exercisable at September 30, 2021 | 5 years 9 months 21 days | ||
Aggregate Intrinsic Value, Options Outstanding (in dollars) | $ 341,514 | $ 107,573 | |
Aggregate Intrinsic Value, Options Exercisable at September 30, 2021 | $ 239,525 |
EQUITY COMPENSATION PROGRAM A_6
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Non-vested stock option activity (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | |
Options - Non-vested - January 1, 2021 | shares | 210,840 |
Options - Granted | shares | 200,000 |
Options - Vested | shares | (130,837) |
Options - Forfeited | shares | (3,333) |
Options - Non-vested - September 30, 2021 | shares | 276,670 |
Weighted-Average Grant-Date Fair Value - Non-vested at Ending balance (in dollars per share) | $ / shares | $ 0.89 |
Weighted-Average Grant-Date Fair Value - Granted (in dollars per share) | $ / shares | 0.57 |
Weighted-Average Grant-Date Fair Value - Vested (in dollars per share) | $ / shares | 0.22 |
Weighted-Average Grant-Date Fair Value - Forfeited (in dollars per share) | $ / shares | 0.68 |
Weighted-Average Grant-Date Fair Value - Non-vested at Ending balance (in dollars per share) | $ / shares | $ 0.66 |
EQUITY COMPENSATION PROGRAM A_7
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total | 200,000 | 22,500 | ||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 22,010 | $ 27,764 | $ 90,944 | $ 83,901 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 144,878 | $ 125,399 | $ 144,878 | $ 125,399 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years) | 1 year 6 months 25 days | 1 year 1 month 28 days |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 1 Months Ended |
Jun. 30, 2021USD ($)shares | |
STOCKHOLDERS' EQUITY | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares | 142,329 |
Cash Contributions | $ | $ 42,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Subordinated convertible notes [Member] | Jul. 22, 2020USD ($)item$ / sharesshares | Sep. 30, 2021USD ($) |
Related Party Transaction [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |
Interest Payable | $ | $ 37,500 | |
Common Stock | ||
Related Party Transaction [Line Items] | ||
Number of shares/warrants comprised in a unit (in shares) | shares | 1 | |
Warrants To Purchase Common Stock Number Of Shares Per Warrant | shares | 0.75 | |
Investment Warrants, Exercise Price | $ / shares | $ 1.35 | |
Warrant [Member] | ||
Related Party Transaction [Line Items] | ||
Number of shares/warrants comprised in a unit (in shares) | shares | 1 | |
Clarex [Member] | ||
Related Party Transaction [Line Items] | ||
Convertible Subordinated Debt | $ | $ 1,500,000 | |
Debt Instrument, Convertible, Number of Equity Instruments | item | 1,500,000 | |
Affiliate Of Clarex [Member] | ||
Related Party Transaction [Line Items] | ||
Convertible Subordinated Debt | $ | $ 1,000,000 | |
Debt Instrument, Convertible, Number of Equity Instruments | item | 1,000,000 |
OTHER LONG-TERM NOTES (Details)
OTHER LONG-TERM NOTES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Less current portion | $ (16,288) | $ (16,288) |
PPP Loan | 0 | 973,000 |
Long-term debt, excluding current portion | 166,054 | 1,133,682 |
Us Small Business Administration Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. | $ 182,000 | $ 177,000 |
OTHER LONG-TERM NOTES - Additio
OTHER LONG-TERM NOTES - Additional information (Details) - Us Small Business Administration Note Payable [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Monthly installment payment | $ 1,922 | $ 1,922 |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% |
PAYROLL PROTECTION PROGRAM (Det
PAYROLL PROTECTION PROGRAM (Details) - USD ($) | May 06, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 19, 2021 | May 04, 2020 |
Debt Instrument [Line Items] | |||||
Proceeds from PPP loan | $ 0 | $ 973,166 | |||
PPP Loan and accrued interest forgiven | $ 980,000 | ||||
PPP Loan | |||||
Debt Instrument [Line Items] | |||||
Proceeds from PPP loan | $ 973,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% |
LEASES (Details)
LEASES (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Maturities of lease liabilities | |
2021 (Remaining) | $ 81 |
2022 | 144 |
2023 | 3 |
Total undiscounted lease payments | 228 |
Less: imputed interest | 5 |
Present value of operating lease liability | $ 223 |
LEASES - Additional information
LEASES - Additional information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
LEASES | ||
Operating lease costs | $ 0.1 | $ 0.3 |