Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 29, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SCI Engineered Materials, Inc. | ||
Entity Central Index Key | 830,616 | ||
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 | Smaller Reporting Company | ||
Entity Public Float | $ 2,633,691 | ||
Trading Symbol | SCIA | ||
Entity Common Stock, Shares Outstanding | 4,186,902 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 920,802 | $ 730,352 |
Accounts receivable Trade, less allowance for doubtful accounts of $15,000 | 336,009 | 271,832 |
Inventories | 617,444 | 376,561 |
Prepaid expenses | 138,175 | 59,203 |
Total current assets | 2,012,430 | 1,437,948 |
Property and Equipment, at cost | ||
Machinery and equipment | 7,824,563 | 7,645,043 |
Furniture and fixtures | 132,543 | 130,027 |
Leasehold improvements | 327,904 | 329,904 |
Construction in progress | 22,504 | 51,775 |
Property, Plant and Equipment, Gross | 8,307,514 | 8,156,749 |
Less accumulated depreciation and amortization | (6,422,448) | (6,019,844) |
Property, Plant and Equipment, Net | 1,885,066 | 2,136,905 |
Other Assets | 52,078 | 50,620 |
TOTAL ASSETS | 3,949,574 | 3,625,473 |
Current Liabilities | ||
Capital lease obligations, current portion | 129,500 | 121,383 |
Notes payable, current portion | 221,105 | 172,408 |
Accounts payable | 307,498 | 151,757 |
Customer deposits | 407,956 | 249,977 |
Accrued compensation | 83,314 | 89,826 |
Accrued expenses and other | 138,662 | 120,943 |
Total current liabilities | 1,288,035 | 906,294 |
Capital lease obligations, net of current portion | 181,744 | 225,944 |
Notes payable, net of current portion | 0 | 221,105 |
Total liabilities | 1,469,779 | 1,353,343 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Convertible preferred stock, Series B, 10% cumulative, nonvoting, no par value, $10 stated value, optional redemption at 103%; optional shareholder conversion 2 shares for 1; 24,152 shares issued and outstanding | 514,438 | 490,286 |
Common stock, no par value, authorized 15,000,000 shares; 4,185,839 and 4,090,804 shares issued and outstanding, respectively | 10,131,307 | 10,049,823 |
Additional paid-in capital | 2,289,474 | 2,193,536 |
Accumulated deficit | (10,455,424) | (10,461,515) |
Total shareholders' equity | 2,479,795 | 2,272,130 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 3,949,574 | $ 3,625,473 |
BALANCE SHEETS _Parenthetical_
BALANCE SHEETS [Parenthetical] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts (in dollars) | $ 15,000 | $ 15,000 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 4,185,839 | 4,090,804 |
Common stock, shares outstanding | 4,185,839 | 4,090,804 |
Convertible Preferred Stock Series B [Member] | ||
Convertible preferred stock, series B, cumulative percentage of interest | 10.00% | 10.00% |
Convertible preferred stock, stated value (in dollars per share) | $ 10 | $ 10 |
Convertible preferred stock, optional redemption | 103.00% | 103.00% |
Convertible preferred stock, optional shareholder conversion | 2:1 | 2:1 |
Convertible preferred stock, shares issued | 24,152 | 24,152 |
Convertible preferred stock, shares outstanding | 24,152 | 24,152 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Total revenue | $ 6,801,365 | $ 5,465,599 |
Total cost of revenue | 5,223,814 | 4,381,198 |
Gross profit | 1,577,551 | 1,084,401 |
General and administrative expense | 1,021,155 | 1,080,380 |
Research and development expense | 330,805 | 319,476 |
Marketing and sales expense | 176,470 | 345,505 |
Income (loss) from operations | 49,121 | (660,960) |
Interest | 41,109 | 45,051 |
Income (loss) before income taxes | 8,012 | (706,011) |
Income taxes | 1,921 | 43 |
Net income (loss) | 6,091 | (706,054) |
Dividends on preferred stock | 24,152 | 24,152 |
LOSS APPLICABLE TO COMMON STOCK | $ (18,061) | $ (730,206) |
Loss per common share | ||
Basic (in dollars per share) | $ 0 | $ (0.18) |
Diluted (in dollars per share) | $ 0 | $ (0.18) |
Weighted average shares outstanding | ||
Basic (in shares) | 4,138,516 | 4,052,128 |
Diluted (in shares) | 4,138,516 | 4,052,128 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit During Development Stage [Member] | Convertible Preferred Stock Series B Member [Member] |
Balance at Dec. 31, 2015 | $ 2,801,299 | $ 9,993,027 | $ 2,097,599 | $ (9,755,461) | $ 466,134 |
Accretion of cumulative dividends | 0 | 0 | (24,152) | 0 | 24,152 |
Stock based compensation expense (Note 2K) | 120,089 | 0 | 120,089 | 0 | 0 |
Common stock issued (Note 6) | 56,796 | 56,796 | 0 | 0 | 0 |
Net income (loss) | (706,054) | 0 | 0 | (706,054) | 0 |
Balance at Dec. 31, 2016 | 2,272,130 | 10,049,823 | 2,193,536 | (10,461,515) | 490,286 |
Accretion of cumulative dividends | 0 | 0 | (24,152) | 0 | 24,152 |
Stock based compensation expense (Note 2K) | 120,090 | 0 | 120,090 | 0 | 0 |
Common stock issued (Note 6) | 81,484 | 81,484 | 0 | 0 | 0 |
Net income (loss) | 6,091 | 0 | 0 | 6,091 | 0 |
Balance at Dec. 31, 2017 | $ 2,479,795 | $ 10,131,307 | $ 2,289,474 | $ (10,455,424) | $ 514,438 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 6,091 | $ (706,054) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and accretion | 460,637 | 445,891 |
Amortization | 9,439 | 9,439 |
Stock based compensation | 201,574 | 172,685 |
Loss on disposal of equipment | 0 | (1,750) |
Inventory reserve | (11,640) | 12,370 |
Change in allowance for doubtful accounts | 0 | (11,318) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (64,177) | 41,998 |
Inventories | (229,243) | 184,184 |
Prepaid expenses | (78,972) | 2,098 |
Other assets | (1,458) | 801 |
Accounts payable | 155,741 | (39,719) |
Accrued expenses and customer deposits | 167,967 | 49,930 |
Net cash provided by operating activities | 615,959 | 160,555 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds on sale of equipment | 0 | 1,750 |
Purchases of property and equipment | (104,029) | (89,615) |
Net cash used in investing activities | (104,029) | (87,865) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options | 0 | 4,200 |
Principal payments on capital lease obligations and notes payable | (321,480) | (343,708) |
Net cash used in financing activities | (321,480) | (339,508) |
NET INCREASE (DECREASE) IN CASH | 190,450 | (266,818) |
CASH - Beginning of year | 730,352 | 997,170 |
CASH - End of year | 920,802 | 730,352 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest | 41,615 | 45,628 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipment purchased by capital lease | 103,550 | 145,077 |
Increase in asset retirement obligation | $ 1,218 | $ 0 |
Business Organization and Purpo
Business Organization and Purpose | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1. Business Organization and Purpose SCI Engineered Materials, Inc. (“SCI”, “we” or the “Company”), formerly Superconductive Components, Inc., an Ohio corporation, was incorporated in 1987. The Company operates in one segment as a global supplier and manufacturer of advanced materials for Physical Vapor Deposition (“PVD”) Thin Film Applications. The Company is focused on specific markets within the PVD industry (Photonics, Thin Film Solar, Glass, Thin Film Battery and Transparent Electronics). Substantially, all of the Company’s revenues are generated from customers with multi-national operations. Through collaboration with end users and Original Equipment Manufacturers the Company develops innovative customized solutions enabling commercial success. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2. Summary of Significant Accounting Policies A. B. C. The Company’s two largest customers accounted for 72% and 9% of total revenue in 2017. These two customers represented 65% of the accounts receivable trade balance at December 31, 2017. The Company expects to collect all outstanding accounts receivables as of December 31, 2017 from these customers. The Company’s two largest customers accounted for 53% and 12% of total revenue in 2016. These two customers represented 68% of the accounts receivable trade balance at December 31, 2016. The Company subsequently collected all outstanding accounts receivables as of December 31, 2016 from these customers. D. Management estimates an allowance for doubtful accounts, which was $15,000 as of December 31, 2017 and 2016. This estimate is based upon management’s review of delinquent accounts and an assessment of the Company’s historical evidence of collections. Specific accounts are charged directly to the reserve or bad debt expense when management obtains evidence of a customer’s insolvency or otherwise determines that the account is uncollectible. Bad debt expense was $0 during 2017 and 2016. F. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference. There was no property and equipment considered impaired during 2017 or 2016. G. H. The Company holds the rights to a provisional patent and any subsequent patents for this technology related to the application of Zinc based Transparent Conductive Oxide in Displays. In 2017, we filed an application for a patent for Process for the Removal of Chromium Contaminants from Ruthenium Sputtering Target Substrates. Costs incurred to secure patents have been capitalized and amortized over the life of the patents. Cost and accumulated amortization of the patents at December 31, 2017 and 2016 were $34,935 and $0, respectively. Amortization expense related to patents was $0 for the years ended December 31, 2017 and 2016. Amortization expense is expected to be $0 until any patents are approved. In April 2015, the FASB issued guidance creating ASC Subtopic 835-30, InterestImputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs J. Revenue Recognition - Revenue from product sales is recognized based on shipping terms and upon shipment to customers. Provisions for discounts and rework costs for returns are established when products are shipped based on historical experience. Customer deposits represent cash received in advance of revenue earned. K. L. M. N. O. New Accounting Pronouncements Stock Compensation - In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification of the statement of cash flows. ASU 2016-09 will be effective for the Company beginning in its first quarter of 2018. The Company is currently evaluating the impact of adopting ASU 2016-09 on its financial statements. Leases - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 will be effective for the Company beginning in its first quarter of 2019, and early adoption is permitted. The Company is currently evaluating the timing of its adoption and the impact of adopting ASU 2016-02 on its consolidated financial statements. Revenue Recognition - In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Adoption of the ASU is not expected to have a significant impact on the Company’s consolidated financial statements . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 3. Inventories Inventories consist of the following at December 31: 2017 2016 Raw materials $ 141,733 $ 110,752 Work-in-process 370,318 249,057 Finished goods 161,393 84,392 673,444 444,201 Reserve for obsolete inventory (56,000) (67,640) $ 617,444 $ 376,561 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 4. Notes Payable During 2010, the Company applied and was approved for a 166 Direct Loan to borrow up to $ with the Ohio Department of Development (ODOD), now known as the Ohio Development Services Agency (ODSA). This loan was finalized in February 2011. The term of the loan is 84 months at a fixed interest rate of %. There is also a % annual servicing fee charged monthly on the outstanding principal balance. Currently, monthly payments of approximately $ , including principal, interest and servicing fee are due through October 2018. A final payment of approximately $ is due November 2018. The loan is collateralized by the related project equipment. As of December 31, 2017 there was an outstanding balance of $ on this loan. Debt issuance costs of $ are netted against this amount for presentation in the financial statements. This loan is also subject to certain covenants, including job creation and retention. On July 21, 2014, the Company and ODSA signed a second amendment relating to the job creation and retention. The Company expects to maintain compliance with all covenants of this loan through the remainder of the loan. During 2010, the Company also applied and was approved for a 166 Direct Loan through the Advanced Energy Program with the Ohio Air Quality Development Authority (OAQDA) to borrow up to approximately $ million (this maximum commitment by the OAQDA was subsequently reduced to $ on March 20, 2012). A final payment of approximately $ (including principal, interest at % and servicing fee) is due February on this loan. Debt issuance costs of $ are netted against this amount for presentation in the financial statements. The Company expects to maintain compliance with all covenants of this loan through the remainder of the loan. An Intercreditor Agreement exists as part of the above mentioned loans with agencies of the State of Ohio. The OAQDA and ODSA agree to shared lien and security interest through mutual covenants. These covenants include, but are not limited to, the creation of an agreed upon number of jobs, filing of quarterly and annual reports and various financial covenants. The Company was in compliance with all covenants of these loans at December 31, 2017. It is possible that the Company may not be in compliance with all covenants in future periods. In the past the lenders have granted the Company a waiver or amendment when relief was sought. If necessary, the Company will seek a waiver or amendment. Notes payable at December 31 is included in the accompanying balance sheets as follows: 2017 2016 ODSA 166 Direct Loan $ 172,081 $ 289,227 OAQDA 166 Direct Loan 49,811 114,512 Total notes payable before debt issuance costs 221,892 403,739 Debt issuance costs at December 31 787 10,226 Total notes payable after debt issuance costs 221,105 393,513 Less current portion 221,105 172,408 Notes payable, net of current portion $ - $ 221,105 Annual maturities of notes payable, for the next five years, are as follows: 2018 $ 221,105 2019 - 2020 - 2021 - 2022 - |
Lease Obligations
Lease Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Note 5. Lease Obligations Operating The Company leases its facilities and certain office equipment under agreements classified as operating leases expiring at various dates through 2024. Rent expense, which includes various monthly rentals for the years ended December 31, 2017 and 2016, totaled $194,209 and $165,769, respectively. Future minimum lease payments at December 31, 2017, are as follows: 2018 $ 106,749 2019 107,512 2020 108,123 2021 110,370 2022 and beyond 329,706 Total minimum lease payments $ 762,460 Capital The Company also leases certain equipment under capital leases. Future minimum lease payments, by year, with the present value of such payments, as of December 31, 2017, are shown in the following table. 2018 $ 142,981 2019 96,372 2020 56,859 2021 40,449 2022 and beyond - Total minimum lease payments 336,661 Less amount representing interest 25,417 Present value of minimum lease payments 311,244 Less current portion 129,500 Capital lease obligations, net of current portion $ 181,744 The equipment under capital lease at December 31 is included in the accompanying balance sheets as follows: 2017 2016 Machinery and equipment $ 706,050 $ 632,995 Less accumulated depreciation and amortization 194,588 136,784 Net book value $ 511,462 $ 496,211 These assets are amortized over a period of ten years using the straight-line method and amortization is included in depreciation expense. The capital leases are structured such that ownership of the leased asset reverts to the Company at the end of the lease term. Accordingly, leased assets are depreciated using the Company's normal depreciation methods and lives. In 2017, ownership of certain assets were transferred to the Company in accordance with the terms of the leases and these assets have been excluded from the leased asset disclosure above. |
Common and Preferred Stock
Common and Preferred Stock | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 6. Common and Preferred Stock Common Stock During 2016, the non-employee board members received 69,296 shares of common stock of the Company with an aggregate value of $52,595. The increased shares were the result of an increase in number of shares granted on a quarterly basis. This was recorded as non-cash stock compensation expense in the financial statements. During 2017, the non-employee board members received compensation of 84,406 shares and officers received 4,500 shares of common stock of the Company. The stock had an aggregate value of $81,484 and was recorded as non-cash stock compensation expense in the financial statements. Preferred Stock Shares of preferred stock authorized and outstanding at December 31, 2017 and 2016, were as follows: Shares Shares Authorized Outstanding Cumulative Preferred Stock 10,000 - Voting Preferred Stock 125,000 - Cumulative Non-Voting Preferred Stock 125,000 (a) 24,152 (a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. In January 1996, the Company completed an offering of 70,000 shares of $10 stated value 1995 Series B 10% cumulative non-voting convertible preferred stock. The shares are convertible to common shares at the rate of $5.00 per share. At the Company’s option, the Series B shares are redeemable at 103% of the stated value plus the amount of any accrued and unpaid cash dividends. There was shares outstanding of Series B convertible preferred stock at December 31, 2017 and 2016. The Board of Directors voted not to authorize the payment of a cash dividend on convertible preferred stock, Series B, to shareholders of record as of December 31, 2017 or December 31, 2016. The Company had accrued dividends of $ and $ at December 31, 2017 and 2016, respectively. These amounts were included in convertible preferred stock, Series B on the balance sheet at December 31, 2017 and 2016. Earnings Per Share Basic income (loss) per share is calculated as income available (loss attributable) to common shareholders divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted income available (loss attributable) to common stockholders divided by the diluted weighted average number of common shares outstanding. Diluted weighted average number of common shares gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. Diluted earnings per share exclude all diluted potential shares if their effect is anti-dilutive. For the years ended December 31, 2017 and 2016, all convertible and preferred stock and common stock options listed in Note 7 were excluded from diluted earnings per share due to being out-of-the-money or anti-dilutive. Following is a summary of employee and director outstanding stock options outstanding and preferred stock, Series B at December 31. 2017 2016 Options 381,447 397,671 Preferred Stock, Series B 24,152 24,152 405,599 421,823 The following is provided to reconcile the earnings per share calculations: 2017 2016 Loss applicable to common stock $ (18,061) $ (730,206) Weighted average common shares outstanding - basic 4,138,516 4,052,128 Effect of dilutions - stock options - - Weighted average shares outstanding - diluted 4,138,516 4,052,128 |
Stock Option Plans
Stock Option Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 7. Stock Option Plans On June 10, 2011, shareholders approved the SCI Engineered Materials, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). The Company adopted the 2011 Plan as incentive to key employees, directors and consultants under which options to purchase up to 250,000 shares of the Company’s common stock may be granted, subject to the execution of stock option agreements. Incentive stock options may be granted to key employees of the Company and non-statutory options may be granted to directors who are not employees and to consultants and advisors who render services to the Company. Options may be exercised for periods up to 10 years from the date of grant at prices not less than 100% of fair market value on the date of grant. As of December 31, 2017, there were no stock options outstanding from the 2011 Plan. On June 9, 2006, shareholders approved the Superconductive Components, Inc. 2006 Stock Incentive Plan. The Company adopted the 2006 Plan as incentive to key employees, directors and consultants under which options to purchase up to 600,000 shares of the Company’s common stock may be granted, subject to the execution of stock option agreements. Incentive stock options may be granted to key employees of the Company and non-statutory options may be granted to directors who are not employees and to consultants and advisors who render services to the Company. Options may be exercised for periods up to 10 years from the date of grant at prices not less than 100% of fair market value on the date of grant. As of December 31, 2017, there were 381,447 stock options outstanding from the 2006 Plan which expire at various dates through November 2024. The cumulative status at December 31, 2017 and 2016, of options granted and outstanding, as well as options which became exercisable in connection with the Stock Option Plans is summarized as follows: Employee Stock Options Weighted Weighted Average Average Aggregate Stock Exercise Contractual Intrinsic Options Price Term (yrs) Value Outstanding at January 1, 2016 572,857 $ 4.27 Exercised (5,000) 0.84 Forfeited (139,186) 4.29 Expired (31,000) 3.25 Outstanding at December 31, 2016 397,671 $ 4.39 Exercised (16,224) 0.84 Outstanding at December 31, 2017 381,447 $ 4.54 2.6 $ - Options exercisable at December 31, 2016 267,668 $ 5.07 3.0 $ - Options exercisable at December 31, 2017 303,829 $ 5.03 2.0 $ - Options expected to vest 77,618 $ 2.64 4.8 $ - There were no Non-Employee Director Stock Options outstanding at December 31, 2017 and 2016. Information related to the weighted average fair value of nonvested stock options for the year ended December 31, 2017 is as follows: Weighted Average Exercise Stock Options Price Employee Stock Options Nonvested options at January 1, 2017 130,003 $ 3.12 Vested (52,385) 3.51 Nonvested options at December 31, 2017 77,618 $ 2.64 Exercise prices range from $ to $ for options at December 31, 2017. The weighted average option price for all options outstanding was $ with a weighted average remaining contractual life of years at December 31, 2017. The weighted average option price for all options outstanding was $ with a weighted average remaining contractual life of years at December 31, 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 8. Income Taxes Deferred tax assets and liabilities result from temporary differences in the recognition of income and expense for tax and financial reporting purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31. 2017 2016 Deferred tax assets NOL carryforwards $ 1,038,000 $ 1,816,000 General business credits carryforwards 244,000 221,000 Stock based compensation 64,000 80,000 UNICAP 30,000 44,000 Allowance for doubtful accounts 3,000 6,000 Reserve for obsolete inventories 12,000 24,000 Reserve for asset retirement 14,000 24,000 Property and equipment (159,000) (283,000) 1,246,000 1,932,000 Valuation allowance (1,246,000) (1,932,000) Net $ - $ - The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%. Accordingly, the Company has modified the value of deferred tax assets and liabilities including the net operating loss carryover benefit at December 31, 2017. Prior to enactment of the new tax reform, the Company had total net deferred tax assets of $1,912,000 before full valuation reserve at December 31, 2017. Taking the new tax reform into consideration, the total net deferred tax assets was $1,246,000 before full valuation reserve at December 31, 2017. A valuation allowance has been recorded against the realizability of the net deferred tax asset such that no value is recorded for the asset in the accompanying financial statements. The valuation allowance totaled $1,246,000 and $1,932,000 at December 31, 2017 and 2016, respectively. The Company has net operating loss carryforwards available for federal and state tax purposes of approximately $ and $ at December 31, 2017 and 2016, respectively, which expire in varying amounts through . For the years ended December 31, 2017 and 2016, a reconciliation of the statutory rate and effective rate for the provisions for income taxes consists of the following: Percentage 2017 2016 Federal statutory rate 35.0 % 35.0 % State/city tax 24.0 0.0 Non-deductible expense 532.6 (8.7) Valuation allowance (567.6) (26.3) Effective rate 24.0 % 0.0 % Components of the income tax provision are as follows: 2017 2016 Current $ 1,921 $ - Deferred: NOL utilization/expiration under 2017 tax law 87,247 (183,000) General business credits (23,087) (22,000) Other temporary differences (43,756) 17,000 Change in valuation allowance (20,404) 188,000 Change in NOL benefit due to 2018 Tax Reform 691,695 - Change in temporary differences due to 2018 Tax Reform (25,595) - Change in valuation allowance due to 2018 Tax Reform (666,100) - Total $ 1,921 $ - The Company follows guidance issued by the Financial Accounting Standards Board (“FASB ASC 740”) with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than fifty percent likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded. The Company has no unrecognized tax benefits under guidance related to tax uncertainties. The Company does not anticipate the unrecognized tax benefits will significantly change in the next twelve months. Any tax penalties or interest expense will be recognized in income tax expense. No interest and penalties related to unrecognized tax benefits were accrued at December 31, 2017 and 2016. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is open to federal and state tax audits until the applicable statute of limitations expire. There are currently no federal or state income tax examinations underway for the Company. The tax years 2014 through 2017 remain open to examination by the major taxing jurisdictions in which the Company operates. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 9. Fair Value of Financial Instruments The fair value of financial instruments represents the price that would be received to sell an asset or paid to transfer a liability (an exit price), and not the price that would be paid to acquire an asset or received to assume a liability (an entry price). Significant differences can arise between the fair value and carrying amount of financial instruments that are recognized at historical cost amounts. The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: · Cash and cash equivalents, short-term notes payable and capital lease obligations and current maturities of long-term notes payable and capital lease obligations: Amounts reported in the balance sheet approximate fair market value due to the short maturity of these instruments. · Long-term note payable obligations: Amounts reported in the balance sheet approximate fair value as the interest rates on the obligations range from 3% to 6.2%, which approximates current fair market rates. |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Disclosure [Text Block] | Note 10. Asset Retirement Obligation Included in machinery and equipment is various production equipment, which per the Company’s building lease, is required to be removed upon termination of the related lease. Included in accrued expenses in the accompanying balance sheet is the asset retirement obligation that represents the expected present value of the liability to remove this equipment. There are no assets that are legally restricted for purposes of settling this asset retirement obligation. Following is a reconciliation of the aggregate retirement liability associated with the Company’s obligation to dismantle and remove the machinery and equipment associated with its lease: Balance at January 1, 2016 $ 65,578 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) - Balance at December 31, 2016 $ 65,578 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 1,218 Balance at December 31, 2017 $ 66,796 |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2017 | |
Liquidity Disclosures [Abstract] | |
Liquidity Disclosures [Text Block] | Note 11. Liquidity Management has forecasted revenues and related costs as well as investing plans and financing needs to determine liquidity to meet cash flow requirements and believes the Company will have sufficient liquidity at least through February 1, 2019. This forecast was based on current cash levels and debt obligations, and the best estimates of revenues primarily from existing customers and gave consideration to the continued and possible increased levels of uncertainty in demand in the markets in which the Company operates. The Company’s ability to maintain current operations is dependent upon its ability to achieve these forecasted results, which the Company believes will occur. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 12. Subsequent Event During January 2018, the Company entered into a capital lease agreement in the amount of $105,325 for new production equipment. This lease includes a term of 48 months and an interest rate of 4.6%. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents, Policy [Policy Text Block] | A. Cash - The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | B. Fair Value of Financial Instruments - The estimated fair value of amounts reported in the financial statements have been determined using available market information and valuation methodologies, as applicable (see Note 9). |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | C. Concentrations of Credit Risk - The Company’s cash balances, which are at times in excess of federally insured levels, are maintained at a large regional bank and a global investment banking group, and are continually monitored to minimize the risk of loss. The Company grants credit to most customers, who are varied in terms of size, geographic location and financial strength. Customer balances are continually monitored to minimize the risk of loss. The Company’s two largest customers accounted for 72% and 9% of total revenue in 2017. These two customers represented 65% of the accounts receivable trade balance at December 31, 2017. The Company expects to collect all outstanding accounts receivables as of December 31, 2017 from these customers. The Company’s two largest customers accounted for 53% and 12% of total revenue in 2016. These two customers represented 68% of the accounts receivable trade balance at December 31, 2016. The Company subsequently collected all outstanding accounts receivables as of December 31, 2016 from these customers. |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | D. Accounts Receivable - The Company extends unsecured credit to customers under normal trade agreements which require payment within 30 days. The Company does not charge interest on delinquent trade accounts receivable. Unless specified by the customer, payments are applied to the oldest unpaid invoice. Accounts receivable are presented at the amount billed. Management estimates an allowance for doubtful accounts, which was $15,000 as of December 31, 2017 and 2016. This estimate is based upon management’s review of delinquent accounts and an assessment of the Company’s historical evidence of collections. Specific accounts are charged directly to the reserve or bad debt expense when management obtains evidence of a customer’s insolvency or otherwise determines that the account is uncollectible. Bad debt expense was $0 during 2017 and 2016. |
Inventory, Policy [Policy Text Block] | E. Inventories - Inventories are stated at the lower of cost or market on an acquired or internally produced lot basis, and consist of raw materials, work-in-process and finished goods. Cost includes material, labor, freight and applied overhead. Inventory reserves are established for obsolete inventory, lower of cost or market, and excess inventory quantities based on management’s estimate of net realizable value. The Company had an inventory reserve of $56,000 and $67,640 at December 31, 2017, and 2016, respectively. |
Property, Plant and Equipment, Policy [Policy Text Block] | F. Property and Equipment - Property and equipment are carried at cost. Depreciation is provided using the straight-line method based on the estimated useful lives of the assets. Useful lives range from three years on computer equipment to sixteen years on certain equipment. Leasehold improvements are amortized over the shorter of the estimated useful life or the term of the lease. Depreciation expense totaled $460,637 and $445,891 for the years ended December 31, 2017 and 2016, respectively. Expenditures for renewals and betterments are capitalized and expenditures for repairs and maintenance are charged to operations as incurred. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference. There was no property and equipment considered impaired during 2017 or 2016. |
Deferred Charges, Policy [Policy Text Block] | G. Deferred Financing Costs - Deferred financing costs are amortized over the term of the related debt using the straight-line method, the result of which is not materially different from the use of the interest method. Deferred financing costs were $787 and $10,226 at December 31, 2017 and 2016, respectively. The related amortization of these costs for the years ended December 31, 2017 and 2016, was $9,439 and is included in interest expense on the statements of operations. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | H. Intangible Assets - The Company reviews intangible assets for impairment and performs detailed testing whenever impairment indicators are present. If necessary, an impairment loss is recorded for the excess of carrying value over fair value. There were no intangible assets considered impaired during 2017 or 2016. The Company holds the rights to a provisional patent and any subsequent patents for this technology related to the application of Zinc based Transparent Conductive Oxide in Displays. In 2017, we filed an application for a patent for Process for the Removal of Chromium Contaminants from Ruthenium Sputtering Target Substrates. Costs incurred to secure patents have been capitalized and amortized over the life of the patents. Cost and accumulated amortization of the patents at December 31, 2017 and 2016 were $34,935 and $0, respectively. Amortization expense related to patents was $0 for the years ended December 31, 2017 and 2016. Amortization expense is expected to be $0 until any patents are approved. |
Debt, Policy [Policy Text Block] | I. Debt Issuance Costs - In April 2015, the FASB issued guidance creating ASC Subtopic 835-30, InterestImputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. The update modifies the presentation of costs of debt issuance as a direct reduction to the face amount of the related reported debt. At December 31, 2017, debt issuance costs of $787 were presented on a net basis against notes payable in the accompanying balance sheet. At December 31, 2016, debt issuance costs of $10,226 were presented on a net basis against notes payable in the accompanying balance sheet. |
Revenue Recognition, Policy [Policy Text Block] | J. Revenue Recognition - Revenue from product sales is recognized based on shipping terms and upon shipment to customers. Provisions for discounts and rework costs for returns are established when products are shipped based on historical experience. Customer deposits represent cash received in advance of revenue earned. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | K. Stock Based Compensation - Compensation cost for all stock-based awards is based on the grant date fair value and is recognized over the required service (vesting) period. Non cash stock based compensation expense was $201,574 and $172,685 for the years ended December 31, 2017 and 2016, respectively. Non cash stock based compensation expense includes $76,984 and $52,595 for stock grants awarded to the non-employee board members during 2017 and 2016, respectively. Unrecognized compensation expense was $20,075 as of December 31, 2017, and will be recognized through 2019. There was no tax benefit recorded for this compensation cost as the expense primarily relates to incentive stock options that do not qualify for a tax deduction until, and only if, a qualifying disposition occurs. |
Research and Development Expense, Policy [Policy Text Block] | L. Research and Development - Research and development costs are expensed as incurred. Research and development expense for the years ended December 31, 2017 and 2016, was $330,805 and $319,476, respectively. The Company has new materials under development that may replace the Cadmium Sulfide buffer layer in CIGS solar cells. These materials were tested at Case Western Reserve University and the results support the use of its innovative material in thin film solar applications that could lead to higher efficiencies. The Company continues to invest in developing new products for all of its markets including transparent conductive oxide systems for the thin film solar and display markets. The Company also has ongoing development efforts with thin film battery materials and transparent electronic products. These efforts include accelerating time to market for those products and involve research and development expense. |
Income Tax, Policy [Policy Text Block] | M. Income Taxes - Income taxes are provided for by utilizing the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates. Deferred tax assets are reduced by a valuation allowance which is established when “it is more likely than not” that some portion or all of the deferred tax assets will not be recognized. |
Use of Estimates, Policy [Policy Text Block] | N. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 during the reporting period. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, inventory allowances, property and equipment depreciable lives, patents and licenses useful lives, revenue recognition, tax valuation, stock based compensation and assessing changes in which impairment of certain long-lived assets may occur. Actual results could differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | O. New Accounting Pronouncements Stock Compensation - In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification of the statement of cash flows. ASU 2016-09 will be effective for the Company beginning in its first quarter of 2018. The Company is currently evaluating the impact of adopting ASU 2016-09 on its financial statements. Leases - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 will be effective for the Company beginning in its first quarter of 2019, and early adoption is permitted. The Company is currently evaluating the timing of its adoption and the impact of adopting ASU 2016-02 on its consolidated financial statements. Revenue Recognition - In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Adoption of the ASU is not expected to have a significant impact on the Company’s consolidated financial statements. The Company’s primary sources of revenue are from product sales recognized based on shipping terms upon shipment to customers. The standard permits the use of either the full retrospective or modified retrospective transition method. The Company is currently planning to use the modified retrospective transition method which requires application of ASU 2014-09 to uncompleted contracts at the date of adoption. Periods prior to the date of adoption are not retrospectively revised, but a cumulative effect of adoption will be recognized for the impact of the ASU on uncompleted contracts at the date of adoption. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories consist of the following at December 31: 2017 2016 Raw materials $ 141,733 $ 110,752 Work-in-process 370,318 249,057 Finished goods 161,393 84,392 673,444 444,201 Reserve for obsolete inventory (56,000) (67,640) $ 617,444 $ 376,561 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Notes payable at December 31 is included in the accompanying balance sheets as follows: 2017 2016 ODSA 166 Direct Loan $ 172,081 $ 289,227 OAQDA 166 Direct Loan 49,811 114,512 Total notes payable before debt issuance costs 221,892 403,739 Debt issuance costs at December 31 787 10,226 Total notes payable after debt issuance costs 221,105 393,513 Less current portion 221,105 172,408 Notes payable, net of current portion $ - $ 221,105 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Annual maturities of notes payable, for the next five years, are as follows: 2018 $ 221,105 2019 - 2020 - 2021 - 2022 - |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease payments at December 31, 2017, are as follows: 2018 $ 106,749 2019 107,512 2020 108,123 2021 110,370 2022 and beyond 329,706 Total minimum lease payments $ 762,460 |
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | The Company also leases certain equipment under capital leases. Future minimum lease payments, by year, with the present value of such payments, as of December 31, 2017, are shown in the following table. 2018 $ 142,981 2019 96,372 2020 56,859 2021 40,449 2022 and beyond - Total minimum lease payments 336,661 Less amount representing interest 25,417 Present value of minimum lease payments 311,244 Less current portion 129,500 Capital lease obligations, net of current portion $ 181,744 |
Schedule of Capital Leased Assets [Table Text Block] | The equipment under capital lease at December 31 is included in the accompanying balance sheets as follows: 2017 2016 Machinery and equipment $ 706,050 $ 632,995 Less accumulated depreciation and amortization 194,588 136,784 Net book value $ 511,462 $ 496,211 |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity Note [Abstract] | |
Schedule of Stock by Class [Table Text Block] | Shares of preferred stock authorized and outstanding at December 31, 2017 and 2016, were as follows: Shares Shares Authorized Outstanding Cumulative Preferred Stock 10,000 - Voting Preferred Stock 125,000 - Cumulative Non-Voting Preferred Stock 125,000 (a) 24,152 (a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Following is a summary of employee and director outstanding stock options outstanding and preferred stock, Series B at December 31. 2017 2016 Options 381,447 397,671 Preferred Stock, Series B 24,152 24,152 405,599 421,823 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following is provided to reconcile the earnings per share calculations: 2017 2016 Loss applicable to common stock $ (18,061) $ (730,206) Weighted average common shares outstanding - basic 4,138,516 4,052,128 Effect of dilutions - stock options - - Weighted average shares outstanding - diluted 4,138,516 4,052,128 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Share Activity [Table Text Block] | Information related to the weighted average fair value of nonvested stock options for the year ended December 31, 2017 is as follows: Weighted Average Exercise Stock Options Price Employee Stock Options Nonvested options at January 1, 2017 130,003 $ 3.12 Vested (52,385) 3.51 Nonvested options at December 31, 2017 77,618 $ 2.64 |
Employee Stock Option [Member] | Series B Preferred Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The cumulative status at December 31, 2017 and 2016, of options granted and outstanding, as well as options which became exercisable in connection with the Stock Option Plans is summarized as follows: Employee Stock Options Weighted Weighted Average Average Aggregate Stock Exercise Contractual Intrinsic Options Price Term (yrs) Value Outstanding at January 1, 2016 572,857 $ 4.27 Exercised (5,000) 0.84 Forfeited (139,186) 4.29 Expired (31,000) 3.25 Outstanding at December 31, 2016 397,671 $ 4.39 Exercised (16,224) 0.84 Outstanding at December 31, 2017 381,447 $ 4.54 2.6 $ - Options exercisable at December 31, 2016 267,668 $ 5.07 3.0 $ - Options exercisable at December 31, 2017 303,829 $ 5.03 2.0 $ - Options expected to vest 77,618 $ 2.64 4.8 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred tax assets and liabilities result from temporary differences in the recognition of income and expense for tax and financial reporting purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31. 2017 2016 Deferred tax assets NOL carryforwards $ 1,038,000 $ 1,816,000 General business credits carryforwards 244,000 221,000 Stock based compensation 64,000 80,000 UNICAP 30,000 44,000 Allowance for doubtful accounts 3,000 6,000 Reserve for obsolete inventories 12,000 24,000 Reserve for asset retirement 14,000 24,000 Property and equipment (159,000) (283,000) 1,246,000 1,932,000 Valuation allowance (1,246,000) (1,932,000) Net $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | For the years ended December 31, 2017 and 2016, a reconciliation of the statutory rate and effective rate for the provisions for income taxes consists of the following: Percentage 2017 2016 Federal statutory rate 35.0 % 35.0 % State/city tax 24.0 0.0 Non-deductible expense 532.6 (8.7) Valuation allowance (567.6) (26.3) Effective rate 24.0 % 0.0 % |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Components of the income tax provision are as follows: 2017 2016 Current $ 1,921 $ - Deferred: NOL utilization/expiration under 2017 tax law 87,247 (183,000) General business credits (23,087) (22,000) Other temporary differences (43,756) 17,000 Change in valuation allowance (20,404) 188,000 Change in NOL benefit due to 2018 Tax Reform 691,695 - Change in temporary differences due to 2018 Tax Reform (25,595) - Change in valuation allowance due to 2018 Tax Reform (666,100) - Total $ 1,921 $ - |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations [Table Text Block] | Following is a reconciliation of the aggregate retirement liability associated with the Company’s obligation to dismantle and remove the machinery and equipment associated with its lease: Balance at January 1, 2016 $ 65,578 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) - Balance at December 31, 2016 $ 65,578 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 1,218 Balance at December 31, 2017 $ 66,796 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Line Items] | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | $ 120,090 | $ 120,089 |
Allowance For Doubtful Accounts Receivable, Current | 15,000 | 15,000 |
Inventory Valuation Reserves | 56,000 | 67,640 |
Depreciation | 460,637 | 445,891 |
Deferred Finance Costs, Net | 787 | 10,226 |
Amortization of Financing Costs | 9,439 | 9,439 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 20,075 | |
Research and Development Expense, Total | 330,805 | 319,476 |
Share-based Compensation, Total | 201,574 | 172,685 |
Bad Debt Expense | 0 | 0 |
Debt Issuance Costs, Current, Net | $ 787 | 10,226 |
Computer Equipment [Member] | ||
Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Leasehold Improvements [Member] | ||
Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Estimated Useful Lives | amortized over the shorter of the estimated useful life or the term of the lease. | |
Other Equipment [Member] | ||
Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 16 years | |
Patents [Member] | ||
Accounting Policies [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 34,935 | 0 |
Finite-Lived Intangible Assets, Accumulated Amortization | 0 | 0 |
Amortization of Intangible Assets | 0 | 0 |
Non Employee Board [Member] | ||
Accounting Policies [Line Items] | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | $ 76,984 | $ 52,595 |
Customer One [Member] | Sales Revenue, Net [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 72.00% | 53.00% |
Customer Two [Member] | Sales Revenue, Net [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 9.00% | 12.00% |
Two Customers [Member] | Accounts Receivable [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 65.00% | 68.00% |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 141,733 | $ 110,752 |
Work-in-process | 370,318 | 249,057 |
Finished goods | 161,393 | 84,392 |
Inventory, Gross | 673,444 | 444,201 |
Reserve for obsolete inventory | (56,000) | (67,640) |
Inventory, Net | $ 617,444 | $ 376,561 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Conversion [Line Items] | ||
Notes Payable | $ 221,892 | $ 403,739 |
Debt issuance costs at December 31 | 787 | 10,226 |
Total notes payable after debt issuance costs | 221,105 | 393,513 |
Less current portion | 221,105 | 172,408 |
Notes payable, net of current portion | 0 | 221,105 |
Ohio Air Quality Development Authority Loan [Member] | ||
Debt Conversion [Line Items] | ||
Notes Payable | 49,811 | 114,512 |
Ohio Development Services Agency One [Member] | ||
Debt Conversion [Line Items] | ||
Notes Payable | $ 172,081 | $ 289,227 |
Notes Payable (Details 1)
Notes Payable (Details 1) - Notes Payable [Member] | Dec. 31, 2017USD ($) |
Debt Conversion [Line Items] | |
2,018 | $ 221,105 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | $ 0 |
Notes Payable (Details Textual)
Notes Payable (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 20, 2012 | Dec. 31, 2010 | |
Ohio Development Services Agency [Member] | |||
Debt Conversion [Line Items] | |||
Line of Credit Facility, Interest Rate During Period | 3.00% | ||
Line of Credit Facility, Amount Outstanding | $ 172,081 | ||
Servicing Fee Annual Percent Fee | 0.25% | ||
Line of Credit Facility, Periodic Payment | $ 10,400 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 744,250 | ||
Debt Issuances Cost | 319 | ||
Ohio Development Services Agency [Member] | Line of Credit [Member] | |||
Debt Conversion [Line Items] | |||
Line of Credit Facility, Final Periodic Payment | $ 71,900 | ||
Ohio Air Quality Development Authority [Member] | |||
Debt Conversion [Line Items] | |||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | $ 368,906 | $ 1,400,000 | |
Line of Credit Facility, Interest Rate During Period | 3.00% | ||
Line of Credit Facility, Amount Outstanding | $ 49,811 | ||
Debt Issuances Cost | 467 | ||
Line Of Credit Facility, State Final Periodic Payment | $ 50,400 |
Lease Obligations (Details)
Lease Obligations (Details) | Dec. 31, 2017USD ($) |
Operating Leased Assets [Line Items] | |
2,018 | $ 106,749 |
2,019 | 107,512 |
2,020 | 108,123 |
2,021 | 110,370 |
2022 and beyond | 329,706 |
Total minimum lease payments | $ 762,460 |
Lease Obligations (Details 1)
Lease Obligations (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leased Assets [Line Items] | ||
2,018 | $ 142,981 | |
2,019 | 96,372 | |
2,020 | 56,859 | |
2,021 | 40,449 | |
2022 and beyond | 0 | |
Total minimum lease payments | 336,661 | |
Less amount representing interest | 25,417 | |
Present value of minimum lease payments | 311,244 | |
Less current portion | 129,500 | $ 121,383 |
Capital lease obligations, net of current portion | $ 181,744 | $ 225,944 |
Lease Obligations (Details 2)
Lease Obligations (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leased Assets [Line Items] | ||
Machinery and equipment | $ 706,050 | $ 632,995 |
Less accumulated depreciation and amortization | 194,588 | 136,784 |
Net book value | $ 511,462 | $ 496,211 |
Lease Obligations (Details Text
Lease Obligations (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | ||
Operating Leases, Rent Expense | $ 194,209 | $ 165,769 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) | Dec. 31, 2017shares | |
Cumulative Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 10,000 | |
Preferred Stock, Shares Outstanding | 0 | |
Voting Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 125,000 | |
Preferred Stock, Shares Outstanding | 0 | |
Cumulative Non Voting Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 125,000 | [1] |
Preferred Stock, Shares Outstanding | 24,152 | |
[1] | Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. |
Common and Preferred Stock (D37
Common and Preferred Stock (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 405,599 | 421,823 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 381,447 | 397,671 |
Series B Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 24,152 | 24,152 |
Common and Preferred Stock (D38
Common and Preferred Stock (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loss applicable to common stock | $ (18,061) | $ (730,206) |
Weighted average common shares outstanding - basic | 4,138,516 | 4,052,128 |
Effect of dilutions - stock options | 0 | 0 |
Weighted average shares outstanding - diluted | 4,138,516 | 4,052,128 |
Common and Preferred Stock (D39
Common and Preferred Stock (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 1996 | |
Stock Issued During Period, Value, New Issues | $ 81,484 | $ 56,796 | |
Common Stock [Member] | |||
Stock Issued During Period, Value, New Issues | $ 81,484 | $ 56,796 | |
Convertible Preferred Stock Series B [Member] | |||
Stock Issued During Period, Shares, New Issues | 70,000 | ||
Preferred Stock, Shares Authorized | 100,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 10 | ||
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||
Convertible Preferred Stock Conversion Price | $ 5 | ||
Preferred Stock Redemption Percentage | 103.00% | ||
Non Employee Board members [Member] | |||
Stock Issued During Period, Shares, New Issues | 84,406 | 69,296 | |
Stock Issued During Period, Value, New Issues | $ 52,595 | ||
Officers [Member] | |||
Stock Issued During Period, Shares, New Issues | 4,500 | ||
Non Employee Board Members And Officers [Member] | |||
Stock Issued During Period, Value, New Issues | $ 81,484 | ||
Series A Preferred Stock [Member] | |||
Preferred Stock, Shares Authorized | 700 | ||
Series B Preferred Stock [Member] | |||
Accrued Dividend | $ 265,672 | $ 241,520 | |
Preferred Stock, Shares Outstanding | 24,152 | 24,152 |
Stock Option Plans (Details)
Stock Option Plans (Details) - Employee Stock Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Options, Outstanding, Beginning Balance | 397,671 | 572,857 |
Stock Options, Expired | (31,000) | |
Stock Options, Exercised | (16,224) | (5,000) |
Stock Options, Forfeited | (139,186) | |
Stock Options, Outstanding, Ending Balance | 381,447 | 397,671 |
Stock Options, Options exercisable | 303,829 | 267,668 |
Stock Options, Options expected to vest | 77,618 | |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 4.39 | $ 4.27 |
Weighted Average Exercise Price, Expired | 3.25 | |
Weighted Average Exercise Price, Exercised | 0.84 | 0.84 |
Weighted Average Exercise Price, Forfeited | 4.29 | |
Weighted Average Exercise Price, Outstanding, Ending Balance | 4.54 | 4.39 |
Weighted Average Exercise Price, Options exercisable | 5.03 | $ 5.07 |
Weighted Average Exercise Price, Options expected to vest | $ 2.64 | |
Weighted Average Contractual Term, Outstanding | 2 years 7 months 6 days | 3 years 9 months 18 days |
Weighted Average Contractual Term, Options exercisable | 2 years | 3 years |
Weighted Average Contractual Term, Options expected to vest | 4 years 9 months 18 days | |
Aggregate Intrinsic Value, Outstanding | $ 0 | |
Aggregate Intrinsic Value, Options exercisable | 0 | $ 0 |
Aggregate Intrinsic Value, Options expected to vest | $ 0 |
Stock Option Plans (Details 1)
Stock Option Plans (Details 1) - Employee Stock Option [Member] | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested options at January 1, 2017 | shares | 130,003 |
Vested, Stock Options | shares | (52,385) |
Nonvested options at December 31, 2017 | shares | 77,618 |
Nonvested, Weighted Average Exercise Price at January 1, 2017 | $ / shares | $ 3.12 |
Vested, Weighted Average Exercise Price | $ / shares | 3.51 |
Nonvested, Weighted Average Exercise Price at December 31, 2017 | $ / shares | $ 2.64 |
Stock Option Plans (Details Tex
Stock Option Plans (Details Textual) - $ / shares | Jun. 10, 2011 | Jun. 09, 2006 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit (in dollars per share) | $ 0.84 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in dollars per share) | 6 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $ 4.54 | ||||
Plan 2011 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 250,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | ||||
Plan 2006 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 600,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Description and Terms | Plan which expire at various dates through November 2024 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 381,447 | ||||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 7 months 6 days | 3 years 9 months 18 days | |||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 4.54 | $ 4.39 | $ 4.27 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 381,447 | 397,671 | 572,857 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||
NOL carryforwards | $ 1,038,000 | $ 1,816,000 |
General business credits carryforwards | 244,000 | 221,000 |
Stock based compensation | 64,000 | 80,000 |
UNICAP | 30,000 | 44,000 |
Allowance for doubtful accounts | 3,000 | 6,000 |
Reserve for obsolete inventories | 12,000 | 24,000 |
Reserve for asset retirement | 14,000 | 24,000 |
Property and equipment | (159,000) | (283,000) |
Deferred Tax Assets, Gross | 1,246,000 | 1,932,000 |
Valuation allowance | (1,246,000) | (1,932,000) |
Net | $ 0 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | ||
Federal statutory rate | 35.00% | 35.00% |
State/city tax | 24.00% | 0.00% |
Non-deductible expense | 532.60% | (8.70%) |
Valuation allowance | (567.60%) | (26.30%) |
Effective rate | 24.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | ||
Current | $ 1,921 | $ 0 |
Deferred: | ||
NOL utilization/expiration under 2017 tax law | 87,247 | (183,000) |
General business credits | (23,087) | (22,000) |
Other temporary differences | (43,756) | 17,000 |
Change in temporary differences due to 2018 Tax Reform | (20,404) | 188,000 |
Income Tax Expense (Benefit) | 1,921 | 43 |
Post Enactment of Tax Rate [Member] | ||
Deferred: | ||
NOL utilization/expiration under 2017 tax law | 691,695 | 0 |
Other temporary differences | (25,595) | 0 |
Change in temporary differences due to 2018 Tax Reform | $ (666,100) | $ 0 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | ||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 4,900,000 | $ 5,200,000 |
Operating Loss Carry forward Expiration Year | 2,037 | |
Deferred Tax Assets, Valuation Allowance, Current | $ 1,246,000 | 1,932,000 |
Deferred Tax Assets, Gross | $ 1,246,000 | $ 1,932,000 |
Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate | 35.00% | 35.00% |
Prior Enactment of Tax Rate [Member] | ||
Income Tax Contingency [Line Items] | ||
Deferred Tax Assets, Gross | $ 1,912,000 | |
Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate | 35.00% | |
Post Enactment of Tax Rate [Member] | ||
Income Tax Contingency [Line Items] | ||
Deferred Tax Assets, Gross | $ 1,246,000 | |
Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate | 21.00% |
Fair Value of Financial Instr47
Fair Value of Financial Instruments (Details Textual) | Dec. 31, 2017 |
Maximum [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 6.20% |
Minimum [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 3.00% |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation [Line Items] | ||
Beginning balance | $ 65,578 | $ 65,578 |
Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) | 1,218 | 0 |
Ending balance | $ 66,796 | $ 65,578 |
Subsequent Event (Details Textu
Subsequent Event (Details Textual) - USD ($) | 1 Months Ended | ||
Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | |||
Capital Leases, Balance Sheet, Assets by Major Class, Net | $ 511,462 | $ 496,211 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Capital Leases, Balance Sheet, Assets by Major Class, Net | $ 105,325 | ||
Capital Lease Obligations Expiration Term | 48 months | ||
Capital Lease Obligations Interest Rate | 4.60% |