Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 08, 2024 | Jun. 30, 2023 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Entity File Number | 0-31641 | ||
Entity Registrant Name | SCI ENGINEERED MATERIALS, INC. | ||
Entity Incorporation, State or Country Code | OH | ||
Entity Tax Identification Number | 31-1210318 | ||
Entity Address, Address Line One | 2839 Charter Street | ||
Entity Address, City or Town | Columbus | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 43228 | ||
City Area Code | 614 | ||
Local Phone Number | 486-0261 | ||
Title of 12(b) Security | Common stock, without par value | ||
Trading Symbol | SCIA | ||
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 | 4,530,207 | ||
Entity Central Index Key | 0000830616 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 15,467,650 | ||
Auditor Name | GBQ Partners, LLC | ||
Auditor Firm ID | 1808 | ||
Auditor Location | Columbus, Ohio | ||
Document Financial Statement Error Correction [Flag] | false |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 5,673,994 | $ 3,947,966 |
Investments - marketable securities, short term | 1,000,000 | 989,265 |
Accounts receivable Trade, less allowance for doubtful accounts of $15,000 | 854,501 | 842,647 |
Tax receivable - Employee Retention Credit | 40,539 | 40,539 |
Other | 15,607 | 12,653 |
Inventories, net | 4,654,398 | 2,177,917 |
Prepaid purchase orders | 1,123,980 | |
Prepaid expenses | 214,458 | 136,134 |
Total current assets | 13,577,477 | 8,147,121 |
Property and Equipment, at cost | ||
Machinery and equipment | 8,677,446 | 8,584,871 |
Furniture and fixtures | 129,476 | 142,471 |
Leasehold improvements | 744,297 | 607,156 |
Construction in progress | 52,097 | 28,708 |
Property and equipment, gross | 9,603,316 | 9,363,206 |
Less accumulated depreciation and amortization | (7,359,310) | (7,101,573) |
Property and equipment, net | 2,244,006 | 2,261,633 |
Investments, net - marketable securities, long term | 994,478 | 1,000,000 |
Right of use asset, net | 592,170 | 185,072 |
Deferred tax asset | 151,164 | |
Other assets | 78,289 | 85,138 |
Total other assets | 1,664,937 | 1,421,374 |
TOTAL ASSETS | 17,486,420 | 11,830,128 |
Current Liabilities | ||
Finance lease obligations, current portion | 49,149 | 97,367 |
Operating lease obligations, current portion | 111,193 | 105,789 |
Accounts payable | 385,489 | 514,512 |
Customer deposits | 4,871,035 | 1,825,595 |
Accrued compensation | 406,971 | 270,168 |
Accrued expenses and other | 120,624 | 122,065 |
Total current liabilities | 5,944,461 | 2,935,496 |
Finance lease obligations, net of current portion | 49,149 | |
Deferred tax liability | 69,846 | |
Operating lease obligations, net of current portion | 492,080 | 99,834 |
Total liabilities | 6,506,387 | 3,084,479 |
Shareholders' Equity | ||
Common stock, no par value, authorized 15,000,000 shares; 4,530,207 and 4,519,524 shares issued and outstanding, respectively | 10,662,343 | 10,618,435 |
Additional paid-in capital | 2,233,384 | 2,231,807 |
Accumulated deficit | (1,915,694) | (4,104,593) |
Total shareholders' equity | 10,980,033 | 8,745,649 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 17,486,420 | $ 11,830,128 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
BALANCE SHEETS | ||
Allowance for doubtful accounts (in dollars) | $ 15,000 | $ 15,000 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 4,530,207 | 4,519,524 |
Common stock, shares outstanding | 4,530,207 | 4,519,524 |
STATEMENTS OF INCOME
STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
STATEMENTS OF INCOME | ||
Revenue | $ 27,984,083 | $ 23,467,030 |
Revenue, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of revenue | $ 22,732,450 | $ 18,680,075 |
Cost, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 5,251,633 | $ 4,786,955 |
General and administrative expense | 1,771,263 | 1,549,696 |
Research and development expense | 501,937 | 375,728 |
Marketing and sales expense | 484,185 | 381,313 |
Income from operations | 2,494,248 | 2,480,218 |
Interest (income) expense | (286,361) | (19,201) |
Income before provision for income taxes | 2,780,609 | 2,499,419 |
Income tax expense | 586,710 | 542,395 |
Net Income | $ 2,193,899 | $ 1,957,024 |
Income per common share | ||
Basic (In dollars per share) | $ 0.48 | $ 0.43 |
Diluted (In dollars per share) | $ 0.48 | $ 0.43 |
Weighted average shares outstanding | ||
Basic (In shares) | 4,528,948 | 4,515,002 |
Diluted (In shares) | 4,559,786 | 4,542,891 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit Period of Adoption, Adjustment | Accumulated Deficit | Period of Adoption, Adjustment | Total |
Balance at Dec. 31, 2021 | $ 10,573,843 | $ 2,227,078 | $ (6,061,617) | $ 6,739,304 | ||
Stock based compensation expense (Note 2J) | 4,729 | 4,729 | ||||
Common stock issued (Note 8) | 44,592 | 44,592 | ||||
Net Income (Loss) | 1,957,024 | 1,957,024 | ||||
Balance at Dec. 31, 2022 | 10,618,435 | 2,231,807 | $ (5,000) | (4,104,593) | $ (5,000) | 8,745,649 |
Stock based compensation expense (Note 2J) | 1,577 | 1,577 | ||||
Common stock issued (Note 8) | 43,908 | 43,908 | ||||
Net Income (Loss) | 2,193,899 | 2,193,899 | ||||
Balance at Dec. 31, 2023 | $ 10,662,343 | $ 2,233,384 | $ (1,915,694) | $ 10,980,033 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 2,193,899 | $ 1,957,024 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and accretion | 465,333 | 425,391 |
Amortization of patents | 4,457 | 4,414 |
Stock based compensation | 45,485 | 49,321 |
(Gain) loss on disposal of equipment | 3,135 | 18,321 |
Deferred taxes | 221,010 | 512,656 |
Inventory reserve | (2,919) | (14,987) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (14,808) | (364,262) |
Inventories | (2,473,562) | (1,089,711) |
Prepaid purchase orders and expenses | (1,202,304) | 542,223 |
Other assets | 12,392 | |
Accounts payable | (129,023) | 264,129 |
Operating lease assets and liabilities, net | (9,448) | (8,066) |
Accrued expenses and customer deposits | 3,173,902 | 138,344 |
Net cash provided by operating activities | 2,281,279 | 2,398,155 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds on sale of equipment | 16,000 | 31,149 |
Purchases of marketable securities | (1,009,478) | (1,989,265) |
Proceeds from maturities of marketable securities | 989,265 | |
Purchases of property and equipment | (453,671) | (536,313) |
Net cash used in investing activities | (457,884) | (2,494,429) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on finance lease obligations | (97,367) | (96,702) |
Net cash used in financing activities | (97,367) | (96,702) |
NET INCREASE IN CASH | 1,726,028 | (192,976) |
CASH - Beginning of year | 3,947,966 | 4,140,942 |
CASH - End of period | 5,673,994 | 3,947,966 |
Cash paid during the period for: | ||
Interest | 4,309 | 8,600 |
Income taxes | 442,906 | 24,935 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Increase in asset retirement obligation | $ 6,900 | $ 6,900 |
Business Organization and Purpo
Business Organization and Purpose | 12 Months Ended |
Dec. 31, 2023 | |
Business Organization and Purpose | |
Business Organization and Purpose | Note 1. Business Organization and Purpose SCI Engineered Materials, Inc. (“SCI”, “we” or the “Company”), 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 markets within the Photonics industry including Aerospace, Automotive, Defense, Glass, Optical Coatings, and Solar. Substantially, all revenues are generated from customers with multi-national operations. The Company develops innovative customized solutions enabling commercial success through collaboration with end users and Original Equipment Manufacturers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies A. B. The Company uses an “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period as necessary for changes in expected lifetime credit losses. The credit loss calculations for held-to-maturity securities are based upon historical default and recovery rates of bonds rated with the same rating as the current portfolio. An adjustment factor is applied to these credit loss calculations based upon management’s assessment of the expected impact from current economic conditions on our investments. The Company monitors the credit quality of debt securities classified as held-to-maturity through the use of their respective credit ratings and updates them on a quarterly basis with the latest assessment completed on December 31, 2023. Our allowance for credit losses was $15,000 at December 31, 2023. C. D. The Company’s two largest customers accounted for 78% and 11% of total revenue in 2023. These two customers represented 72% of the accounts receivable trade balance at December 31, 2023, and the Company expects to collect all outstanding accounts receivable as of December 31, 2023, from these customers. The Company’s two largest customers accounted for 73% and 15% of total revenue in 2022. These two customers represented 59% of the accounts receivable trade balance at December 31, 2022 and the Note 2. Summary of Significant Accounting Policies (continued) Company subsequently collected all outstanding accounts receivable as of December 31, 2022 from these customers. E. Management estimates an allowance for doubtful accounts, which was $15,000 as of December 31, 2023, and 2022. This estimate is based upon management’s assessment of the expected collectability of specific customer accounts, the aging of the accounts receivable and reasonable supportable forecasts. 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. There was no bad debt expense during 2023 and 2022 related to customers’ accounts receivable. F. includes material, labor, freight and applied overhead. Inventory reserves are established for obsolete inventory, lower of cost or net realizable value, and excess inventory quantities based on management’s estimate of net realizable value. The Company had an inventory reserve of $7,512 and $10,431 at December 31, 2023, and 2022, respectively. G. 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. During 2023, various assets totaling $22,478 with a net book value of $12,865 were considered impaired impaired H. 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, 2023, was $85,516 and $22,054 respectively, and cost and accumulated amortization of the patents at December 31, 2022, was $85,516 and $17,596, respectively. Amortization expense related to patents was $4,457 and $4,414 for the years ended December 31, 2023, and 2022, respectively. Amortization expense is expected to be at least $4,933 for each of the next five years. Note 2. Summary of Significant Accounting Policies (continued) I. The Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. The Company sells its products typically under agreements with payment terms of 30-60 days. The Company does not typically include extended payment terms or significant financing components in contracts with customers. The majority of the Company’s contracts have an obligation to transfer products within one year. Thus, the Company elects to use the practical expedient where incremental cost of obtaining a contract, such as commissions, is expensed when incurred because the amortization period for those costs is one year or less. The Company treats shipping and handling activities that occur after control of the product transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation. Customer deposits are funds received in advance from customers and are recognized as revenue when the Company has transferred control of product to the customer. Product revenues are recognized upon shipment of goods as the customer has assumed the significant risks and rewards of ownership and the Company is entitled to payment at this point. Service revenues are recognized upon completion as the customer cannot realize the benefit of the service until fully completed. During 2023 and 2022, revenue from the PVD industry exceeded 99% of total revenue. The balance of the revenue was from the solar market. The top two customers represented 89% and 88% of total revenue during 2023 and 2022, respectively. International shipments resulted in 1% of total revenue during 2023 and 2022. J. K. We are also pursuing opportunities in niche markets of the global photonics industry which can benefit from our expertise in custom powder solutions for advanced materials, innovative products and applications, diffusion and indium bonding, and toll processing services. The Company is developing Note 2. Summary of Significant Accounting Policies (continued) an innovative rotatable precious metal target product for the photonics industry. Investments also continue to be made offering customers alternatives to lower their total cost of ownership for reclaim and repress processes. Initiatives are also being pursued to leverage utilization of our vacuum hot presses, cold isostatic press, and kilns for increased production and development projects. During 2023, we completed the enclosure of our grinding machines which enhances our manufacturing footprint. L. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would not be able to realize our deferred tax assets in the future, we would make an adjustment to the deferred tax asset valuation allowance, which would increase the provision for income taxes. M. N. O. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments | |
Investments | Note 3. Investments Money market funds, where quoted prices are available in an active securities market, are classified within level 1 of the valuation hierarchy. During 2023, the Company invested in a money market fund which had a fair value of $3,035,547 at December 31, 2023. This is valued at original cost plus interest and is included in Cash and cash equivalents on the balance sheet. As of December 31, 2023 and December 31, 2022, the Company held investments in corporate bonds and U.S. government securities that are required to be measured for disclosure purposes at fair value on a recurring basis. The bonds and government securities are considered held-to-maturity and are recorded at amortized cost on the balance sheet. These investments are considered level 2 as detailed in the table below. The Company considers investments which will mature in the next twelve months and interest receivable on the long-term bonds as current assets. The remaining investments are considered non-current assets including the investment in marketable securities which the Company intends to hold longer than twelve months. The fair value of these investments was estimated using recently executed transactions and market price quotations. At December 31, 2023, the length of time until maturity of the bonds currently owned ranged from 5 months to 35 months. The amortized cost, allowance for credit losses, fair value, and the related unrecognized gains and losses of these investments, were as follows: Gross Gross Amortized Unrealized Unrealized Cost Losses Gains Fair Value December 31, 2023 Corporate bonds $ 1,500,000 $ (9,078) $ — $ 1,490,922 U.S. government treasuries 509,478 (1,786) — 507,692 Total investments $ 2,009,478 $ (10,864) $ — $ 1,998,614 Allowance for credit losses (15,000) Total investments, net $ 1,994,478 December 31, 2022 Corporate bonds $ 1,500,000 $ (1,924) $ — $ 1,498,076 U.S. government treasuries 489,265 — 2,665 491,930 Total investments $ 1,989,265 $ (1,924) $ 2,665 $ 1,990,006 The Company uses an “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period as necessary for changes in expected lifetime credit losses. The credit loss calculations for held-to-maturity securities are based upon historical default and recovery rates of bonds rated with the same rating as the current portfolio. An adjustment factor is applied to these credit loss calculations based upon management’s assessment of the expected impact from current economic conditions on our investments. The Company monitors the credit quality of debt securities classified as held-to-maturity through the use of their respective credit ratings and updates them on a quarterly basis with the latest assessment completed during December 2023. Our allowance for credit losses was $15,000 at December 31, 2023. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Inventories | Note 4. Inventories Inventories consist of the following at December 31: December 31, December 31, 2023 2022 Raw materials $ 3,222,642 $ 1,375,669 Work-in-process 1,240,067 528,631 Finished goods 199,201 284,048 4,661,910 2,188,348 Inventory reserve (7,512) (10,431) $ 4,654,398 $ 2,177,917 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit | |
Line of Credit | Note 5. Line of Credit The Company renewed its line of credit with Fifth Third Bank for $1 million during 2023. The line of credit bears interest equal to the rate of interest per annum established by Fifth Third Bank as its Prime Rate. This line of credit has a maturity date of August 29, 2024. No amounts were drawn on this line of credit during 2023 or 2022. |
Operating Lease Obligations
Operating Lease Obligations | 12 Months Ended |
Dec. 31, 2023 | |
Operating Lease Obligations | |
Operating Lease Obligations | Note 6. Operating Lease Obligations The Company entered into an operating lease with a third party on March 18, 2014, for its headquarters in Columbus, Ohio. The terms of the lease include monthly payments ranging from $9,400 to $9,700 with an expiration date of November 30, 2024. The Company has the option to extend the lease period for an additional five years beyond the expiration date and renewal negotiations are expected to commence in the first quarter of 2024. During 2023, the Company determined that it was reasonably certain to renew its operating lease. Therefore, an increase to the right of use asset and operating lease liabilities totaling $499,124 has been reflected in the accompanying financial statements for the year ended December 31, 2023. There are no restrictions or covenants associated with the lease. The lease costs were approximately $115,000 and $113,000 during the years ended December 31, 2023 and 2022, respectively. The following is a maturity analysis, by year, of the annual undiscounted cash outflows of the operating lease liabilities as of December 31, 2023, assuming the lease renews at the current terms: 2024 $ 116,829 2025 116,829 2026 116,829 2027 116,829 2028 and beyond 223,925 Total minimum lease payments 691,241 Less debt discount 87,968 Total operating lease obligations $ 603,273 2023 2022 Operating cash outflows from operating leases - year-to-date $ 105,539 $ 97,292 Weighted average remaining lease term – operating leases 5.9 years 1.9 years Weighted average discount rate – operating leases 5.5 % 5.5 % |
Finance Leases
Finance Leases | 12 Months Ended |
Dec. 31, 2023 | |
Finance Leases | |
Finance Leases | Note 7. Finance Leases The Company also leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of December 31, 2023, are shown in the following table. Total minimum lease payments - 2024 $ 49,859 Less amount representing interest 710 Present value of minimum lease payments 49,149 Less current portion 49,149 Finance lease obligations, net of current portion $ — Weighted average remaining lease term – finance leases 0.7 years Weighted average discount rate – finance leases 4.23 % The equipment under finance lease at December 31 is included in the accompanying balance sheets as follows: December 31, 2023 December 31, 2022 Machinery and equipment $ 306,973 $ 385,923 Less accumulated depreciation and amortization 107,440 104,376 Net book value $ 199,533 $ 281,547 These assets are amortized over a period of ten years using the straight-line method and amortization is included in depreciation expense. The finance 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. Ownership of certain assets was 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, 2023 | |
Common and Preferred Stock | |
Common and Preferred Stock | Note 8. Common and Preferred Stock Common Stock Employees received compensation of 10,683 and 4,500 aggregate shares of Common Stock of the Company during 2023 and 2022, respectively, which had an aggregate value of $43,908 and $14,625, respectively, and was recorded as noncash stock-based compensation expense in the financial statements. The non-employee Board members received compensation of 8,755 shares of Common Stock of the Company during 2022. The stock had an aggregate value of $29,967 and was recorded as non-cash stock compensation expense in the financial statements. Note 8. Common and Preferred Stock (continued) Preferred Stock Shares of Preferred Stock authorized and outstanding at December 31, 2023 and 2022, were as follows: Shares Shares Authorized Outstanding Cumulative Preferred Stock 10,000 — Voting Preferred Stock 125,000 — Cumulative Non-Voting Preferred Stock (a) 125,000 — (a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. Earnings Per Share Basic income per share is calculated as income available to common shareholders divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted income available to common shareholders 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. Employee stock options outstanding at December 31: 2023 2022 Options outstanding 41,304 41,304 The following is provided to reconcile the earnings per share calculations: Year ended December 31, 2023 2022 Net income $ 2,193,899 $ 1,957,024 Weighted average common shares outstanding - basic 4,528,948 4,515,002 Effect of dilution - stock options 30,838 27,889 Weighted average shares outstanding - diluted 4,559,786 4,542,891 |
Stock Option Plans
Stock Option Plans | 12 Months Ended |
Dec. 31, 2023 | |
Stock Option Plans | |
Stock Option Plans | Note 9. 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 Note 9. Stock Option Plans (continued) 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, 2023, there were 21,061 stock options outstanding from the 2011 Plan which expire in May 2028. On June 9, 2006, shareholders approved the Superconductive Components, Inc. 2006 Stock Incentive Plan (the “2006 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. The 2006 Plan expired in 2016 and no additional stock options may be granted. As of December 31, 2023, there were 20,243 stock options outstanding from the 2006 Plan which expire in November 2024. The cumulative status at December 31, 2023 and 2022 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 Average Stock Exercise Options Price Outstanding at January 1, 2022 41,304 $ 1.05 Outstanding at December 31, 2022 41,304 $ 1.05 Outstanding at December 31, 2023 41,304 $ 1.05 Options exercisable at December 31, 2022 34,361 $ 1.01 Options exercisable at December 31, 2023 41,304 $ 1.05 Information related to the weighted average fair value of nonvested stock options for the year ended December 31, 2023, is as follows: Weighted Average Exercise Stock Options Price Employee Stock Options Nonvested options at January 1, 2023 6,943 $ 1.25 Vested (6,943) 1.25 Nonvested options at December 31, 2023 — $ — Exercise prices for options outstanding ranged from $0.84 to $1.25 and the weighted average option price was $1.05 at December 31, 2023, and 2022, respectively. The weighted average remaining contractual life was 2.6 years and 3.6 years at December 31, 2023, and 2022, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 10. 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: 2023 2022 Deferred tax assets (liabilities) NOL carryforwards $ — $ 8,917 General business credits carryforwards — 388,776 Stock based compensation 164,962 155,707 Allowance for doubtful accounts 3,162 3,162 Reserve for obsolete inventories 1,584 2,199 Allowance for credit losses 2,108 — R&E Section 174 expense capitalization 148,859 — Reserve for asset retirement 20,251 18,797 Property and equipment (410,772) (426,394) Total $ (69,846) $ 151,164 No valuation allowance was recorded against the realizability of the net deferred tax asset of $151,164 at December 31, 2022. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2022, management determined that there was sufficient positive evidence to conclude that it was more likely than not that deferred taxes of $151,164 were realizable in part because we achieved six consecutive years of pretax income, expected profits to continue for the foreseeable future and implemented new efficiencies in the Company's manufacturing process. Accordingly, we determined that no valuation allowance was necessary at December 31, 2022. The Company had net operating loss carryforwards available for federal and state tax purposes of approximately $42,000 at December 31, 2022. For the years ended December 31, 2023, and 2022, a reconciliation of the statutory rate and effective rate for the provisions for income taxes consists of the following: Percentage 2023 2022 Federal statutory rate 21.0 % 21.0 % State/city tax 2.1 1.2 Non-deductible expense 0.0 0.2 Other adjustments (2.0) (0.7) Effective rate 21.1 % 21.7 % Note 10. Income Taxes (continued) Components of the income tax provision are as follows: 2023 2022 Current: Federal $ 306,595 $ — State and local 59,105 29,739 Total current 365,700 29,739 Deferred: Federal $ 212,900 $ 493,843 State and local 8,110 18,813 Total deferred 221,010 512,656 Total $ 586,710 $ 542,395 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, 2023 and 2022. 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 2020 through 2023 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, 2023 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 11. Fair Value of Financial Instruments The fair value of financial instrument 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: ● The fair values of cash and cash equivalents, trade receivables, accounts payable, short-term notes payable and finance lease obligations and current maturities of long-term notes payable and finance lease obligations: Amounts are reported at cost, approximate fair value based on the short-term nature and high credit quality of these financial instruments. ● Long-term note payable and finance lease obligations: Amounts reported in the balance sheet approximate fair value as the interest rates on the obligations were 4.2% , which approximates current fair market rates. |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2023 | |
Asset Retirement Obligation | |
Asset Retirement Obligation | Note 12. 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, 2022 $ 82,268 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 6,900 Balance at December 31, 2022 $ 89,168 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 6,900 Balance at December 31, 2023 $ 96,068 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Cash and cash equivalents | A. |
Investments in marketable securities | B. The Company uses an “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period as necessary for changes in expected lifetime credit losses. The credit loss calculations for held-to-maturity securities are based upon historical default and recovery rates of bonds rated with the same rating as the current portfolio. An adjustment factor is applied to these credit loss calculations based upon management’s assessment of the expected impact from current economic conditions on our investments. The Company monitors the credit quality of debt securities classified as held-to-maturity through the use of their respective credit ratings and updates them on a quarterly basis with the latest assessment completed on December 31, 2023. Our allowance for credit losses was $15,000 at December 31, 2023. |
Fair Value of Financial Instruments | C. |
Concentrations of Credit Risk | D. The Company’s two largest customers accounted for 78% and 11% of total revenue in 2023. These two customers represented 72% of the accounts receivable trade balance at December 31, 2023, and the Company expects to collect all outstanding accounts receivable as of December 31, 2023, from these customers. The Company’s two largest customers accounted for 73% and 15% of total revenue in 2022. These two customers represented 59% of the accounts receivable trade balance at December 31, 2022 and the Note 2. Summary of Significant Accounting Policies (continued) Company subsequently collected all outstanding accounts receivable as of December 31, 2022 from these customers. |
Accounts Receivable | E. Management estimates an allowance for doubtful accounts, which was $15,000 as of December 31, 2023, and 2022. This estimate is based upon management’s assessment of the expected collectability of specific customer accounts, the aging of the accounts receivable and reasonable supportable forecasts. 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. There was no bad debt expense during 2023 and 2022 related to customers’ accounts receivable. |
Inventories | F. includes material, labor, freight and applied overhead. Inventory reserves are established for obsolete inventory, lower of cost or net realizable value, and excess inventory quantities based on management’s estimate of net realizable value. The Company had an inventory reserve of $7,512 and $10,431 at December 31, 2023, and 2022, respectively. |
Property and Equipment | G. 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. During 2023, various assets totaling $22,478 with a net book value of $12,865 were considered impaired impaired |
Intangible Assets | H. 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, 2023, was $85,516 and $22,054 respectively, and cost and accumulated amortization of the patents at December 31, 2022, was $85,516 and $17,596, respectively. Amortization expense related to patents was $4,457 and $4,414 for the years ended December 31, 2023, and 2022, respectively. Amortization expense is expected to be at least $4,933 for each of the next five years. |
Revenue Recognition | I. The Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. The Company sells its products typically under agreements with payment terms of 30-60 days. The Company does not typically include extended payment terms or significant financing components in contracts with customers. The majority of the Company’s contracts have an obligation to transfer products within one year. Thus, the Company elects to use the practical expedient where incremental cost of obtaining a contract, such as commissions, is expensed when incurred because the amortization period for those costs is one year or less. The Company treats shipping and handling activities that occur after control of the product transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation. Customer deposits are funds received in advance from customers and are recognized as revenue when the Company has transferred control of product to the customer. Product revenues are recognized upon shipment of goods as the customer has assumed the significant risks and rewards of ownership and the Company is entitled to payment at this point. Service revenues are recognized upon completion as the customer cannot realize the benefit of the service until fully completed. During 2023 and 2022, revenue from the PVD industry exceeded 99% of total revenue. The balance of the revenue was from the solar market. The top two customers represented 89% and 88% of total revenue during 2023 and 2022, respectively. International shipments resulted in 1% of total revenue during 2023 and 2022. |
Stock Based Compensation | J. |
Research and Development | K. We are also pursuing opportunities in niche markets of the global photonics industry which can benefit from our expertise in custom powder solutions for advanced materials, innovative products and applications, diffusion and indium bonding, and toll processing services. The Company is developing Note 2. Summary of Significant Accounting Policies (continued) an innovative rotatable precious metal target product for the photonics industry. Investments also continue to be made offering customers alternatives to lower their total cost of ownership for reclaim and repress processes. Initiatives are also being pursued to leverage utilization of our vacuum hot presses, cold isostatic press, and kilns for increased production and development projects. During 2023, we completed the enclosure of our grinding machines which enhances our manufacturing footprint. |
Income Taxes | L. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would not be able to realize our deferred tax assets in the future, we would make an adjustment to the deferred tax asset valuation allowance, which would increase the provision for income taxes. |
Use of Estimates | M. |
Recent Accounting Pronouncements | N. |
Employee Retention Credit (ERC) | O. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments | |
Schedule of amortized cost, fair value of investments, and related gross unrealized gains/(losses) | Gross Gross Amortized Unrealized Unrealized Cost Losses Gains Fair Value December 31, 2023 Corporate bonds $ 1,500,000 $ (9,078) $ — $ 1,490,922 U.S. government treasuries 509,478 (1,786) — 507,692 Total investments $ 2,009,478 $ (10,864) $ — $ 1,998,614 Allowance for credit losses (15,000) Total investments, net $ 1,994,478 December 31, 2022 Corporate bonds $ 1,500,000 $ (1,924) $ — $ 1,498,076 U.S. government treasuries 489,265 — 2,665 491,930 Total investments $ 1,989,265 $ (1,924) $ 2,665 $ 1,990,006 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Schedule of inventories | Inventories consist of the following at December 31: December 31, December 31, 2023 2022 Raw materials $ 3,222,642 $ 1,375,669 Work-in-process 1,240,067 528,631 Finished goods 199,201 284,048 4,661,910 2,188,348 Inventory reserve (7,512) (10,431) $ 4,654,398 $ 2,177,917 |
Operating Lease Obligations (Ta
Operating Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating Lease Obligations | |
Schedule of annual undiscounted cash flows of the operating lease liabilities | The following is a maturity analysis, by year, of the annual undiscounted cash outflows of the operating lease liabilities as of December 31, 2023, assuming the lease renews at the current terms: 2024 $ 116,829 2025 116,829 2026 116,829 2027 116,829 2028 and beyond 223,925 Total minimum lease payments 691,241 Less debt discount 87,968 Total operating lease obligations $ 603,273 |
Schedule of operating lease other information | 2023 2022 Operating cash outflows from operating leases - year-to-date $ 105,539 $ 97,292 Weighted average remaining lease term – operating leases 5.9 years 1.9 years Weighted average discount rate – operating leases 5.5 % 5.5 % |
Finance Leases (Tables)
Finance Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Finance Leases | |
Schedule of future minimum lease payments | The Company also leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of December 31, 2023, are shown in the following table. Total minimum lease payments - 2024 $ 49,859 Less amount representing interest 710 Present value of minimum lease payments 49,149 Less current portion 49,149 Finance lease obligations, net of current portion $ — Weighted average remaining lease term – finance leases 0.7 years Weighted average discount rate – finance leases 4.23 % |
Schedule of equipment under finance leases | The equipment under finance lease at December 31 is included in the accompanying balance sheets as follows: December 31, 2023 December 31, 2022 Machinery and equipment $ 306,973 $ 385,923 Less accumulated depreciation and amortization 107,440 104,376 Net book value $ 199,533 $ 281,547 |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Common and Preferred Stock | |
Summary of shares of preferred stock authorized and outstanding | Shares of Preferred Stock authorized and outstanding at December 31, 2023 and 2022, were as follows: Shares Shares Authorized Outstanding Cumulative Preferred Stock 10,000 — Voting Preferred Stock 125,000 — Cumulative Non-Voting Preferred Stock (a) 125,000 — (a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. |
Summary of employee and director outstanding stock options outstanding and preferred stock, Series B | Employee stock options outstanding at December 31: 2023 2022 Options outstanding 41,304 41,304 |
Summary of reconciliation of earnings per share calculations | The following is provided to reconcile the earnings per share calculations: Year ended December 31, 2023 2022 Net income $ 2,193,899 $ 1,957,024 Weighted average common shares outstanding - basic 4,528,948 4,515,002 Effect of dilution - stock options 30,838 27,889 Weighted average shares outstanding - diluted 4,559,786 4,542,891 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Common Stock and Stock Options | |
Schedule of weighted average fair value of non vested stock options | Information related to the weighted average fair value of nonvested stock options for the year ended December 31, 2023, is as follows: Weighted Average Exercise Stock Options Price Employee Stock Options Nonvested options at January 1, 2023 6,943 $ 1.25 Vested (6,943) 1.25 Nonvested options at December 31, 2023 — $ — |
Employee Stock Option [Member] | |
Common Stock and Stock Options | |
Schedule of share-based compensation, employee stock options, activity | The cumulative status at December 31, 2023 and 2022 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 Average Stock Exercise Options Price Outstanding at January 1, 2022 41,304 $ 1.05 Outstanding at December 31, 2022 41,304 $ 1.05 Outstanding at December 31, 2023 41,304 $ 1.05 Options exercisable at December 31, 2022 34,361 $ 1.01 Options exercisable at December 31, 2023 41,304 $ 1.05 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | 2023 2022 Deferred tax assets (liabilities) NOL carryforwards $ — $ 8,917 General business credits carryforwards — 388,776 Stock based compensation 164,962 155,707 Allowance for doubtful accounts 3,162 3,162 Reserve for obsolete inventories 1,584 2,199 Allowance for credit losses 2,108 — R&E Section 174 expense capitalization 148,859 — Reserve for asset retirement 20,251 18,797 Property and equipment (410,772) (426,394) Total $ (69,846) $ 151,164 |
Schedule of reconciliation of the statutory rate and effective rate for income taxes | For the years ended December 31, 2023, and 2022, a reconciliation of the statutory rate and effective rate for the provisions for income taxes consists of the following: Percentage 2023 2022 Federal statutory rate 21.0 % 21.0 % State/city tax 2.1 1.2 Non-deductible expense 0.0 0.2 Other adjustments (2.0) (0.7) Effective rate 21.1 % 21.7 % |
Schedule of components of the income tax expense | Components of the income tax provision are as follows: 2023 2022 Current: Federal $ 306,595 $ — State and local 59,105 29,739 Total current 365,700 29,739 Deferred: Federal $ 212,900 $ 493,843 State and local 8,110 18,813 Total deferred 221,010 512,656 Total $ 586,710 $ 542,395 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Asset Retirement Obligation | |
Schedule of Asset Retirement Obligations | Balance at January 1, 2022 $ 82,268 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 6,900 Balance at December 31, 2022 $ 89,168 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 6,900 Balance at December 31, 2023 $ 96,068 |
Business Organization and Pur_2
Business Organization and Purpose (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Business Organization and Purpose | |
Number of operating segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Bad debt expense | $ 0 | $ 0 |
Depreciation expense | 465,333 | 425,391 |
Asset impairment charges | 12,865 | 7,201,000 |
Impaired long-lived assets | $ 22,478 | $ 83,596,000 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | General and Administrative Expense | General and Administrative Expense |
Intangible assets impaired | $ 0 | $ 0 |
Allowance for credit losses | $ 15,000 | |
Concentration risk (as a percent) | 45,485% | 49,321% |
Stock based compensation | $ 45,485 | $ 49,321 |
Unrecognized compensation expense | 0 | |
Research and development expense | 501,937 | 375,728 |
Tax receivable - Employee Retention Credit | $ 40,539 | $ 40,539 |
Computer Equipment | ||
Summary of Significant Accounting Policies | ||
Useful life | 3 years | |
Other Equipment | ||
Summary of Significant Accounting Policies | ||
Useful life | 16 years | |
Revenue from Contract with Customer Benchmark [Member] | Top two customers | ||
Summary of Significant Accounting Policies | ||
Concentration risk (as a percent) | 89% | 88% |
Geographic Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | International | ||
Summary of Significant Accounting Policies | ||
Concentration risk (as a percent) | 1% | 1% |
Photonics market | Revenue from Contract with Customer Benchmark [Member] | Photonics market | ||
Summary of Significant Accounting Policies | ||
Concentration risk (as a percent) | 99% | 99% |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark [Member] | Customer one | ||
Summary of Significant Accounting Policies | ||
Concentration risk (as a percent) | 78% | |
Concentration risk (as a percent) | 73% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark [Member] | Customer two | ||
Summary of Significant Accounting Policies | ||
Concentration risk (as a percent) | 11% | |
Concentration risk (as a percent) | 15% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark [Member] | Top two customers | ||
Summary of Significant Accounting Policies | ||
Concentration risk (as a percent) | 72% | |
Concentration risk (as a percent) | 59% | |
Patents | ||
Summary of Significant Accounting Policies | ||
Finite-Lived Intangible Assets, Gross | $ 85,516 | $ 85,516 |
Finite-Lived Intangible Assets, Accumulated Amortization | 22,054 | 17,596 |
Amortization of Intangible Assets | 4,457 | 4,414 |
Minimum future amortization expense | $ 4,933 | |
Intangible assets expected amortization period (in years) | 5 years | |
Non Employee Board | ||
Summary of Significant Accounting Policies | ||
Stock based compensation | $ 0 | $ 29,968 |
Investments (Details)
Investments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Recurring | Level 2 | ||
Investments | ||
Amortized Cost, before credit allowance | $ 2,009,478 | $ 1,989,265 |
Gross Unrealized Losses | (10,864) | (1,924) |
Gross Unrealized Gains | 2,665 | |
Allowance for credit losses | (15,000) | |
Total investments, net | 1,994,478 | |
Fair value | 1,998,614 | 1,990,006 |
Money market funds | Cash and cash equivalents | Level 1 | ||
Investments | ||
Fair value | 3,035,547 | |
Corporate bonds | Recurring | Level 2 | ||
Investments | ||
Amortized Cost, before credit allowance | 1,500,000 | 1,500,000 |
Gross Unrealized Losses | (9,078) | (1,924) |
Fair value | 1,490,922 | 1,498,076 |
U.S. government treasuries | Recurring | Level 2 | ||
Investments | ||
Amortized Cost, before credit allowance | 509,478 | 489,265 |
Gross Unrealized Losses | (1,786) | |
Gross Unrealized Gains | 2,665 | |
Fair value | $ 507,692 | $ 491,930 |
Investments - Bond Maturity (De
Investments - Bond Maturity (Details) - US government agencies and corporate debt securities - Recurring - Level 2 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Minimum | ||
Investments | ||
Maturity of bonds (in months) | 5 months | 5 months |
Maximum | ||
Investments | ||
Maturity of bonds (in months) | 35 months | 35 months |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw materials | $ 3,222,642 | $ 1,375,669 |
Work-in-process | 1,240,067 | 528,631 |
Finished goods | 199,201 | 284,048 |
Inventory, gross | 4,661,910 | 2,188,348 |
Inventory reserve | (7,512) | (10,431) |
Inventory, net | $ 4,654,398 | $ 2,177,917 |
Line of Credit (Details)
Line of Credit (Details) - Fifth Third Bank - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument | ||
Line of credit borrowing capacity | $ 1,000,000 | |
Line of credit outstanding | $ 0 | $ 0 |
Operating Lease Obligations (De
Operating Lease Obligations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Leases | ||
Net increase to ROU asset and operating lease liabilities | $ 499,124 | |
Operating lease, renewal term | 5 years | |
Operating lease costs | $ 115,000 | $ 113,000 |
Minimum | ||
Operating Leases | ||
Monthly lease payments | 9,400 | |
Maximum | ||
Operating Leases | ||
Monthly lease payments | $ 9,700 |
Operating Lease Obligations - F
Operating Lease Obligations - Future Minimum Lease Payments (Details) | Dec. 31, 2023 USD ($) |
Operating Lease Obligations | |
2024 | $ 116,829 |
2025 | 116,829 |
2026 | 116,829 |
2027 | 116,829 |
2028 and beyond | 223,925 |
Total minimum lease payments | 691,241 |
Less debt discount | 87,968 |
Total operating lease obligations | $ 603,273 |
Operating Lease Obligations - U
Operating Lease Obligations - Undiscounted Cash Outflows (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Lease Obligations | ||
Operating cash outflows from operating lease - year-to-date | $ 105,539 | $ 97,292 |
Weighted average remaining lease term - operating lease | 5 years 10 months 24 days | 1 year 10 months 24 days |
Weighted average discount rate - operating lease | 5.50% | 5.50% |
Finance Leases - Future minimum
Finance Leases - Future minimum lease payments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Finance Leases | ||
Total minimum lease payments | $ 49,859 | |
Less amount representing interest | 710 | |
Present value of minimum lease payments | 49,149 | |
Less current portion | $ 49,149 | $ 97,367 |
Finance lease obligations, net of current portion | $ 49,149 |
Finance Leases - Weighted Avera
Finance Leases - Weighted Averages (Details) | Dec. 31, 2023 |
Finance Leases | |
Weighted average remaining lease term - finance leases | 8 months 12 days |
Weighted average discount rate - finance leases | 4.23% |
Finance Leases - Equipment unde
Finance Leases - Equipment under finance lease and additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finance Leases | ||
Machinery and equipment | $ 306,973 | $ 385,923 |
Less accumulated depreciation and amortization | 107,440 | 104,376 |
Net book value | $ 199,533 | $ 281,547 |
Finance lease amortization period (in years) | 10 years |
Common and Preferred Stock - Co
Common and Preferred Stock - Common Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock Issued During Period, Value, New Issues | $ 43,908 | $ 44,592 |
Common Stock | ||
Stock Issued During Period, Value, New Issues | $ 43,908 | $ 44,592 |
Common Stock | Employee | ||
Stock Issued During Period, Shares, New Issues | 10,683 | 4,500 |
Stock Issued During Period, Value, New Issues | $ 43,908 | $ 14,625 |
Non-employee director | Common Stock | ||
Stock Issued During Period, Shares, New Issues | 8,755 | |
Stock Issued During Period, Value, New Issues | $ 29,967 |
Common and Preferred Stock - Pr
Common and Preferred Stock - Preferred Stock Authorized and Outstanding (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 | |
Cumulative Preferred Stock [Member] | |||
Shares Authorized | 10,000 | ||
Shares Outstanding | 0 | ||
Voting Preferred Stock [Member] | |||
Shares Authorized | 125,000 | ||
Shares Outstanding | 0 | ||
Cumulative Non Voting Preferred Stock [Member] | |||
Shares Authorized | [1] | 125,000 | |
Shares Outstanding | [1] | 0 | |
Preferred Stock | |||
Shares Authorized | 700 | 700 | |
Convertible Preferred Stock, Series B | |||
Shares Authorized | 100,000 | 100,000 | |
[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 - Re
Common and Preferred Stock - Reconciliation of Earnings Per Share Calculations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Common and Preferred Stock | ||
Income applicable to common stock | $ 2,193,899 | $ 1,957,024 |
Weighted average common shares outstanding - basic | 4,528,948 | 4,515,002 |
Effect of dilution - stock options | 30,838 | 27,889 |
Weighted average shares outstanding - diluted | 4,559,786 | 4,542,891 |
Stock Option Plans - Employee S
Stock Option Plans - Employee Stock Options (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Options, Outstanding, Beginning Balance | 41,304 | 41,304 |
Stock Options, Outstanding, Ending Balance | 41,304 | 41,304 |
Stock Options, Options exercisable | 41,304 | 34,361 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 1.05 | $ 1.05 |
Weighted Average Exercise Price, Outstanding, Ending Balance | 1.05 | 1.05 |
Weighted Average Exercise Price, Options exercisable | $ 1.05 | $ 1.01 |
Weighted Average Contractual Term, Outstanding | 2 years 7 months 6 days | 3 years 7 months 6 days |
Stock Option Plans - Weighted a
Stock Option Plans - Weighted average fair value of non vested stock options (Details) - Employee Stock Option [Member] | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested options, Beginning Balance | shares | 6,943 |
Vested, Stock Options | shares | (6,943) |
Nonvested, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.25 |
Vested, Weighted Average Exercise Price | $ / shares | $ 1.25 |
Stock Option Plans - Additional
Stock Option Plans - Additional information (Details) - $ / shares | 12 Months Ended | ||||
Jun. 10, 2011 | Jun. 09, 2006 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
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 option may be exercised Periods | 10 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 21,061 | ||||
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 option may be exercised Periods | 10 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 20,243 | ||||
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, Number | 41,304 | 41,304 | 41,304 | ||
Weighted average option price | $ 1.05 | $ 1.05 | $ 1.05 | ||
Weighted Average Contractual Term, Outstanding | 2 years 7 months 6 days | 3 years 7 months 6 days | |||
Employee Stock Option [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 1.25 | $ 1.25 | |||
Employee Stock Option [Member] | Minimum [Member] | |||||
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 | $ 0.84 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets (liabilities) | ||
NOL carryforwards | $ 8,917 | |
General business credits carryforwards | 388,776 | |
Stock based compensation | $ 164,962 | 155,707 |
Allowance for doubtful accounts | 3,162 | 3,162 |
Reserve for obsolete inventories | 1,584 | 2,199 |
Allowance for credit losses | 2,108 | |
R&E Section 174 expense capitalization | 148,859 | |
Reserve for asset retirement | 20,251 | 18,797 |
Property and equipment | (410,772) | (426,394) |
Total | $ (69,846) | |
Total | $ 151,164 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Effective rate | 21.10% | 21.70% |
Net operating loss carryforwards available for federal and state tax purposes | $ 42,000 | |
Net deferred tax asset | 151,164 | |
Deferred tax liability | $ 69,846 | |
Unrecognized tax benefits | 0 | 0 |
Interest and penalties related to unrecognized tax benefits | $ 0 | 0 |
Recorded Valuation Allowance | 0 | |
Deferred Tax Assets, Reduction of Valuation Allowance | $ 0 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) | Dec. 31, 2022 USD ($) |
Income Taxes | |
Net operating loss carryforwards available for federal and state tax purposes | $ 42,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the statutory rate and effective rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Federal statutory rate | 21% | 21% |
State/city tax | 2.10% | 1.20% |
Non-deductible expense | 0% | 0.20% |
Other adjustments | (2.00%) | (0.70%) |
Effective rate | 21.10% | 21.70% |
Income Taxes - Components of th
Income Taxes - Components of the income tax provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 306,595 | |
State and local | 59,105 | $ 29,739 |
Total current | 365,700 | 29,739 |
Deferred: | ||
Federal | 212,900 | 493,843 |
State and local | 8,110 | 18,813 |
Total deferred | 221,010 | 512,656 |
Total | $ 586,710 | $ 542,395 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) | Dec. 31, 2023 |
Minimum [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 4.20% |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Asset Retirement Obligation | ||
Beginning balance | $ 89,168 | $ 82,268 |
Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) | 6,900 | 6,900 |
Ending balance | $ 96,068 | $ 89,168 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 2,193,899 | $ 1,957,024 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |