The Company cautions investors that its performance (and, therefore, any forward lookingforward-looking statement) is subject to risks and uncertainties. The risks described below are those we currently consider to be material. However, there may be other risks, which we now consider immaterial, or which are unknown or unpredictable, with respect to our business, the markets in which we operate, our competition, the regulatory environment or otherwise that could have a material adverse effect on our business, financial condition, or results of operations.

We recorded a net loss of $0.8 million for each of the yearyears ended December 31, 2019. We had net income in 2018 of $0.7 million,2020 and a net loss of $0.6 million in 2017.2019. Our history of losses has had an adverse effect on our working capital, total assets, and shareholders’ equity. We are unable to predict, with certainty, whether we will be profitable after 2019,2020, and our inability to achieve and sustain profitability may negatively affect our business, financial condition, results of operations, and cash flows.

We may need to raise additional financing to repay our outstanding indebtedness of approximately $2.7$2.6 million, net of the PPP Loan proceeds of $1.0 million forgiven in January 2021, as well as, to fund our current level of operations. Additional financing, which is not in place at this time, may be from the sale of equity or convertible or other debt securities in a public or private offering, or from an additional credit facility. We may be unable to raise sufficient additional capital on favorable terms, if at all, to supply the working capital needs of our existing operations or to expand our business.

A pandemic, epidemic or outbreak of an infectious disease occurring in the United States and/or worldwide, may adversely affect production. The spread of an infectious disease, including the COVID-19 virus, which was declared a pandemic by the World Health Organization on March 11, 2020, may also result in the inability of our suppliers to deliver on a timely basis or at all. In addition federal, state, and local governments may curtail and restrict business activities, as well as the ability for our employees to work. Such events may result in a period of business disruption, and in reduced operations, which could materially affect our business, financial condition and results of operations. Any significant infectious disease outbreak, including the COVID-19 pandemic, could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, resulting in an economic downturn that could impact our business, financial condition and results of operations, including our ability to obtain additional funding, if needed. 

The spread of COVID-19 has negatively impacted the global economy and has had an impact our operations, including the curtailment of certain of our production activities and disruptions in our supply chain. The extent to which the global coronavirus pandemic continues to impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19, and the actions to contain or treat its impact, among others. The Company continues to monitor safety protocols and enhance its business continuity plans for potential exposure in the event of infection in our offices and production facility, or in response to potential mandatory quarantines.

Sales to customers in the defense industry represent a significant part of our business. These customers in turn generally contract with government agencies. Most governmental programs are subject to funding approval through congressional appropriations which can be modified or terminated without warning upon the determination of a legislative or administrative body. Appropriations can also be affected by legislation that addresses larger budgetary issues of the U.S. Government which could reduce available funding for most federal agencies, including the Department of Defense. It is difficult to assess how this may impact our defense industry customers and the business we do with them in the future. The loss or failure to obtain certain contracts or a loss of a major government customer could have a material adverse effect on our business, results of operations, or financial condition.

For the year ended December 31, 2019,2020, five customer accounts represented approximately 47.2%43.0% of total revenues and tworevenues. Only one of these customers each accounted for more than 10% of revenues. We are a supplier of custom manufactured components to OEM customers, and have a number of large customers in both the commercial and defense markets, but the relative size and identity of our largest customers change year to year. In the short term, the loss of any of these large customer accounts or a decline in demand in the markets which they represent could have a material adverse effect on our business, results of operations, or financial condition.

To meet the Company’s strategic objectives, the Company needs to continue to develop new processes, improve existing processes, and manufacture and market new products. As a result, the Company may continue to make investments in process development and additions to its product portfolio. There can be no assurance that the Company will be able to develop and introduce new products or enhancements to its existing products and processes in a way that achieves market acceptance or other pertinent targeted results. The Company also cannot be sure that it will have the human or financial resources to pursue or succeed in such activities.

The Company’s stock is thinly traded. Many factors, including, but not limited to, future announcements concerning the Company, its competitors or customers, as well as quarterly variations in operating results, announcements of technological innovations, seasonal or other variations in anticipated or actual results of operations, changes in earnings estimates by analysts or reports regarding the Company’s industries in the financial press or investment advisory publications, could cause the market price of the Company’s stock to fluctuate substantially. In addition, the Company’s stock price may fluctuate widely for reasons which may be unrelated to operating results. These fluctuations, as well as general economic, political and market conditions such as recessions, military conflicts, or market or related declines, may materially affect the market price of the Company’s common stock. In addition, any information concerning the Company, including projections of future operating results, appearing in investment advisory publications or on-line bulletin boards or otherwise emanating from a source other than the Company could in the future contribute to volatility in the market price of the Company’s common stock.

The Company depends on the expertise, experience, and continuing services of certain scientists, engineers, production and management personnel, and on the Company’s ability to recruit additional personnel. There is competition for the services of these personnel, and there is no assurance that the Company will be able to retain or attract the personnel necessary for its success, despite the Company’s efforts to do so. The loss of services of the Company’s key personnel could have a material adverse effect on its business, results of operations, or financial condition.

The Company’s business is significantly dependent on the demand its customers experience for their products. Many of their end users are in industries that historically have experienced a cyclical demand for their products. The industries include, but are not limited to, the defense electro-optics industry and the manufacturers of process control capital equipment for the semiconductor tools industry. As a result, demand for the Company’s products areis subject to cyclical fluctuations, and this could have a material adverse effect on our business, results of operations, or financial condition.

The Company utilizes many relatively uncommon materials and compounds to manufacture its products. Many of the materials have long lead times and the Company’s suppliers could fail to deliver sufficient quantities of these necessary materials on a timely basis, or deliver contaminated or inferior quality materials, or markedly increase their prices. Any such actions could have an adverse effect on the Company’s business, despite the Company’s efforts to secure long term commitments from its suppliers. Adverse results might include reducing the Company’s ability to meet commitments to its customers, compromising the Company’s relationship with its customers, adversely affecting the Company’s ability to meet expanding demand for its products, or causing the Company’s financial results to deteriorate.

The Company encounters substantial competition from other companies positioned to serve the same market sectors. Some competitors may have financial, technical, capacity, marketing or other resources more extensive than ours, or may be able to respond more quickly than the Company to new or emerging technologies and other competitive pressures. Some competitors have manufacturing operations in low-cost labor regions such as the Far East and Eastern Europe and can offer products at lower prices than the Company. The Company may not be successful in winning orders against the Company’s present or future competitors, and competition may have a material adverse effect on our business, results of operations, or financial condition.

The Company currently holds one patent for a material applicable to an important product, but does not in general rely on patents to protect its products or manufacturing processes. The Company generally relies on a combination of trade secrets and employee non-compete and nondisclosure agreements to protect its intellectual property rights. There can be no assurance that the steps the Company takes will be adequate to prevent misappropriation of the Company’s technology. In addition, there can be no assurance that, in the future, third parties will not assert infringement claims against the Company. Asserting the Company’s rights or defending against third-party claims could involve substantial expense, thus materially and adversely affecting the Company’s business, results of operations, or financial condition.

In the course of our business, we collect and store sensitive data, including intellectual property. We could be subject to service outages or breaches of security systems which may result in disruption, unauthorized access, misappropriation, or corruption of this information. Security breaches of our network or data, including physical or electronic break-ins, vendor service outages, computer viruses, attacks by hackers or similar breaches can create system disruptions, shutdowns, or unauthorized disclosure of confidential information. Although we have not experienced an incident, if we are unable to prevent such security or privacy breaches, our operations would be disrupted or we could suffer, financial loss, property damage, reputational damage, or regulatory penalties because of lost or misappropriated information.

A pandemic, epidemic or outbreak of an infectious disease occurring in the United States and/or worldwide, may adversely affect production. On March 11, 2020, the World Health Organization declared the COVID-19 virus a pandemic. The spread of COVID-19 has impacted the global economy and may impact our operations, including the potential interruption of our production activities or our supply chain. The spread of an infectious disease, including COVID-19, may also result in the inability of our suppliers to deliver timely basis or at all. In addition federal, state, and local governments may curtail and restrict business activities, as well as the ability for our employees to work. Such events may result in a period of business disruption, and in reduced operations, which could materially affect our business, financial condition and results of operations. The extent to which the recent global coronavirus pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain or treat its impact, among others. Any significant infectious disease outbreak, including the COVID-19 pandemic, could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, resulting in an economic downturn that could impact our business, financial condition and results of operations, including our ability to obtain additional funding, if needed.  The Company is currently working to enhance its business continuity plans to include measures to protect our employees in the event of infection in our offices and production facility, or in response to potential mandatory quarantines.

None

Administrative, engineering, and manufacturing operations are housed in a 42,000 square foot building located in Northvale, New Jersey. The lease for the Northvale facility was renewed for a term of three years from June 1, 2019 to May 31, 2022, along with an option to renew the lease for three additional one-year terms running through May 31, 2025, at substantially the same terms. We believe that our existing facility is adequate to meet current and future projected production needs.

We are not party to any legal proceedings as of the date hereof.

Not Applicable

PART II

a)       Market Information

The Company’s Common Stock, with a par value of $0.01 per share, is traded on the OTC Pink Sheets under the symbol “INRD.”

b)       Shareholders

As of March 27, 2020,2021, there were approximately 123121 shareholders of record of our Common Stock based on the `Shareholders’ Listing provided by the Company’s transfer agent. As of the same date, the Company estimates there are an additional 240 beneficial shareholders.

c)       Dividends

The Company has not historically paid cash dividends. Payment of cash dividends is at the discretion of the Company’s Board of Directors and depends, among other factors, upon the earnings, capital requirements, operations and financial condition of the Company. The Company does not anticipate paying cash dividends in the foreseeable future.

d)       Recent Sales of Unregistered Securities

There have been no sales of unregistered securities during the past year.

The following selected statement of operations data for the years ended December 31, 2019 and 2018, is derived from our audited financial statements included within this Annual Report.Not required.

The following discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and the notes thereto presented elsewhere herein. The discussion of results should not be construed to imply any conclusion that such results will necessarily continue in the future.

Critical Accounting Policies

The Company’s significant accounting policies are described in Note 1 of the Consolidated Financial Statements that were prepared in accordance with accounting principles generally accepted in the United States of America. In preparing the Company’s financial statements, the Company made estimates and judgments that affect the results of its operations and the value of assets and liabilities the Company reports. The Company’s actual results may differ from these estimates.

Management has discussed the development and selection of these critical accounting policies and estimates with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the related disclosure. The Company believes that the following summarizes critical accounting policies that require significant judgments and estimates in the preparation of the Company’s consolidated financial statements:

Revenue Recognition

The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach.

Revenue from the Company’s sales continue to generally be recognized either when products are shipped (i.e., point in time) or under certain long-term government contracts, as the Company transfers control of the product or service to its customers (i.e., over time), which approximates the previously used percentage-of-completion method of accounting. As such, the adoption of ASU 2014-09 had no material impact to the Company’s financial position or results of operations.

Inventory

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Cost of manufactured goods includes material, labor and overhead.

The Company records a reserve for slow moving inventory as a charge against earnings for all products identified as surplus, slow moving, or discontinued. Excess work-in-process costs are charged against earnings whenever estimated costs-of-completion exceed unbilled revenues.

Stock-based compensation

Stock based compensation expense is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value of restricted stock units granted is estimated based on the closing market price of the Company’s common stock on the date of the grant. The fair value of these awards, adjusted for estimated forfeitures, is amortized over the requisite service period of the award, which is generally the vesting period.

Income Taxes

Deferred income taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the amounts of assets and liabilities recorded for income tax and financial reporting purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company recognizes the financial statement benefit of an uncertain tax position only after determining that the relevant tax authority would more likely than not sustain the position. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company classifies interest and penalties related to income taxes as income tax expense in its Consolidated Financial Statements.

Leases

The Company entered into an amendment and extension of its building lease on July 8, 2019, retroactive to June 1, 2019. Under the guidance of ASU 2016-02, Leases (Topic 842), the Company must determine if such an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease at inception of the arrangement.  The Company determined that this lease is an operating lease and presented as a right-of-use lease asset, short term lease liability and long termlong-term lease liability on the consolidated balance sheet.  These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rate. 

Results of Operations

The following table sets forth, for the past two years, the percentage relationship of statement of operations categories to total revenues.revenues.

Revenues

Sales were $9.0 million in 2020, a decrease of 10.0% or $1.0 million, compared to $10.0 million in 2019. Lower bookings in 2019 acombined with the effects of mandatory shutdowns, customer pushouts, and reduced demand led to the decrease of 12.8% or $1.5 million, compared to $11.5 million in 2018.sales in 2020.

Sales to the defense and aerospace market in 20192020 increased 43.5%5.6%, or $0.2 million to $3.9 million from $3.7 million from $2.6 million in 2018, representing2019. Sales in the defense and aerospace market represented 43.5% and 37.0% and 22.5% of total sales in 2020 and 2019, respectively. The increase in military and defense spending has resulted in stronger demand for our products in 2019.2020.

Sales in the process control and metrology market decreased $0.9 million, or 20.6% to $3.3 million in 2020 from $4.2 million in 2019, from $5.9 million2019. Sales in 2018, down $1.7 million, or 28.9%. These salesthe process control and metrology represented 41.9%36.9% and 51.3%41.9% of total sales in 20192020 and 2018,2019, respectively. Decreased demand for critical components in the semiconductor capital equipment market negatively impacted sales in 2019. The reduced demand2020 and delayed delivery schedules from two OEM customers resulted in the decrease in 2019.

The Company serves as an OEM supplier of standard and custom optical components and laser accessories within the non-military laser industry. Sales to this and related markets were $0.7 million and $1.2 million in 2020 and 2019, and $1.6 million in 2018.respectively. Overall, sales of laser devices and related products represented 7.4% and 12.1% of revenues in 2020 and 2019, respectively, a decrease of $0.3$0.5 million or 21.8%45.0%. The decrease in 20192020 was due to the cancelation of orders from one international customer.

Sales to customers within the Scientific / R&D market decreasedincreased in 20192020 to $1.1 million from $0.9 million from $1.5 million in 2018. This 38.4% decrease2019. The 22.3% increase is mainly due to reduced revenue on a federal government contract, combined with reducedincreased orders from a national lab.lab and billings from an SBIR contract awarded in the second quarter of 2020. As a percentage of total sales, this market represented 12.2% and 9.0% and 12.7% of total sales in 20192020 and 2018,2019, respectively.

Bookings

The Company booked new orders totaling approximately $8.8$9.8 million in 2019, net of $242,000 in cancelation of orders from an international customer.2020. The Company’s backlog as of December 31, 2019,2020, was $5.1$5.9 million, compared to $6.5$5.1 million as of December 31, 2018.2019.

Cost of Goods Sold and Gross Profit Margin

Cost of goods sold as a percentage of sales increased to 80.0% in 2019, compared to 73.0%was 80.1% for each of the yearyears ended December 31, 2018, or 4.4%.2020 and 2019.

The cost of goods sold in 20192020 was $8.0$7.2 million, compared to $8.4$8.0 million in 2018,2019, a decrease of $0.4$0.8 million, mainly attributable to the decrease in sales, coupled with a change in sales mix.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) were $2,614,000$2.5 million in 2020, compared to $2.6 million in 2019, compared to $2,234,000 in 2018, an increasea decrease of $380,000$0.1 million, or 17%2.9%. The increasedecrease is attributable to increased SG&A salaries, wages and associated benefits of approximately $223,000, due to investmentsa significant reduction in our Sales group and other sales and marketing related expenses, coupled with reduced recruiting and temporary employee costs, offset by an increase in the reserve for doubtful accounts and an increase in insurance costs. The reduction in sales and marketing related expenses is directly related to the protocols and restrictions on travel implemented by the Company as planned.a result of government mandates.

As a percentage of sales, SG&A was 28.2% of sales in 2020 compared to 26.1% of sales in 2019, compared to 19.4% in 2018, primarily due to higherlower sales in 2018.2020.

Operating Income (Loss)

The Company had an operating loss of $622,000$0.7 million in 2019,2020, compared to a net operating incomeloss of $867,000$0.6 million in 2018.2019.

Other Income and Expenses

Net interest expense was $154,000$0.2 million in 2019, a slight decrease from $159,000 in 2018.each of 2020 and 2019.

Income Taxes

In 20192020 and 2018,2019, the Company did not record a current provision for either state tax or federal alternative minimum tax due to carry forward losses incurred in prior years for both income tax and financial reporting purposes.

Net Income (Loss)

As a result of the foregoing, the Company recorded a net loss of $776,000$0.9 million in 2019,2020, compared to a net incomeoperating loss of $707,000$0.8 million in 2018.2019.

Liquidity and Capital Resources

The Company’s primary source of liquidity is cash and cash equivalents and on-going collection of our accounts receivable. The Company’s major uses of cash in the past three years have been for operating expenses, capital expenditures, and for repayment and servicing of outstanding debt and accrued interest.

As of December 31, 20192020, and December 31, 2018,2019, cash and cash equivalents were $951,000$1.1 million and $1,186,000,$1.0 million, respectively.

On April 12, 2018,July 22, 2020, the maturity dates of a $1,500,000 Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible Promissory Note to an affiliate of Clarex were each extended to April 1, 2021,2024, from April 1, 2019.2021. The notes bear interest at 6%. Interest accrues yearly and is payable on maturity. Unpaid interest, along with principal, may be converted into securities of the Company as follows: the notes are convertible in the aggregate into 1,500,000 units and 1,000,000 units, respectively, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to acquire 0.75 shares of common stock at a price of $1.35 per share. As part of the agreement to extend the maturity date of the notes, the expiration dates of the warrants were extended from April 1, 2022 to April 1, 2024.2027.

The Company paid $112,500$0.2 million and $187,500$0.1 million for interest on the subordinated convertible promissory notes in 20192020 and 2018,2019, respectively. Accrued interest of $112,500$37,500 and $75,000$112,500 is included in Accounts payable and accrued liabilities as of December 31, 20192020 and 2018,2019, respectively.

In total, the Company paid $121,000 and $198,000$0.2 million of interest in 2019each of 2020 and 2018, respectively2019, on its outstanding debt, including interest paid on the subordinated convertible promissory notes.

In 20192020 and 2018,2019, the Company had capital expenditures of $310,000$0.2 million and $154,000,$0.3 million, respectively. The increaseCapital spending in capital spending2020 reflects the Company’s investment in information and technology system upgrades to address cybersecurity requirements and manufacturing equipment upgrades. The 2019 capital expenditures reflected our investments in our large diamond turning center, our in-process metrology capabilities, and the installation of a new redundant power system to support our crystal growth and IT infrastructure.

The Company had a net decreaseincrease in cash of $235,000$0.2 million for the twelve months ended December 31, 20192020, compared to a net increasedecrease in cash of $386,000$0.2 million for the twelve months ended December 31, 2018.2019.

On May 6, 2020, the Company received loan proceeds of approximately $973,000, under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) which was enacted March 27, 2020. The PPP Loan, which is in the form of a promissory note dated May 4, 2020, issued by the Company, matures on May 4, 2022, and bears interest at a rate of 1.0% per annum, payable monthly commencing on December 4, 2020. Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during the covered 24-week period will qualify for forgiveness. Forgiveness of the PPP Loan is subject to approval by the Small Business Administration.

On January 19, 2021, the Company received notification from the Small Business Association that the Company’s Forgiveness Application of the PPP Loan and accrued interest, totaling $980,000, was approved in full, and the Company had no further obligations related to the PPP Loan.

Cash flows pertaining to our source and use of cash are presented below (in thousands):

Overview of Financial Condition

The Company recorded a net loss of $776,000$0.9 million and $0.8 million for the twelve months ended December 31, 2020 and 2019, compared to net income of $707,000 in the same period last year.respectively. The Company’s cash and cash equivalents decreasedincreased to $951,000$1.1 million from $1.0 million at December 31, 2019, from $1,186,000 at December 31, 2018.2019.

The Company’s management expects that future cash flows from operations and its existing cash reserves will provide adequate liquidity for the Company’s operations and working capital requirements through at least March 31, 2021.2022.

Contractual Obligations

The following table describes our contractual obligations as of December 31, 20192020 (in thousands):

* The PPP Loan amd accrued interest were forgiven on January 21st, 2021.

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet arrangements at December 31, 20192020 and 2018.2019.

Impact of COVID-19 to Operations

The impacts of the global emergence of COVID-19 on our business and financial results are currently unknown. 

We are conducting business to ensure the safety of our employees and associates actively and earnestly, following all best practice CDC guidelines for prevention in the workplace. We have applied social distancing in our operations and implemented a connected, remote workforce where practicable. While ourOur operations are considered essential business under the Executive Orders of New Jersey’s Governor, and we cannot predict what further actions may be required by federal, state, or local authorities.authorities in the future. Nor can we predict what actions these mandates may have on our customers and suppliers. We will continue to actively monitor the situation and may be required to take further actions that alter our business operations or that we determine are in the best interests of our employees, customers, partners, suppliers and shareholders.  It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our financial results.

While the Company’s bookings were stronger in 2020 and sales in our aerospace and defense and scientific markets improved over last year, total sales overall were negatively impacted by business factors resulting from COVID-19 and governmental restrictions, including disruptions to our customers’ and suppliers’ operations. Our sales and marketing efforts were negatively impacted due to travel and other operational restrictions. The total impact of the global emergence of COVID-19 on our business and financial results are not completely known, and we cannot predict what impact it may have on our continuing operations and the effect to our financial results. 

N/A

The financial statements and supplementary financial information required to be filed under this Item are presented commencing on page 21 of the Annual Report on Form 10-K, and are incorporated herein by reference.

a)Evaluation of Disclosure Controls and Procedures

The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures as of December 31, 20192020, are effective to ensure that information required to be disclosed in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding disclosure.

b)Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our internal control over financial reporting includes those policies and procedures that:

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management assessed the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2019.2020. In making this assessment, management used the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our assessment and the criteria set forth by COSO, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2019.2020.

c)Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation that occurred during the Company’s last fiscal quarter that have materially affected, or that are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

None

PART III

The information required under this item is incorporated by reference to the Company’s Proxy Statement for the 20202021 Annual Meeting of Stockholders which we anticipate will be filed within 120 days after our fiscal year ended December 31, 2019.2020.

The information required under this item is incorporated by reference to the Company’s Proxy Statement for the 20202021 Annual Meeting of Stockholders which we anticipate will be filed within 120 days after our fiscal year ended December 31, 2019.2020.

The information required under this item is incorporated by reference to the Company’s Proxy Statement for the 20202021 Annual Meeting of Stockholders which we anticipate will be filed within 120 days after our fiscal year ended December 31, 2019.2020.

The information required under this item is incorporated by reference to the Company’s Proxy Statement for the 20202021 Annual Meeting of Stockholders which we anticipate will be filed within 120 days after our fiscal year ended December 31, 2019.2020.

The information required under this item is incorporated by reference to the Company’s Proxy Statement for the 20202021 Annual Meeting of Stockholders which we anticipate will be filed within 120 days after our fiscal year ended December 31, 2019.2020.

PART IV

(a) (1)Financial Statements.

Reference is made to the Index to Financial Statements and Financial Statement Schedule commencing on Page 19.20.

(a) (2)Financial Statement Schedule.

Reference is made to the Index to Financial Statements and Financial Statement Schedule on Page 19.20. All other schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Financial Statements or Notes thereto.

(a) (3)Exhibits.