TeraWulf (WULF) 10-Q 14 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 05, 2016
Document and Entity Information
Entity Registrant Name	IKONICS CORP
Entity Central Index Key	1,083,301
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,018,753
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 917,032	$ 2,248,466
Short-term investments	3,399,000
Trade receivables, less allowance of $52,000 in 2016 and $122,000 in 2015	2,154,232	2,165,194
Inventories	2,079,133	2,119,805
Prepaid expenses and other assets	178,521	85,648
Income taxes receivable	71,779	102,778
Total current assets	8,799,697	6,721,891
PROPERTY, PLANT, AND EQUIPMENT, at cost:
Land and building	9,189,743	6,391,555
Machinery and equipment	4,904,353	4,275,910
Office equipment	1,157,909	933,596
Vehicles	272,144	272,141
Construction in progress	398,725	2,491,432
Gross property, plant, and equipment, at cost	15,922,874	14,364,634
Less accumulated depreciation	(6,892,090)	(6,407,304)
Net property, plant, and equipment, at cost	9,030,784	7,957,330
INTANGIBLE ASSETS, less accumulated amortization of $142,593 in 2016 and $123,957 in 2015	343,302	336,096
Total assets	18,173,783	15,015,317
CURRENT LIABILITIES:
Current portion of long-term debt	126,419
Accounts payable - Trade	747,241	420,245
Accounts payable - Construction	8,778	333,339
Accrued compensation	253,228	350,518
Other accrued liabilities	97,192	31,000
Total current liabilities	1,232,858	1,135,102
LONG-TERM LIABILITIES
Long-term debt less current portion	3,109,647
Deferred income taxes	385,000	385,000
Total long-term liabilities	3,494,647	385,000
Total liabilities	4,727,505	1,520,102
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.10 per share; authorized 250,000 shares: issued none
Common stock, par value $.10 per share; authorized 4,750,000 shares; issued and outstanding 2,018,753 shares in 2016 and 2,018,253 in 2015	201,875	201,825
Additional paid-in capital	2,725,384	2,703,050
Retained earnings	10,519,019	10,590,340
Total stockholders' equity	13,446,278	13,495,215
Total liabilities and stockholders' equity	$ 18,173,783	$ 15,015,317

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
CONDENSED BALANCE SHEETS
Trade receivables, allowance	$ 52,000	$ 122,000
INTANGIBLE ASSETS, accumulated amortization	$ 142,593	$ 123,957
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized	250,000	250,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	4,750,000	4,750,000
Common stock, shares issued	2,018,753	2,018,253
Common stock, shares outstanding	2,018,753	2,018,253

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONDENSED STATEMENTS OF OPERATIONS
NET SALES	$ 4,607,501	$ 4,542,730	$ 12,817,289	$ 12,794,167
COST OF GOODS SOLD	2,940,027	2,925,062	8,330,930	8,436,082
GROSS PROFIT	1,667,474	1,617,668	4,486,359	4,358,085
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	1,357,605	1,270,466	4,121,891	3,938,584
RESEARCH AND DEVELOPMENT EXPENSES	150,176	157,814	475,165	506,197
INCOME (LOSS) FROM OPERATIONS	159,693	189,388	(110,697)	(86,696)
INTEREST EXPENSE	(21,721)		(36,720)
OTHER	4,519	825	6,681	4,031
INCOME (LOSS) BEFORE INCOME TAXES	142,491	190,213	(140,736)	(82,665)
INCOME TAX EXPENSE (BENEFIT)	60,225	73,457	(69,415)	1,802
NET INCOME (LOSS)	$ 82,266	$ 116,756	$ (71,321)	$ (84,467)
INCOME (LOSS) PER COMMON SHARE:
Basic (in dollars per share)	$ 0.04	$ 0.06	$ (0.04)	$ (0.04)
Diluted (in dollars per share)	$ 0.04	$ 0.06	$ (0.04)	$ (0.04)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic (in shares)	2,018,753	2,018,253	2,018,614	2,018,253
Diluted (in shares)	2,018,842	2,018,574	2,018,614	2,018,253

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (71,321)	$ (84,467)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	552,885	490,275
Amortization	24,094	18,831
Stock based compensation	18,384	16,088
Net gain on sale and disposal of property, plant and equipment	(5,750)
Loss on intangible asset abandonment		45,873
Changes in working capital components:
Trade receivables	10,962	(186,283)
Inventories	40,672	352,289
Prepaid expenses and other assets	(92,873)	(18,354)
Income tax receivable	31,234	(9,099)
Accounts payable	326,996	80,632
Accrued expenses	(31,098)	91,007
Net cash provided by operating activities	804,185	796,792
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, equipment and construction in progress	(1,966,150)	(1,195,840)
Proceeds from sales of equipment	21,000
Purchases of intangibles	(25,842)	(41,639)
Purchases of short-term investments	(3,399,000)	(650,000)
Proceeds on sale of short-term investments		2,191,000
Net cash provided by (used in) investing activities	(5,369,992)	303,521
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt	3,415,000
Payment on debt issuance costs	(139,418)
Payments on long-term debt	(44,974)
Proceeds from exercise of stock options	3,765
Net cash provided by financing activities	3,234,373
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,331,434)	1,100,313
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	2,248,466	1,936,214
CASH AND CASH EQUIVALENTS AT END OF PERIOD	917,032	3,036,527
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Construction in progress included in construction accounts payable	8,778	569,843
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	25,252
Cash received (paid) for income taxes, net of $12,807 taxes paid in 2016	$ 100,649	$ (10,901)

CONDENSED STATEMENTS OF CASH F6

CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical)	9 Months Ended
	Sep. 30, 2016USD ($)
CONDENSED STATEMENTS OF CASH FLOWS
Cash received (paid) for income taxes, net - income taxes paid	$ 12,807

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2016
Basis of Presentation
Basis of Presentation	1. The condensed balance sheet of IKONICS Corporation (the “Company”) as of September 30, 2016, and the related condensed statements of operations for the three and nine months ended September 30, 2016 and 2015, and cash flows for the nine months ended September 30, 2016 and 2015, have been prepared without being audited. In the opinion of management, these statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of IKONICS Corporation as of September 30, 2016, and the results of operations and cash flows for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted. Therefore, these statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for interim periods are not necessarily indicative of results that will be realized for the full fiscal year. For comparability, certain 2015 amounts related to deferred tax assets and liabilities have been reclassified to conform with classifications adopted in 2016. The reclassifications had no impact on net loss or stockholders’ equity.

Short-Term Investments

Short-Term Investments	9 Months Ended
	Sep. 30, 2016
Short-Term Investments
Short-Term Investments	2. The Company’s $3,399,000 of short-term investments at September 30, 2016 is comprised of fifteen fully insured certificates of deposit with original maturities ranging from six to twelve months and interest rates ranging from 0.45% to 0.65%

Inventories

Inventories	9 Months Ended
	Sep. 30, 2016
Inventories
Inventories	3. The major components of inventories are as follows: Sep 30, 2016 Dec 31, 2015 Raw materials $ $ Work-in-progress Finished goods Reduction to LIFO cost Total Inventories $ $

Earnings Per Common Share (EPS)

Earnings Per Common Share (EPS)	9 Months Ended
	Sep. 30, 2016
Earnings Per Common Share (EPS)
Earnings Per Common Share (EPS)	4. Basic EPS is calculated using net income (loss) divided by the weighted average of common shares outstanding. Diluted EPS is similar to Basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the potential dilutive common shares, such as those shares subject to options, had been issued. Shares used in the calculation of diluted EPS are summarized below: Three Months Ended Sep 30, 2016 Sep 30, 2015 Weighted average common shares outstanding Dilutive effect of stock options Weighted average common and common equivalent shares outstanding Nine Months Ended Sep 30, 2016 Sep 30, 2015 Weighted average common shares outstanding Dilutive effect of stock options — — Weighted average common and common equivalent shares outstanding For the three months ended September 30, 2016, options to purchase 11,418 shares of common stock with a weighted average price of $15.99 were outstanding but were excluded from the computation of common share equivalents because they were anti-dilutive. For the three months ended September 30, 2015, options to purchase 8,500 shares of common stock with a weighted average price of $17.16 were outstanding but were excluded from the computation of common share equivalents because they were anti-dilutive. If the Company was in a net income position for the first nine months of 2016, 4,750 options with a weighted average exercise price of $10.58 would have been included as part of the weighted average common and common equivalent shares outstanding as the options would have been dilutive, while 11,418 options with a weighted average exercise price of $15.99 would have remained excluded as the options were anti-dilutive. If the Company was in a net income position for the first nine months of 2015, 5,918 options with a weighted average exercise price of $12.49 would have been included as part of the weighted average common and common equivalent shares outstanding as the options would have been dilutive while 6,250 options with a weighted average exercise price of $18.28 would have remained excluded as the options were anti-dilutive .

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2016
Stock-Based Compensation
Stock-Based Compensation	5. The Company maintains a stock incentive plan which authorizes the issuance of up to 442,750 shares of common stock. Of those shares, 16,168 were subject to outstanding options and 104,239 were reserved for future grants at September 30, 2016. The plan provides for granting eligible participants stock options or other stock awards, as described by the plan, at option prices ranging from 85% to 110% of fair market value at the date of grant. Options granted expire up to seven years after the date of grant. Such options generally become exercisable over a one- to three-year period. The Company charged compensation cost of approximately $6,600 against income for the three months ended September 30, 2016 and approximately $5,700 for the three months ended September 30, 2015. For the first nine months of 2016, the Company charged compensation cost of approximately $18,400 and approximately $16,100 for the same period in 2015. As of September 30, 2016, there was approximately $39,500 of unrecognized compensation cost related to unvested share-based compensation awards. That cost is expected to be recognized over the next three years. The Company receives a tax deduction for certain stock option exercises during the period in which the options are exercised, generally for the excess of the market price at the time the stock options are exercised over the exercise price of the options, which increases additional paid in capital and reduces income taxes payable. Proceeds from the exercise of 500 stock options were approximately $4,000 for the nine months ended September 30, 2016. No stock options were exercised during the nine months ended September 30, 2015. The fair value of options granted during the nine months ended September 30, 2016 and 2015 was estimated using the Black-Scholes option pricing model with the following assumptions: 2016 2015 Dividend yield 0% 0% Expected volatility 42.4% 42.3% - 42.4% Expected life of option Five Years Five Years Risk-free interest rate 1.3% 1.4% - 1.5% Fair value of each option on grant date $ 4.02 $5.43 - $6.14 There were 4,500 and 7,250 options granted during each of the nine months ended September 30, 2016 and 2015, respectively. Stock option activity during the nine months ended September 30, 2016 was as follows: Weighted Average Exercise Shares Price Outstanding at January 1, 2016 $ Granted Exercised Outstanding at September 30, 2016 $ Exercisable at September 30, 2016 $ The aggregate intrinsic value of all options outstanding and for those exercisable at September 30, 2016 was approximately $4,000 and $1,000, respectively.

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2016
LONG-TERM DEBT
LONG-TERM DEBT	6. On April 1, 2016, the Company entered into a financing agreement (the “Financing Agreement”) under which the Duluth Economic Development Authority (the “Issuer”) agreed to sell $3,415,000 of its Tax Exempt Industrial Revenue Bonds, Series 2016 (IKONICS Project) (the “Bonds”) to Wells Fargo Bank, National Association (the “Bank”), and the Bank agreed to lend to the Company the proceeds received from the sale of the Bonds (the “Loan”). The closing of the sale of the Bonds occurred on April 29, 2016. The proceeds from the Loan were used to finance the construction of a 27,300-square foot building as well as related equipment for use in the Company’s manufacture of sound deadening technology used in the aerospace industry and products consisting of etched composites, ceramics, glass and silicon wafers, to be located in Duluth, Minnesota (the “Project”). The Loan requires monthly payments of approximately $18,000, including interest. The Loan bears interest at a rate of 2.14% per year, payable monthly, and matures on April 1, 2041. Including debt costs of approximately $139,000, the Loan’s effective interest rate is 2.77% per year. The Loan is subject to mandatory purchase provisions, under which any owners of the Bonds (the “Owners”) may tender the Bonds to the Issuer on April 1, 2021, which would result in the Company repaying the outstanding loan principal and any outstanding accrued and unpaid interest to the Issuer at that time. If in the event the Bonds are not repurchased on April 1, 2021, the Bonds shall be subject to the interest rate and redemption provisions set forth in the associated covenant agreement. Subject to limitations in the associated covenant agreement, the Company may cause a redemption of the Bonds, in whole or in part, in authorized denominations at the redemption prices set forth in the Financing Agreement, together with any accrued or unpaid interest to the date of redemption. The Bonds are also subject to redemption in whole in the event of certain extraordinary events related to the Project. The Company is subject to certain customary covenants set forth in the associated covenant agreement, including a requirement that the Company maintain a debt service coverage ratio as of the end of each calendar quarter of not less than 1.25 to 1.00 on a rolling four-quarter basis. The remaining principal payments required under the agreement for years ended December 31, and the current and long‑term portion of the principal, are as follows: 2016 $ 2017 2018 2019 2020 Thereafter Total Principal Less: Unamortized debt issuance costs Less: Current portion Long-term portion $ In connection with the agreement, the Company incurred debt issuance costs of approximately $139,000 during the nine months ended September 30, 2016, which were deferred and are being amortized over the term of the Financing Agreement. Amortization of debt issuance costs was approximately $5,000 for the nine months ended September 30, 2016 and is included in interest expense. Debt issuance costs of $121,000 and $13,000 are netted against long-term debt and current portion of long‑term debt, respectively as of September 30, 2016. Amortization of debt costs is expected to be approximately $3,000 for the remainder of 2016 and approximately $12,000 annually for each of the next four years. In addition to the $3,415,000 in indebtedness pursuant to the Loan, the Company has a bank line of credit providing for borrowings of up to $2,050,000, expiring on May 31, 2017 that bears interest at 1.8 percentage points over the 30‑day LIBOR rate. The Company did not utilize this line of credit during the first nine months of 2016 or 2015 and there were no borrowings outstanding as of September 30, 2016 and December 31, 2015. There are no financial covenants related to the line of credit. Both the $3,415,000 financing pursuant to the Loan and the line of credit are collateralized by substantially all assets of the Company.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2016
Segment Information
SEGMENT INFORMATION	7. The Company’s reportable segments are strategic business units that offer different products and have varied customer bases. There are five reportable segments: Domestic, Export, IKONICS Imaging, Digital Texturing (DTX) and Advanced Material Solutions (AMS). Domestic sells screen printing film, emulsions, and inkjet receptive film to distributors located in the United States and Canada. IKONICS Imaging sells photo resistant film, art supplies, glass, metal medium and related abrasive etching equipment to end user customers located in the United States and Canada. AMS provides sound deadening and weight reduction technology to the aerospace industry along with products and services for etched composites, ceramics, glass and silicon wafers. DTX includes products and customers related to patented and proprietary inkjet technology used for mold texturing and prototyping. Export sells primarily the same products as Domestic and the IKONICS Imaging products not related to AMS or DTX. The accounting policies applied to determine the segment information are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Management evaluates the performance of each segment based on the components of divisional income. Assets and liabilities are not allocated to segments, except for trade receivables which are allocated based on the previous segmentation. Financial information with respect to the reportable segments follows: For the three months ended September 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ For the three months ended September 30, 2015: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ For the nine months ended September 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ For the nine months ended September 30, 2015: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ * Trade receivables by segment as of September 30, 2016 and December 31, 2015 were as follows: Sep 30, 2016 Dec 31, 2015 Domestic $ $ Export IKONICS Imaging DTX AMS Unallocated Total $ $

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Taxes
INCOME TAXES	8. The Company reports a liability for unrecognized tax benefits taken or expected to be taken when they are uncertain. As of September 30, 2016 and December 31, 2015, there was no liability for unrecognized tax benefits. The Company is subject to taxation in the United States and various states. The material jurisdictions that are subject to examination by tax authorities primarily include Minnesota and the United States, in each case for tax years 2013, 2014, and 2015.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2016
Inventories
Schedule of major components of inventories	Sep 30, 2016 Dec 31, 2015 Raw materials $ $ Work-in-progress Finished goods Reduction to LIFO cost Total Inventories $ $

Earnings Per Common Share (EP16

Earnings Per Common Share (EPS) (Tables)	9 Months Ended
	Sep. 30, 2016
Earnings Per Common Share (EPS)
Summary of shares used in the calculation of diluted EPS	Three Months Ended Sep 30, 2016 Sep 30, 2015 Weighted average common shares outstanding Dilutive effect of stock options Weighted average common and common equivalent shares outstanding Nine Months Ended Sep 30, 2016 Sep 30, 2015 Weighted average common shares outstanding Dilutive effect of stock options — — Weighted average common and common equivalent shares outstanding

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2016
Stock-Based Compensation
Assumptions used in estimating fair value of stock options	2016 2015 Dividend yield 0% 0% Expected volatility 42.4% 42.3% - 42.4% Expected life of option Five Years Five Years Risk-free interest rate 1.3% 1.4% - 1.5% Fair value of each option on grant date $ 4.02 $5.43 - $6.14
Stock option activity	Weighted Average Exercise Shares Price Outstanding at January 1, 2016 $ Granted Exercised Outstanding at September 30, 2016 $ Exercisable at September 30, 2016 $

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2016
LONG-TERM DEBT
Schedule of remaining principal payments and current and long-term portion of the principal	2016 $ 2017 2018 2019 2020 Thereafter Total Principal Less: Unamortized debt issuance costs Less: Current portion Long-term portion $

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2016
Segment Information
Schedule of financial information with respect to the reportable segments	IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ For the three months ended September 30, 2015: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ For the nine months ended September 30, 2016: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ For the nine months ended September 30, 2015: IKONICS IKONICS Domestic Export Imaging DTX AMS Unalloc. Total Net sales $ $ $ $ $ $ — $ Cost of goods sold — Gross profit (loss) — Selling, general and administrative* Research and development* — — — — — Income (loss) from operations $ $ $ $ $ $ $ *
Schedule of trade receivables by segment	Sep 30, 2016 Dec 31, 2015 Domestic $ $ Export IKONICS Imaging DTX AMS Unallocated Total $ $

Short-Term Investments (Details

Short-Term Investments (Details) - Certificates of Deposit	9 Months Ended
	Sep. 30, 2016USD ($)
Short-term investments
Fully insured certificates of deposit	$ 3,399,000
Minimum
Short-term investments
Interest rate (as a percent)	0.45%
Maximum
Short-term investments
Maturity period	12 months
Interest rate (as a percent)	0.65%

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Inventories
Raw materials	$ 1,606,841	$ 1,640,098
Work-in-progress	364,879	375,229
Finished goods	1,255,502	1,336,707
Reduction to LIFO cost	(1,148,089)	(1,232,229)
Total inventories	$ 2,079,133	$ 2,119,805

Earnings Per Common Share (EP22

Earnings Per Common Share (EPS) (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Shares used in calculation of diluted EPS
Weighted average common shares outstanding	2,018,753	2,018,253	2,018,614	2,018,253
Dilutive effect of stock options	89	321
Weighted average common and common equivalent shares outstanding	2,018,842	2,018,574	2,018,614	2,018,253
Dilutive effect
Based on the Company's net income position, dilutive effect of stock options (in shares)			4,750	5,918
Based on the Company's net income position, dilutive effect of stock options, weighted average exercise price (in dollars per share)			$ 10.58	$ 12.49
Stock Options
Dilutive effect
Anti-dilutive securities (in shares)	11,418	8,500
Weighted average exercise price of options, anti-dilutive (in dollars per share)	$ 15.99	$ 17.16
Based on the Company's net income position, anti-dilutive securities (in shares)			11,418	6,250
Based on the Company's net income position, anti-dilutive securities, weighted average exercise price (in dollars per share)			$ 15.99	$ 18.28

Stock-Based Compensation - Plan

Stock-Based Compensation - Plan and Expense Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Stock-Based Compensation
Common stock reserved for future grants (in shares)	104,239		104,239
Proceeds from exercise of stock options			$ 3,765
Maximum
Stock-Based Compensation
Number of shares of common stock authorized for issuance	442,750		442,750
Stock Options
Stock-Based Compensation
Outstanding options (in shares)	16,168		16,168		12,168
Compensation cost recognized	$ 6,600	$ 5,700	$ 18,400	$ 16,100
Unrecognized compensation cost	$ 39,500		$ 39,500
Period during which compensation cost is expected to be recognized			3 years
Exercise of stock options (in shares)			500	0
Stock Options | Minimum
Stock-Based Compensation
Price range of stock award (as a percent)			85.00%
Period over which options become exercisable			1 year
Stock Options | Maximum
Stock-Based Compensation
Price range of stock award (as a percent)			110.00%
Expiration period of options granted			7 years
Period over which options become exercisable			3 years

Stock-Based Compensation - Assu

Stock-Based Compensation - Assumptions and Activity (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Weighted Average Exercise Price
Aggregate intrinsic value of all options outstanding	$ 4,000
Aggregate intrinsic value of all options exercisable	$ 1,000
Stock Options
Assumptions used to determine fair value of stock options granted
Dividend yield (as a percent)	0.00%	0.00%
Expected volatility (as a percent)	42.40%
Expected life of option	5 years	5 years
Risk-free interest rate (as a percent)	1.30%
Fair value of each option on grant date (in dollars per share)	$ 4.02
Shares
Outstanding at beginning of period (in shares)	12,168
Granted (in shares)	4,500	7,250
Exercised (in shares)	(500)	0
Outstanding at end of period (in shares)	16,168
Exercisable at end of period (in shares)	6,417
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per shares)	$ 15.47
Granted (in dollars per share)	10.75
Exercised (in dollars per share)	7.53
Outstanding at end of period (in dollars per share)	14.40
Exercisable at end of period (in dollars per share)	$ 15.41
Minimum | Stock Options
Assumptions used to determine fair value of stock options granted
Expected volatility (as a percent)		42.30%
Risk-free interest rate (as a percent)		1.40%
Fair value of each option on grant date (in dollars per share)		$ 5.43
Maximum | Stock Options
Assumptions used to determine fair value of stock options granted
Expected volatility (as a percent)		42.40%
Risk-free interest rate (as a percent)		1.50%
Fair value of each option on grant date (in dollars per share)		$ 6.14

Long-Term Debt (Details)

Long-Term Debt (Details)	Sep. 30, 2016USD ($)	Apr. 29, 2016USD ($)ft²	Sep. 30, 2016USD ($)	Apr. 01, 2016USD ($)
Remaining principal payments
Less: Current portion	$ 126,419		$ 126,419
Long-term portion	3,109,647		3,109,647
Loan
Financing agreement
Monthly payments including interest		$ 18,000
Interest rate		2.14%
Deferred debt issuance costs, gross		$ 139,000
Loan’s effective interest rate		2.77%
Debt service coverage ratio		1.25
Remaining principal payments
2,016	35,000		35,000
2,017	140,000		140,000
2,018	143,000		143,000
2,019	146,000		146,000
2,020	149,000		149,000
Thereafter	2,757,000		2,757,000
Total Principal	3,370,000		3,370,000
Less: Unamortized debt issuance costs	134,000		134,000
Less: Current portion	126,000		126,000
Long-term portion	3,110,000		3,110,000
Debt Issuance Costs
Amortization of debt costs			5,000
Deferred debt issuance costs, noncurrent, net	121,000		121,000
Deferred debt issuance costs, current, net	13,000		13,000
Amortization of debt costs expected in current year	3,000		3,000
Annual expected amortization expense over the next four years	$ 12,000		12,000
Remaining amortization period	4 years
Loan | Building
Financing agreement
Area of building | ft²		27,300
Line Of Credit.
Debt Issuance Costs
Maximum borrowings	$ 2,050,000		$ 2,050,000
Line Of Credit. | 30-day LIBOR
Debt Issuance Costs
Line of credit basis spread (as a percent)			1.80%
Duluth Economic Development Authority
Financing agreement
Bonds issued to the Bank				$ 3,415,000

Segment Information (Details)

Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Financial information with respect to the reportable segments
Net sales	$ 4,607,501	$ 4,542,730	$ 12,817,289	$ 12,794,167
Cost of goods sold	2,940,027	2,925,062	8,330,930	8,436,082
GROSS PROFIT	1,667,474	1,617,668	4,486,359	4,358,085
Selling general and administrative	1,357,605	1,270,466	4,121,891	3,938,584
Research and development	150,176	157,814	475,165	506,197
Income (loss) from operations	159,693	189,388	(110,697)	(86,696)
Trade receivables by segment
Trade receivables	2,154,232		2,154,232		$ 2,165,194
Unalloc.
Financial information with respect to the reportable segments
Selling general and administrative	465,771	417,675	1,422,393	1,387,580
Research and development	150,176	157,814	475,165	506,197
Income (loss) from operations	(615,947)	(575,489)	(1,897,558)	(1,893,777)
Trade receivables by segment
Trade receivables	(30,721)		(30,721)		(102,188)
Domestic
Financial information with respect to the reportable segments
Net sales	1,981,212	1,924,930	5,278,456	5,414,229
Cost of goods sold	1,115,507	1,115,154	3,067,112	3,163,486
GROSS PROFIT	865,705	809,776	2,211,344	2,250,743
Selling general and administrative	330,578	321,810	1,034,975	961,707
Income (loss) from operations	535,127	487,966	1,176,369	1,289,036
Trade receivables by segment
Trade receivables	1,094,858		1,094,858		1,206,077
Export
Financial information with respect to the reportable segments
Net sales	1,273,923	1,367,780	3,470,693	3,823,195
Cost of goods sold	956,953	1,038,354	2,654,611	2,940,707
GROSS PROFIT	316,970	329,426	816,082	882,488
Selling general and administrative	169,858	147,370	472,510	439,361
Income (loss) from operations	147,112	182,056	343,572	443,127
Trade receivables by segment
Trade receivables	467,452		467,452		528,372
IKONICS Imaging
Financial information with respect to the reportable segments
Net sales	879,712	892,811	2,997,006	2,777,684
Cost of goods sold	413,385	398,520	1,378,287	1,308,007
GROSS PROFIT	466,327	494,291	1,618,719	1,469,677
Selling general and administrative	260,810	259,976	759,863	758,399
Income (loss) from operations	205,517	234,315	858,856	711,278
Trade receivables by segment
Trade receivables	327,855		327,855		341,980
DTX
Financial information with respect to the reportable segments
Net sales	195,890	188,074	306,246	385,130
Cost of goods sold	49,924	71,986	120,410	214,080
GROSS PROFIT	145,966	116,088	185,836	171,050
Selling general and administrative	35,595	44,649	109,968	134,892
Income (loss) from operations	110,371	71,439	75,868	36,158
Trade receivables by segment
Trade receivables	52,039		52,039		26,314
Micro-Machining
Financial information with respect to the reportable segments
Net sales	276,764	169,135	764,888	393,929
Cost of goods sold	404,258	301,048	1,110,510	809,802
GROSS PROFIT	(127,494)	(131,913)	(345,622)	(415,873)
Selling general and administrative	94,993	78,986	322,182	256,645
Income (loss) from operations	(222,487)	$ (210,899)	(667,804)	$ (672,518)
Trade receivables by segment
Trade receivables	$ 242,749		$ 242,749		$ 164,639

Income Taxes (Details)

Income Taxes (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Deferred tax amounts included in balance sheet
Unrecognized tax benefits	$ 0	$ 0