Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 30, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Inrad Optics, Inc. | ||
Entity Central Index Key | 0000719494 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Title of 12(g) Security | Common stock, par value $.01 Per Share | ||
No Trading Symbol Flag | true | ||
Entity Common Stock, Shares Outstanding | 13,820,328 | ||
Entity Public Float | $ 5,762,963 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,129,703 | $ 950,705 |
Accounts receivable (net of allowance for doubtful accounts of $91,000 in 2020, and $15,000 in 2019) | 824,452 | 1,233,081 |
Inventories, net | 3,206,057 | 2,834,107 |
Other current assets | 214,748 | 141,339 |
Total current assets | 5,374,960 | 5,159,232 |
Plant and equipment: | ||
Plant and equipment, at cost | 15,191,610 | 14,990,773 |
Less: Accumulated depreciation and amortization | (14,564,186) | (14,309,992) |
Total plant and equipment | 627,424 | 680,781 |
Precious metals | 561,909 | 561,910 |
Lease right-of-use, net | 415,377 | 688,746 |
Other assets | 48,421 | 44,577 |
Total Assets | 7,028,091 | 7,135,246 |
Current liabilities: | ||
Current portion of other long-term notes | 16,288 | 16,044 |
Accounts payable and accrued liabilities | 717,537 | 978,184 |
Contract liabilities | 856,802 | 768,243 |
Current portion of lease obligation | 304,844 | 273,369 |
Total current liabilities | 1,895,471 | 2,035,840 |
Related party convertible notes payable | 2,500,000 | 2,500,000 |
Other long-term notes, net of current portion | 1,133,682 | 166,763 |
Lease obligation, net of current portion | 144,228 | 415,377 |
Total liabilities | 5,673,381 | 5,117,980 |
Shareholders' equity: | ||
Common stock: $.01 par value; 60,000,000 authorized shares; 13,824,928 shares issued at December 31, 2020, and 13,735,177 shares shares issued at December 31, 2019 | 138,251 | 137,353 |
Capital in excess of par value | 19,516,363 | 19,281,255 |
Accumulated deficit | (18,284,953) | (17,386,392) |
Stockholders' Equity before Treasury Stock | 1,369,661 | 2,032,216 |
Less - Common stock in treasury, at cost (4,600 shares) | (14,950) | (14,950) |
Total shareholders' equity | 1,354,711 | 2,017,266 |
Total Liabilities and shareholders' equity | $ 7,028,091 | $ 7,135,246 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts (in dollars) | $ 91,000 | $ 15,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 13,824,928 | 13,735,177 |
Treasury stock, shares | 4,600 | 4,600 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Total revenue | $ 9,007,562 | $ 10,007,655 |
Cost and expenses: | ||
Cost of goods sold | 7,218,119 | 8,015,148 |
Selling, general and administrative expenses | 2,537,630 | 2,614,229 |
Costs and Expenses, Total | 9,755,750 | 10,629,377 |
(Loss) income from operations | (748,188) | (621,722) |
Other expense: | ||
Interest expense-net | (150,374) | (153,938) |
Loss on exchange of precious metals | (438) | |
Nonoperating Income (Expense) | (150,374) | (154,376) |
(Loss) income before income taxes | (898,561) | (776,098) |
Income tax (provision) benefit | 0 | 0 |
Net (loss) income | $ (898,561) | $ (776,098) |
Net (loss) income per common share - basic | $ (0.07) | $ (0.06) |
Net (loss) income per common share - diluted | $ (0.07) | $ (0.06) |
Weighted average shares outstanding - basic | 13,762,795 | 13,672,235 |
Weighted average shares outstanding - diluted | 13,762,795 | 13,672,235 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Capital in excess of par value | Accumulated Deficit | Treasury Stock | Total |
Balance at Dec. 31, 2018 | $ 136,371 | $ 19,055,615 | $ (16,610,294) | $ (14,950) | $ 2,566,742 |
Balance (in shares) at Dec. 31, 2018 | 13,636,988 | ||||
401K contribution | $ 982 | 92,605 | 0 | 0 | 93,587 |
401K contribution (in shares) | 98,189 | ||||
Stock-based compensation expense | $ 0 | 133,035 | 0 | 0 | 133,035 |
Net income (loss) for the year | 0 | 0 | (776,098) | 0 | (776,098) |
Balance at Dec. 31, 2019 | $ 137,353 | 19,281,255 | (17,386,392) | (14,950) | 2,017,266 |
Balance (in shares) at Dec. 31, 2019 | 13,735,177 | ||||
401K contribution | $ 898 | 123,457 | 0 | 0 | 124,355 |
401K contribution (in shares) | 89,751 | ||||
Stock-based compensation expense | $ 0 | 111,651 | 0 | 0 | 111,651 |
Net income (loss) for the year | 0 | 0 | (898,561) | 0 | (898,561) |
Balance at Dec. 31, 2020 | $ 138,251 | $ 19,516,363 | $ (18,284,953) | $ (14,950) | $ 1,354,711 |
Balance (in shares) at Dec. 31, 2020 | 13,824,928 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net (loss) | $ (898,561) | $ (776,098) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities | ||
Depreciation and amortization | 254,194 | 267,098 |
401(k) common stock contribution - non cash item | 124,355 | 93,587 |
Loss on exchange of precious metals | 0 | 438 |
Stock based compensation | 111,651 | 133,035 |
Change in inventory reserve | (18,477) | 2,910 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 408,629 | 63,406 |
Inventories | (353,472) | 178,866 |
Other current assets | (73,409) | 39,554 |
Other assets | 3,844 | (8,872) |
Accounts payable and accrued liabilities | (151,952) | 30,668 |
Customer advances | 88,558 | (4,684) |
Accrued interest in related party note payable | (75,000) | 112,500 |
Total adjustments and changes | 311,233 | 926,250 |
Net cash (used in) provided by operating activities | (587,328) | 150,152 |
Cash flows from investing activities: | ||
Capital expenditures | (200,837) | (310,066) |
Net cash (used in) investing activities | (200,837) | (310,066) |
Cash flows from financing activities: | ||
Proceeds from PPP Loan | 973,166 | 0 |
Principal payments on notes payable-other | (6,003) | (74,934) |
Net cash (used in) financing activities | 967,163 | (74,934) |
Net increase (decrease) in cash and cash equivalents | 178,998 | (234,848) |
Cash and cash equivalents at beginning of period | 950,705 | 1,185,553 |
Cash and cash equivalents at end of period | 1,129,703 | 950,705 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 226,513 | 158,906 |
Income taxes paid | 0 | 0 |
Lease right-of-use asset | $ 0 | 819,612 |
Exchange of precious metals | $ 400 |
Nature of Business and Operatio
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2020 | |
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates | |
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates | 1. Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates a. Nature of Business and Operations Inrad Optics, Inc. and Subsidiaries (the “Company”), was incorporated in the state of New Jersey and is a manufacturer of crystals, crystal devices, electro-optic and optical components, and sophisticated laser devices and instruments. The Company has administrative offices and manufacturing operations in Northvale, New Jersey. The Company’s principal customers include commercial instrumentation companies and OEM laser systems manufacturers, research laboratories, government agencies, and defense contractors. The Company’s products are sold domestically using its own sales staff, and in major overseas markets, principally Europe, Israel, Japan, and Asia, using independent sales agents. b. Liquidity As of December 31, 2020, the Company had working capital of $3.5 million and cash and cash equivalents of $1.1 million. Management believes based on the Company’s operations and its existing working capital resources together with existing cash flows, the Company has sufficient cash flows to fund operations through at least March 31, 2022. c. Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Upon consolidation, all inter-company accounts and transactions are eliminated. d. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, determining our allowance for doubtful accounts, our allowance for inventory obsolescence, the fair value and depreciable lives of long-lived tangible and intangible assets, and deferred taxes and the associated valuation allowance. Actual results could differ from these estimates. e. Cash and cash equivalents The Company considers cash-on-hand and highly liquid investments with original maturity dates of three months or less at the date of purchase to be cash and cash equivalents. f. Accounts receivable Accounts receivable are carried at net realizable value, net of write-offs and allowances. The Company establishes an allowance for doubtful accounts based on estimates as to the collectability of accounts receivable. Management specifically analyzes past-due accounts receivable balances and, additionally, considers bad debt history, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Uncollectible accounts receivable are written-off when it is determined that the balance will not be collected. g. Inventories 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. h. Plant and Equipment Plant and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets which range between five and seven years. Amortization of leasehold improvements is computed using the straight-line method over the lesser of 10 years or the remaining term of the lease including optional renewal periods, as appropriate, when failure to renew the lease imposes an economic penalty on the Company in such an amount that renewal appears to be probable. In determining the amount of the economic penalty, management considers such factors as (i) the costs associated with the physical relocation of the offices, manufacturing facility and equipment, (ii) the economic risks associated with business interruption and potential customer loss during relocation and transition to new premises, (iii) the significant costs of leasehold improvements required at any new location to custom fit our specific manufacturing requirements, and (iv) the economic loss associated with abandonment of existing leasehold improvements or other assets whose value would be impaired by vacating the facility. Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and a gain or loss is recorded. i. Income taxes Deferred 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 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% 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. The Company had no unrecognized tax benefits or liabilities, and no adjustment to its financial position, results of operations, or cash flows relating to uncertain tax positions taken on all open tax years. The Company is no longer subject to federal income tax examinations by tax authorities for the years before 2017 and state or local income tax examinations by tax authorities for the years before 2017. j. Impairment of long-lived assets Long-lived assets, such as plant and equipment and purchased intangibles with finite lives, which are subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Long-lived assets held for sale would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. k. 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. l. Revenue recognition The Company adopted the provisions of ASU 2014-09, “Revenues from Contracts with Customers (ASC 606)” on January 1, 2018, which requires recognition of revenue at the time performance obligations are satisfied. 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). See Note 2. m. Internal research and development costs Internal research and development costs are charged to expense as incurred. n. Precious metals Precious metals are stated at cost and consist of various fixtures used in the high temperature crystal growth manufacturing process. From time to time the quoted market values of these precious metals may be below cost. Management evaluates these market adjustments on a recurring basis and if it is determined that they are other than temporary the carrying value would be adjusted. o. Advertising costs Advertising costs included in selling, general and administrative expenses were $18,000 and $45,000 for the years ended December 31, 2020 and 2019, respectively. Advertising costs are charged to expense when the related services are incurred or related events take place. p. Concentrations and credit risk The concentration of credit risk in the Company’s accounts receivable is mitigated by the Company’s credit evaluation process, familiarity with its small base of recurring customers and reasonably short collection terms and the geographical dispersion of revenue. The Company generally does not require collateral but, in some cases, the Company negotiates cash advances prior to the undertaking of the work. These cash advances are recorded as current liabilities on the balance sheet until corresponding revenues are realized. The Company utilizes many relatively uncommon materials and compounds to manufacture its products and relies on outside vendors for certain manufacturing services. Therefore, any failure by its suppliers to deliver materials of an adequate quality and quantity could have an adverse effect on the Company’s ability to meet the commitments of its customers. For the year ended December 31, 2020, the Company had three customers who had sales representing 17.1%, 7.0% and 6.5% of total revenues. For the year ended December 31, 2019, the Company had three customers who had sales representing 18.5%, 14.7% and 6.1% of total revenues. Since the Company is a supplier of custom manufactured components to OEM customers, the relative size and identity of the largest customer accounts changes somewhat from year to year. In the short term, the loss of any one of these large customer accounts could have a material adverse effect on business, results of operations, and financial condition. q. Fair value measurements The Company follows U.S. GAAP accounting guidance which establishes a framework for measuring fair value and expanded related disclosures. The framework requires fair value to be determined based on the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The valuation techniques required are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The accounting guidance requires the following fair value hierarchy: Level 1 - Quoted prices (unadjusted) for identical assets and liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 - Values determined by models, significant inputs to which are unobservable and are primarily based on internally derived assumptions regarding the timing and amount of expected cash flows. Long-lived assets may be measured at fair value if such assets are held for sale or if there is a determination that the asset is impaired. Management’s determination of fair value, although highly subjective, is based on the best information available, including internal projections of future earnings and cash flows discounted at an appropriate interest rate, quoted market prices when available, market prices for similar assets, broker quotes and independent appraisals, as appropriate. r. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016‑13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments" (“ASU 2016‑13”) which amended guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for interim and annual periods beginning in 2023, with earlier application permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases" (ASC 842), and subsequently issued updates as part of ASU 2018-11, "Leases, Targeted Improvements." The new guidance requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The Company adopted ASC 842, effective January 1, 2019. The Company entered into an amendment and extension of its building lease on July 8, 2019, retroactive to June 1, 2019, and accordingly recorded an initial right-of-use asset of $0.8 million. See Note 12a. Lease Commitments. The adoption of ASU 842 and ASU 2018-11 did not have a material impact on the Company's statements of operations or cash flows. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation: Improvements to Nonemployee Shared-Based Payment Accounting. The ASU update expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company adopted ASU 2018-07 effective January 1, 2019. The adoption did not have a material impact on its financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, on a prospective basis, with early adoption permitted. The Company is currently evaluating the impact of adoption of this guidance and does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU update is intended to simplify the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. This guidance is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. s. Subsequent events Management has performed an evaluation of subsequent events through the date that the financial statements were issued and has determined that it does not have any additional material subsequent events to disclose in the financial statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue | |
Revenue | 2. Revenue Years Ended December 31, 2020 2019 Market (In thousands) Net Sales % Net Sales % Aerospace & Defense $ 3,916 43.5 $ 3,710 37.0 Process Control & Metrology 3,328 36.9 4,189 41.9 Laser Systems 667 7.4 1,212 12.1 Scientific / R&D 1,097 12.2 897 9.0 Total $ 9,008 100.0 $ 10,008 100.0 The Company’s revenues are comprised of product sales as well as products and services provided under long-term government contracts with its customers. All revenue is recognized when the Company satisfies its performance obligation(s) under the contract (either implicit or explicit) by transferring the promised product or service to its customer either when (or as) its customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of standalone selling price for each distinct product or service in the contract, which is generally based on an observable price. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value added, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs are included in cost of goods sold. The Company’s performance obligations under long-term government contracts are generally satisfied over time. Revenue from products or services transferred to customers over time accounted for approximately 1.8% and 3.1% of revenue for 2020 and 2019, respectively. Revenue under these long-term government contracts is generally recognized over time using an input measure based upon the proportion of actual costs incurred to estimated total project costs, which is a method used to best depict the Company’s performance to date under the terms of the contract. Accounting for these long-term government contracts involves the use of various techniques to estimate total revenue and costs. The Company estimates profit on these long-term government contracts as the difference between total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, among other things, labor productivity, costs and availability of materials, and timing of funding by the U.S. government. The nature of these long-term agreements may give rise to several types of variable consideration, such as claims, awards and incentive fees. Historically, these amounts of variable consideration are not considered significant. Additionally, contract estimates may include additional revenue for submitted contract modifications if there exists an enforceable right to the modification, the amount can be reasonably estimated and its realization is probable. These estimates are based on historical collection experience, anticipated performance, and the Company’s best judgement at the time. These amounts are generally included in the contract’s transaction price and are allocated over the remaining performance obligations. Changes in judgments on these above estimates could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of associated income. Under these long-term government contracts, the Company may receive payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. In the event a contract loss becomes known, the entire amount of the estimated loss is recognized in the Consolidated Statements of Operations. The majority of the Company’s revenue is from products and services transferred to customers at a point in time and were approximately 98.2% and 96.9% of revenue for 2020 and 2019, respectively. The Company recognizes revenue at the point in time in which the customer obtains control of the product or service, which is generally when product title passes to the customer upon shipment. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at its physical location. Net sales by timing to transfers of goods and services is as follows: For the years ended December 31, 2020 2019 (in thousands) Transfer at point in time $ 8,842 $ 9,696 Transfer over time 166 312 Total net sales $ 9,008 $ 10,008 |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2020 | |
Inventories, net | |
Inventories, net | 3. Inventories, net Inventories are comprised of the following and are shown net of inventory reserves of approximately $2.5 million at December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Raw materials $ 1,130 $ 1,248 Work in process, including manufactured parts and components 1,718 1,090 Finished goods 358 496 $ 3,206 $ 2,834 |
Plant and Equipment
Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Plant and Equipment | |
Plant and Equipment | 4. Plant and Equipment Plant and equipment are comprised of the following: December 31, 2020 2019 (In thousands) Office and computer equipment $ 1,474 $ 1,345 Machinery and equipment 11,405 11,334 Leasehold improvements 2,312 2,312 15,191 14,991 Less accumulated depreciation and amortization (14,564) (14,310) $ 627 $ 681 Depreciation expense recorded by the Company totaled approximately $254,000 and $256,000 for 2020 and 2019, respectively. No fully depreciated assets were written off in 2020, and $16,000 were written off in 2019. The Company evaluates its property and equipment for impairment when events or circumstances indicate and impairment may exist. Based on this evaluation, the Company concluded that, at December 31, 2020, its long-lived assets were not impaired. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | 5. Related Party Transactions On July 22, 2020, the maturity dates of a $1,500,000 Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible Promissory Note to an affiliate of Clarex were each extended to April 1, 2024, from April 1, 2021. The notes bear interest at 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, 2027. The Company paid $0.2 million and $0.1 million for interest on the subordinated convertible promissory notes in 2020 and 2019, respectively. Accrued interest of $37,500 and $112,500 is included in Accounts payable and accrued liabilities as of December 31, 2020 and 2019, respectively. |
Other Long-Term Notes
Other Long-Term Notes | 12 Months Ended |
Dec. 31, 2020 | |
Other Long-Term Notes | |
Other Long-Term Notes | 6. Other Long-Term Notes Other Long-Term Notes consist of the following: December 31, 2020 2019 (in thousands) U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. $ 177 $ 183 Less current portion (16) (16) Long-term debt, excluding current portion $ 161 $ 167 Other Long-Term Notes mature as follows: Year ending December 31: (In thousands) 2021 $ 16 2022 17 2023 18 2024 18 2025 19 Thereafter 89 $ 177 |
Payroll Protection Program
Payroll Protection Program | 12 Months Ended |
Dec. 31, 2020 | |
Payroll Protection Program | |
Payroll Protection Program | 7. Payroll Protection Program On May 6, 2020, the Company received loan proceeds of approximately $973,000 (the “PPP Loan”), under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) which was enacted March 27, 2020. The PPP Loan, which 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. The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during the 24-week period after the loan origination for certain eligible purposes including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, provided that at least 60% of the loan amount is used for eligible payroll costs; the employer maintaining or rehiring employees and maintaining salaries at certain levels; and other factors. Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during a covered eight-week or twenty-four-week period qualify for forgiveness. Any forgiveness of the PPP Loan is subject to approval by the Small Business. At December 31, 2020, the PPP Loan is included in other long-term notes on the accompanying balance sheet. On January 19, 2021, the Company received notification from the Small Business 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. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | 8. Accounts Payable and Accrued Liabilities Accounts payable and accrued expenses are comprised of the following: December 31, 2020 2019 Trade accounts payable and accrued purchases $ 454 $ 507 Accrued payroll — 133 Accrued 401K company matching contribution 138 114 Accrued expenses – other 125 224 $ 717 $ 978 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The Company did not record a current provision for either state tax or federal tax due to losses incurred for both income tax and financial reporting purposes. A reconciliation of the income tax provision computed at the statutory Federal income tax rate to our effective income tax rate follows (in percent): Years Ended December 31, 2020 2019 Federal statutory rate (21) % (21) % State statutory rate (9) (9) Reduction in State rate due to tax rate change — — Change in Valuation Allowance 3 2 Permanent Differences 11 14 Other 16 14 Effective income tax rate — % — % At December 31, 2020 and 2019, the Company had estimated Federal net operating loss carry forwards of approximately $10.4 million and $9.3 million, respectively, and state net operating loss carry forwards of approximately $5.1 million and $5.8 million, respectively. The 2020 and 2019 net operating loss carryforwards have no expiration dates. Internal Revenue Code Section 382 places a limitation on the utilization of Federal net operating loss and other credit carry forwards when an ownership change, as defined by the tax law, occurs. Generally, this occurs when a greater than 50 percentage point change in ownership occurs. Accordingly, the actual utilization of the net operating loss and carryforwards for tax purposes may be limited annually to a percentage (based on the risk-free interest rate) of the fair market value of the Company at the time of any such ownership change. The Company has not prepared an analysis of ownership changes, but does not believe that a greater than 50% change of ownership has occurred and such limitations would not apply to the Company. Deferred tax assets (liabilities) are comprised of the following: Years Ended December 31, 2020 2019 Account receivable reserves $ 25 $ 4 Inventory reserves 692 697 Inventory capitalization 101 89 Depreciation 182 252 Loss carry forwards 2,636 2,332 Gross deferred tax assets 3,636 3,374 Valuation allowance (3,636) (3,374) Net deferred tax asset $ — $ — In evaluating the Company’s ability to recover deferred tax assets in future periods, management considers the available positive and negative factors, including the Company’s recent operating results, the existence of cumulative losses and near-term forecasts of future taxable income that is consistent with the plans and estimates management is using to manage the underlying business. A significant piece of objective evidence evaluated was the cumulative loss incurred by the Company over the three-year period ended December 31, 2019. On the basis of this evaluation, as of December 31, 2020, the valuation allowance was increased by $262,000. The valuation allowance decreased as of December 31, 2019, by $19,000. The company concluded it was more likely than not that it would not be able to realize a significant portion of the benefit on the deferred tax assets and adjusted the valuation allowance accordingly. The Company files income tax returns in the United States, which typically provides for a three-year statute of limitations on assessments. The Company is no longer subject to federal, state or local income tax examinations by tax authorities for the years before 2017. The guidance for accounting for uncertainties in income taxes requires that we recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. There were no unrecognized tax benefits that impacted our effective tax rate and accordingly, there was no material effect to our financial position, results of operations or cash flows. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged to us in relation to the underpayment of income taxes. We do not anticipate that our unrecognized tax benefits will significantly increase in the next 12 months. |
Equity Compensation Program and
Equity Compensation Program and Stock-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Equity Compensation Program and Stock-based Compensation | |
Equity Compensation Program and Stock-based Compensation | 10. Equity Compensation Program and Stock-based Compensation a. 2020 Equity Compensation Program On February 12, 2020, the Inrad Optics Board of Directors, adopted the Inrad Optics, Inc. 2020 Equity Compensation Program (the “2020 Program”), and received shareholder approval on June 23, 2020. The 2020 Program provides for grants of options, stock appreciation rights and restricted stock awards to employees, officers, directors, and others who render services to the Company. The 2020 Program is comprised of four parts including: (i) the Incentive Stock Option Plan which provides for grants of “incentive stock options,” (ii) the Supplemental Stock Option Plan which provides for grants of stock options that shall not be “incentive stock options,” (iii) the Stock Appreciation Rights Plan which allows the granting of stock appreciation rights and, (iv) the Restricted Stock Award Plan which provides for the granting of restrictive shares of Common Stock and restricted stock units. The 2020 Program is administered by the Compensation Committee of the Board of Directors. Under the 2020 Program, an aggregate of up to 4,000,000 shares of common stock may be granted. b. 2010 Equity Compensation Program The Company’s 2010 Equity Compensation Program (the “2010 Program”) provided for grants of options, stock appreciation rights and restricted stock awards to employees, officers, directors, and others who render services to the Company. The 2010 Program expired on March 23, 2020. All outstanding grants of options, stock appreciation rights and performance shares issued under the 2010 Program will remain outstanding and shall expire on the date determined by the terms of the original grant. The latest date of expiration for outstanding grants under the 2010 Program is March 23, 2030. c. Stock Option Expense The Company’s results for the years ended December 31, 2020 and 2019, include stock-based compensation expense for stock option grants totaling $112,000 and $133,000, respectively. Such amounts have been included in the Consolidated Statements of Operations within cost of goods sold ($29,000 and $37,000 for 2020 and 2019, respectively), and selling, general and administrative expenses ($83,000 and $96,000 for 2020 and 2019, respectively). As of December 31, 2020, and 2019, there were $98,000 and $199,000 of unrecognized compensation costs, net of estimated forfeitures, related to non-vested stock options, which are expected to be recognized over a weighted average period of approximately 1.16 years and 1.89 years, respectively. The weighted average estimated fair value of stock options granted in the two years ended December 31, 2020 and 2019, was $1.41 and $0.76, respectively. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an option award. The Company assumes a dividend yield of zero, as the Company has not paid dividends in the past and does not expect to in the foreseeable future. The expected volatility is based upon the historical volatility of our common stock which the Company believes results in the best estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future volatility. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant with maturity dates approximately equal to the expected life at the grant date. The expected life is based upon the period of expected benefit based on the Company’s evaluation of historical and expected future employee exercise behavior. The following range of weighted-average assumptions were used for to determine the fair value of stock option grants during the years ended December 31, 2020 and 2019: Years Ended December 31, 2020 2019 Expected Dividend yield — % — % Expected Volatility 122.22 % 126.86 % Risk-free interest rate 1.96 % 2.90 % Expected term 10 years 10 years Stock Option Activity A summary of the Company’s outstanding stock options as of and for the years ended December 31, 2020 and 2019, is presented below: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value(a) Outstanding January 1, 2019 1,058,208 $ 0.64 5.58 337,997 Granted 200,000 0.79 Exercised — — Expired/Forfeited (110,941) 1.05 Outstanding December 31, 2019 (b) 1,147,267 $ 0.63 6.29 $ 718,840 Granted 22,500 1.48 Exercised — — Expired/Forfeited (18,900) 0.99 Outstanding December 31, 2020 (b) 1,150,867 $ 0.64 6.61 $ 107,573 Exercisable at December 31, 2020 940,027 $ 0.58 5.68 $ 107,573 (a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices as of December 31, 2020, exceeds the exercise prices of the respective options. (b) Based on the Company’s historical forfeiture rate, the number of options expected to vest is the same as the total outstanding at December 31, 2020. The following table represents non-vested stock options granted, vested, and forfeited for the year ended December 31, 2020: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2020 371,669 0.80 Granted 22,500 1.41 Vested (183,329) 0.77 Forfeited — — Non-Vested – December 31, 2020 210,840 0.89 The total weighted average grant date fair value of options vested during the years ended December 31, 2020 and 2019, was $142,000 and $109,000, respectively. The following table summarizes information about stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Price Outstanding Life in Years Price Outstanding Price $0.18 - $0.35 402,167 5.13 $ 0.29 402,167 $ 0.29 $0.50 - $1.00 711,200 6.56 $ 0.79 532,860 $ 0.79 $1.40 - $1.80 37,500 9.89 $ 1.61 5,000 $ 1.80 |
Net (Loss) Income per Share
Net (Loss) Income per Share | 12 Months Ended |
Dec. 31, 2020 | |
Net (Loss) Income per Share | |
Net (Loss) Income per Share | 11. Net (Loss) Income per Share Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options, stock grants and warrants using the average market prices during the period, including potential common shares issuable upon conversion of outstanding convertible notes, except if the effect on the per share amounts is anti-dilutive. For the year ended December 31, 2020, and 2019, all common equivalent shares outstanding have been excluded from the diluted computation because their effect is anti-dilutive. This included 1,150,867 common stock equivalents related to outstanding options, in addition to 2,500,000 common shares issuable upon conversion of outstanding convertible notes and 1,875,000 common shares underlying warrants issuable upon conversion of outstanding related party convertible notes. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies a. Lease commitments 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 determines 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-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. Lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales and general and administrative expenses on the consolidated statement of operations. An initial right-of-use asset of approximately $0.8 million was recognized as a non-cash asset addition with the signing of the July 8, 2019, lease amendment. Cash paid for amounts included in the present value of the operating lease liability was $0.3 million during the year ended December 31, 2020, and is included in operating cash flows. The following table presents information about the amount and timing of cash flows arising from the Company's operating and capital leases as of December 31, 2020: Maturity of Lease Liability (in thousands) 2021 $ 322 2022 143 2023 3 Total undiscounted operating lease payments 468 Less: imputed interest (19) Present value of operating lease liability $ 449 Other Information Remaining lease term (in months) Opeating lease 17 Capital lease 26 Discount rate for operating leases 5.80 % Discount rate for capital lease % The Company’s total rent expense for the year ended December 31, 2020 and 2019, was $0.3 million and $0.3 million, respectively. The Company also paid real estate taxes and insurance premiums under the terms of the lease that totaled approximately $0.1 million in 2020 and 2019. b. Retirement plans The Company maintains a 401(k) savings plan (the “Plan”) for all eligible employees (as defined in the plan). The 401(k) Plan allows employees to contribute up to 70% of their compensation on a salary reduction, pre-tax basis up to the statutory limitation. The 401(k) Plan also provides that the Company, at the discretion of the Board of Directors, may match employee contributions based on a pre-determined formula. In 2020, the Company’s 401(k) matching contribution for employees was $138,000. This will be funded by way of a contribution of $34,000 and a contribution of 142,329 shares of the Company’s common stock, which will be issued to the Plan in April, 2021. In 2019, the Company’s 401(k) matching contribution for employees was $124,000. This was funded by way of a contribution of 89,751 shares of the Company’s common stock, which were issued to the Plan in June, 2020. The Company records the distribution of the common shares in the Consolidated Statement of Shareholders’ Equity as of the date of distribution to the 401(k) Plan administrator. |
Product Sales, Foreign Sales an
Product Sales, Foreign Sales and Sales to Major Customers | 12 Months Ended |
Dec. 31, 2020 | |
Product Sales, Foreign Sales and Sales to Major Customers | |
Product Sales, Foreign Sales and Sales to Major Customers | 13. Product Sales, Foreign Sales and Sales to Major Customers The Company’s export sales, which are primarily to customers in countries within Europe, Israel, Asia and Japan, amounted to approximately 29.4% and 31.9% of product sales in 2020 and 2019, respectively. The Company had sales to three major customers which accounted for approximately 30.6% of sales in 2020. One customer, a division of a major U.S. defense industry corporation that manufactures electro-optical systems for U.S. and foreign governments accounted for 17.1% of 2020 sales. The two other customers included two foreign-based manufacturers of process control and metrology equipment whose sales represented 7.0% and 6.5% of sales, respectively. For 2019, the top three customers represented 18.5%, 14.7%, and 6.1% respectively. During the past two years, sales to the Company’s top five customers represented approximately 43.0% and 47.2%, respectively. Given the concentration of sales within a small number of customers, the loss of any of these customers would have a significant negative impact on the Company and its business units. |
Shareholder's Equity
Shareholder's Equity | 12 Months Ended |
Dec. 31, 2020 | |
Shareholder's Equity | |
Shareholder's Equity | 14. Shareholders’ Equity a. Common shares reserved for future issuances at December 31, 2020, are as follows: 2020 Equity compensation plan 4,000,000 2010 Equity compensation plan 1,150,867 Subordinated convertible notes 2,500,000 Warrants issuable on conversion of Subordinated convertible notes 1,875,000 9,525,867 b. Warrants The Company had no outstanding warrants as of December 31, 2020 and 2019. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 15. Fair Value of Financial Instruments The methods and assumptions used to estimate the fair value of the following classes of financial instruments were: Current Assets and Current Liabilities: The carrying amount of cash, current receivables and payables and certain other short-term financial instruments approximate their fair value as of December 31, 2020, due to their short-term maturities. Long-Term Debt: The fair value of the Company’s long-term debt, including the current portion, for notes payable and subordinated convertible debentures, was estimated using a discounted cash flow analysis, based on the Company’s assumed incremental borrowing rates for similar types of borrowing arrangements. The fair value of long-term debt is estimated to be $3.1 million compared to its carrying amount of $3.6 million as of December 31, 2020. |
Nature of Business and Operat_2
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates | |
Nature of Business and Operations | a. Nature of Business and Operations Inrad Optics, Inc. and Subsidiaries (the “Company”), was incorporated in the state of New Jersey and is a manufacturer of crystals, crystal devices, electro-optic and optical components, and sophisticated laser devices and instruments. The Company has administrative offices and manufacturing operations in Northvale, New Jersey. The Company’s principal customers include commercial instrumentation companies and OEM laser systems manufacturers, research laboratories, government agencies, and defense contractors. The Company’s products are sold domestically using its own sales staff, and in major overseas markets, principally Europe, Israel, Japan, and Asia, using independent sales agents |
Liquidity | b. Liquidity As of December 31, 2020, the Company had working capital of $3.5 million and cash and cash equivalents of $1.1 million. Management believes based on the Company’s operations and its existing working capital resources together with existing cash flows, the Company has sufficient cash flows to fund operations through at least March 31, 2022. |
Principles of consolidation | c. Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Upon consolidation, all inter-company accounts and transactions are eliminated. |
Use of Estimates | d. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates include, but are not limited to, determining our allowance for doubtful accounts, our allowance for inventory obsolescence, the fair value and depreciable lives of long-lived tangible and intangible assets, and deferred taxes and the associated valuation allowance. Actual results could differ from these estimates. |
Cash and cash equivalents | e. Cash and cash equivalents The Company considers cash-on-hand and highly liquid investments with original maturity dates of three months or less at the date of purchase to be cash and cash equivalents. |
Accounts Receivable | f. Accounts receivable Accounts receivable are carried at net realizable value, net of write-offs and allowances. The Company establishes an allowance for doubtful accounts based on estimates as to the collectability of accounts receivable. Management specifically analyzes past-due accounts receivable balances and, additionally, considers bad debt history, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Uncollectible accounts receivable are written-off when it is determined that the balance will not be collected. |
Inventories | g. Inventories 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. |
Plant and Equipment | h. Plant and Equipment Plant and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets which range between five and seven years. Amortization of leasehold improvements is computed using the straight-line method over the lesser of 10 years or the remaining term of the lease including optional renewal periods, as appropriate, when failure to renew the lease imposes an economic penalty on the Company in such an amount that renewal appears to be probable. In determining the amount of the economic penalty, management considers such factors as (i) the costs associated with the physical relocation of the offices, manufacturing facility and equipment, (ii) the economic risks associated with business interruption and potential customer loss during relocation and transition to new premises, (iii) the significant costs of leasehold improvements required at any new location to custom fit our specific manufacturing requirements, and (iv) the economic loss associated with abandonment of existing leasehold improvements or other assets whose value would be impaired by vacating the facility. Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and a gain or loss is recorded. |
Income Taxes | i. Income taxes Deferred 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 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% 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. The Company had no unrecognized tax benefits or liabilities, and no adjustment to its financial position, results of operations, or cash flows relating to uncertain tax positions taken on all open tax years. The Company is no longer subject to federal income tax examinations by tax authorities for the years before 2017 and state or local income tax examinations by tax authorities for the years before 2017. |
Impairment of long-lived assets | j. Impairment of long-lived assets Long-lived assets, such as plant and equipment and purchased intangibles with finite lives, which are subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Long-lived assets held for sale would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. |
Stock-Based Compensation | k. 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. |
Revenue recognition | l. Revenue recognition The Company adopted the provisions of ASU 2014-09, “Revenues from Contracts with Customers (ASC 606)” on January 1, 2018, which requires recognition of revenue at the time performance obligations are satisfied. 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). See Note 2. |
Internal research and development costs | m. Internal research and development costs Internal research and development costs are charged to expense as incurred. |
Precious metals | n. Precious metals Precious metals are stated at cost and consist of various fixtures used in the high temperature crystal growth manufacturing process. From time to time the quoted market values of these precious metals may be below cost. Management evaluates these market adjustments on a recurring basis and if it is determined that they are other than temporary the carrying value would be adjusted. |
Advertising costs | o. Advertising costs Advertising costs included in selling, general and administrative expenses were $18,000 and $45,000 for the years ended December 31, 2020 and 2019, respectively. Advertising costs are charged to expense when the related services are incurred or related events take place. |
Concentrations and credit risk | p. Concentrations and credit risk The concentration of credit risk in the Company’s accounts receivable is mitigated by the Company’s credit evaluation process, familiarity with its small base of recurring customers and reasonably short collection terms and the geographical dispersion of revenue. The Company generally does not require collateral but, in some cases, the Company negotiates cash advances prior to the undertaking of the work. These cash advances are recorded as current liabilities on the balance sheet until corresponding revenues are realized. The Company utilizes many relatively uncommon materials and compounds to manufacture its products and relies on outside vendors for certain manufacturing services. Therefore, any failure by its suppliers to deliver materials of an adequate quality and quantity could have an adverse effect on the Company’s ability to meet the commitments of its customers. For the year ended December 31, 2020, the Company had three customers who had sales representing 17.1%, 7.0% and 6.5% of total revenues. For the year ended December 31, 2019, the Company had three customers who had sales representing 18.5%, 14.7% and 6.1% of total revenues. Since the Company is a supplier of custom manufactured components to OEM customers, the relative size and identity of the largest customer accounts changes somewhat from year to year. In the short term, the loss of any one of these large customer accounts could have a material adverse effect on business, results of operations, and financial condition. |
Fair value measurements | q. Fair value measurements The Company follows U.S. GAAP accounting guidance which establishes a framework for measuring fair value and expanded related disclosures. The framework requires fair value to be determined based on the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The valuation techniques required are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The accounting guidance requires the following fair value hierarchy: Level 1 - Quoted prices (unadjusted) for identical assets and liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 - Values determined by models, significant inputs to which are unobservable and are primarily based on internally derived assumptions regarding the timing and amount of expected cash flows. Long-lived assets may be measured at fair value if such assets are held for sale or if there is a determination that the asset is impaired. Management’s determination of fair value, although highly subjective, is based on the best information available, including internal projections of future earnings and cash flows discounted at an appropriate interest rate, quoted market prices when available, market prices for similar assets, broker quotes and independent appraisals, as appropriate. |
Recent Accounting Pronouncements | r. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016‑13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments" (“ASU 2016‑13”) which amended guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for interim and annual periods beginning in 2023, with earlier application permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases" (ASC 842), and subsequently issued updates as part of ASU 2018-11, "Leases, Targeted Improvements." The new guidance requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The Company adopted ASC 842, effective January 1, 2019. The Company entered into an amendment and extension of its building lease on July 8, 2019, retroactive to June 1, 2019, and accordingly recorded an initial right-of-use asset of $0.8 million. See Note 12a. Lease Commitments. The adoption of ASU 842 and ASU 2018-11 did not have a material impact on the Company's statements of operations or cash flows. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation: Improvements to Nonemployee Shared-Based Payment Accounting. The ASU update expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company adopted ASU 2018-07 effective January 1, 2019. The adoption did not have a material impact on its financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, on a prospective basis, with early adoption permitted. The Company is currently evaluating the impact of adoption of this guidance and does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU update is intended to simplify the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. This guidance is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
Subsequent events | s. Subsequent events Management has performed an evaluation of subsequent events through the date that the financial statements were issued and has determined that it does not have any additional material subsequent events to disclose in the financial statements. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue | |
Schedule of Disaggregation of Revenue | Years Ended December 31, 2020 2019 Market (In thousands) Net Sales % Net Sales % Aerospace & Defense $ 3,916 43.5 $ 3,710 37.0 Process Control & Metrology 3,328 36.9 4,189 41.9 Laser Systems 667 7.4 1,212 12.1 Scientific / R&D 1,097 12.2 897 9.0 Total $ 9,008 100.0 $ 10,008 100.0 |
Schedule of revenue, remaining performance obligation, expected timing of satisfaction | For the years ended December 31, 2020 2019 (in thousands) Transfer at point in time $ 8,842 $ 9,696 Transfer over time 166 312 Total net sales $ 9,008 $ 10,008 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventories, net | |
Schedule of inventory, current | December 31, 2020 2019 (in thousands) Raw materials $ 1,130 $ 1,248 Work in process, including manufactured parts and components 1,718 1,090 Finished goods 358 496 $ 3,206 $ 2,834 |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Plant and Equipment | |
Schedule of property, plant and equipment | December 31, 2020 2019 (In thousands) Office and computer equipment $ 1,474 $ 1,345 Machinery and equipment 11,405 11,334 Leasehold improvements 2,312 2,312 15,191 14,991 Less accumulated depreciation and amortization (14,564) (14,310) $ 627 $ 681 |
Other Long-Term Notes (Tables)
Other Long-Term Notes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Long-Term Notes | |
Schedule of Debt | December 31, 2020 2019 (in thousands) U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. $ 177 $ 183 Less current portion (16) (16) Long-term debt, excluding current portion $ 161 $ 167 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Year ending December 31: (In thousands) 2021 $ 16 2022 17 2023 18 2024 18 2025 19 Thereafter 89 $ 177 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Payable and Accrued Liabilities | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | December 31, 2020 2019 Trade accounts payable and accrued purchases $ 454 $ 507 Accrued payroll — 133 Accrued 401K company matching contribution 138 114 Accrued expenses – other 125 224 $ 717 $ 978 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Years Ended December 31, 2020 2019 Federal statutory rate (21) % (21) % State statutory rate (9) (9) Reduction in State rate due to tax rate change — — Change in Valuation Allowance 3 2 Permanent Differences 11 14 Other 16 14 Effective income tax rate — % — % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Years Ended December 31, 2020 2019 Account receivable reserves $ 25 $ 4 Inventory reserves 692 697 Inventory capitalization 101 89 Depreciation 182 252 Loss carry forwards 2,636 2,332 Gross deferred tax assets 3,636 3,374 Valuation allowance (3,636) (3,374) Net deferred tax asset $ — $ — |
Equity Compensation Program a_2
Equity Compensation Program and Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Compensation Program and Stock-based Compensation | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following range of weighted-average assumptions were used for to determine the fair value of stock option grants during the years ended December 31, 2020 and 2019: Years Ended December 31, 2020 2019 Expected Dividend yield — % — % Expected Volatility 122.22 % 126.86 % Risk-free interest rate 1.96 % 2.90 % Expected term 10 years 10 years |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s outstanding stock options as of and for the years ended December 31, 2020 and 2019, is presented below: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value(a) Outstanding January 1, 2019 1,058,208 $ 0.64 5.58 337,997 Granted 200,000 0.79 Exercised — — Expired/Forfeited (110,941) 1.05 Outstanding December 31, 2019 (b) 1,147,267 $ 0.63 6.29 $ 718,840 Granted 22,500 1.48 Exercised — — Expired/Forfeited (18,900) 0.99 Outstanding December 31, 2020 (b) 1,150,867 $ 0.64 6.61 $ 107,573 Exercisable at December 31, 2020 940,027 $ 0.58 5.68 $ 107,573 (a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices as of December 31, 2020, exceeds the exercise prices of the respective options. (b) Based on the Company’s historical forfeiture rate, the number of options expected to vest is the same as the total outstanding at December 31, 2020. |
Schedule of Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested | The following table represents non-vested stock options granted, vested, and forfeited for the year ended December 31, 2020: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2020 371,669 0.80 Granted 22,500 1.41 Vested (183,329) 0.77 Forfeited — — Non-Vested – December 31, 2020 210,840 0.89 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The following table summarizes information about stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Price Outstanding Life in Years Price Outstanding Price $0.18 - $0.35 402,167 5.13 $ 0.29 402,167 $ 0.29 $0.50 - $1.00 711,200 6.56 $ 0.79 532,860 $ 0.79 $1.40 - $1.80 37,500 9.89 $ 1.61 5,000 $ 1.80 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Schedule of other information | Maturity of Lease Liability (in thousands) 2021 $ 322 2022 143 2023 3 Total undiscounted operating lease payments 468 Less: imputed interest (19) Present value of operating lease liability $ 449 Other Information Remaining lease term (in months) Opeating lease 17 Capital lease 26 Discount rate for operating leases 5.80 % Discount rate for capital lease % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Shareholder's Equity | |
Schedule of Common shares reserved | Common shares reserved for future issuances at December 31, 2020, are as follows: 2020 Equity compensation plan 4,000,000 2010 Equity compensation plan 1,150,867 Subordinated convertible notes 2,500,000 Warrants issuable on conversion of Subordinated convertible notes 1,875,000 9,525,867 |
Nature of Business and Operat_3
Nature of Business and Operations and Summary of Significant Accounting Policies and Estimates (Details) | 12 Months Ended | ||||
Dec. 31, 2020USD ($)customer | Dec. 31, 2019USD ($)customer | Jul. 08, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Working Capital (Deficit) | $ 3,500,000 | ||||
Cash and Cash Equivalents, at Carrying Value, Total | 1,129,703 | $ 950,705 | $ 1,185,553 | ||
Unrecognized Tax Benefits | 0 | ||||
Advertising Expense | 18,000 | 45,000 | |||
Operating Lease, Right-of-Use Asset | $ 415,377 | $ 688,746 | $ 800,000 | $ 800,000 | |
Top Three Major Customers [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Number of major customers | customer | 3 | 3 | |||
Concentration Risk, Percentage | 30.60% | ||||
Customer One [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Concentration Risk, Percentage | 17.10% | 18.50% | |||
Customer Two [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Concentration Risk, Percentage | 7.00% | 14.70% | |||
Customer Three [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Concentration Risk, Percentage | 6.50% | 6.10% | |||
Minimum [Member] | Property And Equipment Excluding Leasehold Improvements [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Maximum [Member] | Property And Equipment Excluding Leasehold Improvements [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 7 years | ||||
Maximum [Member] | Leasehold Improvements [Member] | |||||
Nature Of Business And Operations And Summary Of Significant Accounting Policies And Estimates [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 10 years |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 9,007,562 | $ 10,007,655 |
Percentage of Revenue from Products or Services | 100.00% | 100.00% |
Aerospace & Defense [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 3,916,000 | $ 3,710,000 |
Percentage of Revenue from Products or Services | 43.50% | 37.00% |
Process Control & Metrology [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 3,328,000 | $ 4,189,000 |
Percentage of Revenue from Products or Services | 36.90% | 41.90% |
Laser Systems [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 667,000 | $ 1,212,000 |
Percentage of Revenue from Products or Services | 7.40% | 12.10% |
Scientific / R&D [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,097,000 | $ 897,000 |
Percentage of Revenue from Products or Services | 12.20% | 9.00% |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue from Products or Services | 100.00% | 100.00% |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue from Products or Services | 1.80% | 3.10% |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue from Products or Services | 98.20% | 96.90% |
Revenue - Transfer of Goods and
Revenue - Transfer of Goods and Services (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 9,007,562 | $ 10,007,655 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8,842,000 | 9,696,000 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 166,000 | $ 312,000 |
Inventories, net - Schedule of
Inventories, net - Schedule of inventory (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventories, net | ||
Raw materials | $ 1,130,000 | $ 1,248,000 |
Work in process, including manufactured parts and components | 1,718,000 | 1,090,000 |
Finished goods | 358,000 | 496,000 |
Inventories, net | $ 3,206,057 | $ 2,834,107 |
Inventories, net - Textual (Det
Inventories, net - Textual (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Inventories, net | ||
Inventory Reserves | $ 2.5 | $ 2.5 |
Plant and Equipment - Schedule
Plant and Equipment - Schedule of plant and equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 15,191,610 | $ 14,990,773 |
Less accumulated depreciation and amortization | (14,564,186) | (14,309,992) |
Total plant and equipment | 627,424 | 680,781 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,474,000 | 1,345,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 11,405,000 | 11,334,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,312,000 | $ 2,312,000 |
Plant and Equipment - Textual (
Plant and Equipment - Textual (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Plant and Equipment | ||
Depreciation | $ 254,000 | $ 256,000 |
Write Off Of Fixed Assets | $ 16,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - Affiliate Of Clarex [Member] | Jul. 22, 2020USD ($)item$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Subordinated convertible notes [Member] | |||
Related Party Transaction [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||
Interest paid | $ 200,000 | $ 100,000 | |
Interest payable | $ 37,500 | $ 112,500 | |
Subordinated convertible notes [Member] | Common Stock | |||
Related Party Transaction [Line Items] | |||
Number of shares/warrants comprised in a unit (in shares) | shares | 1 | ||
Number of shares of common stock to be purchased by each warrant | shares | 0.75 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.35 | ||
Subordinated convertible notes [Member] | Warrant [Member] | |||
Related Party Transaction [Line Items] | |||
Number of shares/warrants comprised in a unit (in shares) | shares | 1 | ||
Convertible Subordinated Debt, $1,500,000 [Member] | |||
Related Party Transaction [Line Items] | |||
Convertible Subordinated Debt | $ 1,500,000 | ||
Debt Instrument, Convertible, Number of Equity Instruments | item | 1,500,000 | ||
Convertible Subordinated Debt, $1,000,000 [Member] | |||
Related Party Transaction [Line Items] | |||
Convertible Subordinated Debt | $ 1,000,000 | ||
Debt Instrument, Convertible, Number of Equity Instruments | item | 1,000,000 |
Other Long-Term Notes (Details)
Other Long-Term Notes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. | $ 177,000 | |
Less current portion | (16,288) | $ (16,044) |
Long-term debt, excluding current portion | 161,000 | 167,000 |
Us Small Business Administration Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. | $ 177,000 | $ 183,000 |
Other Long-Term Notes - Textual
Other Long-Term Notes - Textual (Details) - Us Small Business Administration Note Payable [Member] | 24 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |
Monthly installment payment | $ 1,922 |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% |
Other Long-Term Notes - Schedul
Other Long-Term Notes - Schedule of other long-term note maturities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Other Long-Term Notes | |
2021 | $ 16 |
2022 | 17 |
2023 | 18 |
2024 | 18 |
2025 | 19 |
Thereafter | 89 |
Other Notes Payable, Total | $ 177 |
Payroll Protection Program (Det
Payroll Protection Program (Details) - USD ($) | May 06, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 19, 2021 |
Debt Instrument [Line Items] | ||||
Proceeds from PPP Loan | $ 973,166 | $ 0 | ||
PPP Loan | ||||
Debt Instrument [Line Items] | ||||
Proceeds from PPP Loan | $ 973,000 | |||
PPP Loan | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
PPP Loan and accrued interest forgiven | $ 980,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Liabilities | ||
Trade accounts payable and accrued purchases | $ 454,000 | $ 507,000 |
Accrued payroll | 133,000 | |
Accrued 401K company matching contribution | 138,000 | 114,000 |
Accrued expenses - other | 125,000 | 224,000 |
Accounts Payable and Accrued Liabilities, Current, Total | $ 717,537 | $ 978,184 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax provision (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Federal statutory rate | (21.00%) | (21.00%) |
State statutory rate | (9.00%) | (9.00%) |
Change in Valuation Allowance | 3.00% | 2.00% |
Permanent Differences | 11.00% | 14.00% |
Other | 16.00% | 14.00% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Taxes | ||
Account receivable reserves | $ 25 | $ 4 |
Inventory reserves | 692 | 697 |
Inventory capitalization | 101 | 89 |
Depreciation | 182 | 252 |
Loss carry forwards | 2,636 | 2,332 |
Gross deferred tax assets | 3,636 | 3,374 |
Valuation allowance | (3,636) | (3,374) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Textual (Details
Income Taxes - Textual (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Line Items] | ||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ (262,000) | $ (19,000) |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 0 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 0 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 0 | |
Domestic Tax Authority [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | 10,400,000 | 9,300,000 |
State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | $ 5,100,000 | $ 5,800,000 |
Equity Compensation Program a_3
Equity Compensation Program and Stock-based Compensation (Details) - Employee Stock Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 112,000 | $ 133,000 |
Cost of Sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 29,000 | 37,000 |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 83,000 | $ 96,000 |
Equity Compensation Program a_4
Equity Compensation Program and Stock-based Compensation - Weighted-average assumptions (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity Compensation Program and Stock-based Compensation | ||
Expected Dividend yield | 0.00% | 0.00% |
Expected Volatility | 122.22% | 126.86% |
Risk-free interest rate | 1.96% | 2.90% |
Expected term | 10 years | 10 years |
Equity Compensation Program a_5
Equity Compensation Program and Stock-based Compensation - Activity (Details) - Employee Stock Option [Member] - USD ($) | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options, Outstanding January 1, 2019 | 1,147,267 | 1,058,208 | |
Options, Granted | 22,500 | 200,000 | |
Options, Exercised | 0 | 0 | |
Option, Expired/Forfeited | (18,900) | (110,941) | |
Options, Outstanding | 1,058,208 | 1,150,867 | 1,147,267 |
Options, Exercisable at December 31, 2020 | 940,027 | ||
Weighted Average Exercise Price Per Options Outstanding at January 1, 2020(in dollars per share) | $ 0.63 | $ 0.64 | |
Weighted Average Exercise Price per Option, Granted | 1.48 | 0.79 | |
Weighted Average Exercise Price per Option, Exercised | 0 | 0 | |
Weighted Average Exercise Price per Option, Expired/Forfeited | 0.99 | 1.05 | |
Weighted Average Exercise Price Options Outstanding (in dollars per share) | $ 0.64 | 0.64 | $ 0.63 |
Weighted Average Exercise Price per Option, Exercisable at December 31, 2020 | $ 0.58 | ||
Weighted Average Remaining Contractual Term, Options Outstanding | 5 years 6 months 29 days | 6 years 7 months 10 days | 6 years 3 months 15 days |
Weighted Average Remaining Contractual Term, Exercisable at December 31, 2020 | 5 years 8 months 5 days | ||
Aggregate Intrinsic Value, Options Outstanding (in dollars) | $ 337,997 | $ 107,573 | $ 718,840 |
Aggregate Intrinsic Value, Options Exercisable at December 31, 2020 | $ 107,573 |
Equity Compensation Program a_6
Equity Compensation Program and Stock-based Compensation - Non-vested stock option activity (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Equity Compensation Program and Stock-based Compensation | |
Options - Non-vested - January 1, 2020 | shares | 371,669 |
Options - Granted | shares | 22,500 |
Options - Vested | shares | (183,329) |
Options - Forfeited | shares | 0 |
Options - Non-vested - December 31, 2020 | shares | 210,840 |
Weighted-Average Grant-Date Fair Value - Non-vested at Ending balance (in dollars per share) | $ / shares | $ 0.80 |
Weighted-Average Grant-Date Fair Value - Granted (in dollars per share) | $ / shares | 1.41 |
Weighted-Average Grant-Date Fair Value - Vested (in dollars per share) | $ / shares | 0.77 |
Weighted-Average Grant-Date Fair Value - Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value - Non-vested at Ending balance (in dollars per share) | $ / shares | $ 0.89 |
Equity Compensation Program a_7
Equity Compensation Program and Stock-based Compensation - Option exercise prices (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Exercise Price Range One [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range | $ 0.18 |
Exercise Price, Upper Range | $ 0.35 |
Options Outstanding, Number | shares | 402,167 |
Outstanding Options, Weighted Average Remaining Contractual Life in Years | 5 years 1 month 17 days |
Outstanding Options, Weighted Average Exercise Price | $ 0.29 |
Options Exercisable, Number Outstanding | shares | 402,167 |
Options Exercisable, Weighted Average Exercise Price | $ 0.29 |
Exercise Price Range Two [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range | 0.50 |
Exercise Price, Upper Range | $ 1 |
Options Outstanding, Number | shares | 711,200 |
Outstanding Options, Weighted Average Remaining Contractual Life in Years | 6 years 6 months 22 days |
Outstanding Options, Weighted Average Exercise Price | $ 0.79 |
Options Exercisable, Number Outstanding | shares | 532,860 |
Options Exercisable, Weighted Average Exercise Price | $ 0.79 |
Exercise Price Range Three [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range | 1.40 |
Exercise Price, Upper Range | $ 1.80 |
Options Outstanding, Number | shares | 37,500 |
Outstanding Options, Weighted Average Remaining Contractual Life in Years | 9 years 10 months 21 days |
Outstanding Options, Weighted Average Exercise Price | $ 1.61 |
Options Exercisable, Number Outstanding | shares | 5,000 |
Options Exercisable, Weighted Average Exercise Price | $ 1.80 |
Equity Compensation Program a_8
Equity Compensation Program and Stock-based Compensation - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)itemshares | Dec. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Options Grants In Period Weighted Average Grant Date Fair Value | $ 1.41 | $ 0.76 |
Equity Compensation 2010 Program [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of parts of the 2010 Equity Compensation Program | item | 4 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | shares | 4,000,000 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 112,000 | 133,000 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 98,000 | $ 199,000 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years) | 1 year 1 month 28 days | 1 year 10 months 21 days |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 142,000 | $ 109,000 |
Net (Loss) Income per Share (De
Net (Loss) Income per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,150,867 | |
Convertible Notes Payable [Member] | Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,875,000 | |
Convertible Notes Payable [Member] | Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Maturity of Lease Liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Commitments and Contingencies | |
2021 | $ 322 |
2022 | 143 |
2023 | 3 |
Total undiscounted operating lease payments | 468 |
Less: imputed interest | (19) |
Present value of operating lease liability | $ 449 |
Lease, Cost | |
Remaining lease term (in months) | 17 months |
Remaining capital lease term | 26 months |
Discount rate for operating leases | 5.80% |
Discount rate for capital lease | 3.99 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |
Commitments and Contingencies | |||
Operating Leases, Rent Expense | $ 300,000 | $ 300,000 | |
Operating Lease, Payments | $ 300,000 | ||
Real Estate Taxes and Insurance, Total | $ 100,000 | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 70.00% | 70.00% | |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | $ 138,000 | $ 124,000 | |
Defined Contribution Plan Employer Matching Contribution (In Shares) | 142,329 | 89,751 | |
Defined Contribution Plan Employer Matching Contribution In Cash | $ 34,000 |
Product Sales, Foreign Sales _2
Product Sales, Foreign Sales and Sales to Major Customers (Details) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] - customer | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Customers In Europe Asia Japan [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 29.40% | 31.90% |
Top Three Major Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 30.60% | |
Number Of Major Customers | 3 | 3 |
Major Customers One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.10% | 18.50% |
Major Customers Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 7.00% | 14.70% |
Major Customers Three [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 6.50% | 6.10% |
Top Five Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 43.00% | 47.20% |
Number Of Major Customers | 5 | 5 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common Stock, Capital Shares Reserved for Future Issuance | 9,525,867 | |
Warrants and Rights Outstanding | $ 0 | $ 0 |
2020 Equity compensation plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common Stock, Capital Shares Reserved for Future Issuance | 4,000,000 | |
2010 Equity compensation plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common Stock, Capital Shares Reserved for Future Issuance | 1,150,867 | |
Warrants Issuable On Conversion Of Subordinated Convertible Notes [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common Stock, Capital Shares Reserved for Future Issuance | 1,875,000 | |
Subordinated convertible notes [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common Stock, Capital Shares Reserved for Future Issuance | 2,500,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) $ in Millions | Dec. 31, 2020USD ($) |
Fair Value of Financial Instruments | |
Long-term Debt, Fair Value | $ 3.1 |
Long-term Debt, Gross | $ 3.6 |