Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 14, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Inrad Optics, Inc. | ' |
Entity Central Index Key | '0000719494 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'INRD | ' |
Entity Common Stock, Shares Outstanding | ' | 12,046,003 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash and cash equivalents | $2,649,559 | $3,089,013 |
Accounts receivable (net of allowance for doubtful accounts of $15,000 in 2013 and 2012) | 1,181,766 | 1,557,930 |
Inventories, net | 3,328,190 | 3,596,646 |
Other current assets | 130,115 | 158,742 |
Total current assets | 7,289,630 | 8,402,331 |
Plant and equipment: | ' | ' |
Plant and equipment, at cost | 16,126,168 | 15,446,826 |
Less: Accumulated depreciation and amortization | -14,269,092 | -14,182,712 |
Total plant and equipment | 1,857,076 | 1,264,114 |
Precious Metals | 474,960 | 474,960 |
Goodwill | 311,572 | 311,572 |
Intangible Assets, net | 378,401 | 437,324 |
Other Assets | 34,838 | 534,838 |
Total Assets | 10,346,477 | 11,425,139 |
Liabilities and Shareholders' Equity | ' | ' |
Current portion of other long term notes | 150,200 | 150,200 |
Accounts payable and accrued liabilities | 904,582 | 813,705 |
Customer advances | 107,641 | 297,251 |
Total current liabilities | 1,162,423 | 1,261,156 |
Related Party Convertible Notes Payable | 2,500,000 | 2,500,000 |
Other Long Term Notes, net of current portion | 757,376 | 869,135 |
Total liabilities | 4,419,799 | 4,630,291 |
Commitments | ' | ' |
Shareholders' Equity: | ' | ' |
Common stock: $.01 par value; 60,000,000 authorized shares; 12,050,603 shares issued at September 30, 2013 and 11,881,724 issued at December 31, 2012 | 120,508 | 118,819 |
Capital in excess of par value | 18,262,570 | 18,076,518 |
Accumulated deficit | -12,441,450 | -11,385,539 |
Stockholders' Equity before Treasury Stock | 5,941,628 | 6,809,798 |
Less - Common stock in treasury, at cost (4,600 shares) | -14,950 | -14,950 |
Total shareholders' equity | 5,926,678 | 6,794,848 |
Total Liabilities and Shareholders’ Equity | $10,346,477 | $11,425,139 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts (in dollars) | $15,000 | $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 | 12,050,603 | 11,881,724 |
Treasury stock, shares | 4,600 | 4,600 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Total revenue | $2,756,488 | $2,903,740 | $8,528,212 | $8,624,869 |
Cost and expenses: | ' | ' | ' | ' |
Cost of goods sold | 2,206,529 | 2,287,493 | 6,971,423 | 6,700,833 |
Selling, general and administrative expenses | 743,190 | 848,569 | 2,506,662 | 2,567,661 |
Costs and Expenses, Total | 2,949,719 | 3,136,062 | 9,478,085 | 9,268,494 |
Loss from operations | -193,231 | -232,322 | -949,873 | -643,625 |
Other (expense) income: | ' | ' | ' | ' |
Interest expense-net | -45,562 | -47,267 | -137,038 | -118,006 |
Gain on sale of plant and equipment | 0 | 0 | 31,000 | 0 |
Other (expense) income, Total | -45,562 | -47,267 | -106,038 | -118,006 |
Net loss before income taxes | -238,793 | -279,589 | -1,055,911 | -761,631 |
Income tax (provision) benefit | 0 | 0 | 0 | 0 |
Net loss | ($238,793) | ($279,589) | ($1,055,911) | ($761,631) |
Net loss per common share - basic and diluted (in dollars per share) | ($0.02) | ($0.02) | ($0.09) | ($0.06) |
Weighted average shares outstanding - basic and diluted (in shares) | 12,046,003 | 11,877,124 | 11,956,712 | 11,811,241 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net (loss) | ($1,055,911) | ($761,631) |
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 414,367 | 476,863 |
401K common stock contribution | 80,922 | 151,775 |
(Gain) on sale of plant and equipment | -31,000 | 0 |
Stock based compensation | 106,819 | 153,604 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 376,164 | 237,765 |
Inventories, net | 268,456 | -550,815 |
Other current assets | 28,627 | 11,079 |
Accounts payable and accrued liabilities | 90,877 | 140,097 |
Customer advances | -189,610 | 30,482 |
Total adjustments and changes | 1,145,622 | 650,850 |
Net cash provided by (used in) operating activities | 89,711 | -110,781 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -448,406 | -267,956 |
Down payment on purchase of equipment | 0 | -500,000 |
Proceeds from sale of plant and equipment | 31,000 | 0 |
Net cash (used in) investing activities | -417,406 | -767,956 |
Cash flows from financing activities: | ' | ' |
Proceeds from exercise of stock options | 0 | 5,349 |
Proceeds from Term Note Payable | 0 | 750,000 |
Principal payments on notes payable-other | -111,759 | -29,614 |
Net cash (used in) provided by financing activities | -111,759 | 725,735 |
Net (decrease) in cash and cash equivalents | -439,454 | -153,002 |
Cash and cash equivalents at beginning of period | 3,089,013 | 3,400,205 |
Cash and cash equivalents at end of period | 2,649,559 | 3,247,203 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Interest paid | 144,000 | 132,000 |
Income taxes paid | $2,000 | $12,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Significant Accounting Policies [Text Block] | ' | |||||||
NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Basis of Presentation | ||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of Inrad Optics, Inc. and its subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated. | ||||||||
The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||||||||
In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued. | ||||||||
Management Estimates | ||||||||
These unaudited condensed consolidated financial statements and related disclosures have been prepared in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. | ||||||||
Inventories | ||||||||
Inventories are stated at the lower of cost (first-in-first-out basis) or market. 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. | ||||||||
Inventories are comprised of the following and are shown net of inventory reserves, in thousands: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
Raw materials | $ | 1,122 | $ | 1,267 | ||||
Work in process, including manufactured parts and components | 1,202 | 1,291 | ||||||
Finished goods | 1,004 | 1,039 | ||||||
$ | 3,328 | $ | 3,597 | |||||
Income Taxes | ||||||||
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. | ||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company did not record a current provision for either state or federal income tax due to the losses incurred for both income tax and financial reporting purposes or the availability of net operating loss carry-forwards to offset against federal and state income tax. | ||||||||
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 consistent with the plans and estimates that management uses to manage the underlying business. A significant piece of objective negative evidence evaluated was the cumulative loss incurred by the Company over the three-year period ended December 31, 2012 as well as the nine months ended September 30, 2013. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. | ||||||||
On the basis of this evaluation, as of September 30, 2013, the Company’s management concluded that it is more likely than not that the Company will not be able to realize any portion of the benefit on the net deferred tax balance of $3,432,000 and therefore the Company continues to maintain a valuation allowance for the full amount of the net deferred tax balance. | ||||||||
When sufficient positive evidence exists, the Company’s income tax expense will be charged with the increase or decrease in its valuation allowance. An increase or reversal of the Company’s valuation allowance could have a significant negative or positive impact on the Company’s future earnings. | ||||||||
Net (Loss) Income per Common Share | ||||||||
Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net (loss) income per common share is computed by dividing net (loss) income 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 three and nine months ended September 30, 2013, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. This included 969,021 common stock equivalents related to outstanding options and grants, in each respective period. In addition, there were 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes in each period which were anti-dilutive. | ||||||||
For the three and nine months ended September 30, 2012, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. This included 972,823 common stock equivalents related to outstanding options and grants, in each respective period. In addition, there were 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes in each period which were anti-dilutive. | ||||||||
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 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. | ||||||||
Recently Adopted Accounting Standards | ||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 clarifies the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 is effective for interim and annual reporting periods beginning after December 15, 2013 and should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Management does not expect the adoption of ASU 2013-11 to have a material impact on the Company’s financial position, results of operations or cash flows. | ||||||||
EQUITY_COMPENSATION_PROGRAM_AN
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | |||||||||||||
NOTE 2- EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | ||||||||||||||
a) Stock Option Expense | ||||||||||||||
The Company's results of operations for the three months ended September 30, 2013 and 2012 include stock-based compensation expense for stock option grants totaling $30,324 and $45,746, respectively. Such amounts have been included in the accompanying Condensed Consolidated Statements of Operations within cost of goods sold in the amount of $15,892 ($24,820 for 2012), and selling, general and administrative expenses in the amount of $14,432 ($20,926 for 2012). | ||||||||||||||
The Company's results of operations for the nine months ended September 30, 2013 and 2012 include stock-based compensation expense for stock option grants totaling $103,587 and $149,968, respectively. Such amounts have been included in the accompanying Condensed Consolidated Statements of Operations within cost of goods sold in the amount of $54,980 ($75,517 for 2012), and selling, general and administrative expenses in the amount of $48,527 ($74,451 for 2012). | ||||||||||||||
As of September 30, 2013 and 2012, there were $117,908 and $245,160 of unrecognized compensation cost, net of estimated forfeitures, related to non-vested stock options, which are expected to be recognized over a weighted average period of approximately 0.75 years and 2.0 years, respectively. | ||||||||||||||
There were 80,000 and 30,000 of stock options granted during the nine months ended September 30, 2013 and September 30, 2012, respectively. The following range of weighted-average assumptions were used to determine the fair value of stock option grants during the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Expected Dividend yield | — | % | — | % | ||||||||||
Expected Volatility | 98.1 - 110 | % | 90.8 | % | ||||||||||
Risk-free interest rate | 1.9 - 2.1 | % | 1.63 | % | ||||||||||
Expected term | 8 - 10 years | 10 years | ||||||||||||
b) Stock Option Activity | ||||||||||||||
The following table represents stock options granted, exercised and forfeited during the nine month period ended September 30, 2013: | ||||||||||||||
Stock Options | Number of | Weighted | Weighted | Aggregate | ||||||||||
Options | Average | Average | Intrinsic Value | |||||||||||
Exercise | Remaining | |||||||||||||
Price per Option | Contractual | |||||||||||||
Term (years) | ||||||||||||||
Outstanding at January 1, 2013 | 961,823 | $ | 1 | 6.7 | $ | — | ||||||||
Granted | 80,000 | 0.32 | ||||||||||||
Exercised | — | — | ||||||||||||
Expired/Forfeited | -77,802 | 0.67 | ||||||||||||
Outstanding at September 30, 2013 | 964,021 | $ | 0.97 | 6.1 | $ | — | ||||||||
Exercisable at September 30, 2013 | 720,622 | $ | 1.06 | 5.5 | $ | — | ||||||||
The following table represents non-vested stock options granted, vested and forfeited for the nine months ended September 30, 2013. | ||||||||||||||
Options | Weighted-Average Grant-Date | |||||||||||||
Fair Value | ||||||||||||||
Non-vested - January 1, 2013 | 298,678 | $ | 0.82 | |||||||||||
Granted | 80,000 | $ | 0.28 | |||||||||||
Vested | -106,778 | $ | 0.82 | |||||||||||
Forfeited | -28,501 | $ | 0.86 | |||||||||||
Non-vested – September 30, 2013 | 243,399 | $ | 0.64 | |||||||||||
The total fair value of options vested during the nine months ended September 30, 2013 and 2012 was $87,099 and $113,000, respectively. | ||||||||||||||
c) Restricted Stock Unit Awards | ||||||||||||||
There were no grants of restricted stock units granted under the 2010 Equity Compensation Program during the nine months ended September 30, 2013 and 2012. | ||||||||||||||
Restricted stock units granted usually vest over a three year period at the rate of one-third per year, contingent on continued employment or service during the vesting period. | ||||||||||||||
The Company's results of operations for the three months ended September 30, 2013 and 2012 include stock-based compensation expense for restricted stock unit grants totaling $1,212 and $1,212, respectively, and such amounts have been included in the accompanying Consolidated Statements of Operations within selling, general and administrative expenses. | ||||||||||||||
The Company's results of operations for the nine months ended September 30, 2013 and 2012 include stock-based compensation expense for restricted stock unit grants totaling $3,636 and $3,636, respectively, and such amounts have been included in the accompanying Consolidated Statements of Operations within selling, general and administrative expenses. | ||||||||||||||
A summary of the Company’s non-vested restricted stock units at September 30, 2013 is presented below: | ||||||||||||||
Restricted Stock Units | Weighted-Average Grant-Date | |||||||||||||
Fair Value | ||||||||||||||
Non-vested - January 1, 2013 | 10,000 | $ | 0.97 | |||||||||||
Granted | — | — | ||||||||||||
Vested | -5,000 | $ | 0.97 | |||||||||||
Forfeited | — | — | ||||||||||||
Non-vested – September 30, 2013 | 5,000 | $ | 0.97 | |||||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders Equity Note Disclosure [Text Block] | ' |
NOTE 3- STOCKHOLDERS’ EQUITY | |
For the nine months ended September 30, 2013, the Company issued 5,000 common shares on vesting of restricted stock awards. In April 2013, the Company issued an additional 163,879 common shares to the Inrad Optics 401k plan as a match to employee contributions for 2012. | |
OTHER_LONG_TERM_NOTES
OTHER LONG TERM NOTES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Other Liabilities Disclosure [Text Block] | ' | |||||||
NOTE 4 – OTHER LONG TERM NOTES | ||||||||
On July 26, 2012, the Company entered into a term loan agreement in the amount of $750,000 with Valley National Bank, Wayne, NJ. The loan is payable in equal monthly installments over five years beginning in August 2012 and bears an interest rate of 4.35% annually. The loan is secured with a security interest in new equipment. In 2012, the Company made a down-payment of $500,000 on the equipment and included the payment on the equipment in Other Assets at December 31, 2012. In March 2013, the Company made an installment payment in the amount of $242,500. During the second quarter of 2013, the installation of the equipment was completed and the final installment payment was made. The cost of the equipment including the down-payments and the associated installation costs were capitalized in the second quarter of 2013. | ||||||||
The Company also has a note payable to the U.S. Small Business Administration which bears interest at the rate of 4.0% and is due in 2032. | ||||||||
Other Long Term Notes consist of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Term Note Payable, payable in equal monthly installments of $13,953 and bearing | $ | 589 | $ | 694 | ||||
an interest rate of 4.35% and expiring in July 2017 | ||||||||
U.S. Small Business Administration term note payable in equal monthly installments | $ | 318 | $ | 325 | ||||
of $1,922 and bearing an interest rate of 4.0% and expiring in April 2032. | ||||||||
907 | 1,019 | |||||||
Less current portion | -150 | -150 | ||||||
Long-term debt, excluding current portion | $ | 757 | $ | 869 | ||||
WORKFORCE_REDUCTION
WORKFORCE REDUCTION | 9 Months Ended |
Sep. 30, 2013 | |
Workforce Reduction [Abstract] | ' |
Workforce Reduction Disclosure [Text Block] | ' |
NOTE 5 – WORKFORCE REDUCTION | |
In the first quarter of 2013, the Company instituted a plan to reduce its combined headcount by approximately 11%, in order to reduce costs and align its workforce with current business requirements while ensuring the Company would continue to meet its customers’ needs. The reductions affected both the Company’s Northvale, NJ and the Sarasota, FL operations. Annualized savings from the reductions are expected to be approximately $700,000. Severance and other separation costs of $112,000 and $29,000 were expensed in the first and second quarters and offset payroll savings of approximately $45,000 and $175,000 respectively. Accrued severance payments were $39,000, $71,000 and $31,000 in the first, second and third quarters of 2013, respectively. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Basis of Accounting, Policy [Policy Text Block] | ' | |||||||
Basis of Presentation | ||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of Inrad Optics, Inc. and its subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated. | ||||||||
The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||||||||
In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued. | ||||||||
Use of Estimates, Policy [Policy Text Block] | ' | |||||||
Management Estimates | ||||||||
These unaudited condensed consolidated financial statements and related disclosures have been prepared in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. | ||||||||
Inventory, Policy [Policy Text Block] | ' | |||||||
Inventories | ||||||||
Inventories are stated at the lower of cost (first-in-first-out basis) or market. 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. | ||||||||
Inventories are comprised of the following and are shown net of inventory reserves, in thousands: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
Raw materials | $ | 1,122 | $ | 1,267 | ||||
Work in process, including manufactured parts and components | 1,202 | 1,291 | ||||||
Finished goods | 1,004 | 1,039 | ||||||
$ | 3,328 | $ | 3,597 | |||||
Income Tax, Policy [Policy Text Block] | ' | |||||||
Income Taxes | ||||||||
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. | ||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company did not record a current provision for either state or federal income tax due to the losses incurred for both income tax and financial reporting purposes or the availability of net operating loss carry-forwards to offset against federal and state income tax. | ||||||||
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 consistent with the plans and estimates that management uses to manage the underlying business. A significant piece of objective negative evidence evaluated was the cumulative loss incurred by the Company over the three-year period ended December 31, 2012 as well as the nine months ended September 30, 2013. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. | ||||||||
On the basis of this evaluation, as of September 30, 2013, the Company’s management concluded that it is more likely than not that the Company will not be able to realize any portion of the benefit on the net deferred tax balance of $3,432,000 and therefore the Company continues to maintain a valuation allowance for the full amount of the net deferred tax balance. | ||||||||
When sufficient positive evidence exists, the Company’s income tax expense will be charged with the increase or decrease in its valuation allowance. An increase or reversal of the Company’s valuation allowance could have a significant negative or positive impact on the Company’s future earnings. | ||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||
Net (Loss) Income per Common Share | ||||||||
Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net (loss) income per common share is computed by dividing net (loss) income 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 three and nine months ended September 30, 2013, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. This included 969,021 common stock equivalents related to outstanding options and grants, in each respective period. In addition, there were 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes in each period which were anti-dilutive. | ||||||||
For the three and nine months ended September 30, 2012, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. This included 972,823 common stock equivalents related to outstanding options and grants, in each respective period. In addition, there were 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes in each period which were anti-dilutive. | ||||||||
Compensation Related Costs, Policy [Policy Text Block] | ' | |||||||
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 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. | ||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||
Recently Adopted Accounting Standards | ||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 clarifies the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 is effective for interim and annual reporting periods beginning after December 15, 2013 and should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Management does not expect the adoption of ASU 2013-11 to have a material impact on the Company’s financial position, results of operations or cash flows. | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
Inventories are comprised of the following and are shown net of inventory reserves, in thousands: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
Raw materials | $ | 1,122 | $ | 1,267 | ||||
Work in process, including manufactured parts and components | 1,202 | 1,291 | ||||||
Finished goods | 1,004 | 1,039 | ||||||
$ | 3,328 | $ | 3,597 | |||||
EQUITY_COMPENSATION_PROGRAM_AN1
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | |||||||||||||
The following range of weighted-average assumptions were used to determine the fair value of stock option grants during the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Expected Dividend yield | — | % | — | % | ||||||||||
Expected Volatility | 98.1 - 110 | % | 90.8 | % | ||||||||||
Risk-free interest rate | 1.9 - 2.1 | % | 1.63 | % | ||||||||||
Expected term | 8 - 10 years | 10 years | ||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||||
The following table represents stock options granted, exercised and forfeited during the nine month period ended September 30, 2013: | ||||||||||||||
Stock Options | Number of | Weighted | Weighted | Aggregate | ||||||||||
Options | Average | Average | Intrinsic Value | |||||||||||
Exercise | Remaining | |||||||||||||
Price per Option | Contractual | |||||||||||||
Term (years) | ||||||||||||||
Outstanding at January 1, 2013 | 961,823 | $ | 1 | 6.7 | $ | — | ||||||||
Granted | 80,000 | 0.32 | ||||||||||||
Exercised | — | — | ||||||||||||
Expired/Forfeited | -77,802 | 0.67 | ||||||||||||
Outstanding at September 30, 2013 | 964,021 | $ | 0.97 | 6.1 | $ | — | ||||||||
Exercisable at September 30, 2013 | 720,622 | $ | 1.06 | 5.5 | $ | — | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested [Table Text Block] | ' | |||||||||||||
The following table represents non-vested stock options granted, vested and forfeited for the nine months ended September 30, 2013. | ||||||||||||||
Options | Weighted-Average Grant-Date | |||||||||||||
Fair Value | ||||||||||||||
Non-vested - January 1, 2013 | 298,678 | $ | 0.82 | |||||||||||
Granted | 80,000 | $ | 0.28 | |||||||||||
Vested | -106,778 | $ | 0.82 | |||||||||||
Forfeited | -28,501 | $ | 0.86 | |||||||||||
Non-vested – September 30, 2013 | 243,399 | $ | 0.64 | |||||||||||
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | ' | |||||||||||||
A summary of the Company’s non-vested restricted stock units at September 30, 2013 is presented below: | ||||||||||||||
Restricted Stock Units | Weighted-Average Grant-Date | |||||||||||||
Fair Value | ||||||||||||||
Non-vested - January 1, 2013 | 10,000 | $ | 0.97 | |||||||||||
Granted | — | — | ||||||||||||
Vested | -5,000 | $ | 0.97 | |||||||||||
Forfeited | — | — | ||||||||||||
Non-vested – September 30, 2013 | 5,000 | $ | 0.97 | |||||||||||
OTHER_LONG_TERM_NOTES_Tables
OTHER LONG TERM NOTES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other Liabilities Disclosure [Abstract] | ' | |||||||
Schedule of Debt [Table Text Block] | ' | |||||||
Other Long Term Notes consist of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Term Note Payable, payable in equal monthly installments of $13,953 and bearing | $ | 589 | $ | 694 | ||||
an interest rate of 4.35% and expiring in July 2017 | ||||||||
U.S. Small Business Administration term note payable in equal monthly installments | $ | 318 | $ | 325 | ||||
of $1,922 and bearing an interest rate of 4.0% and expiring in April 2032. | ||||||||
907 | 1,019 | |||||||
Less current portion | -150 | -150 | ||||||
Long-term debt, excluding current portion | $ | 757 | $ | 869 | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Raw materials | $1,122,000 | $1,267,000 |
Work in process, including manufactured parts and components | 1,202,000 | 1,291,000 |
Finished goods | 1,004,000 | 1,039,000 |
Inventories, net | $3,328,190 | $3,596,646 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Tax Reconciliation, Change in Deferred Tax Assets Valuation Allowance | ' | ' | 3,432,000 | ' |
Common Stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 |
Warrant [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,875,000 | 1,875,000 | 1,875,000 | 1,875,000 |
Common Stock Options And Grants [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 969,021 | 972,823 | 969,021 | 972,823 |
EQUITY_COMPENSATION_PROGRAM_AN2
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Expected Dividend yield | 0.00% | 0.00% |
Expected Volatility | ' | 90.80% |
Risk-free interest rate | ' | 1.63% |
Expected term | ' | '10 years |
Minimum [Member] | ' | ' |
Expected Volatility | 98.10% | ' |
Risk-free interest rate | 1.90% | ' |
Expected term | '8 years | ' |
Maximum [Member] | ' | ' |
Expected Volatility | 110.00% | ' |
Risk-free interest rate | 2.10% | ' |
Expected term | '10 years | ' |
EQUITY_COMPENSATION_PROGRAM_AN3
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details 1) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Number of Options, Outstanding at January 1, 2013 | 961,823 | ' | ' |
Number of Options, Granted | 80,000 | 30,000 | ' |
Number of Options, Exercised | 0 | ' | ' |
Number of Options, Expired/Forfeited | -77,802 | ' | ' |
Number of Options, Outstanding at September 30, 2013 | 964,021 | ' | 961,823 |
Number of Options, Exercisable at September 30, 2013 | 720,622 | ' | ' |
Weighted Average Exercise Price per Option, Outstanding at January 1, 2013 | $1 | ' | ' |
Weighted Average Exercise Price per Option, Granted | $0.32 | ' | ' |
Weighted Average Exercise Price per Option, Exercised | $0 | ' | ' |
Weighted Average Exercise Price per Option, Expired/Forfeited | $0.67 | ' | ' |
Weighted Average Exercise Price per Option, Outstanding at September 30, 2013 | $0.97 | ' | $1 |
Weighted Average Exercise Price per Option, Exercisable at September 30, 2013 | $1.06 | ' | ' |
Weighted Average Remaining Contractual Term (years), Outstanding | '6 years 1 month 6 days | ' | '6 years 8 months 12 days |
Weighted Average Remaining Contractual Term (years), Exercisable at September 30, 2013 | '5 years 6 months | ' | ' |
Aggregate Intrinsic Value, Outstanding at January 1, 2013 | $0 | ' | ' |
Aggregate Intrinsic Value, Outstanding at September 30, 2013 | 0 | ' | 0 |
Aggregate Intrinsic Value, Exercisable at September 30, 2013 | $0 | ' | ' |
EQUITY_COMPENSATION_PROGRAM_AN4
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details 2) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Options, Non-vested - January 1, 2013 | 298,678 | ' |
Options, Granted | 80,000 | 30,000 |
Options, Vested | -106,778 | ' |
Options, Forfeited | -28,501 | ' |
Options, Non-vested - June 30, 2013 | 243,399 | ' |
Weighted-Average Grant-Date Fair Value, Non-vested at January 1, 2013 (in dollars per share) | $0.82 | ' |
Weighted-Average Grant-Date Fair Value, Granted (in dollars per share) | $0.28 | ' |
Weighted-Average Grant-Date Fair Value, Vested (in dollars per share) | $0.82 | ' |
Weighted-Average Grant-Date Fair Value, Forfeited (in dollars per share) | $0.86 | ' |
Weighted-Average Grant-Date Fair Value, Non-vested at September 30, 2013 (in dollars per share) | $0.64 | ' |
EQUITY_COMPENSATION_PROGRAM_AN5
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Non-vested Restricted Stock Units, Outstanding January 1, 2013 | 10,000 |
Non-vested Restricted Stock Units, Granted | 0 |
Non-vested Restricted Stock Units, Vested | -5,000 |
Non-vested Restricted Stock Units, Forfeited | 0 |
Non-vested Restricted Stock Units, Outstanding September 30, 2013 | 5,000 |
Weighted Average Grant Date Fair Value, Non-vested Restricted Stock Units, Outstanding January 1, 2013 (in dollars per share) | $0.97 |
Weighted Average Grant Date Fair Value, Non-vested Restricted Stock Units, Granted (in dollars per share) | $0 |
Weighted Average Grant Date Fair Value, Non-vested Restricted Stock Units, Vested (in dollars per share) | $0.97 |
Weighted Average Grant Date Fair Value, Non-vested Restricted Stock Units, Forfeited (in dollars per share) | $0 |
Weighted Average Grant Date Fair Value, Non-vested Restricted Stock Units, Outstanding September 30, 2013 (in dollars per share) | $0.97 |
EQUITY_COMPENSATION_PROGRAM_AN6
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total | ' | ' | 80,000 | 30,000 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | $30,324 | $45,746 | $103,587 | $149,968 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | 117,908 | 245,160 | 117,908 | 245,160 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years) | ' | ' | '9 months | '2 years |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | ' | ' | 87,099 | 113,000 |
Employee Stock Option [Member] | Cost of Sales [Member] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | 15,892 | 24,820 | 54,980 | 75,517 |
Employee Stock Option [Member] | Selling General and Administrative Expense [Member] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | 14,432 | 20,926 | 48,527 | 74,451 |
Restricted Stock Units (Rsus) [Member] | Selling General and Administrative Expense [Member] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | $1,212 | $1,212 | $3,636 | $3,636 |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Vested In Period | 5,000 |
Stock Issued During Period, Shares, Employee Benefit Plan | 163,879 |
OTHER_LONG_TERM_NOTES_Details
OTHER LONG TERM NOTES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Note Payable | $907,000 | $1,019,000 |
Less current portion | -150,000 | -150,000 |
Long-term debt, excluding current portion | 757,376 | 869,135 |
Term Note Payable [Member] | ' | ' |
Note Payable | 589,000 | 694,000 |
Us Small Business Administration Note Payable [Member] | ' | ' |
Note Payable | $318,000 | $325,000 |
OTHER_LONG_TERM_NOTES_Details_
OTHER LONG TERM NOTES (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended |
Jul. 26, 2012 | Sep. 30, 2013 | |
Term Note Payable [Member] | ' | ' |
Debt Instrument, Frequency of Periodic Payment | ' | 'equal monthly installments |
Debt Instrument, Periodic Payment | ' | $13,953 |
Debt Instrument, Interest Rate, Stated Percentage | ' | 4.35% |
Debt Instrument, Maturity Date | ' | 31-Jul-17 |
Cash Down Payment | 500,000 | ' |
Asset Held As Security Purchase Price Installment Payment | ' | 242,500 |
Debt Instrument, Face Amount | 750,000 | ' |
Long-term Debt, Maturities, Repayment Terms | 'five years | ' |
Debt Instrument, Issuance Date | 1-Aug-12 | ' |
Us Small Business Administration Note Payable [Member] | ' | ' |
Debt Instrument, Frequency of Periodic Payment | ' | 'equal monthly installments |
Debt Instrument, Periodic Payment | ' | $1,922 |
Debt Instrument, Interest Rate, Stated Percentage | ' | 4.00% |
Debt Instrument, Maturity Date | ' | 30-Apr-32 |
WORKFORCE_REDUCTION_Details_Te
WORKFORCE REDUCTION (Details Textual) (USD $) | 3 Months Ended | ||
Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | |
Percentage Reduction In Work Force | ' | 11.00% | ' |
Annualized Savings Due To Reduction In Work Force | ' | $700,000 | ' |
Severance Costs | 29,000 | 112,000 | ' |
Offset Payroll Savings Amount | 175,000 | 45,000 | ' |
Severance Costs Payable Quarter One | ' | ' | 39,000 |
Severance Costs Payable Quarter Two | ' | ' | 71,000 |
Severance Costs Payable Quarter Three | ' | ' | $31,000 |