Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 14-May-15 | |
Document Information [Line Items] | ||
Entity Registrant Name | Inrad Optics, Inc. | |
Entity Central Index Key | 719494 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | INRD | |
Entity Common Stock, Shares Outstanding | 12,733,208 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $1,002,335 | $1,003,254 |
Accounts receivable (net of allowance for doubtful accounts of $15,000 in 2015 and 2014) | 1,157,927 | 1,126,655 |
Inventories, net | 2,933,227 | 2,686,721 |
Other current assets | 182,358 | 142,576 |
Total current assets | 5,275,847 | 4,959,206 |
Plant and equipment: | ||
Plant and equipment, at cost | 15,756,539 | 15,741,243 |
Less: Accumulated depreciation and amortization | -14,297,782 | -14,172,811 |
Total plant and equipment | 1,458,757 | 1,568,432 |
Precious Metals | 553,925 | 553,925 |
Intangible Assets, net | 260,556 | 280,196 |
Other Assets | 34,656 | 34,656 |
Total Assets | 7,583,741 | 7,396,415 |
Current Liabilities: | ||
Current portion of other long term notes | 164,100 | 164,100 |
Accounts payable and accrued liabilities | 1,283,526 | 1,017,755 |
Customer advances | 107,628 | 170,166 |
Total current liabilities | 1,555,254 | 1,352,021 |
Related Party Convertible Notes Payable | 2,500,000 | 2,500,000 |
Other Long Term Notes, net of current portion | 508,489 | 548,747 |
Total liabilities | 4,563,743 | 4,400,768 |
Commitments | ||
Shareholders' Equity: | ||
Common stock: $.01 par value; 60,000,000 authorized shares; 12,354,093 shares issued at March 31, 2015 and 12,354,093 issued at December 31, 2014 | 123,543 | 123,543 |
Capital in excess of par value | 18,443,885 | 18,437,405 |
Accumulated deficit | -15,532,480 | -15,550,351 |
Stockholders' Equity before Treasury Stock | 3,034,948 | 3,010,597 |
Less - Common stock in treasury, at cost (4,600 shares) | -14,950 | -14,950 |
Total shareholders’ equity | 3,019,998 | 2,995,647 |
Total Liabilities and Shareholders’ Equity | $7,583,741 | $7,396,415 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 12,354,093 | 12,354,093 |
Treasury stock, shares | 4,600 | 4,600 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Total revenue | $2,530,225 | $1,904,380 |
Cost and expenses: | ||
Cost of goods sold | 1,838,442 | 1,981,678 |
Restructuring costs | 0 | 58,665 |
Selling, general and administrative expenses | 629,257 | 759,105 |
Costs and Expenses, Total | 2,467,699 | 2,799,448 |
Income (loss) from operations | 62,526 | -895,068 |
Other (expense) income: | ||
Interest expense - net | -44,655 | -44,875 |
Gain on sale or disposal of plant and equipment | 0 | 65,074 |
Other (expense) income | -44,655 | 20,199 |
Income (loss) before income taxes | 17,871 | -874,869 |
Income tax (provision) benefit | 0 | 0 |
Net income (loss) | $17,871 | ($874,869) |
Net income (loss) per common share - basic (in dollars per share) | $0 | ($0.07) |
Net income (loss) per common share - diluted (in dollars per share) | $0 | ($0.07) |
Weighted average shares outstanding - basic (in shares) | 12,349,493 | 12,046,836 |
Weighted average shares outstanding - diluted (in shares) | 12,403,321 | 12,046,836 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $17,871 | ($874,869) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 144,611 | 147,967 |
Gain on sale or disposal of plant and equipment | 0 | -65,074 |
Stock based compensation | 6,480 | 33,539 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -31,272 | 385,706 |
Inventories, net | -246,506 | -53,115 |
Other current assets | -39,782 | -12,525 |
Accounts payable and accrued liabilities | 265,771 | 29,221 |
Customer advances | -62,538 | 86,560 |
Total adjustments and changes | 36,764 | 552,279 |
Net cash provided by (used in) operating activities | 54,635 | -322,590 |
Cash flows from investing activities: | ||
Capital expenditures | -15,296 | -172,457 |
Proceeds from sale of plant and equipment | 0 | 78,380 |
Net cash (used in) investing activities | -15,296 | -94,077 |
Cash flows from financing activities: | ||
Principal payments of notes payable-other | -40,258 | -38,621 |
Net cash (used in) financing activities | -40,258 | -38,621 |
Net (decrease) in cash and cash equivalents | -919 | -455,288 |
Cash and cash equivalents at beginning of period | 1,003,254 | 2,451,263 |
Cash and cash equivalents at end of period | 1,002,335 | 1,999,975 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 44,880 | 47,000 |
Income taxes paid | $0 | $2,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, 2014. | ||||||||
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 assumptions and estimates that affect the reported amounts of assets and liabilities, 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 assumptions and estimates 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 assumptions and estimates. 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: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 1,013 | 1,049 | |||||
Work in process, including manufactured parts and components | 1,213 | 956 | ||||||
Finished goods | 707 | 682 | ||||||
$ | 2,933 | $ | 2,687 | |||||
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 months ended March 31, 2015 and 2014, 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 realize 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, 2014. 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 March 31, 2015, 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 $4,597,000 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 Income (Loss) per Common Share | ||||||||
Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net 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 three months ended March 31, 2015, there were a total of 53,828 common stock equivalents related to outstanding stock options which were included in the computation of diluted net loss per share because they were dilutive. There were 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes, in addition to 653,276 stock options which were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. | ||||||||
For the three months ended March 31, 2014, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. This included 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes, in addition to 972,523 common stock options and grants. | ||||||||
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 Guidance | ||||||||
In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”). ASU 2015-03 was issued to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. This guidance should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial statements. | ||||||||
In January 2015, the FASB issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) (“ASU 2015-01”). ASU 2015-01 changed the requirements for reporting extraordinary and unusual items in the income statement. The update eliminates the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. A reporting entity may apply the amendments prospectively or retrospectively to all periods presented in the financial statements. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | ||||||||
In August 2014, the Financial Accounting Standards Board issued authoritative accounting guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. This guidance is effective for public and non-public entities for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The Company is currently assessing the expected impact, if any, that this Accounting Standards Update will have on its consolidated financial statements. | ||||||||
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued an Accounting Standards Update (“ASU”) which supersedes virtually all existing revenue recognition guidance under U.S. GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016 and prohibits early adoption. The update allows for the use of either the retrospective or modified retrospective approach of adoption. Management is currently evaluating the available transition methods and the potential impact of adoption on the Company's Financial Statements. | ||||||||
EQUITY_COMPENSATION_PROGRAM_AN
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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 March 31, 2015 and 2014 include stock-based compensation expense for stock option grants totaling $6,480 and $32,327, respectively. Such amounts have been included in the accompanying Condensed Consolidated Statements of Operations within cost of goods sold in the amount of $1,148 ($16,190 for 2014), and selling, general and administrative expenses in the amount of $5,332 ($16,137 for 2014). | ||||||||||||||
As of March 31, 2015 and 2014, there were $45,015 and $85,471 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 1.5 years and 1.5 years, respectively. | ||||||||||||||
There were 133,000 and 103,000 stock options granted during the three months ended March 31, 2015 and 2014, respectively. The following range of weighted-average assumptions were used to determine the fair value of stock option grants during the three months ended March 31, 2015 and 2014: | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
Expected Dividend yield | —% | —% | ||||||||||||
Expected Volatility | 122 – 127% | 116% | ||||||||||||
Risk-free interest rate | 1.96% | 1.90% | ||||||||||||
Expected term | 10 years | 10 years | ||||||||||||
b) | Stock Option Activity | |||||||||||||
The following table represents stock options granted, exercised and forfeited during the three month period ended March 31, 2015: | ||||||||||||||
Stock Options | Number of | Weighted | Weighted | Aggregate | ||||||||||
Options | Average | Average | Intrinsic Value | |||||||||||
Exercise | Remaining | |||||||||||||
Price per Option | Contractual | |||||||||||||
Term (years) | ||||||||||||||
Outstanding at January 1, 2015 | 877,817 | $ | 0.93 | 5.1 | $ | — | ||||||||
Granted | 133,000 | 0.2 | ||||||||||||
Exercised | — | — | ||||||||||||
Expired/Forfeited | -119,041 | 1.13 | ||||||||||||
Outstanding at March 31, 2015 | 891,776 | $ | 0.79 | 5.4 | $ | 38,650 | ||||||||
Exercisable at March 31, 2015 | 668,047 | $ | 0.97 | 5.1 | $ | 10,314 | ||||||||
The following table represents non-vested stock options granted, vested and forfeited for the three months ended March 31, 2015. | ||||||||||||||
Options | Weighted-Average Grant-Date | |||||||||||||
Fair Value ($) | ||||||||||||||
Non-vested - January 1, 2015 | 150,059 | 0.27 | ||||||||||||
Granted | 133,000 | 0.19 | ||||||||||||
Vested | -49,330 | 0.26 | ||||||||||||
Forfeited | -10,000 | 0.22 | ||||||||||||
Non-vested – March 31, 2015 | 223,729 | 0.22 | ||||||||||||
The total fair value of options vested during the three months ended March 31, 2015 and 2014 was $13,036 and $65,227, respectively. | ||||||||||||||
c) | Restricted Stock Unit Awards | |||||||||||||
There were no grants of restricted stock units granted under the 2010 Equity Compensation Program during the three months ended March 31, 2015 and 2014. | ||||||||||||||
The Company's results of operations for the three months ended March 31, 2015 and 2014 include stock-based compensation expense for restricted stock unit grants totaling $0 and $1,212, respectively, and such amounts have been included in the accompanying Consolidated Statements of Operations within selling, general and administrative expenses. | ||||||||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 3- STOCKHOLDERS’ EQUITY |
In April 2015, the Company issued an additional 383,715 common shares to the Inrad Optics 401k plan as a match to employee contributions for 2014. | |
OTHER_LONG_TERM_NOTES
OTHER LONG TERM NOTES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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 equipment. The Company also has a note payable to the U.S. Small Business Administration which bears interest at the rate of 4.0% annually and is due in 2032. | ||||||||
Other Long Term Notes consist of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Term Note Payable, payable in equal monthly installments of $13,953 and bearing an interest rate of 4.35% and expiring in July 2017 | $ | 370 | $ | 408 | ||||
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 April 2032. | $ | 302 | $ | 305 | ||||
672 | 713 | |||||||
Less current portion | -164 | -164 | ||||||
Long-term debt, excluding current portion | $ | 508 | $ | 549 | ||||
RESTRUCTURING_COSTS
RESTRUCTURING COSTS | 3 Months Ended |
Mar. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | NOTE 5 – RESTRUCTURING COSTS |
The Company completed the transfer of the Sarasota operations to the Northvale, New Jersey facility and the Florida facility was closed as of March 31, 2014. | |
Restructuring charges of $59,000 were expensed in the first quarter of 2014 and cash expenditures related to the consolidation were $124,000 for the three months ended March 31, 2014. The consolidation of the operation was completed by December 31, 2014 and there were no restructuring charges in the three months ended March 31, 2015. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, 2014. | ||||||||
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 assumptions and estimates that affect the reported amounts of assets and liabilities, 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 assumptions and estimates 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 assumptions and estimates. 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: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 1,013 | 1,049 | |||||
Work in process, including manufactured parts and components | 1,213 | 956 | ||||||
Finished goods | 707 | 682 | ||||||
$ | 2,933 | $ | 2,687 | |||||
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 months ended March 31, 2015 and 2014, 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 realize 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, 2014. 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 March 31, 2015, 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 $4,597,000 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 Income (Loss) per Common Share | |||||||
Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net 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 three months ended March 31, 2015, there were a total of 53,828 common stock equivalents related to outstanding stock options which were included in the computation of diluted net loss per share because they were dilutive. There were 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes, in addition to 653,276 stock options which were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. | ||||||||
For the three months ended March 31, 2014, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive. This included 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible notes, in addition to 972,523 common stock options and grants. | ||||||||
Share-based Compensation, Option and Incentive Plans 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] | New Accounting Guidance | |||||||
In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”). ASU 2015-03 was issued to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. This guidance should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial statements. | ||||||||
In January 2015, the FASB issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) (“ASU 2015-01”). ASU 2015-01 changed the requirements for reporting extraordinary and unusual items in the income statement. The update eliminates the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. A reporting entity may apply the amendments prospectively or retrospectively to all periods presented in the financial statements. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | ||||||||
In August 2014, the Financial Accounting Standards Board issued authoritative accounting guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. This guidance is effective for public and non-public entities for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The Company is currently assessing the expected impact, if any, that this Accounting Standards Update will have on its consolidated financial statements. | ||||||||
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued an Accounting Standards Update (“ASU”) which supersedes virtually all existing revenue recognition guidance under U.S. GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016 and prohibits early adoption. The update allows for the use of either the retrospective or modified retrospective approach of adoption. Management is currently evaluating the available transition methods and the potential impact of adoption on the Company's Financial Statements. | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Schedule of Inventory, Current [Table Text Block] | Inventories are comprised of the following and are shown net of inventory reserves: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 1,013 | 1,049 | |||||
Work in process, including manufactured parts and components | 1,213 | 956 | ||||||
Finished goods | 707 | 682 | ||||||
$ | 2,933 | $ | 2,687 | |||||
EQUITY_COMPENSATION_PROGRAM_AN1
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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 three months ended March 31, 2015 and 2014: | |||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
Expected Dividend yield | —% | —% | ||||||||||||
Expected Volatility | 122 – 127% | 116% | ||||||||||||
Risk-free interest rate | 1.96% | 1.90% | ||||||||||||
Expected term | 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 three month period ended March 31, 2015: | |||||||||||||
Stock Options | Number of | Weighted | Weighted | Aggregate | ||||||||||
Options | Average | Average | Intrinsic Value | |||||||||||
Exercise | Remaining | |||||||||||||
Price per Option | Contractual | |||||||||||||
Term (years) | ||||||||||||||
Outstanding at January 1, 2015 | 877,817 | $ | 0.93 | 5.1 | $ | — | ||||||||
Granted | 133,000 | 0.2 | ||||||||||||
Exercised | — | — | ||||||||||||
Expired/Forfeited | -119,041 | 1.13 | ||||||||||||
Outstanding at March 31, 2015 | 891,776 | $ | 0.79 | 5.4 | $ | 38,650 | ||||||||
Exercisable at March 31, 2015 | 668,047 | $ | 0.97 | 5.1 | $ | 10,314 | ||||||||
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 three months ended March 31, 2015. | |||||||||||||
Options | Weighted-Average Grant-Date | |||||||||||||
Fair Value ($) | ||||||||||||||
Non-vested - January 1, 2015 | 150,059 | 0.27 | ||||||||||||
Granted | 133,000 | 0.19 | ||||||||||||
Vested | -49,330 | 0.26 | ||||||||||||
Forfeited | -10,000 | 0.22 | ||||||||||||
Non-vested – March 31, 2015 | 223,729 | 0.22 | ||||||||||||
OTHER_LONG_TERM_NOTES_Tables
OTHER LONG TERM NOTES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Liabilities Disclosure [Abstract] | ||||||||
Schedule of Debt [Table Text Block] | Other Long Term Notes consist of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Term Note Payable, payable in equal monthly installments of $13,953 and bearing an interest rate of 4.35% and expiring in July 2017 | $ | 370 | $ | 408 | ||||
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 April 2032. | $ | 302 | $ | 305 | ||||
672 | 713 | |||||||
Less current portion | -164 | -164 | ||||||
Long-term debt, excluding current portion | $ | 508 | $ | 549 | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Raw materials | $1,013,000 | $1,049,000 |
Work in process, including manufactured parts and components | 1,213,000 | 956,000 |
Finished goods | 707,000 | 682,000 |
Inventories, net | $2,933,227 | $2,686,721 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Summary of Significant Accounting Policies [Line Items] | ||
Deferred Tax Assets, Valuation Allowance | 4,597,000 | |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 53,828 | |
Convertible Debt Securities [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 | 2,500,000 |
Warrant [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,875,000 | 1,875,000 |
Equity Option [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 653,276 | 972,523 |
EQUITY_COMPENSATION_PROGRAM_AN2
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Dividend yield | 0.00% | 0.00% |
Expected Volatility | 116.00% | |
Risk-free interest rate | 1.96% | 1.96% |
Expected term | 10 years | 10 years |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Volatility | 127.00% | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Volatility | 122.00% |
EQUITY_COMPENSATION_PROGRAM_AN3
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details 1) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Outstanding at January 1, 2015 | 877,817 | |
Number of Options, Granted | 133,000 | |
Number of Options, Exercised | 0 | |
Number of Options, Expired/Forfeited | -119,041 | |
Number of Options, Outstanding at March 31, 2015 | 891,776 | 877,817 |
Number of Options, Exercisable at March 31, 2015 | 668,047 | |
Weighted Average Exercise Price per Option, Outstanding at January 1, 2015 | $0.93 | |
Weighted Average Exercise Price per Option, Granted | $0.20 | |
Weighted Average Exercise Price per Option, Exercised | $0 | |
Weighted Average Exercise Price per Option, Expired/Forfeited | $1.13 | |
Weighted Average Exercise Price per Option, Outstanding at March 31, 2015 | $0.79 | $0.93 |
Weighted Average Exercise Price per Option, Exercisable at March 31, 2015 | $0.97 | |
Weighted Average Remaining Contractual Term, Options Outstanding | 5 years 4 months 24 days | 5 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Exercisable at March 31, 2015 | 5 years 1 month 6 days | |
Aggregate Intrinsic Value, Options Outstanding (in dollars) | $38,650 | $0 |
Aggregate Intrinsic Value, Options Exercisable at March 31, 2015 (in dollars) | $10,314 |
EQUITY_COMPENSATION_PROGRAM_AN4
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details 2) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options - Non-vested - January 1, 2014 | 150,059 |
Options - Granted | 133,000 |
Options - Vested | -49,330 |
Options - Forfeited | -10,000 |
Options - Non-vested - September 30, 2014 | 223,729 |
Weighted-Average Grant-Date Fair Value, Non-vested at January 1, 2014 (in dollars per share) | $0.27 |
Weighted-Average Grant-Date Fair Value - Granted (in dollars per share) | $0.19 |
Weighted-Average Grant-Date Fair Value - Vested (in dollars per share) | $0.26 |
Weighted-Average Grant-Date Fair Value - Forfeited (in dollars per share) | $0.22 |
Weighted-Average Grant-Date Fair Value, Non-vested at September 30, 2014 (in dollars per share) | $0.22 |
EQUITY_COMPENSATION_PROGRAM_AN5
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Net Of Forfeitures | 133,000 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $45,015 | $85,471 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years) | 1 year 6 months | 1 year 6 months |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | 13,036 | 65,227 |
Allocated Share-based Compensation Expense | 6,480 | 32,327 |
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Net Of Forfeitures | 133,000 | 103,000 |
Employee Stock Option [Member] | Cost of Sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 1,148 | 16,190 |
Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 5,332 | 16,137 |
Restricted Stock Units (Rsus) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $0 | $1,212 |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) (Inrad Optics 401k plan [Member], Subsequent Event [Member]) | 1 Months Ended |
Apr. 30, 2015 | |
Inrad Optics 401k plan [Member] | Subsequent Event [Member] | |
Class of Stock [Line Items] | |
Stock Issued During Period, Shares, Employee Benefit Plan | 383,715 |
OTHER_LONG_TERM_NOTES_Details
OTHER LONG TERM NOTES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Note Payable | $672,000 | $713,000 |
Less current portion | -164,000 | -164,000 |
Long-term debt, excluding current portion | 508,489 | 548,747 |
Term Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Note Payable | 370,000 | 408,000 |
U.S. Small Business Administration Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Note Payable | $302,000 | $305,000 |
OTHER_LONG_TERM_NOTES_Details_
OTHER LONG TERM NOTES (Details Textual) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Term Note Payable [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Face Amount | $750,000 |
Debt Instrument, Issuance Date | 1-Aug-12 |
Debt Instrument, Frequency of Periodic Payment | monthly |
Debt Instrument, Periodic Payment | 13,953 |
Debt Instrument, Interest Rate, Stated Percentage | 4.35% |
Debt Instrument, Maturity Date | 31-Jul-17 |
Us Small Business Administration Note Payable [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Frequency of Periodic Payment | monthly |
Debt Instrument, Periodic Payment | $1,922 |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% |
Debt Instrument, Maturity Date | 30-Apr-32 |
RESTRUCTURING_COSTS_Details_Te
RESTRUCTURING COSTS (Details Textual) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Charges | $59,000 |
Payments for Restructuring | $124,000 |