Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 13, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 0-11668 | |
Entity Registrant Name | INRAD OPTICS, INC. | |
Entity Address, State or Province | NJ | |
Entity Tax Identification Number | 22-2003247 | |
Entity Address, Address Line One | 181 Legrand Avenue | |
Entity Address, City or Town | Northvale | |
Entity Incorporation, State or Country Code | NJ | |
Entity Address, Postal Zip Code | 07647 | |
City Area Code | 201 | |
Local Phone Number | 767-1910 | |
Title of 12(b) Security | None | |
No Trading Symbol Flag | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,022,320 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000719494 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,792,800 | $ 1,801,188 |
Accounts receivable, net | 1,200,372 | 1,287,653 |
Inventories, net | 2,892,823 | 2,524,871 |
Other current assets | 142,834 | 260,116 |
Total current assets | 6,028,829 | 5,873,828 |
Plant and equipment: | ||
Plant and equipment, at cost | 15,909,169 | 15,393,241 |
Less: Accumulated depreciation and amortization | (14,764,389) | (14,709,744) |
Total plant and equipment | 1,144,780 | 683,497 |
Precious metals | 561,909 | 561,909 |
Lease right-of-use, net | 50,654 | 125,724 |
Other assets | 26,993 | 26,993 |
Total Assets | 7,813,165 | 7,271,951 |
Current liabilities: | ||
Current portion of other long term notes | 60,029 | 16,403 |
Accounts payable and accrued liabilities | 706,342 | 554,604 |
Contract liabilities | 672,644 | 576,474 |
Current portion of lease obligation | 65,265 | 141,536 |
Total current liabilities | 1,504,280 | 1,289,017 |
Related party convertible notes payable | 2,500,000 | 2,500,000 |
Other long term notes, net of current portion | 372,476 | 157,578 |
Lease obligation, net of current portion | 0 | 2,692 |
Total liabilities | 4,376,756 | 3,949,287 |
Shareholders' equity: | ||
Common stock: $.01 par value; 60,000,000 authorized shares; 14,026,920 shares issued at March 31, 2022, and 13,967,257 shares issued at December 31, 2021 | 140,271 | 139,674 |
Capital in excess of par value | 19,805,712 | 19,733,996 |
Accumulated deficit | (16,494,624) | (16,536,056) |
Stockholders' Equity before Treasury Stock | 3,451,359 | 3,337,614 |
Less - Common stock in treasury, at cost (4,600 shares) | (14,950) | (14,950) |
Total shareholders' equity | 3,436,409 | 3,322,664 |
Total Liabilities and shareholders' equity | $ 7,813,165 | $ 7,271,951 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
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 | 14,026,920 | 13,967,257 |
Treasury stock, shares | 4,600 | 4,600 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Total revenue | $ 2,437,096 | $ 2,779,548 |
Cost and expenses: | ||
Cost of goods sold | 1,677,531 | 1,966,807 |
Selling, general and administrative expenses | 676,551 | 608,758 |
Costs and Expenses, Total | 2,354,082 | 2,575,565 |
Income from operations | 83,014 | 203,983 |
Other income (expense): | ||
Gain on forgiveness of PPP loan | 0 | 973,166 |
Interest expense-net | (41,582) | (36,815) |
Nonoperating Income (Expense) | (41,582) | 936,351 |
Income before income taxes | 41,432 | 1,140,334 |
Income tax (provision) benefit | 0 | 0 |
Net income | $ 41,432 | $ 1,140,334 |
Net income per common share - basic | $ 0 | $ 0.08 |
Net income per common share - diluted | $ 0 | $ 0.08 |
Weighted average shares outstanding - basic | 13,992,489 | 13,820,328 |
Weighted average shares outstanding - diluted | 14,586,524 | 14,099,251 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Capital in excess of par value | Accumulated Deficit | Treasury Stock | Total |
Beginning balance at Dec. 31, 2020 | $ 138,251 | $ 19,516,363 | $ (18,284,953) | $ (14,950) | $ 1,354,711 |
Beginning balance (in shares) at Dec. 31, 2020 | 13,824,928 | ||||
401K contribution | $ 0 | 0 | 0 | 0 | 0 |
401K contribution (in shares) | 0 | ||||
Stock-based compensation expense | $ 0 | 29,303 | 0 | 0 | 29,303 |
Net income | 0 | 0 | 1,140,334 | 0 | 1,140,334 |
Ending balance at Mar. 31, 2021 | $ 138,251 | 19,545,666 | (17,144,619) | (14,950) | 2,524,348 |
Ending balance (in shares) at Mar. 31, 2021 | 13,824,928 | ||||
Beginning balance at Dec. 31, 2021 | $ 139,674 | 19,733,996 | (16,536,056) | (14,950) | 3,322,664 |
Beginning balance (in shares) at Dec. 31, 2021 | 13,967,257 | ||||
401K contribution | $ 597 | 50,158 | 0 | 0 | 50,755 |
401K contribution (in shares) | 59,663 | ||||
Stock-based compensation expense | $ 0 | 21,558 | 0 | 0 | 21,558 |
Net income | 0 | 0 | 41,432 | 0 | 41,432 |
Ending balance at Mar. 31, 2022 | $ 140,271 | $ 19,805,712 | $ (16,494,624) | $ (14,950) | $ 3,436,409 |
Ending balance (in shares) at Mar. 31, 2022 | 14,026,920 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 41,432 | $ 1,140,334 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities | ||
Depreciation and amortization | 54,645 | 42,375 |
401K common stock contribution - non cash item | 50,755 | 0 |
Stock based compensation | 21,558 | 29,303 |
Gain on forgiveness of PPP loan | 0 | (973,166) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 87,281 | (451,809) |
Inventories, net | (367,952) | 177,885 |
Other assets | 117,282 | 19,966 |
Accounts payable and accrued liabilities | 147,846 | 145,992 |
Contract liabilities | 96,170 | (200,659) |
Total adjustments and changes | 251,211 | (1,210,113) |
Net cash provided by (used in) operating activities | 292,643 | (69,779) |
Cash flows from investing activities: | ||
Capital expenditures | (515,928) | (13,554) |
Net cash (used in) investing activities | (515,928) | (13,554) |
Cash flows from financing activities: | ||
Principal payments on notes payable-other | 214,897 | 0 |
Net cash (used in) financing activities | 214,897 | 0 |
Net (decrease) in cash and cash equivalents | (8,388) | (83,333) |
Cash and cash equivalents at beginning of period | 1,801,188 | 1,129,703 |
Cash and cash equivalents at end of period | 1,792,800 | 1,046,370 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 42,113 | 37,824 |
Income taxes paid | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Acquisition of equipment by issuing a note payable | $ 270,320 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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, 2021. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed 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. Accounts Receivable Accounts receivable are carried at net realizable value, net of write-offs and allowances. The Company establishes an allowance for doubtful accounts based on estimates as to the collectability of accounts receivable. Management specifically analyzes past-due accounts receivable balances and, additionally, considers bad debt history, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Uncollectible accounts receivable are written-off when it is determined that the balance will not be collected. Reserves for uncollectible accounts receivable are recorded as part of selling, general and administrative expenses in the Consolidated Statements of Operations, and were $46,000 at March 31, 2022, and $90,000 at December 31, 2021. Inventories Inventories are stated at the lower of cost (first-in-first-out basis) and net realizable value. 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 of $2,398,000 and $2,480,000 at March 31, 2022 and December 31, 2021, respectively: March 31, December 31, 2022 2021 (Unaudited) (in thousands) Raw materials $ 1,158 $ 1,160 Work in process, including manufactured parts and components 1,426 1,020 Finished goods 309 345 $ 2,893 $ 2,525 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 year in which the differences are expected to reverse. 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, 2021. 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, 2022, 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 deferred tax asset balance of $3,302,000 and therefore the Company continues to maintain a valuation allowance for the full amount of the net deferred tax asset 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. For the three months ended March 31, 2022 and 2021, the Company did not record a current provision for income taxes due to the permanent difference related to loan forgiveness and the availability of net operating loss carryforwards to offset taxable income for both income tax and financial reporting purposes. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options, stock grants and warrants using the average market prices during the period, including potential common shares issuable upon conversion of outstanding convertible notes, except if the effect on the per share amounts is anti-dilutive. For the three months ended March 31, 2022, 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. In addition, 162,500 common stock options were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. For the three months ended March 31, 2021, 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. In addition, 476,300 common stock options were excluded from basic and diluted net income per common share because their effect is anti-dilutive. A reconciliation of the shares used in the calculation of basic and diluted earnings (loss) per common share is as follows: Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic Income Per Share: Net Income $ 41,432 13,992,489 $ 0.00 $ 1,140,334 13,820,328 $ 0.08 Effect of dilutive securities: Convertible Notes — — — — — — Accrued Interest on Convertible Notes — — — — — — Warrants — — — — — — Stock Options — 594,035 — — 278,923 — Diluted Income Per Share: $ 41,432 14,586,524 $ 0.00 $ 1,140,334 14,099,251 $ 0.08 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. Recent Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) which amended guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for interim and annual periods beginning in 2023, with earlier application permitted. The Company does not expect that the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU update is intended to simplify the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. This guidance is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
REVENUE | |
REVENUE | NOTE 2 –REVENUE The Company’s revenues are comprised of product sales as well as products and services provided under long-term government contracts with its customers. All revenue is recognized when the Company satisfies its performance obligation(s) under the contract (either implicit or explicit) by transferring the promised product or service to its customer either when (or as) its customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of a standalone selling price for each distinct product or service in the contract, which is generally based on an observable price. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Shipping and handling costs are included in cost of goods sold. The Company’s performance obligations under long-term government contracts are generally satisfied over time. Revenue from products or services transferred to customers under these performance obligations accounted for approximately 0% and 1.5% of revenue for the three months ended March 31, 2022 and 2021, respectively. This revenue is generally recognized using an input measure based upon the proportion of actual costs incurred to estimated total project costs, which is a method used to best depict the Company’s performance to date under the terms of the contract. Accounting for these long-term government contracts involves the use of various techniques to estimate total revenue and costs. The Company estimates profit on these long-term government contracts as the difference between total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, among other things, labor productivity, costs and availability of materials, and timing of funding by the U.S. government. The nature of these long-term agreements may give rise to several types of variable consideration, such as claims, awards and incentive fees. Historically, these amounts of variable consideration are not considered significant. Additionally, contract estimates may include additional revenue for submitted contract modifications if there exists an enforceable right to the modification, the amount can be reasonably estimated and its realization is probable. These estimates are based on historical collection experience, anticipated performance, and the Company’s best judgement at the time. These amounts are generally included in the contract’s transaction price and are allocated over the remaining performance obligations. Changes in judgments on these above estimates could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of associated income. Under these long-term government contracts, the Company may receive payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. In the event a contract loss becomes known, the entire amount of the estimated loss is recognized in the Consolidated Statements of Operations. The majority of the Company’s revenue is from products and services transferred to customers at a point in time and was approximately 100% and 98.5% of revenue for the three months ended March 31, 2022 and 2021, respectively. The Company recognizes revenue at the point in time in which the customer obtains control of the product or service, which is generally when product title passes to the customer upon shipment. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at its physical location. The following table summarizes the Company’s sales by market area: Three Months Ended March 31, 2022 2021 Aerospace & Defense $ 847,293 $ 1,176,330 Process Control & Metrology 1,403,133 1,077,376 Laser Systems 64,567 114,746 Scientific / R&D 122,103 411,096 Total $ 2,437,096 $ 2,779,548 Net sales by timing of transfers of goods and services is as follows: Three Months Ended March 31, 2022 2021 Transfer at point in time $ 2,437,096 $ 2,739,329 Transfer over time — 40,219 Total net sales $ 2,437,096 $ 2,779,548 The timing of revenue recognition, billings and cash collections results in billed receivables, costs in excess of billings (contract assets), and billings in excess of costs (contract liabilities, previously deferred revenue) on the Consolidated Balance Sheet. Contract liabilities also include customer advances or prepayments. Costs in excess of billings and billings in excess of costs associated with long-term government contracts were not significant at March 31, 2022 or 2021. At March 31, 2022 and 2021, there was no remaining revenue to be recognized from the long-term government contracts. On March 31, 2022, the Company had approximately $17.4 million of performance obligations, which is also referred to as backlog. Approximately 22% of the March 31, 2022, backlog is related to projects that will extend beyond March 31, 2023. |
EQUITY COMPENSATION PROGRAM AND
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | NOTE 3- EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION a) Stock Option Expense The Company’s results of operations for the three months ended March 31, 2022 and 2021, include stock-based compensation expense for stock option grants totaling $21,558 and $29,302, respectively. The following table shows the amounts for stock-based compensation included in cost of sales and selling, general and administrative expense for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Cost of sales $ 3,252 $ 7,202 Selling, general and administrative 18,306 22,101 Total stock-based compensation expense $ 21,558 $ 29,303 As of March 31, 2022 and 2021, there were $299,000 and $211,000 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 1.54 and 1.57 years, respectively. There were 200,000 stock options granted during each of the three months ended March 31, 2022, and 2021. 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, 2022 and 2021: Three Months Ended March 31, 2022 2021 Expected Dividend yield — % — % Expected Volatility 105 % 106 % Risk-free interest rate 1.54 % 0.86 % Expected term 10 years 10 years b) Stock Option Activity The following table represents stock options granted, exercised and forfeited during the three months ended March 31, 2022: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value Outstanding January 1, 2022 1,152,667 $ 0.60 7.40 $ 107,573 Granted 200,000 1.20 — — Exercised — — — — Expired/Forfeited — — — — Outstanding March 31, 2022 1,352,667 $ 0.69 7.38 $ 970,105 Exercisable at March 31, 2022 1,011,832 $ 0.59 5.95 $ 854,550 The following table represents non-vested stock options granted, vested and forfeited for the three months ended March 31, 2022: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2022 276,670 0.89 Granted 200,000 1.09 Vested (135,835) 0.70 Forfeited — — Non-Vested - March 31, 2022 340,835 0.89 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 4 - STOCKHOLDERS’ EQUITY The Company approved a matching contribution to participants in the Inrad Optics 401k Plan (the “Plan”) for the year ended December 31, 2021, in February 2022. The Company contributed 59,663 common shares of Inrad Optics, Inc. and cash of $76,133 to the Plan in March, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY TRANSACTIONS On July 22, 2020, the maturity dates of a $1,500,000 Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible Promissory Note to an affiliate of Clarex were each extended to April 1, 2024, from April 1, 2021. The notes bear interest at 6%. Interest accrues yearly and is payable on maturity. Unpaid interest, along with principal, may be converted into securities of the Company as follows: the notes are convertible in the aggregate into 1,500,000 units and 1,000,000 units, respectively, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to acquire 0.75 shares of common stock at a price of $1.35 per share. As part of the agreement to extend the maturity date of the notes, the expiration dates of the warrants were extended from April 1, 2024 to April 1, 2027. |
OTHER LONG-TERM NOTES
OTHER LONG-TERM NOTES | 3 Months Ended |
Mar. 31, 2022 | |
OTHER LONG-TERM NOTES | |
OTHER LONG-TERM NOTES | NOTE 6 – OTHER LONG-TERM NOTES Other Long-Term Notes consist of the following: March 31, December 31, 2022 2021 (Unaudited) (in thousands) U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029 $ 170 $ 174 Long-term equipment financing in equal installments of $5,236 and bearing an interest rate of 6.1% and expiring in January 2027 (1) 262 — Less current portion (60) (16) Long-term debt, excluding current portion $ 372 $ 158 (1) The Company purchased certain equipment in the three months ended March 31, 2022, financing approximately $270,000 at a fixed annual interest rate of 6.1% for five years in equal monthly installments. |
PAYROLL PROTECTION PROGRAM
PAYROLL PROTECTION PROGRAM | 3 Months Ended |
Mar. 31, 2022 | |
PAYROLL PROTECTION PROGRAM | |
PAYROLL PROTECTION PROGRAM | NOTE 7 – PAYROLL PROTECTION PROGRAM On May 6, 2020, the Company received loan proceeds of approximately $973,000 (the “PPP Loan”), under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) which was enacted March 27, 2020. The PPP Loan, which was in the form of a promissory note, dated May 4, 2020, issued by the Company, initially matured on May 4, 2022, and bore interest at a rate of 1.0% per annum. On January 19, 2021, the Company received notification from the Small Business Association that the Company’s Forgiveness Application of the PPP Loan and accrued interest, totaling $980,000, was approved in full, and the Company had no further obligations related to the PPP Loan. Accordingly, the Company recorded a gain on the forgiveness of the PPP Loan in the three-month period ending March 31, 2021. |
LEASE AMENDMENT
LEASE AMENDMENT | 3 Months Ended |
Mar. 31, 2022 | |
LEASE AMENDMENT | |
LEASE AMENDMENT | NOTE 8 – LEASE AMENDMENT The Company entered into an amendment and extension of its building lease on July 8, 2019, retroactive to June 1, 2019. Under the guidance of ASU 2016-02, Leases (Topic 842), the Company determines if such an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease at inception of the arrangement. The Company determined that this lease is an operating lease and presented as a right-of-use lease asset, short term lease liability and long-term lease liability on the consolidated balance sheet. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales and general and administrative expenses on the consolidated statement of operations. An initial right-of-use asset of $0.8 million was recognized as a non-cash asset addition with the signing of the July 8, 2019, office lease. Cash paid for amounts included in the present value of operating lease liability was $0.1 million during the three months ended March 31, 2021, and is included in operating cash flows. Operating lease costs were $0.1 million during each of the three months ended March 31, 2022 and 2021, respectively. |
IMPACT OF COVID-19
IMPACT OF COVID-19 | 3 Months Ended |
Mar. 31, 2022 | |
IMPACT OF COVID-19 | |
IMPACT OF COVID-19 | NOTE 9 – IMPACT OF COVID-19 The COVID-19 pandemic has created significant volatility and economic disruption and the impact on our future consolidated results of operations remains uncertain. The extent to which COVID-19 impacts our employees, operations, customers, suppliers and financial results depends on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic (and whether there is a resurgence or multiple resurgences in the future, including the impact of new variants); government actions taken in response to the pandemic, including required shutdowns, vaccine or testing mandates; supply chain disruptions; rising inflation; labor shortages; and the effect on our customers demand for our products. We may also be impacted by state actions, orders and policies regarding the COVID-19 pandemic. While our operations were considered essential business under the Executive Orders of New Jersey’s Governor, we cannot predict whether new temporary closures, shelter-in-place orders, travel, or quarantine policies will have an impact on our operations. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business and Operations | 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, 2021. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued. |
Management Estimates | 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. |
Accounts receivable | Accounts Receivable Accounts receivable are carried at net realizable value, net of write-offs and allowances. The Company establishes an allowance for doubtful accounts based on estimates as to the collectability of accounts receivable. Management specifically analyzes past-due accounts receivable balances and, additionally, considers bad debt history, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Uncollectible accounts receivable are written-off when it is determined that the balance will not be collected. Reserves for uncollectible accounts receivable are recorded as part of selling, general and administrative expenses in the Consolidated Statements of Operations, and were $46,000 at March 31, 2022, and $90,000 at December 31, 2021. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in-first-out basis) and net realizable value. 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 of $2,398,000 and $2,480,000 at March 31, 2022 and December 31, 2021, respectively: March 31, December 31, 2022 2021 (Unaudited) (in thousands) Raw materials $ 1,158 $ 1,160 Work in process, including manufactured parts and components 1,426 1,020 Finished goods 309 345 $ 2,893 $ 2,525 |
Income taxes | 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 year in which the differences are expected to reverse. 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, 2021. 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, 2022, 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 deferred tax asset balance of $3,302,000 and therefore the Company continues to maintain a valuation allowance for the full amount of the net deferred tax asset 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. For the three months ended March 31, 2022 and 2021, the Company did not record a current provision for income taxes due to the permanent difference related to loan forgiveness and the availability of net operating loss carryforwards to offset taxable income for both income tax and financial reporting purposes. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options, stock grants and warrants using the average market prices during the period, including potential common shares issuable upon conversion of outstanding convertible notes, except if the effect on the per share amounts is anti-dilutive. For the three months ended March 31, 2022, 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. In addition, 162,500 common stock options were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. For the three months ended March 31, 2021, 2,500,000 common shares and 1,875,000 common shares from warrants issuable upon conversion of outstanding related party convertible notes were excluded from the computation of basic and diluted net income per common share because their effect is anti-dilutive. In addition, 476,300 common stock options were excluded from basic and diluted net income per common share because their effect is anti-dilutive. A reconciliation of the shares used in the calculation of basic and diluted earnings (loss) per common share is as follows: Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic Income Per Share: Net Income $ 41,432 13,992,489 $ 0.00 $ 1,140,334 13,820,328 $ 0.08 Effect of dilutive securities: Convertible Notes — — — — — — Accrued Interest on Convertible Notes — — — — — — Warrants — — — — — — Stock Options — 594,035 — — 278,923 — Diluted Income Per Share: $ 41,432 14,586,524 $ 0.00 $ 1,140,334 14,099,251 $ 0.08 |
Stock-based compensation | 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. |
Recent Accounting Standards | Recent Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) which amended guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for interim and annual periods beginning in 2023, with earlier application permitted. The Company does not expect that the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU update is intended to simplify the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. This guidance is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of inventory | March 31, December 31, 2022 2021 (Unaudited) (in thousands) Raw materials $ 1,158 $ 1,160 Work in process, including manufactured parts and components 1,426 1,020 Finished goods 309 345 $ 2,893 $ 2,525 |
Schedule of reconciliation of shares used in calculation of basic and diluted earnings (loss) per common share | A reconciliation of the shares used in the calculation of basic and diluted earnings (loss) per common share is as follows: Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic Income Per Share: Net Income $ 41,432 13,992,489 $ 0.00 $ 1,140,334 13,820,328 $ 0.08 Effect of dilutive securities: Convertible Notes — — — — — — Accrued Interest on Convertible Notes — — — — — — Warrants — — — — — — Stock Options — 594,035 — — 278,923 — Diluted Income Per Share: $ 41,432 14,586,524 $ 0.00 $ 1,140,334 14,099,251 $ 0.08 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
REVENUE | |
Schedule of disaggregation of revenue | The following table summarizes the Company’s sales by market area: Three Months Ended March 31, 2022 2021 Aerospace & Defense $ 847,293 $ 1,176,330 Process Control & Metrology 1,403,133 1,077,376 Laser Systems 64,567 114,746 Scientific / R&D 122,103 411,096 Total $ 2,437,096 $ 2,779,548 |
Schedule of net sales by timing of transfers of goods and services | Net sales by timing of transfers of goods and services is as follows: Three Months Ended March 31, 2022 2021 Transfer at point in time $ 2,437,096 $ 2,739,329 Transfer over time — 40,219 Total net sales $ 2,437,096 $ 2,779,548 |
EQUITY COMPENSATION PROGRAM A_2
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | |
Schedule of Stock-based Compensation Included in Cost of Sales and Selling, General and Administrative Expense | Three Months Ended March 31, 2022 2021 Cost of sales $ 3,252 $ 7,202 Selling, general and administrative 18,306 22,101 Total stock-based compensation expense $ 21,558 $ 29,303 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Three Months Ended March 31, 2022 2021 Expected Dividend yield — % — % Expected Volatility 105 % 106 % Risk-free interest rate 1.54 % 0.86 % Expected term 10 years 10 years |
Schedule of Share-based Compensation, Stock Options, Activity | The following table represents stock options granted, exercised and forfeited during the three months ended March 31, 2022: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value Outstanding January 1, 2022 1,152,667 $ 0.60 7.40 $ 107,573 Granted 200,000 1.20 — — Exercised — — — — Expired/Forfeited — — — — Outstanding March 31, 2022 1,352,667 $ 0.69 7.38 $ 970,105 Exercisable at March 31, 2022 1,011,832 $ 0.59 5.95 $ 854,550 |
Schedule of Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested | The following table represents non-vested stock options granted, vested and forfeited for the three months ended March 31, 2022: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2022 276,670 0.89 Granted 200,000 1.09 Vested (135,835) 0.70 Forfeited — — Non-Vested - March 31, 2022 340,835 0.89 |
OTHER LONG-TERM NOTES (Tables)
OTHER LONG-TERM NOTES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
OTHER LONG-TERM NOTES | |
Schedule of Debt | March 31, December 31, 2022 2021 (Unaudited) (in thousands) U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029 $ 170 $ 174 Long-term equipment financing in equal installments of $5,236 and bearing an interest rate of 6.1% and expiring in January 2027 (1) 262 — Less current portion (60) (16) Long-term debt, excluding current portion $ 372 $ 158 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 1,158,000 | $ 1,160,000 |
Work in process, including manufactured parts and components | 1,426,000 | 1,020,000 |
Finished goods | 309,000 | 345,000 |
Inventories, net | $ 2,892,823 | $ 2,524,871 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basic and diluted earnings (loss) per common share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income(Loss) (Numerator) | ||
Net income (loss) | $ 41,432 | $ 1,140,334 |
Convertible Notes | 0 | 0 |
Accrued Interest on Convertible Notes | 0 | 0 |
Warrants | 0 | 0 |
Stock Options | 0 | 0 |
Diluted Income (Loss) Per Share: | ||
Net Income (Loss) | $ 41,432 | $ 1,140,334 |
Shares (Denominator) | ||
Weighted average shares outstanding - basic | 13,992,489 | 13,820,328 |
Convertible Notes | 0 | 0 |
Accrued Interest on Convertible Notes | 0 | 0 |
Warrants | 0 | 0 |
Stock Options | 594,035 | 278,923 |
Diluted income (loss) per share: | ||
Weighted average shares outstanding - diluted | 14,586,524 | 14,099,251 |
Basic income (loss) per share: | ||
Net income per common share - basic | $ 0 | $ 0.08 |
Earnings per share diluted, conversion notes | 0 | 0 |
Earnings per Share diluted, accrued interest on convertible notes | 0 | 0 |
Earnings per share diluted, warrants | 0 | 0 |
Earnings per share diluted, stock options | 0 | 0 |
Diluted Income (Loss) Per Share: | ||
Earnings Per Share, Diluted | $ 0 | $ 0.08 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |||
Inventory Reserves | $ 2,398,000 | $ 2,480,000 | |
Deferred Tax Assets, Valuation Allowance, Total | 3,302,000 | ||
Income tax expenses | 0 | $ 0 | |
Selling, General and Administrative Expenses | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |||
Provision for Doubtful Accounts | $ 46,000 | $ 90,000 | |
Employee Stock Option | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 162,500 | 476,300 | |
Warrant | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,875,000 | 1,875,000 | |
Common Stock | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 | 2,500,000 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,437,096 | $ 2,779,548 |
Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 847,293 | 1,176,330 |
Process Control & Metrology | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,403,133 | 1,077,376 |
Laser Systems | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 64,567 | 114,746 |
Scientific / R&D | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 122,103 | $ 411,096 |
REVENUE - Transfer of Goods and
REVENUE - Transfer of Goods and Services (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,437,096 | $ 2,779,548 |
Transferred at Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,437,096 | 2,739,329 |
Transferred over Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 | $ 40,219 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Remaining revenue to be recognized from the long-term government contracts | $ 0 | $ 0 |
Amount of performance obligation | $ 17,400,000 | |
Percentage of remaining performance obligation | 22.00% | |
Transferred over Time | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue from products or services | 0.00% | 1.50% |
Transferred at Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue from products or services | 100.00% | 98.50% |
EQUITY COMPENSATION PROGRAM A_3
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION (Details) - Employee Stock Option - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 21,558 | |
Cost of Sales | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 3,252 | $ 7,202 |
Selling, General and Administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 18,306 | $ 22,101 |
EQUITY COMPENSATION PROGRAM A_4
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Weighted-average assumptions (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | ||
Expected Dividend yield | 0.00% | 0.00% |
Expected Volatility | 105.00% | 106.00% |
Risk-free interest rate | 1.54% | 0.86% |
Expected term | 10 years | 10 years |
EQUITY COMPENSATION PROGRAM A_5
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, Granted | 200,000 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding at beginning | 1,152,667 | |
Options, Granted | 200,000 | |
Options, Exercised | 0 | |
Option, Expired/Forfeited | 0 | |
Options outstanding at ending | 1,352,667 | 1,152,667 |
Options, Exercisable at Ending | 1,011,832 | |
Weighted Average Exercise Price Per Options Outstanding at Beginning (in dollars per share) | $ 0.60 | |
Weighted Average Exercise Price per Option, Granted | 1.20 | |
Weighted Average Exercise Price per Option, Exercised | 0 | |
Weighted Average Exercise Price per Option, Expired/Forfeited | 0 | |
Weighted Average Exercise Price Options Outstanding at Ending (in dollars per share) | 0.69 | $ 0.60 |
Weighted Average Exercise Price per Option, Exercisable at ending | $ 0.59 | |
Weighted Average Remaining Contractual Term, Options Outstanding at Beginning | 7 years 4 months 17 days | 7 years 4 months 24 days |
Weighted Average Remaining Contractual Term, Exercisable at Ending | 5 years 11 months 12 days | |
Aggregate Intrinsic Value, Options Outstanding at Beginning (in dollars) | $ 970,105 | $ 107,573 |
Aggregate Intrinsic Value, Options Exercisable at Ending | $ 854,550 |
EQUITY COMPENSATION PROGRAM A_6
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Non-vested stock option activity (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION | |
Options - Non-vested | shares | 276,670 |
Options - Granted | shares | 200,000 |
Options - Vested | shares | (135,835) |
Options - Forfeited | shares | 0 |
Options - Non-vested | shares | 340,835 |
Weighted-Average Grant-Date Fair Value - Non-vested at Ending balance (in dollars per share) | $ / shares | $ 0.89 |
Weighted-Average Grant-Date Fair Value - Granted (in dollars per share) | $ / shares | 1.09 |
Weighted-Average Grant-Date Fair Value - Vested (in dollars per share) | $ / shares | 0.70 |
Weighted-Average Grant-Date Fair Value - Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value - Non-vested at Ending balance (in dollars per share) | $ / shares | $ 0.89 |
EQUITY COMPENSATION PROGRAM A_7
EQUITY COMPENSATION PROGRAM AND STOCK BASED COMPENSATION - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
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, Total | 200,000 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 21,558 | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 299,000 | $ 211,000 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years) | 1 year 6 months 14 days | 1 year 6 months 25 days |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 1 Months Ended |
Mar. 31, 2022USD ($)shares | |
STOCKHOLDERS' EQUITY | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares | 59,663 |
Cash Contributions | $ | $ 76,133 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Subordinated convertible notes [Member] | Jul. 22, 2020USD ($)item$ / sharesshares |
Related Party Transaction [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 6.00% |
Common Stock | |
Related Party Transaction [Line Items] | |
Number of shares/warrants comprised in a unit (in shares) | 1 |
Warrants To Purchase Common Stock Number Of Shares Per Warrant | 0.75 |
Investment Warrants, Exercise Price | $ / shares | $ 1.35 |
Warrant | |
Related Party Transaction [Line Items] | |
Number of shares/warrants comprised in a unit (in shares) | 1 |
Clarex | |
Related Party Transaction [Line Items] | |
Convertible Subordinated Debt | $ | $ 1,500,000 |
Debt Instrument, Convertible, Number of Equity Instruments | item | 1,500,000 |
Affiliate Of Clarex | |
Related Party Transaction [Line Items] | |
Convertible Subordinated Debt | $ | $ 1,000,000 |
Debt Instrument, Convertible, Number of Equity Instruments | item | 1,000,000 |
OTHER LONG-TERM NOTES (Details)
OTHER LONG-TERM NOTES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Less current portion | $ (60,029) | $ (16,403) |
Long-term debt, excluding current portion | 372,000 | 158,000 |
Us Small Business Administration Note Payable | ||
Debt Instrument [Line Items] | ||
U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in July 2029. | 170,000 | $ 174,000 |
Long-term Equipment Financing | ||
Debt Instrument [Line Items] | ||
Long-term equipment financing in equal installments of $5,236 and bearing an interest rate of 6.1% and expiring in January 2027 | $ 262,000 |
OTHER LONG-TERM NOTES - Additio
OTHER LONG-TERM NOTES - Additional information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Us Small Business Administration Note Payable | ||
Debt Instrument [Line Items] | ||
Monthly installment payment | $ 1,922,000 | $ 1,922,000 |
Fixed interest rate | 4.00% | 4.00% |
Long-term Equipment Financing | ||
Debt Instrument [Line Items] | ||
Debt term | 5 years | |
Debt, face amount | $ 270,000 | |
Equal installment | $ 5,236,000 | $ 5,236,000 |
Fixed interest rate | 6.10% | 6.10% |
PAYROLL PROTECTION PROGRAM (Det
PAYROLL PROTECTION PROGRAM (Details) - USD ($) | May 06, 2020 | Jan. 19, 2021 | May 04, 2020 |
Debt Instrument [Line Items] | |||
PPP Loan and accrued interest forgiven | $ 980,000 | ||
PPP Loan | |||
Debt Instrument [Line Items] | |||
Proceeds from PPP Loan | $ 973,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% |
LEASE AMENDMENT - Additional in
LEASE AMENDMENT - Additional information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jul. 08, 2019 | |
LEASE AMENDMENT | ||||
Lease right-of-use, net | $ 50,654 | $ 125,724 | $ 800,000 | |
Operating Lease, Payments | $ 100,000 | |||
Operating lease costs | $ 100,000 | $ 100,000 |