Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 14, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2024 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 0-11668 | |
Entity Registrant Name | INRAD OPTICS, INC. | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 22-2003247 | |
Entity Address, Address Line One | 181 Legrand Avenue | |
Entity Address, City or Town | Northvale | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07647 | |
City Area Code | 201 | |
Local Phone Number | 767-1910 | |
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 | 16,767,642 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000719494 | |
Amendment Flag | false | |
Title of 12(b) Security | None | |
Security Exchange Name | NONE | |
Document Quarterly Report | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 2,496,476 | $ 2,973,384 |
Accounts receivable, net of allowance for credit losses of $46,000 at March 31, 2024 and December 31, 2023 | 1,333,777 | 1,591,996 |
Inventories, net | 3,380,662 | 3,148,708 |
Other current assets | 830,669 | 665,262 |
Total current assets | 8,041,584 | 8,379,350 |
Plant and equipment: | ||
Plant and equipment, at cost | 16,699,043 | 16,330,559 |
Less: Accumulated depreciation and amortization | (15,123,302) | (15,034,667) |
Total plant and equipment | 1,575,741 | 1,295,892 |
Precious metals | 561,909 | 561,909 |
Lease right-of-use, net | 367,593 | 443,532 |
Deferred tax asset | 1,970,000 | 1,000,000 |
Other assets | 26,993 | 26,993 |
Total Assets | 12,543,820 | 11,707,676 |
Current liabilities: | ||
Current portion of other long term notes | 72,311 | 71,362 |
Accounts payable and accrued liabilities | 760,028 | 832,149 |
Contract liabilities | 1,057,053 | 1,067,183 |
Current portion of lease obligation | 313,567 | 309,618 |
Related party convertible notes payable | 2,500,000 | 0 |
Total current liabilities | 4,702,959 | 2,280,312 |
Related party convertible notes payable | $ 0 | $ 2,500,000 |
Notes Payable, Noncurrent, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Other long term notes, net of current portion | $ 226,955 | $ 245,379 |
Lease obligation, net of current portion | 54,027 | 133,915 |
Total liabilities | 4,983,941 | 5,159,606 |
Shareholders' equity: | ||
Common stock: $.01 par value; 60,000,000 authorized shares; 14,255,575 shares issued at March 31, 2024, and 14,235,575 shares issued at December 31, 2023 | 142,557 | 142,357 |
Capital in excess of par value | 20,169,214 | 20,135,722 |
Accumulated deficit | (12,736,942) | (13,715,059) |
Stockholders' equity before treasury stock | 7,574,829 | 6,563,020 |
Less - Common stock in treasury, at cost (4,600 shares) | (14,950) | (14,950) |
Total shareholders' equity | 7,559,879 | 6,548,070 |
Total Liabilities and shareholders' equity | $ 12,543,820 | $ 11,707,676 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for credit losses | $ 46,000 | $ 46,000 |
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 | 14,255,575 | 14,235,575 |
Treasury stock, shares | 4,600 | 4,600 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Total revenue | $ 2,889,799 | $ 2,807,161 |
Cost and expenses: | ||
Cost of goods sold | 1,801,539 | 1,926,891 |
Selling, general and administrative expenses | 1,046,498 | 750,362 |
Cost and expenses, Total | 2,848,037 | 2,677,253 |
Income from operations | 41,762 | 129,908 |
Other income (expense): | ||
Interest expense-net | (33,645) | (38,381) |
Nonoperating Income (Expense) | (33,645) | (38,381) |
Income before income taxes | 8,117 | 91,528 |
Income tax benefit (provision) | 0 | |
Net income | $ 978,117 | $ 91,528 |
Net income per common share - basic | $ 0.07 | $ 0.01 |
Net income per common share - diluted | $ 0.06 | $ 0.01 |
Weighted average shares outstanding - basic | 14,250,975 | 14,088,320 |
Weighted average shares outstanding - diluted | 17,189,908 | 14,759,188 |
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, 2022 | $ 140,931 | $ 19,925,293 | $ (16,383,482) | $ (14,950) | $ 3,667,792 |
Beginning balance (in shares) at Dec. 31, 2022 | 14,092,920 | ||||
401K contribution | $ 333 | 54,388 | 0 | 0 | 54,721 |
401K contribution (in shares) | 33,322 | ||||
Stock-based compensation expense | $ 0 | 34,203 | 0 | 0 | 34,203 |
Stock options exercised | $ 793 | 30,993 | 0 | 0 | 31,786 |
Stock options exercised (in shares) | 79,333 | ||||
Net Income (Loss) | $ 0 | 0 | 91,528 | 0 | 91,528 |
Ending balance at Mar. 31, 2023 | $ 142,057 | 20,044,877 | (16,291,954) | (14,950) | 3,880,030 |
Ending balance (in shares) at Mar. 31, 2023 | 14,205,575 | ||||
Beginning balance at Dec. 31, 2023 | $ 142,357 | 20,135,722 | (13,715,059) | (14,950) | 6,548,070 |
Beginning balance (in shares) at Dec. 31, 2023 | 14,235,575 | ||||
401K contribution | $ 0 | 0 | 0 | 0 | 0 |
401K contribution (in shares) | 0 | ||||
Stock-based compensation expense | $ 0 | 28,292 | 0 | 0 | 28,292 |
Stock options exercised | $ 200 | 5,200 | 0 | 0 | 5,400 |
Stock options exercised (in shares) | 20,000 | ||||
Net Income (Loss) | $ 0 | 0 | 978,117 | 0 | 978,117 |
Ending balance at Mar. 31, 2024 | $ 142,557 | $ 20,169,214 | $ (12,736,942) | $ (14,950) | $ 7,559,879 |
Ending balance (in shares) at Mar. 31, 2024 | 14,255,575 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||
Net income | $ 978,117 | $ 91,528 | |
Adjustments to reconcile net income to net cash provided (used in) by operating activities | |||
Depreciation and amortization | 88,635 | 74,353 | |
401K common stock contribution - non cash item | 54,721 | ||
Stock based compensation | 28,292 | 34,203 | |
Income tax benefit | 0 | $ 1,000,000 | |
Change in inventory reserve | 10,666 | 149,667 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 258,219 | (78,464) | |
Inventories | (242,620) | (327,036) | |
Other current and non - current assets | (89,468) | 222,306 | |
Other current and non - current liabilities | (75,940) | 3,677 | |
Accounts payable and accrued liabilities | (72,121) | (74,882) | |
Contract liabilities | (10,130) | 13,983 | |
Total adjustments and changes | (1,074,467) | 72,528 | |
Net cash provided by operating activities | (96,350) | 164,056 | |
Cash flows from investing activities: | |||
Capital expenditures | (368,484) | (187,961) | |
Net cash (used in) investing activities | (368,484) | (187,961) | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 5,400 | 31,786 | |
Principal payments on notes payable-other, net | (17,474) | (16,533) | |
Net cash provided by financing activities | (12,074) | 15,253 | |
Net (decrease) in cash and cash equivalents | (476,908) | (8,652) | |
Cash and cash equivalents at beginning of period | 2,973,384 | 2,003,485 | 2,003,485 |
Cash and cash equivalents at end of period | 2,496,476 | 1,994,833 | $ 2,973,384 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 41,500 | 42,454 | |
Income taxes paid | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
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 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, 2023. 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 Beginning in 2023, the Company adopted Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Company extends credit to its customers that satisfy pre-defined credit criteria. Accounts receivable are recorded net of an allowance for credit losses. The Company estimates the allowance for credit losses based on an analysis of the aging of accounts receivable, an assessment of collectability, including any known or anticipated bankruptcies, customer-specific circumstances, and an evaluation of current economic conditions. Actual write-off of receivables may differ from estimates due to changes in customer and economic circumstances. For the period ended March 31, 2024, there were no changes to the estimate for credit losses. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net-realizable value. Cost of manufactured goods includes material, labor and overhead. The Company records a reserve for slow moving inventory as a charge against earnings for all products identified as surplus, slow moving, or discontinued. Excess work-in-process costs are charged against earnings whenever estimated costs-of-completion exceed unbilled revenues. Inventories are comprised of the following and are shown net of inventory reserves of $2,144,000 and $2,134,000, at March 31, 2024 and December 31, 2023, respectively: March 31, December 31, 2024 2023 (Unaudited) (in thousands) Raw materials $ 719 $ 718 Work in process, including manufactured parts and components 2,138 1,915 Finished goods 524 516 $ 3,381 $ 3,149 Income Taxes In evaluating the Company’s ability to recover deferred tax assets in future periods, management considers the available positive and negative factors. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative, including the Company’s recent operating results, the existence of cumulative income or losses and near-term forecasts of future taxable income that is consistent with the plans and estimates management is using to manage the underlying business. During 2023, the Company reached a cumulative income position over the previous three years. The cumulative three-year income is considered objective, verifiable, and positive evidence and thus received significant weighting. Additional positive evidence considered by the Company in its assessment included recent utilization of tax attribute carryforwards and future forecasts of continued profitability. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. Therefore, during the fourth quarter of 2023, based on all available positive and negative evidence, the Company determined that it was appropriate to release a portion of the valuation allowance on the Company’s U.S. federal and state deferred tax assets. The Company recognized a $1.0 million discrete tax benefit during the year ended December 31, 2023, as a result of the valuation allowance release. In the three months ended March 31, 2024, the Company determined that sufficient evidence existed to release the remaining portion of its deferred tax valuation allowance on the Company’s U.S. federal and state deferred tax assets. The Company recognized a $970,000 discrete tax benefit during the three months ended March 31, 2024 as a result of the valuation allowance release. For the three months ended March 31, 2024, and 2023, the Company did not record a current provision for income taxes due to 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, 2024, a total of 2,500,000 common shares issuable upon conversion of outstanding convertible notes have been included in the diluted computation of net income per share. 1,875,000 common shares underlying warrants issuable upon conversion of outstanding related party convertible notes have been excluded from the diluted computation of net income per share because their effect is anti-dilutive.A total of 438,933 common stock equivalents related to outstanding options have been included in the computation of diluted earnings per share because their effect is dilutive. For the three months ended March 31, 2023, 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, 161,000 common stock options were excluded from the computation of 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, 2024 March 31, 2023 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic Income Per Share: Net Income $ 978,117 14,250,975 $ 0.07 $ 91,528 14,088,320 $ 0.01 Effect of dilutive securities: Convertible Notes — 2,500,000 — — — — Accrued Interest on Convertible Notes 37,500 — — — — — Warrants — — — — — — Stock Options — 438,933 — — 670,868 — Diluted Income Per Share: $ 1,015,617 17,189,908 $ 0.06 $ 91,528 14,759,188 $ 0.01 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 December 2023, the FASB issued new guidance designed to improve corporate income tax disclosure requirements, primarily through increased disaggregation disclosures within the effective tax rate reconciliation as well as enhanced disclosures on corporate income taxes paid. The guidance is effective for all fiscal years beginning after December 15, 2024. The new standard can be adopted on a prospective basis with an option to be adopted retrospectively and early adoption is permitted. The Company is not early adopting the standard. We are currently evaluating this guidance to determine its impact on our condensed consolidated financial statements. In November, 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023 - 07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant expenses. The updated standard is effective for annual periods beginning in fiscal 2024 and interim periods beginning in the first quarter of fiscal 2025. Early adoption is permitted. The Company is currently evaluating this guidance to determine to determine its impact on our 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 was effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Accordingly, the Company adopted the provisions of this guidance on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements. |
CONCENTRATION OF CASH
CONCENTRATION OF CASH | 3 Months Ended |
Mar. 31, 2024 | |
CONCENTRATION OF CASH | |
CONCENTRATION OF CASH | NOTE 2 – CONCENTRATION OF CASH In May 2023, the Company entered into an Insured Cash Sweep (“ICS”) agreement with Valley National Bank, where funds are placed at destination institutions through the service of the Promontory Interfinancial Network, LLC. Such funds placed into the deposit account will not exceed the Federal Deposit Insurance Corporation (“FDIC”) standard maximum deposit insurance amount, currently $250,000, at any one destination institution thereby eliminating credit risk on cash balances over $250,000. The Company was subject to credit risk due to the concentration of cash balances that exceeded the federally insured limits by approximately $2.25 million at March 31, 2024, and $2.72 million at December 31, 2023, on cash balances of $2.5 million and $3.0 million at March 31,2024, and December 31, 2023, respectively. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2024 | |
REVENUE | |
REVENUE | NOTE 3 – 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 majority of the Company’s revenue is from products and services transferred to customers at a point in time and was 100% of revenue for each of the three months ended March 31, 2024 and 2023, respectively. The Company recognizes revenue at the point in time at which the customer obtains control of the product or service, which is generally when the product title passes to the customer upon shipment. In limited cases,the 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, 2024 2023 Aerospace & Defense $ 549,362 $ 444,451 Process Control & Metrology 2,070,703 2,274,396 Scientific / R&D 269,734 88,314 Total $ 2,889,799 $ 2,807,161 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. On March 31, 2024, the Company had approximately $14.0 million of performance obligations, which is also referred to as backlog. Approximately 7.5% of the March 31, 2024, backlog is related to projects that will extend beyond March 31, 2025. |
EQUITY COMPENSATION PROGRAM AND
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION | |
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION | NOTE 4- EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION a) Stock Option Expense The Company’s results of operations for the three months ended March 31, 2024 and 2023, include stock-based compensation expense for stock option grants totaling $28,292 and $34,203, 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, 2024 and 2023: Three Months Ended March 31, 2024 2023 Cost of sales $ 3,851 $ 3,243 Selling, general and administrative 24,441 30,960 Total stock-based compensation expense $ 28,292 $ 34,203 As of March 31, 2024, and 2023, there were $93,000 and $208,000 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 1.20 years and 1.26 years respectively. There were no stock options granted during the three months ended March 31, 2024, and 20,000 stock options granted during the three months ended March 31, 2023. 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, 2023: Three Months Ended March 31, 2023 Expected Dividend yield — % Expected Volatility 92 % Risk-free interest rate 0.86 % Expected term 10 years b) Stock Option Activity The following table represents stock options granted, exercised, and forfeited during the three months ended March 31, 2024: Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value Outstanding January 1, 2024 1,112,667 $ 0.75 6.88 $ 1,214,875 Granted — — Exercised (20,000) 0.27 Expired/Forfeited — — Outstanding March 31, 2024 1,092,667 $ 0.75 6.91 $ 829,290 Exercisable at March 31, 2024 1,015,991 $ 0.72 6.57 $ 786,748 The following table represents non-vested stock options granted, vested, and forfeited for the three months ended March 31, 2024: Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2024 206,675 0.89 Granted — — Vested (130,001) 0.87 Forfeited — — Non-Vested - March 31, 2024 76,674 1.16 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 5 - STOCKHOLDERS’ EQUITY The Company approved a matching contribution to participants in the Inrad Optics 401k Plan (the “Plan”) for the year ended December 31, 2023, in February 2024. The Company contributed cash of $141,000 to the Plan in February 2024. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS On October 12, 2023, 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 January 15, 2025, from August 15, 2024. 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. The warrants expire on August 15, 2027. The Clarex Notes have been reclassified to current liabilities because the maturity dates are less than one year from March 31, 2024. See also Note 9 - Subsequent Events. |
OTHER LONG-TERM NOTES
OTHER LONG-TERM NOTES | 3 Months Ended |
Mar. 31, 2024 | |
OTHER LONG-TERM NOTES | |
OTHER LONG-TERM NOTES | NOTE 7 – OTHER LONG-TERM NOTES Other Long-Term Notes consist of the following: March 31, December 31, 2024 2023 (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 $ 136 $ 140 Long-term equipment financing in equal installments of $5,236 and bearing an interest rate of 6.1% and expiring in January 2027 (1) 163 176 Less current portion (72) (71) Long-term debt, excluding current portion $ 227 $ 245 (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 payable in equal monthly installments. |
LEASE AMENDMENT
LEASE AMENDMENT | 3 Months Ended |
Mar. 31, 2024 | |
LEASE AMENDMENT | |
LEASE AMENDMENT | NOTE 8 – LEASE AMENDMENT The Company entered into an amendment and extension of its building lease on July 25, 2022, retroactive to June 1, 2022. Under the guidance of ASU 2016-02, Leases (Topic 842), the Company must determine if such an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease at the inception of the arrangement. The Company determined that this lease is an operating lease and presented as a right-of-use lease asset, short-term lease liability, and long-term lease liability on the consolidated balance sheet. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales and general and administrative expenses on the consolidated statement of operations. An initial right-of-use asset of approximately $0.9 million was recognized as a non-cash asset addition with the signing of the July 29, 2022, lease amendment. Cash paid for amounts included in the present value of the operating lease liability was $0.2 million for each of the three months ended March 31, 2024 and 2023, and is included in operating cash flows. Operating lease costs were $0.1 million during each of the three months ended March 31, 2024 and 2023, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS Merger Agreement On April 8, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Luxium Solutions, LLC, a Delaware limited liability company (“Parent”), and Indigo Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub”), providing for the acquisition of the Company by Parent. Pursuant to the terms of the Merger Agreement, Merger Sub will, at the closing of the transactions contemplated by the Merger Agreement, merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent (the “Merger”). Pursuant to the Merger Agreement, each share of common stock of the Company, par value $0.01 per share (a “Share”), other than Cancelled Sharesas (as defined in the Merger Agreement) issued and outstanding immediately prior to the effective time of the Merger shall be automatically converted into the right to receive $1.10 in cash, without interest, payable to the holder thereof upon surrender of such Shares in the manner provided in the Merger Agreement. The consummation of the Merger is not subject to any financing condition. The Merger Agreement contains customary representations and warranties of the Company, Parent and Merger Sub. The Merger Agreement also contains customary covenants and agreements, including with respect to the operation of the business of the Company between signing and closing, public disclosures and other matters. The consummation of the transactions contemplated by the Merger Agreement is subject to the fulfillment or waiver (if permitted by law) of certain customary closing conditions, including, without limitation, (i) the absence of any law, injunction or order enacted, entered, promulgated, or enforced by any governmental entity which prohibits, enjoins or makes illegal the consummation of the Merger and the transactions contemplated by the Merger Agreement, (ii) obtaining the affirmative vote of a majority of the votes cast by the holders of the outstanding Shares entitled to vote in favor of the approval and adoption of the Merger Agreement, (iii) the conversion of the Convertible Notes (as defined below) and cancellation of all Noteholder Warrants (as defined below), in each case as contemplated by the Conversion Agreement (as defined below), (iv) the customary bring-down of representations, warranties and covenants by the Company and Parent, and (v) the absence of any Material Adverse Effect (as defined in the Merger Agreement) since the signing date. Voting Agreement In connection with the Company, Parent and Merger Sub entering into the Merger Agreement, each of the current executive officers and directors of the Company (solely in their capacity as stockholders of the Company) and each of the Noteholders (together, the “ Supporting Stockholders Voting Agreement Conversion and Cancellation Agreement In connection with the Merger Agreement, on April 8, 2024, the Company entered into a Conversion and Cancellation Agreement (the “Conversion Agreement”) with Parent, Clarex Limited (“Clarex”) and Welland Limited (“Welland” and together with Clarex, the “Noteholders”). Pursuant to the Conversion Agreement, Clarex agreed to convert the entire principal amount of its $1,500,000 Subordinated Convertible Promissory Note and Welland agreed to convert the entire principal amount of its $1,000,000 Subordinated Convertible Promissory Note at least five business days prior to the record date for the Company stockholder meeting to approve and adopt the Merger Agreement. On May 2, 2024, the Clarex Convertible Note converted pursuant to its terms into 1,500,000 shares of common stock and warrants to purchase 1,125,000 shares (the “Clarex Warrants”) at an exercise price of $1.35 per share, and the Welland Convertible Note converted pursuant to its terms into 1,000,000 shares of common stock and warrants to purchase 750,000 shares (the “Welland Warrants” and together with the Clarex Warrants, the “Noteholder Warrants”) at an exercise price of $1.35 per share. Pursuant to the Conversion Agreement, all interest then outstanding under the Convertible Notes on the date of conversion, or $50,833, was paid to the Noteholders in cash. Pursuant to the Conversion Agreement, the Noteholder Warrants shall be canceled and terminated effective immediately prior to the closing of the Merger; provided however, such cancellation and termination shall not be effective unless the closing of the Merger occurs. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | 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 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, 2023. 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 Beginning in 2023, the Company adopted Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Company extends credit to its customers that satisfy pre-defined credit criteria. Accounts receivable are recorded net of an allowance for credit losses. The Company estimates the allowance for credit losses based on an analysis of the aging of accounts receivable, an assessment of collectability, including any known or anticipated bankruptcies, customer-specific circumstances, and an evaluation of current economic conditions. Actual write-off of receivables may differ from estimates due to changes in customer and economic circumstances. For the period ended March 31, 2024, there were no changes to the estimate for credit losses. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net-realizable value. Cost of manufactured goods includes material, labor and overhead. The Company records a reserve for slow moving inventory as a charge against earnings for all products identified as surplus, slow moving, or discontinued. Excess work-in-process costs are charged against earnings whenever estimated costs-of-completion exceed unbilled revenues. Inventories are comprised of the following and are shown net of inventory reserves of $2,144,000 and $2,134,000, at March 31, 2024 and December 31, 2023, respectively: March 31, December 31, 2024 2023 (Unaudited) (in thousands) Raw materials $ 719 $ 718 Work in process, including manufactured parts and components 2,138 1,915 Finished goods 524 516 $ 3,381 $ 3,149 |
Income taxes | Income Taxes In evaluating the Company’s ability to recover deferred tax assets in future periods, management considers the available positive and negative factors. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative, including the Company’s recent operating results, the existence of cumulative income or losses and near-term forecasts of future taxable income that is consistent with the plans and estimates management is using to manage the underlying business. During 2023, the Company reached a cumulative income position over the previous three years. The cumulative three-year income is considered objective, verifiable, and positive evidence and thus received significant weighting. Additional positive evidence considered by the Company in its assessment included recent utilization of tax attribute carryforwards and future forecasts of continued profitability. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. Therefore, during the fourth quarter of 2023, based on all available positive and negative evidence, the Company determined that it was appropriate to release a portion of the valuation allowance on the Company’s U.S. federal and state deferred tax assets. The Company recognized a $1.0 million discrete tax benefit during the year ended December 31, 2023, as a result of the valuation allowance release. In the three months ended March 31, 2024, the Company determined that sufficient evidence existed to release the remaining portion of its deferred tax valuation allowance on the Company’s U.S. federal and state deferred tax assets. The Company recognized a $970,000 discrete tax benefit during the three months ended March 31, 2024 as a result of the valuation allowance release. For the three months ended March 31, 2024, and 2023, the Company did not record a current provision for income taxes due to 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, 2024, a total of 2,500,000 common shares issuable upon conversion of outstanding convertible notes have been included in the diluted computation of net income per share. 1,875,000 common shares underlying warrants issuable upon conversion of outstanding related party convertible notes have been excluded from the diluted computation of net income per share because their effect is anti-dilutive.A total of 438,933 common stock equivalents related to outstanding options have been included in the computation of diluted earnings per share because their effect is dilutive. For the three months ended March 31, 2023, 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, 161,000 common stock options were excluded from the computation of 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, 2024 March 31, 2023 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic Income Per Share: Net Income $ 978,117 14,250,975 $ 0.07 $ 91,528 14,088,320 $ 0.01 Effect of dilutive securities: Convertible Notes — 2,500,000 — — — — Accrued Interest on Convertible Notes 37,500 — — — — — Warrants — — — — — — Stock Options — 438,933 — — 670,868 — Diluted Income Per Share: $ 1,015,617 17,189,908 $ 0.06 $ 91,528 14,759,188 $ 0.01 |
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 December 2023, the FASB issued new guidance designed to improve corporate income tax disclosure requirements, primarily through increased disaggregation disclosures within the effective tax rate reconciliation as well as enhanced disclosures on corporate income taxes paid. The guidance is effective for all fiscal years beginning after December 15, 2024. The new standard can be adopted on a prospective basis with an option to be adopted retrospectively and early adoption is permitted. The Company is not early adopting the standard. We are currently evaluating this guidance to determine its impact on our condensed consolidated financial statements. In November, 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023 - 07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant expenses. The updated standard is effective for annual periods beginning in fiscal 2024 and interim periods beginning in the first quarter of fiscal 2025. Early adoption is permitted. The Company is currently evaluating this guidance to determine to determine its impact on our 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 was effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Accordingly, the Company adopted the provisions of this guidance on January 1, 2024. The adoption did not 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, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of inventory reserves | March 31, December 31, 2024 2023 (Unaudited) (in thousands) Raw materials $ 719 $ 718 Work in process, including manufactured parts and components 2,138 1,915 Finished goods 524 516 $ 3,381 $ 3,149 |
Schedule of reconciliation of shares used in calculation of basic and diluted earnings (loss) per common share | Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Income(Loss) Shares Per Share Income(Loss) Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic Income Per Share: Net Income $ 978,117 14,250,975 $ 0.07 $ 91,528 14,088,320 $ 0.01 Effect of dilutive securities: Convertible Notes — 2,500,000 — — — — Accrued Interest on Convertible Notes 37,500 — — — — — Warrants — — — — — — Stock Options — 438,933 — — 670,868 — Diluted Income Per Share: $ 1,015,617 17,189,908 $ 0.06 $ 91,528 14,759,188 $ 0.01 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
REVENUE | |
Schedule of company's sales by market area | Three Months Ended March 31, 2024 2023 Aerospace & Defense $ 549,362 $ 444,451 Process Control & Metrology 2,070,703 2,274,396 Scientific / R&D 269,734 88,314 Total $ 2,889,799 $ 2,807,161 |
EQUITY COMPENSATION PROGRAM A_2
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 2023 Cost of sales $ 3,851 $ 3,243 Selling, general and administrative 24,441 30,960 Total stock-based compensation expense $ 28,292 $ 34,203 |
Schedule of fair value of stock option grants | Three Months Ended March 31, 2023 Expected Dividend yield — % Expected Volatility 92 % Risk-free interest rate 0.86 % Expected term 10 years |
Schedule of company's outstanding stock options | Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price per Contractual Intrinsic Stock Options Options Option Term (years) Value Outstanding January 1, 2024 1,112,667 $ 0.75 6.88 $ 1,214,875 Granted — — Exercised (20,000) 0.27 Expired/Forfeited — — Outstanding March 31, 2024 1,092,667 $ 0.75 6.91 $ 829,290 Exercisable at March 31, 2024 1,015,991 $ 0.72 6.57 $ 786,748 |
Schedule of non-vested stock options granted, vested, and forfeited | Weighted-average Grant-date Fair Value Options ($) Non-Vested - January 1, 2024 206,675 0.89 Granted — — Vested (130,001) 0.87 Forfeited — — Non-Vested - March 31, 2024 76,674 1.16 |
OTHER LONG-TERM NOTES (Tables)
OTHER LONG-TERM NOTES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
OTHER LONG-TERM NOTES | |
Schedule of other long-term notes | March 31, December 31, 2024 2023 (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 $ 136 $ 140 Long-term equipment financing in equal installments of $5,236 and bearing an interest rate of 6.1% and expiring in January 2027 (1) 163 176 Less current portion (72) (71) Long-term debt, excluding current portion $ 227 $ 245 (1) The Company purchased certain equipment in the three months ended March 31, 2022, financing approximately $270,000 at a fixed annual interest rate of 6.1% for five years payable in equal monthly installments. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 719,000 | $ 718,000 |
Work in process, including manufactured parts and components | 2,138,000 | 1,915,000 |
Finished goods | 524,000 | 516,000 |
Inventories, net | $ 3,380,662 | $ 3,148,708 |
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, 2024 | Mar. 31, 2023 | |
Income(Loss) (Numerator) | ||
Net income | $ 978,117 | $ 91,528 |
Convertible notes | 0 | 0 |
Accrued interest on convertible notes | 37,500 | 0 |
Warrants | 0 | 0 |
Stock options | 0 | 0 |
Diluted income per share | ||
Net income | $ 1,015,617 | $ 91,528 |
Shares (Denominator) | ||
Net income | 14,250,975 | 14,088,320 |
Convertible notes | 2,500,000 | 0 |
Accrued interest on convertible notes | 0 | 0 |
Warrants | 0 | 0 |
Stock options | 438,933 | 670,868 |
Diluted income per share | ||
Diluted income per share | 17,189,908 | 14,759,188 |
Earnings per share diluted | ||
Net income per common share - basic | $ 0.07 | $ 0.01 |
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 | ||
Diluted income per share | $ 0.06 | $ 0.01 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Estimate for credit losses | $ 0 | ||
Allowance for credit losses | 46,000 | $ 46,000 | |
Inventory reserves | $ 2,144,000 | 2,134,000 | |
Income tax benefit | $ 0 | $ 1,000,000 | |
Employee Stock Option | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Antidilutive securities excluded from computation of earnings per share, amount | 438,933 | 161,000 | |
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 |
CONCENTRATION OF CASH (Details)
CONCENTRATION OF CASH (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | May 31, 2023 |
CONCENTRATION OF CASH | |||
Cash balances | $ 2,496,476 | $ 2,973,384 | |
Credit risk | |||
CONCENTRATION OF CASH | |||
Cash balances | $ 2,250,000 | $ 2,720,000 | $ 250,000 |
REVENUE - Company's sales by ma
REVENUE - Company's sales by market area (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUE | ||
Revenue | $ 2,889,799 | $ 2,807,161 |
Aerospace & Defense | ||
REVENUE | ||
Revenue | 549,362 | 444,451 |
Process Control & Metrology | ||
REVENUE | ||
Revenue | 2,070,703 | 2,274,396 |
Scientific / R&D | ||
REVENUE | ||
Revenue | $ 269,734 | $ 88,314 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUE | ||
Remaining performance obligations | $ 14 | |
Percentage of remaining performance obligation | 7.50% | |
Transfer at point in time | ||
REVENUE | ||
Percentage of revenue from products or services | 100% | 100% |
EQUITY COMPENSATION PROGRAM A_3
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Equity Compensation Program and Stock-based Compensation | ||
Options, granted | 0 | 20,000 |
Employee Stock Option | ||
Equity Compensation Program and Stock-based Compensation | ||
Allocated share-based compensation expense | $ 28,292 | $ 34,203 |
Employee service share-based compensation, unrecognized compensation costs, net of estimated forfeitures | $ 93,000 | $ 208,000 |
Employee service share-based compensation, expected to be recognized over a weighted average period (in years) | 1 year 2 months 12 days | 1 year 3 months 3 days |
Employee Stock Option | Cost of goods sold | ||
Equity Compensation Program and Stock-based Compensation | ||
Allocated share-based compensation expense | $ 3,851 | $ 3,243 |
Employee Stock Option | Selling, general and administrative expenses | ||
Equity Compensation Program and Stock-based Compensation | ||
Allocated share-based compensation expense | $ 24,441 | $ 30,960 |
EQUITY COMPENSATION PROGRAM A_4
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION - Weighted-average assumptions (Details) | 3 Months Ended |
Mar. 31, 2023 | |
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION | |
Expected dividend yield | 0% |
Expected volatility | 92% |
Risk-free interest rate | 0.86% |
Expected term | 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, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Equity Compensation Program and Stock-based Compensation | |||
Options, granted | 0 | 20,000 | |
Employee Stock Option | |||
Equity Compensation Program and Stock-based Compensation | |||
Options Outstanding at Beginning | 1,112,667 | ||
Options, granted | 0 | ||
Options, Exercised | (20,000) | ||
Option, Expired/Forfeited | 0 | ||
Options Outstanding at ending | 1,092,667 | 1,112,667 | |
Options, Exercisable at Ending | 1,015,991 | ||
Weighted Average Exercise Price Per Options Outstanding at Beginning (in dollars per share) | $ 0.75 | ||
Weighted Average Exercise Price per Option, Granted | 0 | ||
Weighted Average Exercise Price per Option, Exercised | 0.27 | ||
Weighted Average Exercise Price per Option, Expired/Forfeited | 0 | ||
Weighted Average Exercise Price Options Outstanding at Ending (in dollars per share) | 0.75 | $ 0.75 | |
Weighted Average Exercise Price per Option, Exercisable at ending | $ 0.72 | ||
Weighted Average Remaining Contractual Term, Options Outstanding at Beginning | 6 years 10 months 28 days | 6 years 10 months 17 days | |
Weighted Average Remaining Contractual Term, Options Outstanding at Ending | 6 years 10 months 28 days | 6 years 10 months 17 days | |
Weighted Average Remaining Contractual Term, Exercisable at Ending | 6 years 6 months 25 days | ||
Aggregate Intrinsic Value, Options Outstanding at Beginning (in dollars) | $ 1,214,875 | ||
Aggregate Intrinsic Value, Options Outstanding at Ending (in dollars) | 829,290 | $ 1,214,875 | |
Aggregate Intrinsic Value, Options Exercisable at Ending | $ 786,748 |
EQUITY COMPENSATION PROGRAM A_6
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION- Non-vested stock option activity (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
EQUITY COMPENSATION PROGRAM AND STOCK-BASED COMPENSATION | |
Options - Non-vested | shares | 206,675 |
Granted | shares | 0 |
Vested | shares | (130,001) |
Forfeited | shares | 0 |
Options - Non-vested | shares | 76,674 |
Weighted-average Grant-date Fair Value - Non-vested at beginning balance (in dollars per share) | $ / shares | $ 0.89 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0.87 |
Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-average Grant-date Fair Value - Non-vested at ending balance (in dollars per share) | $ / shares | $ 1.16 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 1 Months Ended |
Feb. 29, 2024 USD ($) | |
STOCKHOLDERS' EQUITY | |
Cash contributions | $ 141,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Subordinated convertible note | Oct. 12, 2023 USD ($) item $ / shares shares |
Common stock | |
Related Party Transactions | |
Number of shares of common stock to be purchased by each warrant | 0.75 |
Debt instrument, convertible, number of equity instruments | 0.75 |
Common stock at a price | $ / shares | $ 1.35 |
Number of shares/warrants comprised in a unit (in shares) | 1 |
Warrant | |
Related Party Transactions | |
Number of shares/warrants comprised in a unit (in shares) | 1 |
Clarex | |
Related Party Transactions | |
Convertible subordinated debt | $ | $ 1,500,000 |
Debt instrument, convertible, number of equity instruments | item | 1,500,000 |
Affiliate of Clarex | |
Related Party Transactions | |
Convertible subordinated debt | $ | $ 1,000,000 |
Debt instrument, interest rate, stated percentage | 6% |
Debt instrument, convertible, number of equity instruments | item | 1,000,000 |
OTHER LONG-TERM NOTES (Details)
OTHER LONG-TERM NOTES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Other Long-Term Notes | ||
Less current portion | $ (72,311) | $ (71,362) |
Long-term debt, excluding current portion | 227,000 | 245,000 |
U.S. small business administration note payable | ||
Other Long-Term Notes | ||
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. | 136,000 | 140,000 |
Long-term equipment financing | ||
Other Long-Term Notes | ||
Long-term equipment financing in equal installments of $5,236 and bearing an interest rate of 6.1% and expiring in January 2027 | $ 163,000 | $ 176,000 |
OTHER LONG-TERM NOTES - Additio
OTHER LONG-TERM NOTES - Additional information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
U.S. small business administration note payable | ||
Other Long-Term Notes | ||
Monthly installment payment | $ 1,922,000 | |
Fixed interest rate | 4% | |
Long-term equipment financing | ||
Other Long-Term Notes | ||
Equal installment | $ 5,236,000 | |
Fixed interest rate | 6.10% | 6.10% |
Debt, face amount | $ 270,000 | |
Debt term | 5 years |
LEASE AMENDMENT (Details)
LEASE AMENDMENT (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Jul. 29, 2022 | |
LEASE AMENDMENT | ||||
Operating lease, right-of-use asset | $ 367,593 | $ 443,532 | $ 900,000 | |
Operating lease payments | 200,000 | $ 200,000 | ||
Operating lease costs | $ 100,000 | $ 100,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | May 02, 2024 | Apr. 08, 2024 | Mar. 31, 2024 | Dec. 31, 2023 |
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Principal amount | $ 2,500,000 | $ 0 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Shares issued and outstanding converted into the right to receive | $ 1.10 | |||
Interest outstanding under convertible notes | $ 50,833 | |||
Subsequent Event [Member] | Clarex Warrants | ||||
Subsequent Event [Line Items] | ||||
Warrant to purchase | 1,125,000 | |||
Exercise price | $ 1.35 | |||
Subsequent Event [Member] | Welland Warrants | ||||
Subsequent Event [Line Items] | ||||
Warrant to purchase | 750,000 | |||
Exercise price | $ 1.35 | |||
Subsequent Event [Member] | Clarex | ||||
Subsequent Event [Line Items] | ||||
Principal amount | 1,500,000 | |||
Convertible note of common stock | 1,500,000 | |||
Subsequent Event [Member] | Welland | ||||
Subsequent Event [Line Items] | ||||
Principal amount | $ 1,000,000 | |||
Convertible note of common stock | 1,000,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 978,117 | $ 91,528 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |