Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 27, 2021 | Jun. 30, 2020 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Registrant Name | SCI ENGINEERED MATERIALS, INC. | ||
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 | 4,466,969 | ||
Entity Central Index Key | 0000830616 | ||
Title of 12(g) Security | Common stock, without par value | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Trading Symbol | SCIA | ||
Entity Public Float | $ 4,327,184 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 2,917,551 | $ 1,828,397 |
Accounts receivable Trade, less allowance for doubtful accounts of $15,000 | 459,471 | 348,524 |
Inventories, net | 1,180,359 | 2,749,038 |
Prepaid expenses | 131,333 | 105,464 |
Total current assets | 4,688,714 | 5,031,423 |
Property and Equipment, at cost | ||
Machinery and equipment | 8,280,611 | 8,258,578 |
Furniture and fixtures | 132,365 | 137,680 |
Leasehold improvements | 592,899 | 592,899 |
Construction in progress | 3,904 | |
Property, Plant and Equipment, Gross | 9,009,779 | 8,989,157 |
Less accumulated depreciation and amortization | (7,121,647) | (7,036,955) |
Property, Plant and Equipment, Net | 1,888,132 | 1,952,202 |
Right of use asset, net | 357,396 | 434,492 |
Deferred tax asset | 1,019,317 | |
Other assets | 96,623 | 86,958 |
Total other assets | 1,473,336 | 521,450 |
TOTAL ASSETS | 8,050,182 | 7,505,075 |
Current Liabilities | ||
Finance lease obligations, current portion | 160,416 | 98,524 |
Notes payable, current portion | 252,577 | |
Operating lease obligations, current portion | 86,844 | 80,669 |
Accounts payable | 147,284 | 254,004 |
Customer deposits | 1,010,236 | 2,408,837 |
Accrued compensation | 115,143 | 116,686 |
Accrued expenses and other | 105,585 | 80,375 |
Total current liabilities | 1,878,085 | 3,039,095 |
Finance lease obligations, net of current portion | 243,218 | 125,311 |
Notes payable, net of current portion | 72,723 | |
Operating lease obligations, net of current portion | 304,989 | 391,833 |
Total liabilities | 2,499,015 | 3,556,239 |
Shareholders' Equity | ||
Convertible preferred stock, Series B, 10% cumulative, nonvoting, no par value, $10 stated value, optional redemption at 103%; optional shareholder conversion 2 shares for 1; 24,152 shares issued and outstanding | 514,438 | 514,438 |
Common stock, no par value, authorized 15,000,000 shares; 4,466,969 and 4,370,519 shares issued and outstanding, respectively | 10,530,669 | 10,410,677 |
Additional paid-in capital | 2,246,501 | 2,265,925 |
Accumulated deficit | (7,740,441) | (9,242,204) |
Total shareholders' equity | 5,551,167 | 3,948,836 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,050,182 | $ 7,505,075 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for doubtful accounts (in dollars) | $ 15,000 | $ 15,000 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 4,466,969 | 4,370,519 |
Common stock, shares outstanding | 4,466,969 | 4,370,519 |
Convertible Preferred Stock Series B [Member] | ||
Convertible preferred stock, series B, cumulative percentage of interest | 10.00% | 10.00% |
Convertible preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Convertible preferred stock, stated value (in dollars per share) | $ 10 | $ 10 |
Convertible preferred stock, optional redemption | 103.00% | 103.00% |
Convertible preferred stock, optional shareholder conversion | 2:1 | 2:1 |
Convertible preferred stock, shares issued | 24,152 | 24,152 |
Convertible preferred stock, shares outstanding | 24,152 | 24,152 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
STATEMENTS OF OPERATIONS | ||
Total revenue | $ 10,896,099 | $ 12,950,387 |
Total cost of revenue | 8,697,809 | 10,741,824 |
Gross profit | 2,198,290 | 2,208,563 |
General and administrative expense | 1,148,615 | 1,261,958 |
Research and development expense | 337,823 | 366,492 |
Marketing and sales expense | 195,505 | 249,255 |
Income from operations | 516,347 | 330,858 |
Interest expense | 32,087 | 22,468 |
Income before income taxes | 484,260 | 308,390 |
Income tax (benefit) expense (Note 9) | (1,017,503) | 3,039 |
Net income | 1,501,763 | 305,351 |
Dividends on preferred stock | 24,152 | 24,152 |
INCOME APPLICABLE TO COMMON STOCK | $ 1,477,611 | $ 281,199 |
Income per common share | ||
Basic (In dollars per share) | $ 0.33 | $ 0.06 |
Diluted (In dollars per share) | $ 0.33 | $ 0.06 |
Weighted average shares outstanding | ||
Basic (In shares) | 4,423,125 | 4,328,210 |
Diluted (In shares) | 4,434,000 | 4,362,327 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Convertible Preferred Stock Series B [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 514,438 | $ 10,275,733 | $ 2,280,060 | $ (9,547,555) | $ 3,522,676 |
Accretion of cumulative dividends | 24,152 | (24,152) | |||
Stock based compensation expense (Note 2I) | 10,017 | 10,017 | |||
Proceeds from exercise of stock options | 14,952 | 14,952 | |||
Payment of cumulative dividends (Note 7) | (24,152) | (24,152) | |||
Common stock issued (Note 7) | 119,992 | 119,992 | |||
Net income | 305,351 | 305,351 | |||
Balance at Dec. 31, 2019 | 514,438 | 10,410,677 | 2,265,925 | (9,242,204) | 3,948,836 |
Accretion of cumulative dividends | 24,152 | (24,152) | |||
Stock based compensation expense (Note 2I) | 4,728 | 4,728 | |||
Payment of cumulative dividends (Note 7) | (24,152) | (24,152) | |||
Common stock issued (Note 7) | 119,992 | 119,992 | |||
Net income | 1,501,763 | 1,501,763 | |||
Balance at Dec. 31, 2020 | $ 514,438 | $ 10,530,669 | $ 2,246,501 | $ (7,740,441) | $ 5,551,167 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 1,501,763 | $ 305,351 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and accretion | 451,816 | 428,604 |
Amortization of right of use asset | 77,096 | 71,209 |
Amortization of patents | 3,931 | 2,860 |
Stock based compensation | 124,720 | 130,009 |
(Gain) loss on disposal of equipment | (1,322) | 3,193 |
Increase in deferred tax asset | (1,019,317) | |
Inventory reserve | 2,221 | (7,744) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (110,947) | 129,407 |
Inventories | 1,566,457 | 11,551 |
Prepaid expenses | (25,869) | 507,961 |
Right of use asset | 0 | (505,701) |
Other assets | (13,597) | (14,204) |
Accounts payable | (106,720) | (67,344) |
Operating lease obligations | (80,669) | 472,502 |
Accrued expenses and customer deposits | (1,378,531) | (935,447) |
Net cash provided by operating activities | 991,032 | 532,207 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds on sale of equipment | 3,063 | 1,033 |
Purchases of property and equipment | (78,915) | (380,636) |
Net cash used in investing activities | (75,852) | (379,603) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options | 14,952 | |
Principal payments on finance lease obligations and notes payable | (127,174) | (117,846) |
Proceeds from SBA Paycheck Protection Program note payable | 325,300 | |
Payments of cumulative dividends on preferred stock | (24,152) | (24,152) |
Net cash provided by (used in) financing activities | 173,974 | (127,046) |
NET INCREASE IN CASH | 1,089,154 | 25,558 |
CASH - Beginning of year | 1,828,397 | 1,802,839 |
CASH - End of year | 2,917,551 | 1,828,397 |
Cash paid during the year for: | ||
Interest | 16,452 | 11,075 |
Income taxes | 1,814 | 3,039 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipment purchased by finance lease | 306,973 | 78,950 |
Increase in asset retirement obligation | $ 3,600 | $ 2,541 |
Business Organization and Purpo
Business Organization and Purpose | 12 Months Ended |
Dec. 31, 2020 | |
Business Organization and Purpose | |
Business Organization and Purpose | Note 1. Business Organization and Purpose SCI Engineered Materials, Inc. (“SCI”, “we” or the “Company”), an Ohio corporation, was incorporated in 1987. The Company operates in one segment as a global supplier and manufacturer of advanced materials for Physical Vapor Deposition (“PVD”) Thin Film Applications. The Company is focused on markets within the PVD industry including Photonics, Solar, Glass, and Transparent Electronics. Substantially, all revenues are generated from customers with multi-national operations. The Company develops innovative customized solutions enabling commercial success through collaboration with end users and Original Equipment Manufacturers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies A. B. C. The Company’s two largest customers accounted for 75% and 9% of total revenue in 2020. These two customers represented 61% of the accounts receivable trade balance at December 31, 2020. The Company expects to collect all outstanding accounts receivables as of December 31, 2020 from these customers. The Company’s two largest customers accounted for 72% and 10% of total revenue in 2019. These two customers represented 76% of the accounts receivable trade balance at December 31, 2019. The Company subsequently collected all outstanding accounts receivables as of December 31, 2019 from these customers. D. Management estimates an allowance for doubtful accounts, which was $15,000 as of December 31, 2020 and 2019. This estimate is based upon management’s review of delinquent accounts and an assessment of the Company’s historical evidence of collections. Specific accounts are charged directly to the reserve or bad debt expense when management obtains evidence of a customer’s insolvency or otherwise determines that the account is uncollectible. There was no bad debt expense during 2020 and 2019. E. F. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference. There was no property and equipment considered impaired during 2020 or 2019. G. Costs incurred to secure patents have been capitalized and amortized over the life of the patents. Cost and accumulated amortization of the patents at December 31, 2020 was $85,444 and $8,768 respectively, and cost and accumulated amortization of the patents at December 31, 2019 was $78,810 and $4,837, respectively. Amortization expense related to patents was $3,931 and $2,860 for the years ended December 31, 2020 and 2019, respectively. Amortization expense is expected to be at least $3,931 for each of the next five years. H. The Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. The Company sells its products typically under agreements with payment terms less than 45 days. The Company does not typically include extended payment terms or significant financing components in contracts with customers. The majority of the Company’s contracts have an obligation to transfer products within one year. Thus, the Company elects to use the practical expedient where incremental cost of obtaining a contract, such as commissions, is expensed when incurred because the amortization period for those costs is one year or less. The Company treats shipping and handling activities that occur after control of the product transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation. Customer deposits are funds received in advance from customers and are recognized as revenue when the Company has transferred control of product to the customer. Product revenues are recognized upon shipment of goods as the customer has assumed the significant risks and rewards of ownership and the Company is entitled to payment at this point. Service revenues are recognized upon completion as the customer cannot realize the benefit of the service until fully completed. During 2020 and 2019, revenue from the Photonics market was 99% and 97% of total revenue, respectively. The balance of the revenue in each period was almost entirely from the Solar market. The top two customers represented 84% and 82% of total revenue during 2020 and 2019, respectively. International shipments resulted in 4% and 8% of total revenue for 2020 and 2019, respectively. I. J. K. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would not be able to realize our deferred tax assets in the future, we would make an adjustment to the deferred tax asset valuation allowance, which would increase the provision for income taxes. L. M. In June 2016, the FASB issued ASU No. 2016-13 “Credit Losses - Measurement of Credit Losses on Financial Instruments.” ASU No. 2016-13 significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables, by replacing today’s “incurred loss” approach with an “expected loss” model under which allowances will be recognized based on expected rather than incurred losses. ASU No. 2016-13 will become effective for the Company in the first quarter of 2023. The Company is evaluating the impact that the adoption of this update will have on its financial statements. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventories | |
Inventories | Note 3. Inventories Inventories consist of the following at December 31: 2020 2019 Raw materials $ 206,668 $ 883,767 Work-in-process 877,812 1,802,092 Finished goods 120,097 85,176 1,204,577 2,771,035 Reserve for obsolete inventory (24,218) (21,997) $ 1,180,359 $ 2,749,038 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable | |
Notes Payable | Note 4. Notes Payable On April 17, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP”), with a principal amount of $325,300. The PPP was established under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (the “SBA”). The term of the PPP loan is two years. The interest rate on this loan is 1.0% per annum, which shall be deferred for the first six months of the term of the loan. After the initial six-month deferral period, the loan requires monthly payments of principal and interest until maturity with respect to any portion of the PPP loan which is not forgiven as described below. The Company is permitted to prepay or partially prepay the PPP loan at any time with no prepayment penalties. Under the terms of the CARES Act, PPP loan recipients can apply for, and be granted, forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations and ongoing rulemaking by the SBA, based on the use of loan proceeds for payroll costs and mortgage interest, rent or utility costs and the maintenance of employee and compensation levels. The SBA approved the Forgiveness Application in full on January 6, 2021. The Company renewed its line of credit with Huntington National Bank for $1 million. The line of credit bears interest at 0.5 percentage points over the Prime Commercial Rate with an expiration date of October 5, 2021. At December 31, 2020, no amounts were drawn on the line of credit. Notes payable at December 31, 2020 is included in the accompanying balance sheets as follows: U.S. SBA Paycheck Protection Program $ 325,300 Less current portion 252,577 Notes payable, net of current portion $ 72,723 Annual maturities of notes payable: 2021 $ 252,577 2022 72,723 Total $ 325,300 |
Lease Obligations
Lease Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Lease Obligations | |
Lease Obligations | Note 5. Lease Obligations Operating The Company entered into an operating lease with a third party on March 18, 2014 for its headquarters in Columbus, Ohio. The terms of the lease include monthly payments ranging from $9,200 to $9,700 with a maturity date of November 30, 2024. The Company has the option to extend the lease period for an additional five years beyond the original expiration date. There are no restrictions or covenants associated with the lease. The lease costs were approximately $108,100 and $106,200 during the years ended December 31, 2020 and 2019, respectively. The following is a maturity analysis, by year, of the annual undiscounted cash outflows of the operating lease liabilities as of December 31, 2020: 2021 $ 110,364 2022 112,611 2023 114,857 2024 102,550 Total minimum lease payments 440,382 Less debt discount 48,549 Total operating lease obligations $ 391,833 Operating cash outflows from operating leases $ 153,485 Weighted average remaining lease term – operating leases 3.9 years Weighted average discount rate – operating leases 5.5 % |
Finance Leases
Finance Leases | 12 Months Ended |
Dec. 31, 2020 | |
Finance Leases | |
Finance Leases | Note 6. Finance Leases The Company also leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of December 31, 2020, are shown in the following table. 2021 $ 174,943 2022 105,154 2023 101,675 2024 49,859 Total minimum lease payments 431,631 Less amount representing interest 27,997 Present value of minimum lease payments 403,634 Less current portion 160,416 Finance lease obligations, net of current portion $ 243,218 The equipment under finance lease at December 31 is included in the accompanying balance sheets as follows: 2020 2019 Machinery and equipment $ 745,289 $ 438,316 Less accumulated depreciation and amortization 157,486 98,305 Net book value $ 587,803 $ 340,011 These assets are amortized over a period of ten years using the straight-line method and amortization is included in depreciation expense. The finance leases are structured such that ownership of the leased asset reverts to the Company at the end of the lease term. Accordingly, leased assets are depreciated using the Company's normal depreciation methods and lives. Ownership of certain assets was transferred to the Company in accordance with the terms of the leases and these assets have been excluded from the leased asset disclosure above. The Company entered into a finance lease obligation during 2020 for the rebuild of production equipment in the amount of $306,973. This asset is reflected in the total above. |
Common and Preferred Stock
Common and Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Common and Preferred Stock | |
Common and Preferred Stock | Note 7. Common and Preferred Stock Common Stock During 2020, the non-employee board members received 96,450 shares of common stock of the Company with an aggregate value of $119,992. This was recorded as non-cash stock compensation expense in the financial statements. During 2019, the non-employee board members received compensation of 63,500 shares of common stock of the Company. The stock had an aggregate value of $119,992 and was recorded as non-cash stock compensation expense in the financial statements. Preferred Stock Shares of preferred stock authorized and outstanding at December 31, 2020 and 2019, were as follows: Shares Shares Authorized Outstanding Cumulative Preferred Stock 10,000 — Voting Preferred Stock 125,000 — Cumulative Non-Voting Preferred Stock 125,000 (a) 24,152 (a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. In January 1996, the Company completed an offering of 70,000 shares of $10 stated value 1995 Series B 10% cumulative non-voting convertible preferred stock. The shares are convertible to common shares at the rate of $5.00 per share. At the Company’s option, the Series B shares are redeemable at 103% of the stated value plus the amount of any accrued and unpaid cash dividends. There were 24,152 shares of Series B convertible preferred stock outstanding at December 31, 2020 and 2019. During 2020 and 2019, a dividend payment of $24,152 was made to preferred shareholders of record. The Company had accrued dividends of $265,672 at December 31, 2020 and 2019. These amounts were included in convertible preferred stock, Series B on the balance sheet at December 31, 2020 and 2019. Earnings Per Share Basic income per share is calculated as income available to common shareholders divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted income available to common shareholders divided by the diluted weighted average number of common shares outstanding. Diluted weighted average number of common shares gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. Diluted earnings per share exclude all diluted potential shares if their effect is anti-dilutive. Following is a summary of employee and director outstanding stock options outstanding and preferred stock, Series B at December 31. 2020 2019 Options 76,037 76,037 Preferred Stock, Series B 24,152 24,152 100,189 100,189 The following is provided to reconcile the earnings per share calculations: 2020 2019 Income applicable to common stock $ 1,477,611 $ 281,199 Weighted average common shares outstanding - basic 4,423,125 4,328,210 Effect of dilution - stock options 10,875 34,117 Weighted average shares outstanding - diluted 4,434,000 4,362,327 |
Stock Option Plans
Stock Option Plans | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plans | |
Stock Option Plans | Note 8. Stock Option Plans On June 10, 2011, shareholders approved the SCI Engineered Materials, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). The Company adopted the 2011 Plan as incentive to key employees, directors, and consultants under which options to purchase up to 250,000 shares of the Company’s common stock may be granted, subject to the execution of stock option agreements. Incentive stock options may be granted to key employees of the Company and non-statutory options may be granted to directors who are not employees and to consultants and advisors who render services to the Company. Options may be exercised for periods up to 10 years from the date of grant at prices not less than 100% of fair market value on the date of grant. As of December 31, 2020, there were 34,715 stock options outstanding from the 2011 Plan which expire in May 2028. On June 9, 2006, shareholders approved the Superconductive Components, Inc. 2006 Stock Incentive Plan. The Company adopted the 2006 Plan as incentive to key employees, directors, and consultants under which options to purchase up to 600,000 shares of the Company’s common stock may be granted, subject to the execution of stock option agreements. Incentive stock options may be granted to key employees of the Company and non-statutory options may be granted to directors who are not employees and to consultants and advisors who render services to the Company. Options may be exercised for periods up to 10 years from the date of grant at prices not less than 100% of fair market value on the date of grant. The 2006 Plan expired in 2016 and no additional stock options may be granted. As of December 31, 2020, there were 41,322 stock options outstanding from the 2006 Plan which expire at various dates through November 2024. The cumulative status at December 31, 2020 and 2019, of options granted and outstanding, as well as options which became exercisable in connection with the Stock Option Plans is summarized as follows: Employee Stock Options Weighted Weighted Average Average Aggregate Stock Exercise Contractual Intrinsic Options Price Term (yrs) Value Outstanding at January 1, 2019 396,941 $ 4.41 Forfeited (17,616) 1.00 Exercised (31,788) 0.84 Expired (271,500) 6.00 Outstanding at December 31, 2019 76,037 $ 1.03 Outstanding at December 31, 2020 76,037 $ 1.03 5.5 $ 36,712 Options exercisable at December 31, 2019 48,265 $ 0.90 5.4 $ 14,529 Options exercisable at December 31, 2020 55,208 $ 0.94 4.7 $ 31,296 Options expected to vest 20,829 $ 1.25 7.4 $ 5,416 Information related to the weighted average fair value of nonvested stock options for the year ended December 31, 2020 is as follows: Weighted Average Exercise Stock Options Price Employee Stock Options Nonvested options at January 1, 2020 27,772 $ 1.25 Vested (6,943) 1.25 Nonvested options at December 31, 2020 20,829 $ 1.25 Exercise prices ranged from $0.84 to $1.25 and the weighted average option price was $1.03 at December 31, 2020 and 2019. The weighted average remaining contractual life was 5.5 years and 6.5 years at December 31, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | Note 9. Income Taxes Deferred tax assets and liabilities result from temporary differences in the recognition of income and expense for tax and financial reporting purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31. 2020 2019 Deferred tax assets (liabilities) NOL carryforwards $ 786,151 $ 822,000 General business credits carryforwards 381,178 331,000 Stock based compensation 143,073 118,000 UNICAP — 59,000 Allowance for doubtful accounts 3,162 3,000 Reserve for obsolete inventories 5,105 5,000 Reserve for asset retirement 15,888 15,000 Property and equipment (315,240) (300,000) 1,019,317 1,053,000 Valuation allowance — (1,053,000) Net $ 1,019,317 $ — A valuation allowance of $0 has been recorded against the realizability of the net deferred tax asset of $1,019,317 at December 31, 2020. The valuation allowance totaled $1,053,000 at December 31, 2019. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2020, management determined that there is sufficient positive evidence to conclude that it is more likely than not that deferred taxes of $1,019,317 are realizable in part because we achieved four consecutive years of pretax income, expect profits to continue for the foreseeable future and implemented new efficiencies in the Company's manufacturing process. Accordingly, we determined that no valuation allowance was necessary at December 31, 2020. The Company had net operating loss carryforwards available for federal and state tax purposes of approximately $3,700,000 and $4,300,000 at December 31, 2020 and 2019, respectively, which expire in varying amounts through 2040. The deferred tax asset of $1,019,317 expires as follows: 2021 – 2025 $ 364,000 2026 – 2030 218,000 2031 – 2035 371,000 2036 – 2040 66,317 For the years ended December 31, 2020 and 2019, a reconciliation of the statutory rate and effective rate for the provisions for income taxes consists of the following: Percentage 2020 2019 Federal statutory rate % 21.0 % State/city tax 1.0 Non-deductible expense 1.0 Valuation allowance (231.7) (22.0) Effective rate (210.1) % 1.0 % Components of the income tax provision are as follows: 2020 2019 Current $ 1,814 $ 3,039 Deferred: NOL utilization/expiration 36,200 (41,000) General business credits (50,477) (42,000) Other temporary differences 48,172 126,000 Change in valuation allowance (1,053,212) (43,000) Total $ (1,017,503) $ 3,039 The Company follows guidance issued by the Financial Accounting Standards Board (“FASB ASC 740”) with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than fifty percent likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded. The Company has no unrecognized tax benefits under guidance related to tax uncertainties. The Company does not anticipate the unrecognized tax benefits will significantly change in the next twelve months. Any tax penalties or interest expense will be recognized in income tax expense. No interest and penalties related to unrecognized tax benefits were accrued at December 31, 2020 and 2019. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is open to federal and state tax audits until the applicable statute of limitations expire. There are currently no federal or state income tax examinations underway for the Company. The tax years 2017 through 2020 remain open to examination by the major taxing jurisdictions in which the Company operates. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 10. Fair Value of Financial Instruments The fair value of financial instruments represents the price that would be received to sell an asset or paid to transfer a liability (an exit price), and not the price that would be paid to acquire an asset or received to assume a liability (an entry price). Significant differences can arise between the fair value and carrying amount of financial instruments that are recognized at historical cost amounts. The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: · Cash and cash equivalents, short-term notes payable and finance lease obligations and current maturities of long-term notes payable and finance lease obligations: Amounts reported in the balance sheet approximate fair market value due to the short maturity of these instruments. · Long-term note payable and finance lease obligations: Amounts reported in the balance sheet approximate fair value as the interest rates on the obligations range from 1.0% to 6.2%, which approximates current fair market rates. |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation | |
Asset Retirement Obligation | Note 11. Asset Retirement Obligation Included in machinery and equipment is various production equipment, which per the Company’s building lease, is required to be removed upon termination of the related lease. Included in accrued expenses in the accompanying balance sheet is the asset retirement obligation that represents the expected present value of the liability to remove this equipment. There are no assets that are legally restricted for purposes of settling this asset retirement obligation. Following is a reconciliation of the aggregate retirement liability associated with the Company’s obligation to dismantle and remove the machinery and equipment associated with its lease: Balance at January 1, 2019 $ 69,227 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) Balance at December 31, 2019 $ 71,768 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 3,600 Balance at December 31, 2020 $ 75,368 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Event | |
Subsequent Event | Note 12. Subsequent Event On January 6, 2021, the SBA approved the Company’s Paycheck Protection Program Forgiveness Application in full. The total amount of the loan was $325,300. The debt forgiveness is expected to be applied against the note payable and accrued interest on the note and recorded as a gain on debt forgiveness in the first quarter of 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Cash | A. |
Fair Value of Financial Instruments | B. |
Concentrations of Credit Risk | C. The Company’s two largest customers accounted for 75% and 9% of total revenue in 2020. These two customers represented 61% of the accounts receivable trade balance at December 31, 2020. The Company expects to collect all outstanding accounts receivables as of December 31, 2020 from these customers. The Company’s two largest customers accounted for 72% and 10% of total revenue in 2019. These two customers represented 76% of the accounts receivable trade balance at December 31, 2019. The Company subsequently collected all outstanding accounts receivables as of December 31, 2019 from these customers. |
Accounts Receivable | D. Management estimates an allowance for doubtful accounts, which was $15,000 as of December 31, 2020 and 2019. This estimate is based upon management’s review of delinquent accounts and an assessment of the Company’s historical evidence of collections. Specific accounts are charged directly to the reserve or bad debt expense when management obtains evidence of a customer’s insolvency or otherwise determines that the account is uncollectible. There was no bad debt expense during 2020 and 2019. |
Inventories | E. |
Property and Equipment | F. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference. There was no property and equipment considered impaired during 2020 or 2019. |
Intangible Assets | G. Costs incurred to secure patents have been capitalized and amortized over the life of the patents. Cost and accumulated amortization of the patents at December 31, 2020 was $85,444 and $8,768 respectively, and cost and accumulated amortization of the patents at December 31, 2019 was $78,810 and $4,837, respectively. Amortization expense related to patents was $3,931 and $2,860 for the years ended December 31, 2020 and 2019, respectively. Amortization expense is expected to be at least $3,931 for each of the next five years. |
Revenue Recognition | H. The Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. The Company sells its products typically under agreements with payment terms less than 45 days. The Company does not typically include extended payment terms or significant financing components in contracts with customers. The majority of the Company’s contracts have an obligation to transfer products within one year. Thus, the Company elects to use the practical expedient where incremental cost of obtaining a contract, such as commissions, is expensed when incurred because the amortization period for those costs is one year or less. The Company treats shipping and handling activities that occur after control of the product transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation. Customer deposits are funds received in advance from customers and are recognized as revenue when the Company has transferred control of product to the customer. Product revenues are recognized upon shipment of goods as the customer has assumed the significant risks and rewards of ownership and the Company is entitled to payment at this point. Service revenues are recognized upon completion as the customer cannot realize the benefit of the service until fully completed. During 2020 and 2019, revenue from the Photonics market was 99% and 97% of total revenue, respectively. The balance of the revenue in each period was almost entirely from the Solar market. The top two customers represented 84% and 82% of total revenue during 2020 and 2019, respectively. International shipments resulted in 4% and 8% of total revenue for 2020 and 2019, respectively. |
Stock Based Compensation | I. |
Research and Development | J. |
Income Taxes | K. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would not be able to realize our deferred tax assets in the future, we would make an adjustment to the deferred tax asset valuation allowance, which would increase the provision for income taxes. |
Use of Estimates | L. |
Recent Accounting Pronouncements | M. In June 2016, the FASB issued ASU No. 2016-13 “Credit Losses - Measurement of Credit Losses on Financial Instruments.” ASU No. 2016-13 significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables, by replacing today’s “incurred loss” approach with an “expected loss” model under which allowances will be recognized based on expected rather than incurred losses. ASU No. 2016-13 will become effective for the Company in the first quarter of 2023. The Company is evaluating the impact that the adoption of this update will have on its financial statements. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventories | |
Schedule of Inventories | Inventories consist of the following at December 31: 2020 2019 Raw materials $ 206,668 $ 883,767 Work-in-process 877,812 1,802,092 Finished goods 120,097 85,176 1,204,577 2,771,035 Reserve for obsolete inventory (24,218) (21,997) $ 1,180,359 $ 2,749,038 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable | |
Schedule of notes payable included in the accompanying balance sheet | Notes payable at December 31, 2020 is included in the accompanying balance sheets as follows: U.S. SBA Paycheck Protection Program $ 325,300 Less current portion 252,577 Notes payable, net of current portion $ 72,723 |
Schedule of annual maturities of notes payable | 2021 $ 252,577 2022 72,723 Total $ 325,300 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lease Obligations | |
Schedule of annual undiscounted cash flows of the operating lease liabilities | The following is a maturity analysis, by year, of the annual undiscounted cash outflows of the operating lease liabilities as of December 31, 2020: 2021 $ 110,364 2022 112,611 2023 114,857 2024 102,550 Total minimum lease payments 440,382 Less debt discount 48,549 Total operating lease obligations $ 391,833 |
Schedule of operating lease other information | Operating cash outflows from operating leases $ 153,485 Weighted average remaining lease term – operating leases 3.9 years Weighted average discount rate – operating leases 5.5 % |
Finance Leases (Tables)
Finance Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Finance Leases | |
Schedule of future minimum lease payments | The Company also leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of December 31, 2020, are shown in the following table. 2021 $ 174,943 2022 105,154 2023 101,675 2024 49,859 Total minimum lease payments 431,631 Less amount representing interest 27,997 Present value of minimum lease payments 403,634 Less current portion 160,416 Finance lease obligations, net of current portion $ 243,218 |
Schedule of equipment under finance leases | The equipment under finance lease at December 31 is included in the accompanying balance sheets as follows: 2020 2019 Machinery and equipment $ 745,289 $ 438,316 Less accumulated depreciation and amortization 157,486 98,305 Net book value $ 587,803 $ 340,011 |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Common and Preferred Stock | |
Summary of shares of preferred stock authorized and outstanding | Shares of preferred stock authorized and outstanding at December 31, 2020 and 2019, were as follows: Shares Shares Authorized Outstanding Cumulative Preferred Stock 10,000 — Voting Preferred Stock 125,000 — Cumulative Non-Voting Preferred Stock 125,000 (a) 24,152 (a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. |
Summary of employee and director outstanding stock options outstanding and preferred stock, Series B | Following is a summary of employee and director outstanding stock options outstanding and preferred stock, Series B at December 31. 2020 2019 Options 76,037 76,037 Preferred Stock, Series B 24,152 24,152 100,189 100,189 |
Summary of reconciliation of earnings per share calculations | The following is provided to reconcile the earnings per share calculations: 2020 2019 Income applicable to common stock $ 1,477,611 $ 281,199 Weighted average common shares outstanding - basic 4,423,125 4,328,210 Effect of dilution - stock options 10,875 34,117 Weighted average shares outstanding - diluted 4,434,000 4,362,327 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Common Stock and Stock Options | |
Schedule of weighted average fair value of non vested stock options | Information related to the weighted average fair value of nonvested stock options for the year ended December 31, 2020 is as follows: Weighted Average Exercise Stock Options Price Employee Stock Options Nonvested options at January 1, 2020 27,772 $ 1.25 Vested (6,943) 1.25 Nonvested options at December 31, 2020 20,829 $ 1.25 |
Employee Stock Option [Member] | Series B Preferred Stock [Member] | |
Common Stock and Stock Options | |
Schedule of share-based compensation, employee stock options, activity | The cumulative status at December 31, 2020 and 2019, of options granted and outstanding, as well as options which became exercisable in connection with the Stock Option Plans is summarized as follows: Employee Stock Options Weighted Weighted Average Average Aggregate Stock Exercise Contractual Intrinsic Options Price Term (yrs) Value Outstanding at January 1, 2019 396,941 $ 4.41 Forfeited (17,616) 1.00 Exercised (31,788) 0.84 Expired (271,500) 6.00 Outstanding at December 31, 2019 76,037 $ 1.03 Outstanding at December 31, 2020 76,037 $ 1.03 5.5 $ 36,712 Options exercisable at December 31, 2019 48,265 $ 0.90 5.4 $ 14,529 Options exercisable at December 31, 2020 55,208 $ 0.94 4.7 $ 31,296 Options expected to vest 20,829 $ 1.25 7.4 $ 5,416 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31. 2020 2019 Deferred tax assets (liabilities) NOL carryforwards $ 786,151 $ 822,000 General business credits carryforwards 381,178 331,000 Stock based compensation 143,073 118,000 UNICAP — 59,000 Allowance for doubtful accounts 3,162 3,000 Reserve for obsolete inventories 5,105 5,000 Reserve for asset retirement 15,888 15,000 Property and equipment (315,240) (300,000) 1,019,317 1,053,000 Valuation allowance — (1,053,000) Net $ 1,019,317 $ — |
Schedule of deferred tax asset expires | The deferred tax asset of $1,019,317 expires as follows: 2021 – 2025 $ 364,000 2026 – 2030 218,000 2031 – 2035 371,000 2036 – 2040 66,317 |
Schedule of reconciliation of the statutory rate and effective rate for income taxes | For the years ended December 31, 2020 and 2019, a reconciliation of the statutory rate and effective rate for the provisions for income taxes consists of the following: Percentage 2020 2019 Federal statutory rate % 21.0 % State/city tax 1.0 Non-deductible expense 1.0 Valuation allowance (231.7) (22.0) Effective rate (210.1) % 1.0 % |
Schedule of Components of the income tax provision | Components of the income tax provision are as follows: 2020 2019 Current $ 1,814 $ 3,039 Deferred: NOL utilization/expiration 36,200 (41,000) General business credits (50,477) (42,000) Other temporary differences 48,172 126,000 Change in valuation allowance (1,053,212) (43,000) Total $ (1,017,503) $ 3,039 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation | |
Schedule of Asset Retirement Obligations | Balance at January 1, 2019 $ 69,227 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) Balance at December 31, 2019 $ 71,768 Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) 3,600 Balance at December 31, 2020 $ 75,368 |
Business Organization and Pur_2
Business Organization and Purpose (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Business Organization and Purpose | |
Number of operating segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Line Items] | ||
Allowance for doubtful accounts | $ 15,000 | $ 15,000 |
Bad debt expense | 0 | 0 |
Inventory valuation reserves | 24,218 | 21,997 |
Depreciation expense | 451,816 | 428,604 |
Property and equipment impaired | 0 | 0 |
Intangible assets impaired | 0 | 0 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 11,033 | |
Research and development expense | 337,823 | 366,492 |
Stock based compensation | $ 124,720 | $ 130,009 |
Computer Equipment [Member] | ||
Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Certain Equipment [Member] | ||
Accounting Policies [Line Items] | ||
Property, Plant and Equipment, Useful Life | 16 years | |
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | International | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 4.00% | 8.00% |
Product Concentration Risk [Member] | Sales Revenue, Net [Member] | Photonics market [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 99.00% | 97.00% |
Patents [Member] | ||
Accounting Policies [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 85,444 | $ 78,810 |
Finite-Lived Intangible Assets, Accumulated Amortization | 8,768 | 4,837 |
Amortization of Intangible Assets | 3,931 | 2,860 |
Minimum Expected Amortization Expense In Future | $ 3,931 | |
Period of expected amortization for intangible assets | 5 years | |
Non Employee Board [Member] | ||
Accounting Policies [Line Items] | ||
Stock based compensation | $ 119,992 | $ 119,992 |
Customer One [Member] | Sales Revenue, Net [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 75.00% | 72.00% |
Customer Two [Member] | Sales Revenue, Net [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 9.00% | 10.00% |
Two Customers [Member] | Accounts Receivable [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 61.00% | 76.00% |
Two Customers [Member] | Sales Revenue, Net [Member] | ||
Accounting Policies [Line Items] | ||
Concentration Risk, Percentage | 84.00% | 82.00% |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventories | ||
Raw materials | $ 206,668 | $ 883,767 |
Work-in-process | 877,812 | 1,802,092 |
Finished goods | 120,097 | 85,176 |
Inventory, Gross | 1,204,577 | 2,771,035 |
Reserve for obsolete inventory | (24,218) | (21,997) |
Inventory, Net | $ 1,180,359 | $ 2,749,038 |
Notes Payable - Notes payable i
Notes Payable - Notes payable included in the balance sheet (Details) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
Less current portion | $ 252,577 |
Notes payable, net of current portion | 72,723 |
SBA PPP Loan | |
Debt Instrument [Line Items] | |
U.S. SBA Paycheck Protection Program | 325,300 |
Less current portion | 252,577 |
Notes payable, net of current portion | $ 72,723 |
Notes Payable - Annual maturiti
Notes Payable - Annual maturities of notes payable (Details) - SBA PPP Loan | Dec. 31, 2020USD ($) |
Annual maturities | |
2021 | $ 252,577 |
2022 | 72,723 |
Total | $ 325,300 |
Notes Payable - Additional info
Notes Payable - Additional information (Details) - USD ($) | Oct. 05, 2021 | Apr. 17, 2020 | Dec. 31, 2020 |
SBA PPP Loan | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 325,300 | ||
Term of loan | 2 years | ||
Interest rate (in percentage) | 1.00% | ||
Deferral period for monthly payments | 6 months | ||
Prepayment penalties | $ 0 | ||
Huntington Bank [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | ||
Borrowings on line of credit | $ 0 | ||
Huntington Bank [Member] | Prime Commercial Rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% |
Lease Obligations - Future Mini
Lease Obligations - Future Minimum Lease Payments (Details) | Dec. 31, 2020USD ($) |
Lease Obligations | |
2021 | $ 110,364 |
2022 | 112,611 |
2023 | 114,857 |
2024 | 102,550 |
Total minimum lease payments | 440,382 |
Less debt discount | 48,549 |
Total operating lease obligations | $ 391,833 |
Lease Obligations - Additional
Lease Obligations - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating cash outflows from operating leases | $ 153,485 | |
Weighted average remaining lease term - operating leases | 3 years 10 months 24 days | |
Weighted average discount rate - operating leases | 5.50% | |
Operating lease, renewal term | 5 years | |
Operating Lease, Cost | $ 108,100 | $ 106,200 |
Minimum [Member] | ||
Operating Lease Monthly Rent Payable | 9,200 | |
Maximum [Member] | ||
Operating Lease Monthly Rent Payable | $ 9,700 |
Finance Leases - Future minimum
Finance Leases - Future minimum lease payments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Finance Leases | ||
2021 | $ 174,943 | |
2022 | 105,154 | |
2023 | 101,675 | |
2024 | 49,859 | |
Total minimum lease payments | 431,631 | |
Less amount representing interest | 27,997 | |
Present value of minimum lease payments | 403,634 | |
Less current portion | 160,416 | $ 98,524 |
Finance lease obligations, net of current portion | $ 243,218 | $ 125,311 |
Finance Leases - Equipment unde
Finance Leases - Equipment under finance lease and additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finance Leases | ||
Machinery and equipment | $ 745,289 | $ 438,316 |
Less accumulated depreciation and amortization | 157,486 | 98,305 |
Net book value | $ 587,803 | 340,011 |
Amortization period, Finance lease (in years) | 10 years | |
Property and equipment purchased by finance lease | $ 306,973 | $ 78,950 |
Common and Preferred Stock - Co
Common and Preferred Stock - Common Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Issued During Period, Value, New Issues | $ 119,992 | $ 119,992 |
Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | $ 119,992 | $ 119,992 |
Common Stock [Member] | Non Employee Board [Member] | ||
Stock Issued During Period, Shares, New Issues | 96,450 | 63,500 |
Stock Issued During Period, Value, New Issues | $ 119,992 | $ 119,992 |
Common and Preferred Stock - Pr
Common and Preferred Stock - Preferred Stock Authorized and Outstanding (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 | |
Shares Outstanding | 24,152 | 24,152 | |
Cumulative Preferred Stock [Member] | |||
Shares Authorized | 10,000 | 10,000 | |
Shares Outstanding | 0 | 0 | |
Voting Preferred Stock [Member] | |||
Shares Authorized | 125,000 | 125,000 | |
Shares Outstanding | 0 | 0 | |
Cumulative Non Voting Preferred Stock [Member] | |||
Shares Authorized | [1] | 125,000 | 125,000 |
Shares Outstanding | 24,152 | 24,152 | |
Series A Preferred Stock [Member] | |||
Shares Authorized | 700 | ||
Convertible Preferred Stock Series B [Member] | |||
Shares Authorized | 100,000 | ||
Shares Outstanding | 24,152 | 24,152 | |
[1] | Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance. |
Common and Preferred Stock - _2
Common and Preferred Stock - Preferred Stock - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 1996 | Dec. 31, 2020 | Dec. 31, 2019 | |
Preferred Stock, Shares Outstanding | 24,152 | 24,152 | |
Convertible Preferred Stock Series B [Member] | |||
Stock Issued During Period, Shares, New Issues | 70,000 | ||
Preferred Stock, No Par Value | $ 10 | $ 0 | $ 0 |
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||
Convertible Preferred Stock Conversion Price | $ 5 | ||
Preferred Stock Redemption Percentage | 103.00% | ||
Preferred Stock, Shares Outstanding | 24,152 | 24,152 | |
Payments of Dividends | $ 24,152 | $ 24,152 | |
Accrued Dividend | $ 265,672 | $ 265,672 |
Common and Preferred Stock - Su
Common and Preferred Stock - Summary of Employee and Director Outstanding Stock Options Outstanding and Preferred Stock, Series B (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 |
Common and Preferred Stock | ||
Options | 76,037 | 76,037 |
Preferred Stock, Series B | 24,152 | 24,152 |
Number of Options and Preferred Stock Outstanding | 100,189 | 100,189 |
Common and Preferred Stock - Re
Common and Preferred Stock - Reconciliation of Earnings Per Share Calculations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share | ||
Income applicable to common stock | $ 1,477,611 | $ 281,199 |
Weighted average common shares outstanding - basic | 4,423,125 | 4,328,210 |
Effect of dilution - stock options | 10,875 | 34,117 |
Weighted average shares outstanding - diluted | 4,434,000 | 4,362,327 |
Stock Option Plans - Employee S
Stock Option Plans - Employee Stock Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Options, Outstanding, Beginning Balance | 76,037 | |
Stock Options, Outstanding, Ending Balance | 76,037 | 76,037 |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Options, Outstanding, Beginning Balance | 76,037 | 396,941 |
Stock Options, Forfeited | (17,616) | |
Stock Options, Exercised | (31,788) | |
Stock Options, Expired | (271,500) | |
Stock Options, Outstanding, Ending Balance | 76,037 | 76,037 |
Stock Options, Options exercisable | 55,208 | 48,265 |
Stock Options, Options expected to vest | 20,829 | |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 1.03 | $ 4.41 |
Weighted Average Exercise Price, Exercised | 0.84 | |
Weighted Average Exercise Price, Expired | 6 | |
Weighted Average Exercise Price, Forfeited | 1 | |
Weighted Average Exercise Price, Outstanding, Ending Balance | 1.03 | 1.03 |
Weighted Average Exercise Price, Options exercisable | 0.94 | $ 0.90 |
Weighted Average Exercise Price, Options expected to vest | $ 1.25 | |
Weighted Average Contractual Term, Outstanding | 5 years 6 months | 6 years 6 months |
Weighted Average Contractual Term, Options exercisable | 4 years 8 months 12 days | 5 years 4 months 24 days |
Weighted Average Contractual Term, Options expected to vest | 7 years 4 months 24 days | |
Aggregate Intrinsic Value, Outstanding | $ 36,712 | |
Aggregate Intrinsic Value, Options exercisable | 31,296 | $ 14,529 |
Aggregate Intrinsic Value, Options expected to vest | $ 5,416 |
Stock Option Plans - Weighted a
Stock Option Plans - Weighted average fair value of non vested stock options (Details) - Employee Stock Option [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested options, Beginning Balance | shares | 27,772 |
Vested, Stock Options | shares | (6,943) |
Nonvested options, Ending Balance | shares | 20,829 |
Nonvested, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.25 |
Vested, Weighted Average Exercise Price | $ / shares | 1.25 |
Nonvested, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 1.25 |
Stock Option Plans - Additional
Stock Option Plans - Additional information (Details) - $ / shares | Jun. 10, 2011 | Jun. 09, 2006 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 76,037 | 76,037 | |||
Plan 2011 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 250,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 34,715 | ||||
Plan 2006 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 600,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 41,322 | ||||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 76,037 | 76,037 | 396,941 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit (in dollars per share) | $ 0.84 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 1.25 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets (liabilities) | ||
NOL carryforwards | $ 786,151 | $ 822,000 |
General business credits carryforwards | 381,178 | 331,000 |
Stock based compensation | 143,073 | 118,000 |
UNICAP | 0 | 59,000 |
Allowance for doubtful accounts | 3,162 | 3,000 |
Reserve for obsolete inventories | 5,105 | 5,000 |
Reserve for asset retirement | 15,888 | 15,000 |
Property and equipment | (315,240) | (300,000) |
Deferred Tax Assets, Gross | 1,019,317 | 1,053,000 |
Valuation allowance | 0 | (1,053,000) |
Net | $ 1,019,317 | $ 0 |
Income Taxes - Deferred tax a_2
Income Taxes - Deferred tax asset expires (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Taxes | ||
Net | $ 1,019,317 | $ 0 |
2021 - 2025 | 364,000 | |
2026 - 2030 | 218,000 | |
2031 - 2035 | 371,000 | |
2036 - 2040 | $ 66,317 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the statutory rate and effective rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Federal statutory rate | 21.00% | 21.00% |
State/city tax | 0.40% | 1.00% |
Non-deductible expense | 0.20% | 1.00% |
Valuation allowance | (231.70%) | (22.00%) |
Effective rate | (210.10%) | 1.00% |
Income Taxes - Components of th
Income Taxes - Components of the income tax provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Current | $ 1,814 | $ 3,039 |
Deferred: | ||
NOL utilization/expiration | 36,200 | (41,000) |
General business credits | (50,477) | (42,000) |
Other temporary differences | 48,172 | 126,000 |
Change in valuation allowance | (1,053,212) | (43,000) |
Total | (1,017,503) | 3,039 |
Total | $ (1,017,503) | $ 3,039 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Recorded Valuation Allowance | $ 0 | |
Net deferred tax asset | 1,019,317 | $ 0 |
Deferred Tax Assets, Valuation Allowance | 0 | 1,053,000 |
Deferred Tax Assets, Reduction of Valuation Allowance | 0 | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 3,700,000 | 4,300,000 |
Operating Loss Carry forward Expiration Year | 2040 | |
Unrecognized Tax Benefits | $ 0 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | $ 0 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) | Dec. 31, 2020 |
Minimum [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 1.00% |
Maximum [Member] | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 6.20% |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Asset Retirement Obligation | ||
Beginning balance | $ 71,768 | $ 69,227 |
Increase in present value of the obligation (accretion expense in the corresponding amount charged against earnings) | 3,600 | 2,541 |
Ending balance | $ 75,368 | $ 71,768 |
Subsequent Event (Details)
Subsequent Event (Details) - SBA PPP Loan - USD ($) | Jan. 06, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | ||
U.S. SBA Paycheck Protection Program | $ 325,300 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
U.S. SBA Paycheck Protection Program | $ 325,300 |